Entrepreneurs and start-ups should lead on the type of business support on offer to them in Wales rather than the current case of it being shaped by those providing it, says head of partnerships at the Alacrity Foundation Caroline Thompson.
Addressing a meeting of Cardiff Breakfast Club, Ms Thompson, who was previously chief executive of Be The Spark, an initiative driving deeper connections between the key pillars of the Welsh economy, said ‘feeders,’ whether funders or business support organisations and initiatives, were often the ‘leaders’ and that needed to be switched around to help optimise the potential and scalability of start-up firms in Wales.
Ms Thompson recently joined the Newport-based charitable status Alacrity Foundation, which through its graduate entrepreneurship programme, is creating a new wave of tech start-ups in Wales.
Be The Spark, which she remains an advocate of, champions more interactions between those operating in government, corporates, risk capital, academia and entrepreneurship, to drive the competitiveness of the Welsh economy.
Ms Thompson, who started her career in banking with NatWest, said: “Be The Spark helped me get right under the bonnet of what is actually going on in Wales and I absolutely experienced during those two years the good, the bad and the extremely ugly.
“I did learn a huge amount and Be The Spark is about one thing, culture, actions and activity. And whilst I am now working for the Alacrity Foundation, I won’t stop ‘being Be The Spark’, because it is not a job title, but actions you take to form part of the entrepreneurial ecosystem that we have got in Wales.”
She said that every successful country or region in world bar none have great connections [five pillars of Be The Spark].
She added: “In Wales this is commonsense, but it is not always common practice. We know each other really well, but when you over play a strength it becomes a weakness. So, while we know each other, do we work together well to make use of these connections? It is complicated, but for entrepreneurship it is the
“I recently read a book called Startup Communities by Brad Feld, and it brought home to me the things I had been thinking and learning in Be The Spark. Based on the community of Boulder in Colorado, it talks about ‘leaders and feeders’ and the difference between them. What Brad describes as leaders are entrepreneurs and the feeders are everyone else around it that supports entrepreneurs.
“Now I can categorically say in Wales that the feeders are leading and not the other way around and we need to try and change that, so that the feeders are listening and talking to entrepreneurs about what needs to happen in terms of the support they require, whether that is around funding, or linking back into academia and skills. It needs to come back full circle.”
She said the “beautiful thing” about the Alacrity Foundation, is that it uses Be The Spark in action. She added: “We have that connectivity and that is what makes it so special. We try to stimulate and generate the next generation of tech entrepreneurs. We don’t just harvest ‘bright young things’ put them in a room, introduce a couple of mentors and wait for the magic to happen.
“It is a pretty tough 15 month programme and the great thing for me is that it is demand led. We go out and find strategic partners, both public and private sector organisations, and really understand what problems they have.
“We then bring them back to Alacrity House to work with our entrepreneurs to see if we can find a tech solution. We don’t just create a solution for that company, we will look to turn it into a global scaleable business.”
During her speech she conducted a Q&A with two digital entrepreneurs, Gemma Hallett of Pontypridd-based career disrupter MiFuture, which matches via an app career opportunities to the growing number of young people not going to university and Peter Allan of Newport-based Surple, which has developed an innovative energy analytics software that help large organisations manage and reduce their energy use.
Mr Allan came through the Alacrity Foundation while Ms Hallett, a former Welsh rugby international, gave up a job as a PE teacher to take the entrepreneurship plunge.
She said: “I left teaching having taken redundancy and incredibly naïvely thought it be would about six months to get up and running. I was renting at the time, gave up my house to move in with family, used money I was saving for a house, sold my car, and then went to work part time in my uncle’s fish shop for about 18 months.
“I spent an incredibly long period of time, in that first year, going to Business Wales [Welsh Government funded business support initiative] workshops and things I should not have been going to basically. It was so old school when you are trying to be a disrupter and creating real change.”
Ms Hallett said she had explored raising growth finance, including from the Development Bank of Wales and a number of angel investors. She added: “I am actually glad that I didn’t [take funding].
“We approached the Development Bank of Wales about 18 months ago and we just missed out to another start-up in Cardiff that was in the career space. Even though they had a completely different model and market, it just showed it was sort of ‘first through the door’ rather than who is offering the best value for Wales.
“We took a step back and restructured how we were going to bootstrap for another year. I learnt so much from doing that, because if we had the quarter of a million pounds that we were looking for, I probably would have done everything wrong with that. I have seen so many start-ups where that has happened. I think it has put me in a better stage to raise now.”
On her experiences with angel investors, she said: “I met with two, and it was really obvious that the first just wanted to swallow us up into their company. I naïvely thought it could be something, but it took Gareth [Gareth Jones from Town Square] to say Gemma walk away. The next one I met was saying they ‘could do that with the data, what’s the exit’ and was going to put a team in etc.
“I didn’ want to work with someone like that. There are a couple of very big fish in a very small pond in Wales [angel investors], but they are very dominating in trying to get the conversation to go their way.
” So, I have taken a step back from that and I am now actually having some great conversations with London and Dubai, and people in a bigger pond.”
Mr Allan said: “We took seed funding from a partnership group at the end of the Alacrity Foundation. We saw that as an opportunity to stay within a network and connected to people who we thought would help us grow the business. We are now around halfway through that seed round.
“So we are looking down the line, maybe in around nine months to a year, at a series A or a slightly bigger seed round. That is something we are really conscious of and want to add to our pool of investors to keep that level of strategic investment in place.
“We made sure from the start that we got some really good individuals mentors in place, but it is something I think is hard in Wales. They are there, but I know friends who run businesses in Bristol and London and it is just abundant and that is a mentality thing more than anything else.
“There is a philanthropic element to Wales and if you are Welsh you want to support other Welsh people and I think that is brilliant, but having individual people in specialist sectors that can help you grow the business, that is something I really struggle with finding.”