Entrepreneurship
Theme: Innovation
Cross-cutting themes covered: Tailored financial solutions
Name of project: Creative Business Accelerator (CBA)
City: London
What is it? The Creative Business Accelerator aimed to raise awareness among innovative creative entrepreneurs of the sources of finance available to them, and how to access it. The support was available to creative businesses identified as ‘high-growth’ – i.e. with the potential to expand considerably through high-level investment and loan finance.
Who is it? The project was delivered and managed by London Business Angels, Greater London Enterprise and the London Development Agency.
A range of sector-specific networks and agencies were involved in the project on an informal basis, such as the Cultural Industries Development Agency, the Chartered Society of Designers, Cockpit Arts and the Centre for Fashion Enterprise.
Where is it? The project worked with creative industry businesses across London.
Who funds it? The programme budget was around £120,000 (€178,000) and was funded by the London Development Agency.
How does it work? Identifying the need for finance among creative industry businesses: As a first stage in this project, interviews were held with business support providers and creative entrepreneurs to assess the level of demand for finance in the creative sector. Research revealed that many creative industry businesses in London are potentially ‘high-growth’ (i.e. with the potential to expand considerably through high-level investment and loan finance) but lack awareness about the types of finance available to help them to grow.
The level of support currently on offer for potentially ‘high-growth’ creative sector business in London was also reviewed. Although many agencies in London offer support to businesses in the creative sector, it was found that there was no dedicated support for ‘high-growth’ businesses, and little knowledge among business support providers about high-level finance, such as Business Angels investments.
Investment readiness support: Demand for ‘investment readiness’ support in the creative sector was found to exist. (‘Investment readiness’ support helps entrepreneurs to develop the financial awareness, business planning and management skills required to access equity and debt finance.) Based on this finding, the Creative Business Accelerator was set up to provide the following support: -
Importantly, the programme was competitive and was only available to creative entrepreneurs who were deemed potentially high-growth, according to a number of different criteria including management expertise and turnover.
What are the results? The Creative Business Accelerator was successful in raising awareness among creative entrepreneurs of the types of finance available to them, and in raising the skills levels of the entrepreneurs to help them access that finance.
Is the model transferable? The CBA uncovered unexploited demand for ‘investment readiness’ training among London’s creative industry sector. It was found that many creative sector enterprises, particularly in the digital media sectors, have the potential to be ‘high-growth’, but lack awareness of what finance exists at the top end of the market to help them to grow. The CBA service was developed to address this market gap. To transfer the model to other locations and sectors, market research should be undertaken as a first stage to ensure sufficient demand for services.
Building on local competitive advantages? The CBA worked closely with a range of business support intermediaries, in order to market the service to creative entrepreneurs. The intermediaries involved in the CBA were also well-placed to support businesses that did not qualify for the programme – i.e. which were not seen as ‘high-growth’.
What are the barriers to transferability? London Business Angels, which delivered the service, is well-linked into London’s investment community. The agency was therefore able to offer specialist services to businesses in the field of ‘investment readiness’, as well as providing opportunities for entrepreneurs to present their business models to a panel of investors. If the project were to be replicated, it would be necessary for the delivery organisation to work closely with the investment community in a similar way.
