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'Best of the best' will triumph in fight for funding

Only the strongest funding bids will be successful in the current credit-starved climate, according to a North East fund manager.

Barrie Hensby, managing director of fund management firm NEL, warned that companies seeking capital would have to put forward strong business cases and demonstrate they have the relevant skills and experience in order to secure financial backing from a cautious investment community.

Mr Hensby was speaking alongside a panel of investment experts at the ‘Crisis, What Crisis?’ event held by the County Durham Development Company (CDDC) at the North East Technology Park (NETPark) in Sedgefield.

He told the business audience: “People have lost sight of what the balance of risk and reward is. Now you are getting a revision back to basics. Investors are going to be very, very choosy about what they will invest in. Only the best of the best are going to raise capital.”

Mike Smith, partner at Tait Walker, echoed the sentiment that only the best companies would secure finance, adding that the investment community has traditionally been cautious about which businesses they choose to lend money to. He said: “I don’t think the current situation has made that much difference to people raising early stage equity.”

However, he said that the emergence in the past three years of two dedicated business angel networks was a major boost for funding at that level. He said the arrival of the likes of Hotspur and the Business Investment Group was “a very positive trend in the North East”.

This was posted in Bdaily's Members' News section by Ruth Mitchell .