Serial entrepreneur Mike Jackson is the man behind WebStart Bristol, a Bristol-based tech incubator looking for the next big things in web-based technology.
The scheme launched in January, with a batch of 10 fledgling startups joining a structured mentoring programme. Mike explains: “We provide approximately £10,000 worth of investment in exchange for a 10% equity stake, and then run a 10-week incubation service that aims to get these startups off the ground and investor-ready.”
The participants receive expert advice on marketing, finance and product development from some of Bristol’s top business minds, and then they’re given the chance to pitch their ideas to would-be investors.
The process somewhat resembles popular BBC show Dragons’ Den, but Mike says WebStart Bristol is much more than that: ‘We invest in the person or team first, and the idea second. We’re looking for great people with ideas for high-growth, web-enabled businesses, but we’re actually much more interested in their motivation and background rather than the idea per se.
“Dragons’ Den is an entertainment programme, with the dragons firmly believing they know the answer to everything. In contrast, we openly admit we don’t!
“I mean, would we have invested in Snapchat? A service that allows you to send messages visible for just six seconds before they completely disappear? It sounds bonkers, but it’s become one of the hottest properties out there. So we very much judge the person and the belief in the idea, rather than whether or not we think it’ll work.”
A capital idea
Mike secured the £150,000 investment capital through crowd funding platform Seedrs, despite the investors having no idea who or what they would be backing. “All investments are SEIS (Seed Enterprise Investment Scheme) qualifiable, which gives very strong tax advantages to the investors,” explains Mike.
“We invest in the person or team first, and the idea second”
“They can claim 50% of their investment against their income tax bill and, if after three years there is a profit on the investment, they pay no capital gains tax whatsoever. This makes it a very attractive opportunity for what you might call a ‘sophisticated investor’. Equally, we’ve also got people pledging relatively low amounts, and they’re doing it because it’s fun, it’s supporting the tech sector, and they’re hoping we find the next Facebook, which is more of a punt on the future. Crowd funding allows you to place those punts in a very simple and easy way.”
While Mike would love to discover the next Mark Zuckerberg, he’s been pleasantly surprised at the broad range of people approaching WebStart Bristol. “We do have some teams straight out of university,” he says, “but we’ve also had middle-aged and even later-aged people who’ve decided to put their job on hold to pursue their idea. We’ve met a much bigger cross-section of society than I anticipated. The one thing I’ve been disappointed by is the lack of female entrepreneurs, which isn’t reflective of the talent out there.
“Another thing I want to point out is that you definitely don’t have to be a ‘techie’ to start a tech company. In many cases, it’s probably an advantage if you’re more business-minded than tech.”
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Mike promotes his venture by speaking at local universities and attending networking events. He also regularly pops up in the local press, where his message is always the same: “For a lot of people the barrier is ‘How will I pay my bills?’ or ‘How will I put food on the table?’
“That’s where we come in. We probably don’t provide enough money to launch a business, but we certainly give enough to take the pressure off and allow time to refine a business plan, or perhaps get a basic product out there.”
“We give £10,000 if you’re the single founder of the company, £15,000 for two founders, and £20,000 if you’re a team of three or above. It’s on a ‘mouths to feed’ basis, if you like, so even if you’ve got a mortgage, that should be enough to cover your expenses while we help you get off the ground.”
Startups and downs
Mike has enjoyed business success in the past, selling his first company, Ultimate Events, in 2001. Since then, he’s had a few ups and downs, and learnt valuable lessons along the way. He firmly believes incubators are the way forward to inspire and support the next generation of tech entrepreneurs.
“We’re looking for great people with ideas for high-growth, web-enabled businesses, but we’re actually much more interested in their motivation and background rather than the idea per se”
“When I initially wanted to launch my own tech startup in Bristol, I had very little guidance or help, and couldn’t find people to talk to about it, so I did it myself and made some big mistakes. I launched something that the public weren’t interested in and ended up a lot poorer, but quite a lot wiser. When I discovered the world of incubators, I realised I could have done things differently.”
The first intake of entrepreneurs have successfully completed the programme, leaving with a wide range of web and mobile products. The second group of 10 startups are midway through their programme and applications are now open for the next intake, via the website.