Blog

Celebrating this financial year; looking forwards to 2016

Jonathan Gold

17 Dec 2015

As the year draws to a close, I find myself reflecting through the eyes of an investor. We should celebrate that 2015 sees the successful end of the current investment of the North East JEREMIE Funds.

I’m told well over £130m has been invested and an additional £150m attracted from private investors. We await the next funds for 2016 and the following five years with interest. As I write this, there is no clarity when these funds will be available and how.

This has been the year at Rivers Capital where we completed investments of £9.5m from the North East Angel Fund plus a further £8m leveraged from other investors into 66 businesses. We made the Micro Loan Fund work for so many great small businesses, over 400 in total. Interestingly a recent survey by Business Banking Insight (BBI), who surveyed some 5,000 UK SMEs, reported that businesses were increasingly looking to ‘alternative’ sources of finance.

What is not a surprise from the BBI survey is that they report 73% of businesses consider investing their own money to expand their business. I had always assumed that was the case, far more sensible to do this, if you can, than taking the responsibility and cost of accepting money from others. Of course it’s best to do a bit of both, using their own hard earned cash but also leveraging that with investors’ money, bank, VC, angel or the crowd. The BBI go one to say that 63% would consider a bank loan. Well these days that might be our Micro Loan Fund or a crowd-funded bond or other ‘alternative’ lender.

Interestingly this chimes with our own survey conducted at Rivers Capital; 58% of our responses from North East businesses would consider a loan as a source of finance for their business.  75% have answered ‘growth’ as the primary reason for applying for funding.  It’s encouraging that growth is on the agenda, something that has characterised 2015 as more businesses seem to be considering or actually financing growth.

So-called ‘alternative’ lending is now mainstream and should be treated as such. There is no soft money and one of the things I think will mark out 2015 is that it was the year that crowd-funding, peer-to-peer lending and others came of age. This has been marked, if you look carefully, by mainstream banks and the City of London’s big investors starting to invest directly into on-line platforms. I suggest this trend will continue in 2016. We could see Finance Circle and others becoming mainstream banks.

The other notable event in the North this year has been the emergence of the ‘Northern Powerhouse’ as a concept. I’m not yet sure what this means for start-ups and growing small business in our region. One thing is clear to me, we need to embrace the concept and be part of it to better coordinate investment activity across the whole of the North.

However, that does not mean, as I have heard rumours, giving control over future investment funds from Government and the EU, the next JEREMIE programme, to anyone outside the region. The North East has one of the most successful programmes run here by North East Finance let’s not break the model just to meet a political agenda.

During the year we also saw two fantastic examples of why the North East is a great place for entrepreneurs, innovation and finance. Alice Hall was awarded ‘Emerging Entrepreneur’ of the year with her fantastic local success and online retailing Pink Boutique. A true entrepreneurial start-up built by Alice in 2012 with an initial £90 and in 2014-15 turned over £6m and exports to 59 countries. The other example is the new innovative business Atom Bank, the mobile banking platform. They not only have closed major investment rounds this year but in July were granted their banking licence, a tremendous achievement and of course they were founded here and based in Durham. Watch out for Atom Bank’s launch in 2016.

So, like Matt Ridley, I’m a rational optimist (read his book on the subject it’s good) and think 2016 will be a steady build on 2015 with more businesses growing and more ways for them to access finance.

So to all entrepreneurs and investors out there, have a great festive season and I hope Santa delivers the cash you need plus that prosperous New Year.


Entrepreneurs are constantly striving for success, looking for ways to make their business work. A lot is written about success, I have decided to take...

Having read all sorts of doom and gloom and plenty of speculation since the UK referendum to “Brexit” or leave the EU. What does it...

Whilst wandering through the attributes of the Entrepreneur, one can be forgiven for being bombarded with lists of skillsets, strengths and traits without ever seeing...

Looking for investment? Well you are competing with hundreds of small businesses and entrepreneurs in your local area and thousands nationally, especially on crowdfunding platforms....

When I left university setting up your own business was not an option anyone mentioned. To me an entrepreneur was….well I'm not sure I knew...

Some people plan their negotiation strategy, the outcome they want, their Best Alternative to Negotiated Agreement "BATNA". Others seem to wing it, too many settle...

As the year draws to a close, I find myself reflecting through the eyes of an investor. We should celebrate that 2015 sees the successful...

It’s amazing that people think Crowdfunding is new. What is new I guess is that the general public can go onto on-line platforms and share...

Most investors like to be able to visit the business they invest in, and they like to talk to the people running it, face to...

People don’t notice the number of start-ups that happen, come and go below the radar. Entrepreneurs who never go to a bootcamp, never have a...

I should qualify the above statement right away. You should take advice if you think your business or start-up needs investment. Why? Well a good...

There is a recurring theme in what makes a successful business. It's the people involved. When you hear about a terrific new start-up or amazing...

The North East of England is part of the Northern PowerHouse. The concept will be the poorer without this region with its 5 universities, 6...

I have said before 'investing is a balance of risk and reward' - so is running your own business. Most entrepreneurs do both by taking...

One thing I think the British are bad at is counting and shouting about our acheivments. There is an odd issue around someone telling you...

I admire people who seek finance to start, fund, maintain or grow their business. They have taken on something they believe in and or have...

So if you are looking for investment for your new business idea or even perhaps investing what should you do, where to go, Angels, VCs...

It can be fun to criticise venture fund managers, the investment industry and even more so the Government or European Institutions. Sometimes I think it’s...

Finding the right business model for your idea is crucial to your chances of success. Too few startups and entrepreneurs consider this in detail at...

Over the last few weeks there has been a lot of advice flying around about advice. I'm taking about advice for entrepreneurs. Many business people and wealthy...

Firstly, congratulations are in order! I'm sure that if you have raised your seed capital, ordinarily a tantalising couple of hundred thousand pounds sterling if...