Capital Match is a new service for Northern Ireland-based companies from Catalyst Inc, formerly the NI Science Park.
Capital Match is not a business angel network. It operates by building trusted relationships with many, mostly non-NI, funding sources and then matching each company to a very few funders – but only where the match is just right for both parties. It is very selective and focused in how it does this matching.
Alan Watts, the new Director of Capital Match is best known as the director of Halo, the NI business angel network, for the last eight years. However it’s all change at Halo, as the operation of the network has now reverted to the local development agency. So, while wishing Halo all the best, the question of course arose of what Catalyst Inc should be doing in this space, if anything? A thorough stakeholder consultation and design thinking workshop revealed that there is fact an interesting gap.
Proof of concept, local funds and angels are great for the smaller funding requirements and private equity organisations can do the big stuff. However, while the latter occasionally dip below £2m sized deals, it is very difficult for them do deals of this size economically. Essentially the amount of work for a fund raiser is the same for a £500k deal as for a £2m+ deal. So the fees on a smaller deal need to be proportionately much higher.
The gap identified by the NI research is for deals above the normal first angel level and below £2m. And so into this gap now steps the new service – Capital Match.
The really neat thing about this is that Connect, also as part of Catalyst Inc, already runs the highly successful Springboard programme, which is preparing high potential companies with the drive and ambition to succeed. And these companies are going to need to secure their first funding of around £500k to £2m. Perfect for Capital Match.
The Springboard programme has been very successful. This isn’t surprising as it’s powered by a huge team of highly skilled volunteers. In fact there is a pool of over 400 subject matter experts and 75 entrepreneurs in residence. These are the experienced entrepreneurs, business people and professionals who – without charging – challenge and coach the most promising companies to maximise opportunity and reduce go to market risk. And the evidence shows it works, with 90% of Springboard graduates having successfully raised capital of over £27m.
Alan Watts, Director of Capital Match, commented:
“UK investors have no shortage of deals. Their problem is the sheer number of applicants and the work needed to filter these down to those worthy of serious work towards investing. Capital Match does this for you two ways.
“The Springboard programme provides a dealflow of battle-hardened companies that have already received a lot of hard work and input by experienced volunteer experts.
“And secondly Capital Match will only suggest a company to a particular investor, be that a company or an individual, where that company is bang in the middle of their sweet spot. So very few deal referrals, but ones that a funder will want to see.”