Entrepreneurial-Spark® ("E-Spark") has today launched its second facility in Scotland at the headquarters of Sir Tom Hunter's West Coast Capital. At the event, Harper Macleod Partner Paula Skinner also announced an innovative new way for companies to raise finance through equity-based crowdfunding which will assist E-Spark's continued drive to deliver ambitious growth for Scotland's fragile start-up businesses.
The E-Spark operation will provide a boost for Ayrshire as it focuses on accelerating potential high impact businesses and has uniquely gained funding from both philanthropy and Local Councils.
E-Spark West Coast was launched by Cabinet Secretary for Finance, Employment and Sustainable Growth John Swinney. He said:
"Scotland is recognised for our contribution to shaping the modern world through innovation and the Scottish Government, with our agencies and Local Authorities, working closely with business and industry to ensure the country continues to be a competitive hotbed, generating innovative ideas and new entrepreneurs.
"Entrepreneurial Spark's decision to establish operations in Ayrshire is a fantastic boost to the local business community. This industry led, not-for-profit initiative, is the first of its kind in Scotland and offers new start-up businesses, free workspace, IT access and invaluable mentoring advice from Scotland's leading business people.
"I am confident that this private and public sector collaboration will play a key role in providing our next generation of entrepreneurs with the skills and tools they need to flourish and contribute to Scotland's economic success."
The facility has been jointly funded via support from The Hunter Foundation who are providing all the infrastructure support and East, North and South Ayrshire. E-Spark has attracted applications from over 100 companies keen to benefit from the facilities, mentoring and support on offer for free with thirty companies now selected and operational there.
Sir Tom Hunter commented:
"E-Spark sums up the spirit of Scotland for me – ambitious, innovative and grounded in excellence.The equity based crowd-funding model is a really innovative means to both reducing the cost of fundraising but also accelerating that funding, which in turn is great for start-up businesses and for Scotland's ambitions.
"As Jim Duffy and his team prove E-Spark's high growth support model works; we need to move rapidly to scaling this up across Scotland using this public-private sector partnership approach."
Explaining the equity crowd-funding model, founder and Chief Executive of E-Spark, Jim Duffy said:
"In essence, this will allow Scotland's growth businesses seeking significant funds, say from £150,000 to £1 million to raise much needed funds at markedly reduced cost. This plugs a significant gap in the market and was pioneered in Scotland by Brew Dog. The great thing about this scheme, devised by Harper Macleod with NCM Finance who are FSA authorized, is we can drive this forward for numerous businesses with two from E-Spark already readying their fundraising announcements.
"Our philosophy is simple – where we see barriers to growth for start-up business we either knock them down or go around them; finance is simply one of those barriers."
Paula Skinner, Partner at Harper Macleod LLP said: "In the current climate, funding for entrepreneurs and businesses is becoming increasingly harder to secure. Bank debt is virtually non-existent for many early stage businesses and, whilst in Scotland, we have an active angel investment community, it is still difficult for businesses to get access to capital. We want to help businesses and the Scottish economy by being innovative and developing alternative sources of funding that represents value to all involved."
Gordon Merrylees, RBS Regional Managing Director of Business Banking Scotland said: "It takes enormous determination and commitment to start a new business and we must ensure that anyone looking to take that step has the right encouragement and support available to them. Entrepreneurial Spark is an important and exciting initiative as it will provide solid foundations to help the next generation of Scottish entrepreneurs grow successful, sustainable businesses. We are delighted to provide our support and aim to become an integral part of the project."
As part of the strategic partnership RBS has agreed to fund grants for a number of start-ups in each hatchery.
E-Spark will announce the name and set up of their equity crowd funding model in July and has two companies from the first E-Spark based in Glasgow lined up to launch fundraising exercises soon after.
Established in 1988, Harper Macleod is widely recognised for partnering with clients to deliver commercially-focused legal advice. With 48 Partners, 166 fee-earners and a total complement of over 270 staff based in Glasgow, Edinburgh and Inverness. The firm is noted for its expertise in key industry sectors, including Banks & Financial Institutions; Energy & Natural Resources; Food, Leisure & Hospitality; Insurance; Property & Construction; Public Sector (including Housing); Retail; Sport; and Family-owned Businesses. Clients include Clydesdale Bank, SSE Renewable Developments, William Hill, E.ON, Direct Line Group, Glasgow 2014 Limited,The Forestry Commission Scotland, The Department for Work & Pensions, The Scottish Government, HEROtsc, HSBC, The Scottish Premier League and Optical Express.