#6 The Birmingham Ecosystem With A Senior Analyst From Midven
This week I stayed close to home and spoke to Liam Bradley, a Senior Analyst at Midven, a Midlands-based venture capital firm founded in 1990 with head offices in Birmingham City Centre.
Birmingham Venture Capital and Startup Ecosystem
This blog is a big tick on my list; the Midlands is close to my heart, and I set my sights on getting in touch with Midven pretty early on. Developing insight on this ecosystem not only builds my perspective of the city I’ve worked in and worked on (for my dissertation) across three years but also provides avenues to explore in the future.
Carry on reading to find out about Liam’s unique path into VC, my thoughts on Birmingham’s networking and investor scene, and a startup that provided insight based off satellite, aerial and drone imagery.
If you’re reading this online, be sure to subscribe using the button below. I’ve got some exciting content coming up from conversations with a senior manager at the British Business Bank and a co-founder of Scottish Equity Partners.
At the time of writing this, I have interviewed people from 10 different VC firms and 13 various startups which have massively developed my perspective. Because of these experiences, I am now feeling more confident about my own opinion and hypothesis on geographical diversity within VC and startups and will be writing more content specifically covering this soon!
Midven was founded by six Midlands-based entrepreneurs in 1990 and is now wholly owned by its management team who have helped grow the firm, doubling the team size and funds managed since 2007.
The firm is made up of entrepreneurs who are equipped to help grow entrepreneurs and being based Birmingham; they’re in a perfect position to spot outliers across the Midlands. The firm is sector agnostic, so can cover every sector, but has a skew towards tech startups (due to their higher return potential).
I am still unsure whether the Midlands does get its fair share of investment, but one of the benefits that I believe being based in Birmingham has for firms like Midven is that it is the heartbeat of the region so attracts a significant proportion of what is spent. Furthermore, the area is uber-connected to the whole of the UK, meaning intra-region relationships and funding can easily be reached. Funds such as MEIF are ready to be utilised by the right investors on the best startups, as long as the proper training and business plans exist.
Liam has a very different path into VC than many people I have spoken to, and he highlighted that because there aren’t “set stages” in VC. His age alone makes him an outlier for the opportunity, and it’s great to speak to younger venture capitalists about their journey. Graduating in 2017 with a BA in History from the University of Birmingham, he got hired by Midven into one of their graduate positions after stumbling upon the role.
I couldn’t find exact numbers, but there are undoubtedly many multiples less graduate roles in VC than there are applicants, with many of these being filled behind closed doors. So for Liam to get in through the front door without investment banking or consulting experience, is quite impressive.
Liam gets the chance to work on the whole deal lifecycle, conducting due diligence, research, financial modelling and analysis, amongst other things. This is a benefit of working in VC and a smaller firm like Midven; you can avoid being pigeonholed and get variety from working across all areas of the business and portfolio.
Outside of COVID, Liam also gets to meet with many different startups, founders and professionals through the Birmingham network, which is particularly fruitful to local investors.
Birmingham’s Startup and Investor Scene
The conversation with Liam quickly turned to how Birmingham has many different strengths and weaknesses which help make it a startup hub but also restrict the cities growth. The three main takeaways from this are:
Three large inner-city universities: The proximity and combination in specialities that the three Birmingham universities have made the city a multidisciplinary hub where Cross campus collaboration catalyses innovation. However, as I have covered before, do these university spin-outs stay in the city or move elsewhere? I believe in the past they have mainly left the city.
The city can’t attract or keep the best talent: Despite three major universities and excellent connectivity in the city, Birmingham cannot attract and retain the best talent, with London offering higher salaries and “better social lives” for graduates. Hopefully, HS2 and changing working patterns will help overcome this barrier. Still, a quick job board search highlights the quality and quantity difference in startup/corporate jobs in London compared to the rest of the UK.
Birmingham’s industrial history: Birmingham has been known for its heavy industry after championing the industrial revolution in the UK, but with most of this dying over the past 50 years, the city has been forced to diversify from its industrial roots which previously held it back. This diversify or die movement has forced the region to be innovative, and I believe is a big driver of entrepreneurship in the region.
With most UK funds not returning the investment to the investors (following the Powers Law) and global estimates suggesting “Ninety-five percent of VCs aren’t profitable” (source), the chat with Liam highlighted that Midven is in the land of opportunity but has to work hard to avoid joining the above statistic.
Liam’s Tips To Founders
I asked Liam to give myself and other founders some useful tips from his time at Midven to help us work with VCs better while also improving the chance of success for a startup:
Take advantage of the available programs: Liam mentioned how Midven run a 2-day investment readiness workshop for founders. Utilising free programs such as the one that Midven runs to develop your skillset and grow your network is invaluable and saves founders valuable cash.
Be realistic: He says many founders come to Midven with a valuation that is far too unrealistic for their company. He said that he will pretty much always meet with founders that have a realistic valuation for their company.
This is a view I have heard from many in the industry, as a crazy valuation can often be a sign of bad things to come…
Don’t burn yourself out: Most founders are likely going through the same problems that you are going through. You’re not alone, ask for help and learn from the mistakes others have made in the past.
My Pick From The Portfolio
Below is the company that I have picked from Midven’s portfolio companies as one that I am particularly interested in and think my readers should check out. While I did ask Liam about this company, I didn’t ask him to make a pick one himself because at the end of the day, the firm wouldn’t have invested in each one of the portfolio companies if they didn’t find them exciting or high potential.
Geospatial Insight is a leading provider of independent research derived from the analysis of satellite, aerial and drone imagery. It’s no secret that I love drones and data; Geospatial are doing some cool things in this space (primarily in insurance and investment) through analysing the landscape from above; this allows them to identify and analyse trends which can be used to help their clients make better decisions.
The below video shows one of Geospatial Insight’s case studies which shows its insurance CAT capabilities.
With drone usage expected to become more and more popular over the next decades, forward-thinking companies such as Geospatial Insights are in a prime position to use their first-mover advantage to grasp the market demand as it grows.
It has been a great experience chatting with Liam from Midven, I’d like to thank him and the Midven team for allowing me to get these insights and feature them in the blog! These opportunities really do make this worth it and I hope my readers find them useful!
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