Monthly Archives: April 2010

Fractals of finance, funding gaps in the digital media and creative sector

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pro.manchester research in the digital, media, creative sector flags up a funding gap of a much lower dimension then the Rowlands Report – £2 million to £10 million for small to medium size enterprises. pro.manchester is floating the idea of the pro.manchester DMC VC Ingenuity fund 1 with a target of £100 million, part of which would be allocated to this area.
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SME Funding gap, will the ICFC return?

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The Rowlands report, led by venture capitalist Chris Rowlands, aimed to examine the market for growth capital available to UK small and medium sized enterprises. The report suggested a mezzanine product (not debt, nor equity) would be best suited to fill this gap. It would help address demand side aversion to pure equity, and provide a return above regular bank lending to reward investors. The mezzanine product for students of history is beginning to look remarkably like the high coupon Cumulative Redeemable Preference shares much loved by the ICFC (1945). This was probably the only exotic instrument in town until “Big Bang” in the 1980’s.
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