Venture Services in London | Identifying a Gap in the Tech Scene

It’s apparent that the tech startup scene (fintech, lawtech, martech, proptech, etc.) in London is booming. However, there is a gap that has been identified in this market.

Non-Technical Founders

Non-technical founders exist everywhere in London but are rarely discussed or acknowledged. The program head at one of London’s biggest accelerators said that 60 percent of his portfolio were companies lead by non-technical founders who were struggling with their technology.

In contrast to San Francisco, which has an enduring legacy of technology and engineering, London’s startup founders and investors typically come from a variety of non-technical backgrounds, notably finance, retail, marketing, and real estate. As a result, one of the principal challenges they face is how to establish necessary technical expertise within their company.

What Non-Technical Founders Can Do

Non-technical founders typically have two options: hire a CTO or work with a third party agency or development shop. While both routes have their advantages, both also present challenges that can be difficult to overcome for a young company with limited capital, expertise, and time to grow.

Hiring a CTO to build an in-house engineering team should be the most risk-averse option in the long term. But, thanks to the explosion of startup activity combined with aggressive recruitment by big tech companies such as Google, Amazon and Facebook, engineering expertise isn’t always easy to come by. Few startups have the capital to shoulder the costs associated with finding (and retaining) an industry veteran.

On the other hand, service providers — or “dev shops” — remove the problem of hiring but bring different frustrations. Founders often find cause to distrust their technical suppliers, common complaints include a lack of responsiveness and commitment. When a supplier bills purely for engineering time, the long-term technical plan usually falls by the wayside in favor of immediate solutions. Technical inexperience can feel like a heavy burden to first-time early-stage founders as a result.

The Third Option

For companies reluctant to commit heavy resources to an unknown CTO or partner with a short-term dev shop, venture services provide an excellent middle solution. Through venture partners, firms can get the long-term commitment of an in-house team without the challenges of attracting and retaining individual contributors.

Recognizing that capital is no longer as scarce as the ability to create great software products, venture services firms offer a hybrid of investment and software services that helps non-technical founders accelerate their product at a crucial phase of their trajectory.

Starting Up in London

There’s never been a better time to start a company in London. Thanks to government incentives such as the Seed Enterprise Investment Scheme (SEIS) in particular, it’s comparatively straightforward to attract early-stage investment from a growing cohort of angel investors, many of whom are gravitating toward technology after decades spent in the City or the hedge funds of Mayfair.

The United Kingdom government also offers favourable Research and Development Tax Credits to young companies solving problems with software. Unlike SEIS, this government scheme is little known and frequently overlooked, leaving millions of pounds of annual credits unclaimed.

We all know that software is eating the world, which means that managing technology teams is now a high priority for every founder and CEO. But, if you’re not technical, it can be a challenge knowing where to start and who to trust.

In addition to capital partners, many companies in London now need ‘digital partners’ too. And, thanks to the investment they make in their clients, venture services firm are committed to helping you create long-term value, not short-term fees.

Interested in hearing more advice about SEIS, tax credits and services that will help your company? Join us on Nov, 17th for the second annual Investment Conference. Secure your tickets here!

About the Author

Castle Digital Partners is a venture services firm that partners with management teams to invest in the software platforms that drive their businesses. They are a hands-on, strategic digital partner — providing the digital strategy and execution a business needs to accelerate its software platform vision.