Launch of Tanaka Venture Capital Club

The launch event took place on 2 November 2004 at Tanaka Business School.

Last Tuesday (2 November 2004) saw the inaugural event of the Tanaka Venture Capital Club  held at the Tanaka Business School. Speakers for the evening were Anne Glover, current Chair of the BVCA  and co-founder and Chief Executive of Amadeus Capital , Michele Giddens, Director of Bridges Community Ventures  and Chirag Shah of Tradingpartners.com . They addressed a packed lecture theatre of current students, alumni, and industry figures.

Anne Glover declared that the European venture capital industry is not dead. She argued that it is not an 'equity gap' but a 'business building gap' that exists. The number of deals was comparable between the US and European markets, but the level of investment by European VCs lagged by 50% in seed and first round, and by 75% in later stages. In particular, the technology suffered from underinvestment over all stages, as 'hype' had exceeded reality and returns were perceived as poor.

On the one hand, she believes that VCs need to define their goals in order to improve returns. Not every company should be funded by venture capital; it should depend on their market, their competitive advantage and their potential growth. On the other hand, she recommends that the European VC market becomes more ambitious, adopting the 'think big' culture of US venture capitalists, by creating larger funds and increasing the levels of investment in ventures.

Next, Michele Giddens enlightened the audience on the social venture capital industry. All private equity provides social returns in the form of economic growth and employment. However social venture capital aims to invest in ventures which achieve not only financial but also measurable social returns.

The industry is based on the US model, which started in the 1970s, and commenced in the UK in the 1990s. Her firm, Bridges Community Ventures raised £20m and was matched by government funds of £20m. They sought to invest in ventures located in most deprived areas of the country. These ventures had to provide returns in the area, either through employment, use of local suppliers or creating a market. Their successes included Elixir Games, the video games developer, EB2, the online booking engine for airlines and Simply Energy, the utilities comparison service.

Concluding the programme, Chirag Shah gave us the entrepreneur's perspective. His experience showed that risk is a major issue that has to be measured and controlled. He identified three critical success factors for Venture Capital Investment:

1. get the right Management Team (including advisers) - you need a track-record if you want Venture Capitalists to pay attention to your entrepreneurial project
2. find the right VC companies for your venture. You  also have to decide if Venture Capital is the right choice for your venture. There are other sources of funding which could be more appropriate - Government funding, business angels, Venture Capital trusts, structured finance, etc
3. NETWORK as much as you can

The event was a sell-out success and was attended by representatives of Imperial Innovations , the Entrepreneurship Centre , Executive MBA, Full-time MBA, alumni, and industry figures.

The Tanaka Venture Capital Club  is a body for students and alumni involved with or interested in entrepreneurship and venture capital. We plan a series of lectures and networking evenings over the forthcoming academic year. We also offer teams of MBA students the opportunity to work on specific venture capital and entrepreneurship projects.