Venture capital continues to be sloshing about for technology firms, even if the shutdown of a swathe of music/tech startups in 2015 suggests it may be drying up for companies around our industry that haven’t shown enough traction.
But what about funding for companies in the creative industries? That’s a long-running challenge. Edge Investments is one of the companies that’s been trying to connect private investors with creative-industry companies for some time, raising funds of nearly £200m in the past.
Yesterday it announced its latest £40m fund, backed by the UK government’s British Business Bank. Its Edge Creative Enterprise Fund plans to invest in “fast-growing and revenue-generating small and medium-sized creative companies”.
There are plenty of those in the UK, although Edge’s desire for “a minimum three times return for its private investors over its 7 – 10 year life” may filter them out somewhat.
“Our view is that a high degree of sector knowledge mitigates risk and also allows us to assess the most promising opportunities and most talented executives,” said Edge CEO David Glick.
“There are nearly 160,000 creative industries businesses in Britain yet despite being in this high growth sector, many of them find it difficult to attract adequate capital to maximize their potential.”
The new fund may be coming at a good time for music management companies in particular, who are taking on more responsibilities in the development, digital marketing and distribution of their artists, including making the kind of investments that might traditionally have been solely the preserve of labels and publishers.
But that requires capital to make those investments: if the new Edge fund (and perhaps similar schemes from other companies in its sector) delivers on its potential, for management firms with the will to invest more in artists, it could provide them with the way.