Focusing on budding start-ups, attracting international partners and tackling gender inequality should be prioritised in Greater Manchester's investment sector, one of the industry's leading lights has said.
As head of investment at GC Angels, Jess Jackson helps lead an organisation that has raised more than £30m and supported in excess of 30 companies since 2015.
She is also a founding member of Fund Her North which was established in November 2020 and supports investment opportunities for female entrepreneurs across the North of England.
In an exclusive interview with BusinessLive, Jess Jackson sets out what state the sector is in following the Covid-19 pandemic, how important investment angels are to start-ups, the future of investment in Greater Manchester as well as how to improve the representation of women in organisations.
The state of the Greater Manchester investment sector
Jess Jackson said: "It's incredibly buoyant at the moment. During Covid, we did see a massive increase in Government support backed by both debt and equity propositions. We saw a lot of injection into that which was really helpful for businesses to bridge the gap between their first investment and the next one.
"Coming out of Covid we have seen a lot of things emerging as well: more announcements from the British Business Bank's regional angel pilot funding and there has been more innovative grant funding.
"There have really been lots of responses here, there and everywhere for very niche things and incredibly general things
"It's an incredibly encouraging trend to see.
"There was a huge freeze in angels looking at doing investment, really getting a picture of what was going on.
"We often know that they will have a small chunk that they might use for playing around with in the tech sector but because there was a whole instability everywhere so a lot of investors would have felt very destabilised really by all of that.
"But we saw some of that intention return quickly. We saw new people come to the fore who maybe were looking to do something a bit more 'philanthropic' with their money or even their time.
"I think people are coming back out there. Everyone has had an opportunity to change their investment processes and adapt and take Covid into consideration.
"Whatever changes have been made have been baked in and people are carrying on as normal."
On the strength of Greater Manchester as a centre of investment, she added: "Greater Manchester has become a fintech capital and finance capital and there are lots of banks that have their regional headquarters here as well.
"There has been a lot of SME lending and we have had a lot of venture capitalists base themselves up here more and more each month it seems.
"We're also getting challenger banks opening here such as Bank North.
"The scene is really lively and we have got some fantastic universities and great tech transfer offices and the Northern Gritstone fund.
"That said, we always know that the ecosystem can function better and that there are certain weaknesses that can prevail.
"We work really hard by joining our partners together to make sure those things don't block up and prevent people from raising money."
The role of investment angels in startups
Investment angels are just one way a business can raise capital in order to grow.
They usually invest in start-up companies and can provide a vital injection of money to help the firm survive those difficult and challenging first few years.
Jess Jackson said: "They are absolutely essential because one of the downsides of the pandemic is that venture capitalists really retreated and stopped taking risks on those companies that had already had angel funding and were now looking for £750,000 or more.
"Those deals really struggled and it's still in a difficult space today.
"Angels stepping up and helping those businesses through is really important.
"We have met some absolutely fantastic angels through some of the investments that we have made over the last 18 months through the deals and then welcomed them into our network and made other introductions as well.
"It has been really rewarding to meet someone for the first time and then maybe 18 months later you have two portfolio businesses in common and you're able to have frank conversations about what is important and what is needed.
The future of the sector in Greater Manchester
Mrs Jackson has also revealed what she thinks the investment sector in Greater Manchester needs to do in the future to improve.
She adds that making sure companies who have just been established are supported as well as looking outside of the UK for potential investment partners.
She said: "There needs to be a lot more emphasis on the very early stages such as those businesses that have never raised before and are looking for anything between £100,000 and up to £500,000.
"They are often very difficult for even some angel groups to get to grips with unless you have a very experienced investor who really sees this opportunity and can also back it and drive it with the founders.
"Although there has been a lot of money coming in focusing on those later stages, there has not enough, and there never will be really at the early stage, and I think the next year we are going to see a big injection in that through some kind of public instrument that's really focusing and homing in on that.
"There is also going to be a huge amount of international interest in investing here because there is much more of an opportunity than there has ever been.
"GC Angels are looking at a huge global partner, which we can't announce yet, but through that, we would see exclusive deal flow sharing and bringing in high-net-worth capital into businesses here with huge potential for internationalisation and that business being able to reach customers over in their respective countries.
"We are going to find ways of getting around the challenges of Brexit through close partners and some of these trade partnerships with specific nations.
The need for greater gender equality
"On the one hand, I'm incredibly lucky to be in the role that I'm in.
"I'm a founding member of Fund Her North which is 28 different funding organisations across the North and it just so happened that there was a woman within each of those organisations who had a shared passion about helping female founders and we recognised how important our role was in that through advocacy, mentorship and support and direct investment as well.
"We don't want to just work with women in funds. It helps if we want to make a referral but actually, we should not be shy about asking men to join the network as well.
"If they support that cause as well then why should they not be in the room at the same time.
"That said I think with some funds we all struggled to find a woman who was working in their fund so there is an issue of women at the right level of seniority.
"We're hiring at the moment and the number of women I get applying is very minimal and that's obviously quite disappointing.
"It is a longer-term issue but we need to be able to support women through their careers.
"Fund Her North is really great for that visibility but there is a gap in women in decision-making roles and coming up through organisations.
"You need both to cultivate that talent and there is a lot of work to be done."