Our North of Tyne Culture and Creative Investment Programme (CCIP) has supported over 200 businesses since it was launched in 2021. What’s unique about the programme is that it offers up to £150,000 investment, exclusive to North of Tyne creative businesses through loans and equity. With over £1m already invested into eight businesses, including Venture Stream and Grid Finder, we chat with Investment Managers Sasha Collington and Rahul Misra to find out who it’s aimed at, what it can help you achieve and how business can apply.
Rahul Misra: There is already a large ecosystem of support for small businesses in the North East, however, most of it is centred on business support and grants. What differentiates our programme is that there is an investment element to it, and it is focused on the creative and cultural sectors. Businesses have gone on this journey with us, moving away from a grant-dependency mindset, making that commercial leap and taking advantage of finance to grow. There’s a vibrant sector in the region but we’ve been able to unlock things through finance that perhaps weren’t happening before.
R: It was pretty clear that the creative sector was looking for an investor that understood the sector itself. It’s quite different from all others and has its own challenges in terms of balancing IP generation which is quite high-risk, and work-for-hire, which is lower-risk but with limited upside. We felt like creative companies needed strategic support; it’s not just about capital but what happens after we’ve made the investment. How can we be involved to help make connections, steer their thoughts in a direction that works for them and also be a supportive investor that provides a helping hand where required.
Sasha Collington: We also have lots of experience within all areas of the creative sector so I think that is advantageous when working with founders because we really understand them and their business model.
S: The fund offers investment of up to £150K through loans and equity. With equity, we can come on board as a catalyst investor which is really helpful for people when they’re trying to close an investment round, as getting that first investor is part of the challenge. Part of the objective of the fund is to help businesses be commercially sustainable because the world is changing. Investing in the infrastructure of your business is really crucial to being able to get to that next stage of revenue or expanding your team. We also look at the impact on the region, employment generation and other factors when considering investment opportunities.
R: What helps is that this is a really nimble fund. We’ve got equity, which is geared more towards high-risk, early-stage businesses – we can take an equity shareholding position at that early stage in businesses that maybe pre or post revenue. Equally, we can work with more established companies which have a strong revenue and clients base and are looking to grow their operations. We can provide them with loan finance to take that scaling journey. We want to be an ethical investor that tries to fit the kind of business you’re running with the kind of finance that you need.
R: Yes. So far through our investment portfolio in the North of Tyne, we’ve worked with businesses across a wide range of sectors including animation, immersive theatre, advertising and marketing, and games. We cover all of the 11 sub-sectors from the DCMS definition of the creative industries, and there are sectors that we’d love to support more, such as architecture or fashion. Through our national investment team, we’ve invested in more than 450 different creative businesses over the last decade and we’re bringing that expertise into the region through this fund.
R: Part of being investment-ready is knowing your business really well, so if you’re applying for equity investment, you need to have a strong, water-tight proposition and if that’s not ready yet, then perhaps there’s still work to be done. Similarly for loans, if you’re not generating revenue or don’t have enough margins to pay back the loan, then clearly it’s not the right form of finance for you. However, through the initial assessment process, it becomes clear very quickly whether this programme is something that will work for you.
S: The Expression of Interest is like a mini-application form. Sometimes, people have to spend a long time on an application only to get a ‘no’ after a long wait but the great thing about our Expression of Interest is that it’s very compact. It really just gives us an idea of your business so we can see if it fits our criteria. If it’s a good fit, we can invite companies to make a full application.
R: Once we’ve seen your Expression of Interest, we aim to get in touch with companies within five days to let them know whether they have something we can work with.
S: I’d like to see that the businesses we have supported have really grown and flourish. A few years down the line, it would be great to see that they’ve grown in size, employed new people and expanded in revenue. To see that this finance has helped them to get to certain new points in their own growth would be really satisfying. That also has an impact on employment, competition and the vibrancy of the region.
The CCIP is part of Creative UK’s wider activity in the North East – see what else we’re up to in this region here.