Access to funding in the Scottish Tech Sector

Historically a pioneer and entrepreneurial powerhouse, Scotland has a proud tradition of innovation and new technologies such as Artificial Intelligence, Big Data, Robotics, Advanced Manufacturing, Precision Medicine and the ‘Internet of Things’ are driving the next generation of tech firms.

Our vibrant technology sector is increasingly important to the economy, contributing more than £5bn (ScotlandIS – Scottish Technology Industry Survey 2017) GVA last year. It is estimated that over 90,000 people are employed in digital technologies across the economy – and that number is increasing rapidly as new firms start up and established businesses scale up. Between 2010 and 2015 there was a 53% increase in the number of new tech businesses compared with a 19% increase in start-ups across Scottish business more generally.

One of the biggest challenges for tech entrepreneurs is accessing funding. A greal deal of investment is often required for R&D before tech businesses can take their products or services to market. 

To assist the sector, Johnston Carmichael has built up a team of specialist advisers, drawn from departments ranging from innovation taxes to corporate finance, who are highly experienced at helping fast growth businesses to maximise vital tax reliefs and access the capital they require to achieve growth. Last year alone we delivered £65m of tech-focused corporate finance deals.

As the go-to firm for Scotland’s tech innovators and incubators, we also actively engage with and support the scene. Our approach includes partnerships with some of the Scotland’s most-informative technology schemes, including Engage Invest Exploit (EIE), Scottish EDGE and StartUp Summit. Across Scotland our team is now working with 400 up and coming technology SMEs.

Among the ambitious start ups we’re assisting is Aberdeen-based EBar Initiatives Ltd. Established by two Robert Gordon University MBA graduates in response to the excruciatingly long bar queues that we all experience at major events, its first product is the EBar®, a self-service beverage dispenser that pours the perfect pint in seconds. The business recently won £75,000 in funding from Scottish EDGE, a dragon’s den style competition for start ups.

Initially appointed by EBar as its accountancy partner, providing services including end of year bookkeeping, grant audits and tax advice, our relationship with the company will develop as it grows.

For example, when EBar entered its first external funding round, the business invited us to undertake a thorough review of its business plan which included challenging the founders’ forecast models and assumptions. Our role was to see the challenges as well as the opportunities, that could lie ahead, helping the business to prepare for tough questions from potential investors.

More recently we’ve also been working with EBar to explore a staff incentive scheme that would encourage its team to excel and provide employees with a sense of ownership. It’s an approach that our specialist team is highly experienced in delivering. Last year we set up 50 share schemes to help incentivise and retain high calibre staff.

While we’re proud of the support we provide to the flourishing sector we recognise that there is no one size fits all. Our clients all want to grow in different ways. The great thing is that our specialist advisers have the knowledge and experience to work with businesses at all stages of their growth journey from start up through to scaling and growing as opportunities arise.

Want to find out more about how we can help your business grow? Get in touch to arrange an initial chat: