£1m venture capital launch for West Midlands creative businesses

Valerie | 24 Sep 2009, 09:26

C&binet comment: Thomas Dillon, Chairman, Creative Advantage Fund, Birmingham

Today is an exciting day for me as Chairman of Creative Advantage Fund (CAF) with the launch of a new £1 million round of investment in the creative industries of the West Midlands. We support c&binet and see the project as an opportunity not only to communicate with creative business in the digital space, but also to evangelise for the role of public venture capital in the creative sector.

Since it was set up in 2000 –by Birmingham City Council and West Midlands Arts (now part of the Arts Council), with additional moneys from the regional development agency, the European Regional Development Fund and the private sector – CAF has invested over £1.3 million in creative businesses, helping Midlands-based SMEs like Hotbed Media Ltd. and Maverick Television establish themselves among the leading independent TV production companies outside London. Today we are opening up a new fund with up to £1 million being made available to small and medium sized enterprises.

CAF’s objective is to bridge the “equity gap”, addressing market failure in the provision of risk capital to SMEs in the creative sector.  With the support of Birmingham City Council, we are now actively seeking investment opportunities in our region in the range £75,000 to £150,000. Any West Midlands-based creative SME’s with an interest should contact us at

CAF uses the DCMS definition of creative industries, namely “those activities which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property”. Past investments have included film, TV, theatre, educational services, toy design and software. We have gathered a great deal of experience in the practicalities of investment in the sector and work sympathetically with creative businesses to help them prepare themselves for investment (so-called “investment readiness”). We usually appoint a non-executive director to the board of the investee company. This director supports and counsels the business, a service which adds value beyond the mere provision of cash.

CAF was born from the idea that those forms of creative activity that express themselves through business are best supported by shared risk-taking, not grant-giving. Venture capital is a long-term game, but our experience is that public venture capital is an effective and low-cost method of supporting innovation. We are looking forward with excitement to finding and supporting a new generation of creative entrepreneurs in the West Midlands.

With access to finance a key theme of next month’s c&binet forum, I will be following the debate closely and will be looking to share what we have learned with CAF whenever possible.