Funding is a critical concern for many businesses, and 2023 saw a decline across various sectors. While no particular sector missed out entirely, biotech and creative industries offer fascinating insights into the finance landscape. These two pillars of the UK economy, though very different, share the challenge of securing the right finance at the right time.
The Decline in Finance Across the Board
Compared to the booming funding scene of 2021, 2023 saw a sharp decline in overall investment. Sectors like biotech and creative industries, which are typically strong, were also affected. In biotech, the early-stage and start-up market showed resilience, but later-stage finance struggled due to a lack of liquidity. Similarly, the creative sector saw varied levels of support, with businesses ranging from immersive gaming tech to sustainable fashion facing different challenges.
The situation highlights a common issue across sectors: expertise in their respective fields does not necessarily translate into strong commercial strategies. Many companies, whether in biotech or creative industries, need specialised support to articulate their value propositions effectively to secure the right finance.
Biotech: The Need for Patient Capital
The biotech sector in the UK benefits from an abundance of talented scientists and strong academic institutions. Despite this, securing finance for early-stage companies in this field is not easy. The long time frame to bring biotech innovations to market—often seven or eight years—requires investors with patient capital and deep pockets.
Moreover, while scientists excel in research, they may struggle with commercial strategy and pitching their business to potential investors. That’s where specialist advisors come in. Mentorship is vital to help these companies refine their business plans, pitch decks, and financial models. Investors familiar with the sector and its unique challenges are essential for these companies to succeed. The right guidance can ensure that biotech start-ups secure the finance they need to navigate the long road to market.
Creative Sector: Diverse Finance Needs, Tailored Solutions
In contrast, the creative sector is much more diverse. From gaming tech to fashion start-ups, businesses in this space have vastly different finance needs. Yet, they share a common hurdle: transforming their creativity into a strong business case that appeals to investors.
Creative entrepreneurs often need help in areas like grant applications, loan negotiations, and business planning. While the UK government has provided early-stage grant funding and tax incentives, these businesses often require additional mentorship to secure the finance they need. Specialists who understand both the creative process and commercial requirements play a crucial role in helping these companies thrive.
The Role of Experts and Finance Networks
Across both sectors, access to the right expertise is crucial. In biotech, start-ups need to work with experienced investors who understand the long-term nature of the industry. For the creative sector, companies benefit from a peer network of experts, funders, and investors who grasp the nuances of their business models.
Mentorship and peer support can help companies navigate the complexities of their finance journey. Whether it’s helping a biotech firm craft a detailed financial forecast or assisting a creative company in applying for grants, expert guidance is invaluable. Finance networks of specialists can help companies leverage opportunities and secure the necessary funding to grow and succeed.
Opportunities for Improving Finance Access
While the government has been supportive, particularly with grant funding and tax incentives, there is room for improvement. Building stronger networks within these sectors can lead to more collaboration, better access to specialist investors, and increased success in securing finance.
For biotech, more partnerships with experienced investors and specialists can provide the patient capital these companies need. In the creative industry, fostering peer networks and connecting businesses with investors who understand the creative process will open up new finance opportunities.
The funding landscape in 2023 may have been challenging, but the potential for growth remains strong. By bringing together the right finance resources, mentorship, and networks, the UK can continue to support its biotech and creative sectors, ensuring they remain pillars of innovation and success.