The 999 on start-up funding

by Kate Pritchard - Thursday, 22nd November 2007 -

Bureaucratic. Useless. A waste of time. That was Neil McCutcheon’s view of public-funded investment advice organisations – until one saved his York-based start-up.

McCutcheon set up Lattice Voice Technologies in January this year, developing translation software for the emergency services. But, ten months on, he has yet to take the product to market.

“We still have a turnover of zero. It’s a nice round figure and it’s easy to monitor,”
he jokes.

The past year has been spent developing and trialling the software.

So, how did McCutcheon fund a business that wasn’t making a penny?

He contacted Business Link ,which put him in touch with Connect Yorkshire, a government agency aimed at fast-tracking technology and life sciences start-ups.

McCutcheon was encouraged to sign up for Venturefest, an investment competition that brings together entrepreneurs with more than 60 regional and national business angels. “It’s a bit like Dragons’ Den – only slightly friendlier.”

Connect Yorkshire paired McCutcheon with business mentor Dean Harris of KPMG to help with the pitch. “He helped square up our presentation and gave us constructive criticism – for free.”

The advice paid off. McCutcheon secured £150,000 in first-round funding from Yorkshire Fund Managers in return for a 30 per cent stake. “They said it was the best business pitch they’d ever heard.”

“We’re going to start selling the software in January, and we’re arranging the next round of funding,” says McCutcheon, who expects to be turning over £800,000 by the end of next year, with profits of £400,000.

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