The primary focus for the Synapse team, after identifying the perfect location at the Innovation Birmingham Campus, turned to growth, both in financial backing and building the team. Founding CEO Brian Donnelly and others invested £500,000 of their own money for working capital while additional funding options were examined.
As Brian rapidly discovered: “Although I had spent eight years in Silicon Valley and raised $51m+ in equity funding there, coming back to Birmingham made me realise what an entirely different financing landscape exists here.” Whilst he was scratching his head about how to solve the problems posed by risk averse UK funding institutions, Brian was introduced to ART. Brian says that the most helpful funding Synapse has ever received has been from the team at ART Business Loans. (http://artbusinessloans.co.uk)
Dr Steve Walker, Andy King and the ART team are local legends. ART made a critical investment in Synapse when no bank was interested, and did so on the basis of a handshake after meeting with the team to discuss their innovative spreadsheet technology.
“It’s refreshing to see business being done this way. ART are providing funding to start-ups such as ourselves in the way that banks used to do decades ago. They were fantastic,” says Brian.
Once ART had shown their confidence in Synapse, it was easier to raise grants, given the liquidity needed for match funding. Synapse was then successful in raising £500,000 R&D grant funding from the UK Government’s SMART scheme. This critical funding allowed Synapse to build much of their technology and gain a leading UK bank as an important customer.
“The grant and other funding opportunities in Birmingham have been fantastic; nothing like this exists in Silicon Valley,” says Brian. Beyond the SMART grants, funding from Coventry University, enterprise Catalyst, Bournville College and HSBC EFG Loan contributed another £330,000 cash. Securing funding allowed Brian to focus on acquiring new local talent for Synapse from the pool of 60,000 new graduates arriving in the city every year.
“One of the key things I learned in Silicon Valley is how really critical it is to hire the best possible talent – no expense spared – especially in the early stages of a start-up.” Unlike the vast majority of start-ups in the UK, Synapse grants vesting stock options to every single member of staff – just as every Silicon Valley Company does. “Everyone here has stock, a quarterly bonus, gym membership and a good package — it works for Oracle, Microsoft, Google—maybe they are not so dumb?” says Brian.
Finding good people means finding the very best recruiters that can make this happen. Silicon Valley companies tend to work with one or two really top flight recruiters for the long term. “Amir Rasool (Certes Recruitment) has surrounded me with quite brilliant computer scientists since I engaged with him right from the beginning — we have a tremendous team of software engineers.”
Of course having a great technical team but being unable to explain the product to the world is the doom of many start-ups, so Brian engaged with Verity Stokes of Katie Bard to provide deeply talented English Graduates that could take on this task. “Verity believes it is essential to meet graduates for a face to face career counselling interview. This has enabled her to keep providing me with ferociously bright and talented women that can explain our story, manage our business and keep our engineers on track.
One of the things we learned the hard way in Silicon Valley is that you need a great lawyer and a great CFO from the get go.” A big part of the rationale for this is that you cannot afford to make mistakes in getting the corporate structure right at the beginning as it may foil funding later. A law firm with a long history and deep understanding of successful investment is vital, and a CFO to manage the financial transition from start-up through successful funding rounds — even more so. CFO Steven Brown has been with Synapse since its inception. As partner of the highly respected local accountants Pointon Young, Steven’s abilities complement Brian’s experience perfectly, taking revenues from £300,000 to £1.8 million in three years. Partner Debra Martin of Geldards law firm has completed over 150 equity fundings and is working with Synapse on their next major funding round.
Sharon Atherton, Resource Senior Analyst at a leading UK Bank says, “Synapse is on track to deliver benefits of £2 million.” For more details call 0121 250 5675 or email firstname.lastname@example.org