COMPANY NEWS >> INCUBATOR' FIRM SEES TEN-FOLD INCREASE IN CITY WORKERS WISHING TO SET UP BUSINESSES
London, 8 March, 2010 – Sturgeon Ventures LLP, the ‘regulatory incubator’, has seen the number of inquiries from City workers looking for help to set up their own businesses rise ten-fold in the last three months.
Sturgeon, which specialises in helping entrepreneurs establish start-up financial services businesses in the institutional space, says City workers tired of bonus cuts and taxes as well as the restrictions of working in big organisations are finding more confidence to set up on their own this year as the shock of the financial crisis abates. It received around 25 inquiries in 2009 but it is now fielding around 20 or more a month, equating to an approximate 10-fold increase.
Sturgeon specialises in helping entrepreneurs establish start-up financial services businesses, nurturing them through the initial regulatory phase until they can be directly regulated by the Financial Services Authority in their own right. Sturgeon provides advice on marketing, training, human resources, branding and compliance, helping companies to gain competency and prove their business models to the regulator. It believes it is the UK’s longest running regulatory umbrella in the institutional arena.
Sturgeon is finding that while many financial workers, especially those working in banks, might be encouraged to leave the UK for less draconian tax regimes, many are also tempted to stay in the City and set up their own businesses. The vast majority of inquiries it receives are from bank or ex-bank workers, many of whom want to provide advice on how to trade distressed debt. Their clients would include banks looking to rebuild their balance sheets. More foreign firms are also looking to locate new offices in London, trading on their own stronger currencies.
Seonaid Mackenzie, Managing Partner of Sturgeon, commented: “Clearly, the banks cutting bonuses this year is a major factor in driving staff to start their own ventures. The chances are many people won’t get a bonus this year and some are being told they won’t get what they have earned for several years. That has given people the initial impetus to set up on their own.
"But it is also true that people in the City feel much more confident than last year, when it felt like the shutters were being pulled down everywhere. There will always be entrepreneurialism in the City; people make money, get experience in big firms and later decide they want to control their own destiny. That will never go away."
While the financial crisis caused massive disruption, Sturgeon believes at least some good has come out of it. Seonaid added: “One thing that has come back in the last six months is that people care again. Ethics and integrity are returning. One thing definitely noticeable is that people take a phone call and talk to people in a friendlier manner. A bit of humanity has come back and that is a good thing. Prior to that, integrity had left the City. Many people were full of greed and ego. The City needs to be apologetic about that."
IlliquidX, a boutique firm that is a client of Sturgeon, offers a trading platform for institutional, corporate and professional high net worth clients to trade illiquid debt. Celestino Amore, founder and Managing Director at IlliquidX, commented: “Every recession provides the best opportunity to start a business. Firms are going bust and investors are looking for interesting and strong business plans. The characteristics of this recession are particularly poignant for IlliquidXas it has enhanced the business opportunity that we target – the trading of bankrupt, defaulted and distressed assets.
“Sturgeon has been extremely valuable to us. As a start-up needing regulation by the FSA, it was important for us to have a robust and knowledgeable compliance team that could help us navigate the minefield of compliance issues in financial services.”
Sturgeon can help clients achieve direct authorisation straight away, either doing the work or delegating it to a compliance consultancy, or it can make clients appointed representatives of Sturgeon until they can attain directly regulated status and gain relevant competencies in their chosen future business field. Sturgeon can also help clients to buy authorised firms that want capital injections or new partners.
The start-ups are mainly asset management firms, corporate finance consultancies and third party fund raising operations. Sturgeon also works with established overseas companies looking to come to the United Kingdom, assisting them to become appointed representatives of Sturgeon.