In a recent TechCrunch article, Nick Halstead of fav.or.it wrote some observations on the government’s new debt-related support interventions for small and medium businesses. For odd reasons, though, he concluded the article with a brief “scathing” criticism of NESTA Investments. Amusingly, this last paragraph seems to have generated more debate than the substance of his article. As an ex-NESTA employee, I felt obliged to join in the fray.
A few words in defense of NESTA: as a CEO of a web 2.0 start-up, I certainly sympathise with your frustration. However, it would be arrogant of us to assume that “Technology” only includes Web 2.0 developments. Indeed, Web 2.0 activity in the UK only comprises a fraction of technological development, and associated investment into this space. As a technology fund, NESTA Investments actively pursues and manages a portfolio of investments in ICT (particularly high-tech hardware), biotech, and cleantech.
Additionally, as NESTA funding currently originates from the public purse (technically, from lottery proceeds) as taxpayers we should be pleased that they are investing their resources on areas in which they have solid expertise (and accordingly, can make more intelligent investments and provide meaningful support to their portfolio), rather than pouring money into whatever technology seems ‘hot’ at the moment.
Furthermore, as can be seen by the popularity of the myriad web 2.0 networking events, there are a number of other investors, both angels and institutional players, now active in the Web 2.0 space. While there is certainly room for additional investment in this realm, it seems entirely appropriate to me that NESTA spend its limited resources on areas where there are fewer private sector players (and accordingly, a more significant equity gap). Don’t get me wrong - I’d be overjoyed if they launched a web 2.0 fund - but I do understand their rationale for not having done so yet.
Finally, just because NESTA Investments is not active in Web 2.0 work, does not mean that NESTA is not involved in the social media space. Indeed, they have an entire programmatic stream, called Web Connect, devoted to investigation and support of highly innovative applications of web 2.0 concepts.
Coming from a country (the US) with no real analogue to NESTA, I’m constantly amazed that people so harshly criticise having a quasi-government agency focused on technology, creativity, and entrepreneurship - or, in other words, the future. I suppose that fact that it is the subject of growing debate could be seen as a sign of its growing significance and repuation. I certainly have my own thoughts on how NESTA might improve and evolve into its next incarnation, but they are based upon experience and analysis of the organisation and its activities. And despite such reservations, as a UK resident I can only consider myself luck that such an unusual and forward-thinking organisation exists.
Tags: NESTA2 Comments
2 responses so far ↓
Having consulted for NESTA in the past I’m fully aware of the hard work that they put in. You rightly state that there is a limited amount of cash to invest in a wide range of enterprises.
Not only does web2.0 have to compete with other technology companies but also with scientific and art-based organisations. It is wholly appropriate that NESTA have a greater focus on those investments that are less likely to be made by the private sector - these projects tend to for the social good of the nation, not primarily about taking the web world by storm.
Angels Den,
Thanks much for the comment. You’re entirely correct that the technology realm is actually quite wide-ranging (further complicated when you add in additional elements of the ‘Creative Industries’). NESTA has a small team, and thus they spend time on those things that they know best. Personally, I’m hoping that some of the government’s proposed GBP 1 Billion fund be directed to NESTA such that they can grow their team and target new areas of high-potential, in particular Web 2.0.