Jump in financial services start-ups
By Jonathan Moules
The financial crisis has been good news for at least one group of people in the City – those with an entrepreneurial spark.
Sturgeon Ventures, which was set up in 2004 to help people establish financial services businesses in the institutional market, has reported that it is busier than it has ever been, due to a tenfold increase in inquiries in the past three months.
But Sturgeon added that the start-ups were not being driven by bankers who had been made redundant and needed to find a new source of income.
Instead, those who have kept their jobs are now seeing new opportunities and choosing to run their own affairs, according to Seonaid Mackenzie, Sturgeon’s managing partner.
“There are a lot of opportunities out there because the banks are in a mess,” she said. “People think, if I am not going to get a bonus, I would rather work for myself.
”Sturgeon, which helps incubate start-ups by providing regulatory support and connections with potential clients, received about 25 inquiries in 2009 from would-be entrepreneurs.
Since the beginning of 2010, this has risen to 20 a month. However, not all of these are suitable for Sturgeon’s support, explained Mackenzie.
“If someone comes here with some highly complicated idea, I won’t take it,” she said.
One idea she did take was Per Wimmer’s investment bank specialising in global capital raising, corporate finance and listed equity trading for institutional investors.
Wimmer, who worked for Goldman Sachs, Collins Stewart and the MAN Group before going it alone, said there was no better time than now to start a business – because setting up costs were so low and clients were willing to try a new player.
“For me, the credit crunch has been the best thing that ever happened,” he said. “You find a lot of talented staff who you can attract, and costs such as real estate are very low. If you have the appetite for risk, you can do business.”