Insider Media Limited

One of the North West's most experienced venture capital investors has called for serious thought to be given towards who are the best people running start-up businesses, which ones to back and how to provide them with capital and support.

Richard Young, investment director at EV, the Preston and Manchester-based fund management firm which runs the North West Fund for Venture Capital within the £185m North West Fund, said he has a generation of individuals who can lead what he has termed "management breakouts".

"We are looking to support management teams or individuals who have looked at acquisitions and can build a start-up," he told Insider. "They are private equity grade managers who want to do something on their own. I call them management breakouts."

Young said he has identified the common success factor within the businesses the fund has backed. "We have had 250 applications to the North West Fund for Venture. Most are dreamers who have never run a business and who haven’t learnt the business of business. Start-ups ideally should be second careers.

"My belief is that there are significant numbers of people who are working for companies laden down with debt and who can’t do anything exciting. They’re frustrated and haven’t been able to get funding."

Young started his career as an investment manager with 3i when it controlled a network of regional offices and did smaller scale venture funding. He said the timing is right for venture funds to back start-ups again.

"Since private equity abandoned this space, the only people doing this have been business angels. We think this is of its time. If I was 35 and running a division I would want to get out, go for it myself and generate revenues. These are start-ups and have rock all to do with technology."

He said at least three of the business backed by the North West Fund for Venture Capital fit into the breakout tag. They include Sean Maguire who runs Ambitious Minds; David Anwyl, who has started his own executive search business; Jim Aspin of consultancy business Edge Public Solutions; and Stewart DeRoma, who has set up Rock Networks.

Earlier this month, Liverpool-based Ambitious Minds became the latest business to secure an investment from the fund. It was awarded £350,000 to support the expansion of its bespoke financial training courses and educational products.

The interview with Richard Young features in this month's North West Business Insider, which is out now.