Patrick Bradley, the managing director for Station 12, presents to importance of backing risk

1. Backing Risk
Patrick Bradley
Station 12
3rd July 2014

2. Station 12
• “Spin out” from Ingenious Ventures
• All verticals of creative industries
• Our approach:
Labs – research, innovate, invest
Growth – later stage funding

3. Innovation & Risk
Define our Terms:
Innovation
• Change, create, find a new solution to resolve an obstacle
• “Original”, new ideas, creativity
Risk
• Danger, peril, exposure to danger
• Proximity
• Fear of failure or opportunity?
• Perceptions
• Flying is dangerous – Alcock & Brown

4. Who Is Taking Risk?
• All of us! Life is uncertain
• Entrepreneurs, pioneers, explorers
• “Disruption”, fracture
• Why risky - risk of failure, lack of capital, tech
doesn’t work
• Gradations of risk: “High” “Low”

5. Who Is Backing Risk?
• Governments, banks, investors - gradations of “risk”
‒ Policy imperatives
‒ “No risk” banking
‒ Investors “quantified risk”
• Incentives to take risk
– Greed
– Profit
– Fiscal structures, SEIS, EIS, VCT, Entrepreneur’s relief, tax credits

6. Managing Risk
• Evaluation of potential outcome of a proposed activity
• Markets, people, structures, luck
• Research – size, players, barriers, knowledge
• People – track record, passion, vision, team
• Structures – equity, debt
• Portfolio theories
• Cut and run
• Luck – special sauce

7. My Experience
• Uncertainty is impossible to foresee
• Tech applications: binary outcomes – motion
sensors
• Content outcomes: 19/ Pop Idol
• “No-one knows anything” – but people count!

8. “Is Risk Now Good?”
• Change means growth?
• Creating new abundance – sharing resources,
intelligent data, replenishment
• Challenges of the Global Market
• Death by accountancy
• Entrepreneurs are cool

9. Conclusion
• Risk & Innovation – key to a healthy economy
and democracy
• Education & Culture
• Back innovators, spread the risk, seek the
upside