“Gordon Brown…you are potty”

Our lamentable prime minister is trying to create a ‘National Investment Corporation’.

It will solve the equity gap.

It will channel mezzanine debt (with conversion rights) into enterprising businesses. Sums between £2m- £10m.

A cracking idea Gordon.

The only problem is that it won’t work, it won’t happen and its conception is akin to George Osborne mistaking Davos for Madame Tussauds.

GB is trying to persuade investment banks to support the idea with money. He wants to recreate ICFC. But he’s changed his mind. Now he hopes to create a supply chain through existing fund managers.

There are two problems here. My own experience of fund managers is that most are lazy, rude, ignorant and over paid. Most measure themselves by peer group performance: “hey, we are fifth. We only lost 17.2% of our funds against the mean of 22.3%”. They then rush off to collect their bonuses.

I could transform the fund management sector by one simple change: pay them by results. No luxury offices, no eight week holidays, no £300,000+ a year salary for turning up to work. No awards from self seeking personal finance editors from the Nationals.

Make them do what the majority of our friends do in Enterprise Britain: pay them by results.

Most fund managers do not understand the SME sector. Their stupidity is only matched by their rudeness.

Blinkers

The other issue is that the supply chain is blinkered. A VCT (Venture Capital Trust) manager will understand venture capital. Whether the applicant needs venture capital is irrelevant. That is what he sells. And we don’t want to overwork the poor dears. They will make no attempt to help anybody. As soon as they sniff there is no a deal, they simply chuck you out.

Gordon: a challenge

Gordon Brown: I challenge you. I bet you Dirk’s collection of Harry Potter books, that this idea has no chance. Apart from the fact that David Miliband will have replaced you as the opposition leader, it is ill thought out, woolly, plain potty and will never happen.

You are guilty of leaving behind you a ‘nation’ of Enterprise Britain that has been more poorly served than perhaps by any recent modern government.

Harold Wilson understood the issue of the equity gap.

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