The truth is that nobody knows whether we have reached the bottom of the market, but in my opinion, we are there, or thereabouts. Conditions seem much improved since December 2009 and the number of quality businesses we are now seeing reflect this.

Catapult took the decision to continue to invest throughout the economic cycle, even in the midst of the worst of the downturn. Of course a higher degree of caution was applied, but if we came across a well managed business with good potential, then money was made available to invest. 

We are starting to receive more approaches for funding and it is crucial for any management team looking to attract investment that they present their case clearly and with sound strategic objectives. This means demonstrating a number of key elements via their business plan including: what the additional investment would be used for, what opportunities exist within their marketplace, as well as a clear understanding of who their competitors are and any future market, together with realistic financial projections. 

Whilst recognising that many companies have held back from investing over the past couple of years, the bottom line is that ambitious companies will not place their growth plans on hold for ever. After all, if they can cope with a severe downturn by battening down the hatches and come through the other side, then they should be well placed to take advantage of any upturn. 

Clearly in order to do this, there have to be funders willing to invest in their companies. The banks continue to be cautious in their approach, although they are more open to investing alongside private equity participation if the package is attractive enough.

With what will undoubtedly be a growing requirement for investment over the coming months we are pleased to announce some good news for Midlands companies: Catapult has been granted an extension on the investment period of the £20m Advantage Enterprise & Innovation Fund (AEIF) which we manage.

This fund allows us to make available between £250k - £1m, provided that it is matched by a similar or greater amount from private investors. Backed by investors including Advantage West Midlands and the European Regional Development Fund, the funding period will now run through to the end of December 2010.

As I mentioned earlier, funders have pulled back from investing and this has led to private equity houses being awash with money and needing to find good quality businesses to back. Sooner, or later the money they are holding will need to be invested or investors will want it back! 

There is undoubtedly uncertainty hanging over the UK economy due to the forthcoming General Election on May 6.  It is important that an overall majority is secured by one of the major parties, otherwise a hung Parliament will almost certainly have a detrimental effect on the markets.

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