A TECHNOLOGY entrepreneur and investor is aiming to raise up to £25 million to fund the growth of Scottish tech firms at the scale-up stage.

Steven Morris will use his ESM Investments vehicle to establish a fund and aims to attract a group of high net worth individuals to commit up to £200,000 each.

Mr Morris said this was likely to be in the form of a Venture Capital Trust (VCT), which offers tax incentives for members.

ESM was founded by Mr Morris in 2011 and currently counts 80 members, who have collectively backed 12 start-ups in Scotland to the value of £8m.

Among its portfolio are firms working across a number of tech sectors, including media, energy, finance and even the arts.

“For [our members] there are two drivers, an affinity to Scottish businesses and trust and belief in what ESM is doing,” he said.

Mr Morris said his recruitment strategy had always been relatively passive, but has become more active. “We are looking to grow that investor base from 80 to 200,” he said, with a target of raising £25m by 2018.

Proactively increasing the investor base is the first track of activity.

“The second track is we are preparing, and have been for six months, to raise a fund,” said Mr Morris. “The exact way we are going to do that is not tied down but will most likely be a UK-wide VCT.”

When the fund is up and running – which he estimates will be next year – there will change in emphasis from early stage companies to those ready to scale up, with Mr Morris anticipating about six companies will be backed by the fund.

“If you’ve got a dozen companies at early-stage you really want the second stage to be at a different phase so it’s about de-risking and creating more opportunity,” he said.

The fund would be a specialist VCT, focusing on the technology sector, where Mr Morris said the funding of an invention was as important as the invention itself.

“We’re sticking to tech because the 80 investors alongside me are tech people. That doesn’t mean to say a non-tech business can’t be successful but we want to stay within a narrow focus because that’s what we do.”

Mr Morris sold his ETV Interactive communications business in 2007, eight years after founding it, and went on to back and then exit electronic transaction firm TS3 Services in 2011. After a failed attempt at retirement on the Costa del Sol he returned to Scotland and set up ESM Investments to back start-ups.

“There was nothing there to make me jump out of bed, and there was an element of unfinished business, I felt I had maybe cashed in too soon,” he said. “Maybe I could have hung in longer, but in hindsight it was the best thing I could have done because I sold six months before the start of the financial crash.”

After selling ETV he worked for the acquiring company, US-based I-BAHN, in the Far East, where he said he learned more about taking a business international, and that this would form a cornerstone to the new fund’s strategy.

When asked if the ambition was to back a company that emulates the success of Skyscanner, which was sold to Chinese travel group Ctrip for £1.4 billion, Mr Morris said: “I want at least one large success, but I’m realistic about it, as you might have to invest in 20 or 30 businesses to find one of those.”

Mr Morris said the company would focus on Scotland for now, adding the investment culture in the country was two decades ahead of the financial hubs of the Far East.

“[Places like Hong Kong, Kuala Lumper, Australia] could argue they are hubs but five years ago you would not see an investment community with the strength in depth we have here in Scotland.

“It’s not a nationalist thing, but early stage investment has been going on in this country for almost 25 years. In Hong Kong it’s only been in the last few years [it has emerged].”