Raising £1M and more: equity or debt?
On Wednesday 17th January, I asked this question and many more at our most recent Scale-up Briefing. With over 80 founders, investors and supporters…Read more
Finance is one of the key focus areas for the Scale-up Institute and a topic which is highlighted as a challenge by many of the scale-up businesses I have spoken to so far. I have heard war stories of venture capitalists who won’t consider investing outside London, frustrations with crowdfunding platforms, and much more in between. This is a common challenge which (in my opinion) needs to be addressed locally and nationally – politically and practically.
Last week I was lucky enough to attend the launch of the ScaleUp Institute’s latest report ‘SME Finance Monitor: The Scale-up Perspective’ which was hosted at the London Stock Exchange. This report builds on the annual SME Finance Monitor run by BDRC Continental (since 2011) and analyses scale-up business leaders’ opinions and actions from interviews conducted in 2015/2016. The full report (link below) shares much more, but here are some highlights:
The report also highlights an interesting analysis of the SME Finance Monitor commissioned by the British Business Bank. This work segments the SME population according (broadly) to their confidence in their own abilities relating to finance and their perceptions of financial opportunities/threats. The four categories are a useful tool to help us to target our support and understand the themes in this community in relation to finance:
Finally, we were treated to a preview of some forthcoming research the ScaleUp Institute is undertaking with Beauhurst which is currently underway (due to launch in November 2017). This work (so far) analyses nearly 4,000 ‘visible’ scale-up businesses (i.e. those who are identifiable through their accounts). The main take away, which loomed large over the boardroom was a single statement ‘Only 14% of scale-up businesses have used equity finance.’ It will be interesting to see what further insights this analysis provides when it is released in full in November – particularly for us as a region.
So, if scale-ups are more likely than ‘non scale-ups’ to be aware of available finance options, but only 14% of ‘visible’ scale-ups are receiving equity investment, as Irene Graham (CEO of Scale-up Institute) eloquently suggested, imagine what could be possible if the appetite and access to equity finance was greater and could be encouraged.
That brings me back to my role as Scale-up Enabler – the question that I need help answering is: what needs to change in the West of England for more scale-up businesses to take advantage of these finance opportunities and grow? There were lots of practical and policy ideas from colleagues around the table – if you’d like to add your view, please get in touch with me (details below).
This blog series tells the story of the Scale-up Enabler, Briony Phillips. Briony joined the Engine Shed team on a 1 year contract in June 2017 funded by Business West, Engine Shed, The University of Bristol and the West of England Local Enterprise Partnership (LEP). This group have a shared ambition – first, to identify scale-up businesses in the West of England region and to better understand their challenges and second, to design, facilitate and support initiatives that will make it easier for businesses to scale-up more effectively.
Briony – Scale-up Enabler