Are Start-ups Stealing All the Limelight from Scale-ups?

20th May 2016

For the first time on record, lending to start-ups has overtaken that given to SMEs. According to the Business Enterprise Fund (BEF), a northern business lender, 54% of loans granted by the organisation last year went to start-up ventures, meaning that lending to new businesses has exceeded that given to established firms.

Britain’s entrepreneurial spirit is undeniable; over 608,000 new businesses were launched in 2015, compared to 2011, when just 440,000 new start-ups were created in the UK. The appetite among Brits to start their own company is clearly growing all the time. However, it is important that this ‘start-up revolution’ does not overshadow the country’s huge pool of established businesses, particularly when it comes to growth capital.

Research by commercial insurer RSA has found that more than half of new businesses in the UK do not survive beyond five years, with a lack of finance cited as one of the main reasons for their failure. It is vitally important, therefore, that the Government, trade bodies and the investment industry remain focused on ensuring the long-term survival and growth of British businesses, not just fuelling the volume of new start-ups emerging.

IW Capital’s Race to Scale initiative addresses this issue and the needs of the scale-up community. The £100 million funding initiative enables business owners to submit proposals and then, if the proposal is accepted, go on to pitch to a room full of serious investors at one of the events run by our sister company Crowdfinders.

The funding drive was officially launched at Crowdfinders Live on 21 April, with four businesses pitching for their chance to secure between £100,000 and £5 million worth of investments/loans. We have some exciting news to share about the success of the event, which we will be revealing next week. In the meantime, visit the dedicated Race to Scale website to find out more and to submit your business proposals.

As part of the Race to Scale initiative, next week we will also be releasing our SME Heatmap: Sectors that Scale – this will celebrate Britain’s thriving SME community, shining light on the industries that are growing at pace across the country. We look forward to updating you on the release of Sectors that Scale in the coming days.