IW Capital and the future of SME finance
The SME finance arena is hugely important to the growth of small businesses throughout the UK. Entrepreneurs looking to grow their business and bring to life the range of innovative ideas they possess often rely on alternative finance routes such as EIS and debt lending. These opportunities are to the benefit of both the entrepreneurs and investors who support high growth SMEs.
In the last eight years IW Capital has helped 40 different small businesses to grow and scale and has worked with a variety of fantastic entrepreneurs and business leaders. The future of high growth small businesses is likely to come from sectors facing problems or challenges as it is often the case that opportunity comes out of crisis.
This week, Growth Business sat down with Luke Davis, CEO and founder of IW Capital, to discuss small businesses, growth and future plans for IW Capital.
How does IW Capital differ from other financiers?
Our secret sauce for IW Capital is that it acts as the investor rather than a broker for individual investors, which gives us more control and enables better deals and exit strategies on behalf of our investors.
Broadly speaking, we take a 30pc stake in a company including an equity stake ourselves. Because of this, our interests are aligned with investors. At least we can say honestly say to our clients, we genuinely care about this company because our investment is at risk too.
What are you looking for from entrepreneurs?
When I go to these meetings, it’s always the individuals. Every single company I’ve had where the relationship has broken down or the investment looks ropey, it’s because the human interaction has broken down. Of course, the business plan is important, and you can see there’s a unique opportunity there and they’re generating revenue. But it’s the management team that’s behind it that’s key. I’ve worked with management teams where they could have literally invented the wheel and they’d have got it wrong!
What’s the next disruptive technology in your opinion?
Regulation and regulation technology. With Brexit there are going to be more problems to solve, and entrepreneurs are going to come along and innovate. Everything will get more complicated with import and export, say, and some smart man or woman will come along and solve it. You just have to reverse engineer all the problems that are going to be thrown up by Brexit and then you’ve got investment opportunities. Here’s a problem, let’s find an opportunity.
You can read the full article here