Entrepreneurship is flourishing in Britain, with new businesses being created at an increasing rate. In 2011, the number of start-ups launched totalled 440,600 – by 2015 this figure had risen to a record-breaking 608,110. However, while a great deal of focus goes on the exponential growth in start-up activities in the UK, these figures do not tell the whole story.
An often over looked segment of Britain’s private sector are established SMEs. Worryingly, these businesses – which have outgrown their ‘start-up’ label – are facing a funding gap that is hindering them in their scale-up ambitions. Last year, David Cameron valued “the valley of death” shortfall in business finance at £1 billion.
To develop a greater understanding of the challenges scale-up businesses are facing, Barclays Bank, in collaboration with the Business Schools of both the University of Oxford and the University of Cambridge, has released a new report titled ‘Scale Up UK: Growing Businesses, Growing our Economy’. While revealing that only 2% to 4% of British SMEs are able to grow turnover by 20% for three consecutive years, the report presents six recommendations to help Britain’s scale-up community. These include:
- Increasing the number of UK venture capital funds that are sufficient enough to finance scale-ups
- Growing the number of experienced UK investors with in-depth sector experience and strong international networks
- Developing new approaches for creating liquidity in private company shares
- Collecting systematic data about the financing of scale-ups
Based on these recommendations, it is pleasing to see that IW Capital has already made a head-start, alongside our sister company Crowdfinders, by launching Race to Scale – a £100 million funding drive dedicated solely to Britain’s scaling businesses. Over the course of next week, IW Capital will be providing detailed information on this exciting new initiative, including ways in which investors and qualifying SMEs can become involved. In the interim, click here to find out more about Race to Scale, and how you can get involved.
We look forward to updating you on Race to Scale initiative over the coming week.