Ones to watch
High-growth, ambitious companies are getting access to the funding and advice they need to transition to the next stage of their lifecycle through LSEG’s ELITE business support programme.
London Stock Exchange Group’s ELITE platform provides the most exciting and ambitious private companies with access to the funding and advice they need to move on to their next stage of growth. The importance of high-growth small businesses shouldn’t be underestimated. Despite accounting for just 3.4% of the UK economy, they were responsible for a sizeable 36.2% of growth in 2013, according to Octopus Investments.
Sector at a glance
- 200 companies are part of the ELITE programme in the UK and Italy
- £19.5 billion in total revenues
- 88,000 employees
Commentary by Tim Hames, Director General, British Private Equity & Venture Capital Association
The UK economy is now firmly back in growth mode. After the deepest recession since the Second World War, the country finds itself looking forward to a bright future as robust economic performance, powered by businesses large and small, ensures our role as a competitive player on the world stage.
Now is the time to consider how to make this growth sustainable. Small and medium-sized businesses have, rightly, been the focus of policy-makers, for the seeds of future economic prosperity lie within this vastly important community of companies. By encouraging innovation, productivity, exporting and business investment, the UK can lay down the fundamentals of growth. We need to turn today’s start-ups into tomorrow’s market leaders, transforming our SMEs into global operators.
“We should be encouraging investment into early-stage companies from all corners”
This is where venture capital and private equity will have a pivotal role to play. In fact, it already does. Over the past five years, private equity and venture capital funds have invested approximately £30bn into more than 3,900 companies based in the UK. About 90% of these are small and medium-sized businesses.
And this happens throughout the country. Whether it is biotech in Nottingham, oil and gas in Aberdeen, media in Manchester or semiconductors in Bristol, where investment is required and business expertise sought, private equity and venture capital will be found. Our members invest in the sorts of business that will be central to Britain’s ability to compete and lead in the new economy. High-growth businesses, backed by experienced investors, can help Britain achieve the innovation and growth that is crucial to our position in the world economy.
In order to achieve this, we need, in crude terms, more money and, crucially, more sources of money. Banks are not lending to first-time customers, especially small companies – even those with large growth potential. It should be a priority to divert all the capital we can muster towards viable companies in this space.
£30bn – the sum invested by private equity and venture capital over the past five years
We should be encouraging investment into early-stage companies from all corners, and there needs to be a widening and deepening of the investor pool, whether they be traditional institutions such as pension funds; others such as family offices and large corporates through corporate venturing schemes; or individuals such as business angels or through syndicates and crowdfunding.
Britain must now cement its position as the home of enterprise and one of the best places in the world to innovate and invest. But this can only happen with a holistic examination of the funding ecosystem and by encouraging greater investment from more sources.