CEOs under 40

Age is rarely a factor when striving to reach the top of the business world. In the UK, some of the most successful CEOs are under 40 – proof that if you’re good enough, you’re old enough.

Behind some of the world’s biggest companies are business icons who were young, full of great ideas and determined to succeed at all costs when they started out. Many of those enterprises are based in the UK, which shows the entrepreneurial spirit that existed back then and continues to thrive today.

Sector at a glance

  • £5,400 – The average size of loan awarded under the Government’s Start Up Loans scheme, aimed at helping new ventures
  • 30% – According to research by The Prince’s Trust and RBS, almost one third of young people expect to be self-employed in the future
  • More than one in four unemployed young people (27 per cent) would rather try setting up a business than continue looking for a job in today’s market

Young chief executives and the economy

Companies run by CEOs who are under 40 have performed remarkably well between 2009 and 2012. Having seen average revenues rise by 38 per cent in 2010, businesses with relatively young bosses at the helm achieved almost the same growth rate two years later (37.5 per cent). Growth in 2011 was also impressive, with average revenues reaching 33 per cent.

Such growth is proof that CEOs do not need years of experience to be successful. Rather, they require a great business idea, financial backing and an unshakeable determination to get their venture off the ground. They must also be prepared for any setbacks and refuse to give up if things go wrong.

As a recent Forbes article points out, today’s best CEOs need to empower their staff, and be visible and available to the workforce and shareholders. They should also be both a leader and a team player – one of the key attributes that the young CEOs in this report possess.


Nothing ventured, nothing gained

Commentary by Tim Hames, Director General, British Private Equity & Venture Capital Association

Nothing unites politicians of all parties and the media like celebrating the importance of SMEs to our economy while lamenting the absence of finance available for them. These lamentations have focused largely on whether the banks are doing enough, and are largely misplaced. What the data shows is that many SMEs are not looking for new loan facilities and of those that are, many will eventually be successful.

What should concern us is that of those SMEs that are turned away, many are seeking finance for the first time. This means they could have high-growth prospects with the potential to create new jobs. We need to ensure there is finance available for such businesses, whoever is providing it.

"Some 90 per cent of venture capital and private equity goes into SMEs. We finance businesses right up and down the funding ladder"

We must then face the reality that a concentrated banking sector in the midst of balance sheet repair is not going to return to SME lending, particularly of the type and scale we need. Many high-growth SMEs are in frontier sectors like high-tech and life sciences and many will be pre-profit, or even pre-revenue, seeking finance for the first time – not an attractive proposition for a loan manager. But if the banks will not provide this finance then we must find alternatives.

Some 90 per cent of venture capital and private equity goes into SMEs. We finance businesses right up and down the funding ladder at all stages of growth. Yet there is a fundamental policy challenge that we still need to resolve. How can we make sure that the many start-ups in Britain grow into medium and large businesses here in the UK?

Venture capital needs more support from institutional investors such as pension funds – especially public sector pension funds – to help fund small businesses into their latter stages of growth and stop them being bought by our overseas competitors.

The measure of success for our SME community is, therefore, how good we are at financing their growth into large businesses. Reforms to AIM are a useful development and provide another route to attracting growth equity. We need to educate and offer an incentive for our institutional investors into backing our SMEs where the banks will not, through vehicles such as venture capital.

SMEs may well be the backbone of our economy, but with the right finance available they can do more than just support it – they can transform it into a global leader in technology and innovation.

BrewDog’s owners have demonstrated that you can turn a hobby into a thriving business.
Offering customers flexible contracts has helped Fluidata stay ahead of the competition.
Investing in its people and products has paid off for the social media specialist.
Offering customers cost savings and greater efficiencies allowed Tracsis to thrive during the economic downturn.