Eighty-four per cent of entrepreneurs across the UK aim to fundraise up to £10 million each over the next 12 months, according to a new report from EY.
The EY Fast Growth Tracker interviewed 371 business owners about their fundraising and exit plans. It finds that funding remains the biggest hurdle to British business success, with 50 per cent of business owners agreeing it is the largest constraint on their growth.
Despite the majority of those surveyed completing a funding round in the past 12 months (61 per cent), many found this process to be a distraction to running their business (40 per cent).
However, this has not stopped UK entrepreneurs from being hungry for capital. Seventy-two per cent of those wanting to fundraise in the next year are looking for up to £5 million in capital, with a further one in six (17 per cent) wanting to raise over £10 million.
Alumni from EY’s Entrepreneur Of The Year programme also took part in the survey. The programme, which brings together fast-growth business leaders from across the UK to network and share insights, celebrates the role entrepreneurs play in powering the UK economy. 2018 will mark the programme’s 20th Anniversary in the UK, and is now open for nominations.
Joanna Santinon, EY entrepreneur of the year lead partner at EY, says, ‘Entrepreneurs, with their innovative and optimistic outlook, will help to lead the way for UK business. In a rapidly changing world, where others see barriers, entrepreneurs will often see opportunity. Other businesses can learn a great deal from their ‘can-do’ attitude, passion and sense of purpose, which contributes to their fast-growth and ambitious plans for the future.’
Revenue growth ambitions
More than half of the businesses surveyed (55 per cent) expect to grow their revenue by 50 per cent or more in the coming year, with another one in five (19 per cent) expecting a minimum increase of 20 per cent. Tech entrepreneurs are the most ambitious when it comes to their growth, with two thirds (65 per cent) expecting to increase their revenues by over 50 per cent or more in the next twelve months.
Targeting overseas investors
Business owners are often not looking to UK-based venture capital to fund this growth. A majority (62 per cent) are targeting overseas investors, perhaps driven by the fact that more than a third (39 per cent) were unable to find suitable investors in their previous funding round.
Richard Goold, EY fast growth platform partner, comments, ‘Funding has historically been, and continues to be, a hurdle to growth for the country’s entrepreneurial businesses. This research shows a disparity between matching ambitious enterprises with suitable investors, leading many to look overseas to find the growth capital they need.
‘To make our start-ups a British business success, more routes to funding need to be created to ensure that these bright, entrepreneurial businesses are enabled to flourish.’