Helping to raise Series A investment for tech companies.
The report is a fascinating survey of founders and CEOs of some of the UK's most exciting businesses, offering insight into their plans (and hopes and fears) for the year ahead. In such an unstable climate, access to finance and talent shortage remain at the top of the list of worries.
About Techcelerate Ventures
Tech Investment and Growth Advisory for Series A in the UK, operating in £150k to £5m investment market, working with #SaaS #FinTech #HealthTech #MarketPlaces and #PropTech companies.
EY Fast Growth
Tracker 2018
A survey of UK
entrepreneurs
December
2
EY Fast Growth Tracker 2018
1
EY Fast Growth Tracker 2018
Executive summary
EY is pleased to share the second annual Fast Growth Tracker, a survey of the UK's leading entrepreneurs and startup founders.
Entrepreneurs are vital contributors to innovation and growth in the UK and the cohort we surveyed in 2018 are no different. We're
proud to present their views on the UK startup ecosystem and the issues they consider most important.
Entrepreneurs play a vital role in the UK economy. The products and businesses
they create drive innovation, economic growth and generate jobs. In 2018 we turned
to entrepreneurs for their views on the startup ecosystem, surveying the business
leaders of tomorrow to determine what comes next for UK founders.
The 2018 Fast Growth Tracker proves that 'Fast Growth' companies can be found
across the country and come in all shapes and sizes. The startups surveyed in 2018
Yj]qgmf_2-1 Yj]mf\]jfin]q]Yjkgd\&@go]n]jl`]k][gehYfa]k`Yn]ka_fafi[Yfl
ambition.
O
v er 5 1%
ex
p ect to g row rev en
u es b y 5 0%
or m
ore thi s y ear and 43% are
planning to add 10 or more people to their team in the next 12 months.
Our survey suggests that
U
K
en trep ren eu rs hav e a stron
g
ap
p eti te f or
f
u
n
d
i
n
g
as they l ook to f
u el i
n
n ov ati on
an
d
d el
i
v er on thei r am
b
i ti ou s g rowth
targ ets. 66% expect to raise capital in the next 12 months and 70% of this
group are planning to raise 1m or more. Crowdfunding and initial coin offerings
A;Gk!g^^]jY[[]kklgf]ohggdkg^[YhalYd&@go]n]j^gj/- g^]flj]hj]f]mjk
ljY\alagfYd]imalqfifYf[af_naYn]flmj][YhalYdfijekj]eYafkl`]hj]^]jj]\kgmj[]
of funding.
For the second year in a row the m aj ori ty of U
K
en trep ren eu rs are p
l an
n
i
n
g
to
ex i t to an i
n tern ati on al acq
u
i rer (
5
3
%
)
, wi th 6
7
%
ex
p ecti
n
g
to ex i t wi thi n
the
next five years. This hints at a larger trend within the UK startup ecosystem, with
many founders choosing to leverage the resources of a large parent organisation and
accelerate growth rather than remain independent.
There are of course challenges to entrepreneurial success. The 2018 survey
highlighted two obstacles that are affecting startup founders: access to f
u
n
d
i
n
g
(
5 1%
) an
d
a tal en t shortag e (
4
5
%
)
rem ai
n
cri ti cal b arri ers to g rowth. This is
consistent with the 2017 survey, implying that further work in the public and private
sector is required to help resolve these issues.
There is also evidence that
m
arket v ol ati
l
i ty an
d
u
n certai n ty ov er the U
K
' s f
u tu re
hav e started to i
m
p act the M
&
A
l an
d scap e. 29% of entrepreneurs plan to pursue
M&A in the next 12 months and just 17% believe that now is a favourable time to exit.
This appears to be, in part, attributable to Brexit. Over 75% of UK founders are
[gf[]jf]\YZgmll`]aehY[lg^:j]palgfl`]ajZmkaf]kkYf\)0 a\]flafi]\alYkl`]aj
biggest issue.
Maintaining a supportive environment for entrepreneurs who want to start and build
companies in the UK will be vitally important to the country's economic future. We
live in a dynamic and fast-changing world. Innovation is at the heart of this and we're
proud to provide a voice to the entrepreneurs across the country who are working to
invent the future.
R
i chard Gool d
Partner
EY Fast Growth
J oan
n a S an ti
n on
Partner
EY Entrepreneur Of The Year
A
n
n a Fael ten
Associate Partner
EY Corporate Finance
J
n
n
S
n
i
n
n
2
EY Fast Growth Tracker 2018
Our annual survey of UK entrepreneurs offers an insight into the minds of the country's most innovative business leaders. We asked them
about their priorities, frustrations and plans for the future. In 2018 we received 380 responses from startup executives and founders ...
About the 2018 Fast Growth Tracker
Total resp on
d en ts
380
34%
14%
52%
1%
Venture
Growth
Seed
Exited
C hart 1: R esp on
d en ts b y g rowth stag e
C hart 4
: R esp on
d en ts b y i
n
d
u stry sector
C hart 5
: R esp on
d en ts b y l ocati on
C hart 2: C om
p an y ag e
19%
19%
40%
21%
< 2 years
25 years
> 10 years
510 years
C hart 3
: P
ri or y ear rev en
u e
56%
24%
8%
8% 3%
1%
< 1mn
5mn10mn
50mn250mn
1mn5mn
10mn50mn
250mn+
6%
5%
5%
5%
14%
30%
35%
Other
Media &
Telecoms
Leisure &
Entertainment
Retail
Industrials Business &
Professional
Services
Technology
2%
3%
6%
6%
6%
6%
6%
15%
16%
34%
Other
South
West
North
West
Wales Northern
Ireland
Midlands North
East
South
East
Scotland London
3
EY Fast Growth Tracker 2018
Perspectives on growth
U
K
en trep ren eu rs rem ai
n
op ti
m
i sti c ab ou t thei r f
u tu re
g rowth p rosp ects
O
v er 4
4
%
of en trep ren eu rs were ab
l e to g row
rev en
u es b y 5 0%
or m
ore l ast y ear and this
is expected to increase over the next twelve
months. Thi s b
u
l
l
i sh ou tl ook i s p arti cu
l arl y
stron
g
i
n
the techn ol og y sector
where 59% of
respondents expect revenue growth to exceed
50% this year.
L on
d on
an
d
the S ou th East are the m ost
op ti
m
i sti c reg
i on s, with 56% and 60% of
entrepreneurs respectively expecting to grow
j]n]fm]Zq-( gjegj]&@go]n]j$o`ad]l`]
overall outlook remains bullish there is evidence
to suggest that growth expectations in other
parts of the country are starting to soften.
38% of respondents in Scotland expect to grow
revenues by 50% or more this year compared to
56% in 2017. Moreover, growth forecasts in Wales
have followed a similar trend with the number
of entrepreneurs expecting >50% growth falling
from 67% to 38%.
C hart 6
: W
hat rev en
u e g rowth d o y ou ex p ect to achi ev e thi s y ear?
12%
46%
25%
17%
North East
4%
32%
41%
23%
Northern Ireland
33%
10%
19%
38%
Wales
20%
22%
20%
38%
Scotland
28%
29%
43%
North West
8%
23%
23%
46%
South West
26%
26%
48%
Midlands
18%
9%
17%
56%
London
2%
10%
2%
28%
60%
South East
< 10% 10%20% 20% 50% 50%+
4
EY Fast Growth Tracker 2018
Startups are looking to fill
sal es an
d
d
i
g
i tal rol es i
n
ord er to f
u el g rowth
As entrepreneurs continue to scale their
companies access to tal en t b ecom es ev en
m
ore
cri ti cal . Responses to the 2018 survey suggest
that some of the biggest gaps exist in sales and
digital roles. 60% of entrepreneurs surveyed
are currently looking to expand their sales team
and 58% are actively seeking to improve their
digital capabilities.
Hiring and talent
C hart 7
: H ow m an y p eop
l e d o y ou ex p ect to ad
d
to y ou r team
i
n
the n ex t 12 m on ths?
C hart 8: W
hi ch areas of y ou r b
u si
n ess are y ou l ooki n
g
to hi re f or?
26%
32%
25%
11%
6%
22%
35%
21%
14%
8%
< 5
510
1020
2050
50 +
2018
2017
13%
26%
50%
51%
56%
58%
60%
Other
Finance
Support &
admin staff
Marketing &
communications
Business
development
Digital
capabilities
Sales
Note: Respondents able to select multiple answers
5
EY Fast Growth Tracker 2018
V en tu re cap
i tal rem ai
n s the
p ref erred sou rce of f
u
n
d
i
n
g
f or U
K
en trep ren eu rs
The pools of capital available to entrepreneurs
`Yn]af[j]Yk]\ka_fafi[Yfldqafj][]flq]Yjk&
Startups can now explore crowdfunding and
initial coin offerings (ICOs) in addition to
ljY\alagfYd]imalqYf\\]ZlfifYf[]&@go]n]j^gj
75% of entrepreneurs venture capital remains the
primary source of funding.
In a similar manner to 2017, team
d
i stracti on s
and the identification of suitable investors
remain the most difficult part of fundraising
i
n
2018. Although undoubtedly challenging,
our experience is that these obstacles can
be overcome through careful planning and
preparation in advance of a fundraise.
Raising capital
C hart 9
: D o y ou ex p ect to rai se f
u
n
d s i
n
the n ex t
12 m on ths?
C hart 11: W
hi ch sou rces of f
u
n
d
i
n
g
are y ou
con si
d eri
n
g
?
C hart 12: W
hat was the tou
g hest p art of y ou r
l ast f
u
n
d
rai se?
C hart 10: H ow m
u ch are y ou p
l an
n
i
n
g
to rai se?
66%
34%
Yes
No
30%
51%
6%
13%
< 1mn
1mn5mn
5mn10mn
10mn+
3%
13%
16%
19%
20%
75%
ICO
Other
Invoice finance
or debt finance
Bank financing
Crowdfunding
Venture capital
9%
12%
39%
40%
7%
18%
37%
38%
Investor
information
requirements
Agreeing terms
Finding suitable
investors
Distraction for
your team
2018
2017
Note: Respondents able to select multiple answers
6
EY Fast Growth Tracker 2018
Sector focus: Technology
Despite confidence in their
own g rowth p rosp ects, tech
en trep ren eu rs are p
l an
n
i
n
g
f or an ex i t
L][`]flj]hj]f]mjkj]eYaf[gffi\]flafl`]aj
ability to scale their businesses. Nearly 60%
of the technology companies we surveyed in
2018 expect to grow revenue by 50% or more
this year. The majority plan to fuel this growth
by raising more money.
7
6
%
of en trep ren eu rs
b el
i ev e that v al
u ati on s i
n
the techn ol og y
sector are i
m
p
rov
i
n
g and they plan to capitalise
on that by launching a funding round in the next
12 months.
Despite the optimism surrounding their own
companies tech entrepreneurs aren't convinced
that the UK start up ecosystem will support
more 'unicorns'. 58% agree that the UK
entrepreneurial environment is currently not
conducive to producing 'unicorn' technology
companies. Moreover,
7 2%
p
l an
to ex i t thei r
b
u si
n ess wi thi n
the n ex t 5
y ears an
d
25
%
i
n
u
n
d er 3 . In a similar manner to the 2018 Fast
Growth Tracker cohort, an exit to an international
corporate is the most attractive option for 60% of
tech entrepreneurs.
C hart 13
: W
hat rev en
u e g rowth d o y ou ex p ect to
achi ev e thi s y ear?
C hart 14
: D o y ou ex p ect to rai se f
u
n
d s i
n
the n ex t
12 m on ths?
C hart 15
: W
hat are y ou r ex p ectati on s f or v al
u ati on s
of b
u si
n esses l
i ke y ou rs?
7%
13%
21%
59%
50%+
20%50%
10%20%
< 10%
77%
23%
No
Yes
3%
21%
76%
Worsening
Stable
Improving
7
EY Fast Growth Tracker 2018
Preparing for an exit
For the secon
d
y ear ru
n
n
i
n
g
an
acq
u
i si ti on
b y an i
n tern ati on al
corp orate i s the p ref erred ex i t
rou te f or U
K
f ou
n
d ers
6
7
%
of en trep ren eu rs ex p ect to ex i t thei r
business within five years. This is consistent
with the 2017 Fast Growth Tracker, however just
22% expect the exit to come under three years
compared to 30% in 2017. Thi s i
m
p
l
i es that
som e en trep ren eu rs are starti
n
g
to rev
i se
thei r own ex i t ti
m
etab
l e
, with near term events
like Brexit creating market uncertainty.
An exit to an international corporate remains the
preferred exit route for 60% of entrepreneurs,
a seven percentage point decrease from 2017.
In comparison just 11% of startup founders are
considering listing on an international stock
exchange and 14% plan to exit to private equity.
C hart 16
: W
hen d o y ou ex p ect to ex i t?
C hart 17
: H ow are y ou p
l an
n
i
n
g
to ex i t?
2%
20%
45%
13%
20%
2%
28%
34%
14%
22%
< 1 year
13 years
35 years
> 5 years
No plans to exit
2018
2017
53%
19%
14%
11%
3%
60%
14%
11%
15%
Sale to an international
corporate
Sale to a domestic
corporate
Sale to private
equity
Listing on a stock
exchange
Other
2018
2017
8
EY Fast Growth Tracker 2018
The challenges ahead
S
tru ctu ral chal l en
g es i
n
the U
K
con ti
n
u e to create
b arri ers to en trep ren eu ri al
su ccess
Perhaps unsurprisingly Brexit remains a pressing
concern for UK entrepreneurs, with 76%
concerned about its impact on their companies
and 18% identifying it as their biggest concern.
In addition, 49% of the founders surveyed do not
believe that the current environment in the UK
is conducive to producing a 'unicorn' company.
This implies that there is more work do be done
by the public and private sector to support UK
entrepreneurs. Maintaining the UK 's status as an
attractive market to build a company will be of vital
importance if the economy is to thrive in the future.
C hart 18: A
re y ou con cern ed ab ou t the i
m
p act of
B
rex i t on y ou r b
u si
n ess?
C hart 20: ' The U
K
en trep ren eu ri al en
v
i ron
m
en t
i s cu rren tl y n ot con
d
u ci
v e to p rod
u ci
n
g
'
u
n
i corn '
techn ol og y com
p an
i es. '
58%
24%
18%
Yes, but I have more pressing
concerns
No
Yes, it is my biggest
concern
C hart 19
: W
hat d o y ou b el
i ev e are the m aj or b arri ers
to f em
al e en trep ren eu r su ccess (
i
f an y
)
?
39%
20%
9%
9%
23%
None (equal opportunity)
Lack of relevant role models
Women prioritise a work/
life balance
Limited access to funding
Other
2%
14%
35%
33%
16%
Strongly agree
Agree
Neither agree nor disagree
Disagree
Strongly disagree
9
EY Fast Growth Tracker 2018
Key contacts
R
i chard Gool d
Partner
Fast Growth Platform
+ 44 20 7951 0603
rgoold@uk.ey.com
J oan
n a S an ti
n on
Partner
Entrepreneur Of The Year
+44 20 7951 5510
jsantinon@uk.ey.com
A
n
n a Fael ten
Associate Partner
Corporate Finance
+ 44 20 7951 3063
afaelten@uk.ey.com
C
on tri
b
u
tors
The EY Fast Growth P
l atf orm
The EY Fast Growth Platform provides a tailored suite of professional services
and support to fast growing tech companies.
For more information, visit www. ey . com
/
u k/ FastGrowthP
l atf orm
EY En trep ren eu r O
f The Year
EY Entrepreneur Of The Year has been celebrating, supporting and
[gff][laf_]flj]hj]f]mjkkaf[]alfijkldYmf[`]\afl`]MCegj]l`Yf*(q]Yjk
ago. The programme recognises successful entrepreneurs making a positive
impact on their society and the economy, and the legacies they're building.
For more information and to enter next year's competition,
visit www. eoy . co.
uk
B eau hu rst
Beauhurst provides research and insight on the UK's high-growth companies.
The data platform allows professionals to discover and track Britain's most
ambitious businesses in unrivalled detail.
For more information, visit www. b eau hu rst. com
About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services
o]\]dan]j`]dhZmad\ljmklYf\[gffi\]f[]afl`][YhalYdeYjc]lkYf\af][gfgea]kl`]ogjd\gn]j&O]\]n]dgh
outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a
critical role in building a better working world for our people, for our clients and for our communities.
=Qj]^]jklgl`]_dgZYdgj_YfarYlagf$Yf\eYqj]^]jlggf]gjegj]$g^l`]e]eZ]jfijekg^=jfkl Qgmf_
Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited
by guarantee, does not provide services to clients. For more information about our organization, please
visit ey.com.
Ernst & Young LLP
The UK firm Ernst & Young LLP is a limited liability partnership registered in England and Wales with registered number OC300001 and is a
member firm of Ernst & Young Global Limited.
Ernst & Young LLP, 1 More London Place, London, SE1 2AF.
2018 Ernst & Young LLP. Published in the UK.
All Rights Reserved.
ED None
EY-000081087.indd (UK) 12/18. Artwork by Creative Services Group London.
In line with EY's commitment to minimise its impact on the environment, this document has been printed on paper with a high
recycled content.
Information in this publication is intended to provide only a general outline of the subjects covered. It should neither be regarded as comprehensive
nor sufficient for making decisions, nor should it be used in place of professional advice. Ernst & Young LLP accepts no responsibility for any loss
arising from any action taken or not taken by anyone using this material.
ey.com/uk
EY | Assurance | Tax | Transactions | Advisory
Tracker 2018
A survey of UK
entrepreneurs
December
2
EY Fast Growth Tracker 2018
1
EY Fast Growth Tracker 2018
Executive summary
EY is pleased to share the second annual Fast Growth Tracker, a survey of the UK's leading entrepreneurs and startup founders.
Entrepreneurs are vital contributors to innovation and growth in the UK and the cohort we surveyed in 2018 are no different. We're
proud to present their views on the UK startup ecosystem and the issues they consider most important.
Entrepreneurs play a vital role in the UK economy. The products and businesses
they create drive innovation, economic growth and generate jobs. In 2018 we turned
to entrepreneurs for their views on the startup ecosystem, surveying the business
leaders of tomorrow to determine what comes next for UK founders.
The 2018 Fast Growth Tracker proves that 'Fast Growth' companies can be found
across the country and come in all shapes and sizes. The startups surveyed in 2018
Yj]qgmf_2-1 Yj]mf\]jfin]q]Yjkgd\&@go]n]jl`]k][gehYfa]k`Yn]ka_fafi[Yfl
ambition.
O
v er 5 1%
ex
p ect to g row rev en
u es b y 5 0%
or m
ore thi s y ear and 43% are
planning to add 10 or more people to their team in the next 12 months.
Our survey suggests that
U
K
en trep ren eu rs hav e a stron
g
ap
p eti te f or
f
u
n
d
i
n
g
as they l ook to f
u el i
n
n ov ati on
an
d
d el
i
v er on thei r am
b
i ti ou s g rowth
targ ets. 66% expect to raise capital in the next 12 months and 70% of this
group are planning to raise 1m or more. Crowdfunding and initial coin offerings
A;Gk!g^^]jY[[]kklgf]ohggdkg^[YhalYd&@go]n]j^gj/- g^]flj]hj]f]mjk
ljY\alagfYd]imalqfifYf[af_naYn]flmj][YhalYdfijekj]eYafkl`]hj]^]jj]\kgmj[]
of funding.
For the second year in a row the m aj ori ty of U
K
en trep ren eu rs are p
l an
n
i
n
g
to
ex i t to an i
n tern ati on al acq
u
i rer (
5
3
%
)
, wi th 6
7
%
ex
p ecti
n
g
to ex i t wi thi n
the
next five years. This hints at a larger trend within the UK startup ecosystem, with
many founders choosing to leverage the resources of a large parent organisation and
accelerate growth rather than remain independent.
There are of course challenges to entrepreneurial success. The 2018 survey
highlighted two obstacles that are affecting startup founders: access to f
u
n
d
i
n
g
(
5 1%
) an
d
a tal en t shortag e (
4
5
%
)
rem ai
n
cri ti cal b arri ers to g rowth. This is
consistent with the 2017 survey, implying that further work in the public and private
sector is required to help resolve these issues.
There is also evidence that
m
arket v ol ati
l
i ty an
d
u
n certai n ty ov er the U
K
' s f
u tu re
hav e started to i
m
p act the M
&
A
l an
d scap e. 29% of entrepreneurs plan to pursue
M&A in the next 12 months and just 17% believe that now is a favourable time to exit.
This appears to be, in part, attributable to Brexit. Over 75% of UK founders are
[gf[]jf]\YZgmll`]aehY[lg^:j]palgfl`]ajZmkaf]kkYf\)0 a\]flafi]\alYkl`]aj
biggest issue.
Maintaining a supportive environment for entrepreneurs who want to start and build
companies in the UK will be vitally important to the country's economic future. We
live in a dynamic and fast-changing world. Innovation is at the heart of this and we're
proud to provide a voice to the entrepreneurs across the country who are working to
invent the future.
R
i chard Gool d
Partner
EY Fast Growth
J oan
n a S an ti
n on
Partner
EY Entrepreneur Of The Year
A
n
n a Fael ten
Associate Partner
EY Corporate Finance
J
n
n
S
n
i
n
n
2
EY Fast Growth Tracker 2018
Our annual survey of UK entrepreneurs offers an insight into the minds of the country's most innovative business leaders. We asked them
about their priorities, frustrations and plans for the future. In 2018 we received 380 responses from startup executives and founders ...
About the 2018 Fast Growth Tracker
Total resp on
d en ts
380
34%
14%
52%
1%
Venture
Growth
Seed
Exited
C hart 1: R esp on
d en ts b y g rowth stag e
C hart 4
: R esp on
d en ts b y i
n
d
u stry sector
C hart 5
: R esp on
d en ts b y l ocati on
C hart 2: C om
p an y ag e
19%
19%
40%
21%
< 2 years
25 years
> 10 years
510 years
C hart 3
: P
ri or y ear rev en
u e
56%
24%
8%
8% 3%
1%
< 1mn
5mn10mn
50mn250mn
1mn5mn
10mn50mn
250mn+
6%
5%
5%
5%
14%
30%
35%
Other
Media &
Telecoms
Leisure &
Entertainment
Retail
Industrials Business &
Professional
Services
Technology
2%
3%
6%
6%
6%
6%
6%
15%
16%
34%
Other
South
West
North
West
Wales Northern
Ireland
Midlands North
East
South
East
Scotland London
3
EY Fast Growth Tracker 2018
Perspectives on growth
U
K
en trep ren eu rs rem ai
n
op ti
m
i sti c ab ou t thei r f
u tu re
g rowth p rosp ects
O
v er 4
4
%
of en trep ren eu rs were ab
l e to g row
rev en
u es b y 5 0%
or m
ore l ast y ear and this
is expected to increase over the next twelve
months. Thi s b
u
l
l
i sh ou tl ook i s p arti cu
l arl y
stron
g
i
n
the techn ol og y sector
where 59% of
respondents expect revenue growth to exceed
50% this year.
L on
d on
an
d
the S ou th East are the m ost
op ti
m
i sti c reg
i on s, with 56% and 60% of
entrepreneurs respectively expecting to grow
j]n]fm]Zq-( gjegj]&@go]n]j$o`ad]l`]
overall outlook remains bullish there is evidence
to suggest that growth expectations in other
parts of the country are starting to soften.
38% of respondents in Scotland expect to grow
revenues by 50% or more this year compared to
56% in 2017. Moreover, growth forecasts in Wales
have followed a similar trend with the number
of entrepreneurs expecting >50% growth falling
from 67% to 38%.
C hart 6
: W
hat rev en
u e g rowth d o y ou ex p ect to achi ev e thi s y ear?
12%
46%
25%
17%
North East
4%
32%
41%
23%
Northern Ireland
33%
10%
19%
38%
Wales
20%
22%
20%
38%
Scotland
28%
29%
43%
North West
8%
23%
23%
46%
South West
26%
26%
48%
Midlands
18%
9%
17%
56%
London
2%
10%
2%
28%
60%
South East
< 10% 10%20% 20% 50% 50%+
4
EY Fast Growth Tracker 2018
Startups are looking to fill
sal es an
d
d
i
g
i tal rol es i
n
ord er to f
u el g rowth
As entrepreneurs continue to scale their
companies access to tal en t b ecom es ev en
m
ore
cri ti cal . Responses to the 2018 survey suggest
that some of the biggest gaps exist in sales and
digital roles. 60% of entrepreneurs surveyed
are currently looking to expand their sales team
and 58% are actively seeking to improve their
digital capabilities.
Hiring and talent
C hart 7
: H ow m an y p eop
l e d o y ou ex p ect to ad
d
to y ou r team
i
n
the n ex t 12 m on ths?
C hart 8: W
hi ch areas of y ou r b
u si
n ess are y ou l ooki n
g
to hi re f or?
26%
32%
25%
11%
6%
22%
35%
21%
14%
8%
< 5
510
1020
2050
50 +
2018
2017
13%
26%
50%
51%
56%
58%
60%
Other
Finance
Support &
admin staff
Marketing &
communications
Business
development
Digital
capabilities
Sales
Note: Respondents able to select multiple answers
5
EY Fast Growth Tracker 2018
V en tu re cap
i tal rem ai
n s the
p ref erred sou rce of f
u
n
d
i
n
g
f or U
K
en trep ren eu rs
The pools of capital available to entrepreneurs
`Yn]af[j]Yk]\ka_fafi[Yfldqafj][]flq]Yjk&
Startups can now explore crowdfunding and
initial coin offerings (ICOs) in addition to
ljY\alagfYd]imalqYf\\]ZlfifYf[]&@go]n]j^gj
75% of entrepreneurs venture capital remains the
primary source of funding.
In a similar manner to 2017, team
d
i stracti on s
and the identification of suitable investors
remain the most difficult part of fundraising
i
n
2018. Although undoubtedly challenging,
our experience is that these obstacles can
be overcome through careful planning and
preparation in advance of a fundraise.
Raising capital
C hart 9
: D o y ou ex p ect to rai se f
u
n
d s i
n
the n ex t
12 m on ths?
C hart 11: W
hi ch sou rces of f
u
n
d
i
n
g
are y ou
con si
d eri
n
g
?
C hart 12: W
hat was the tou
g hest p art of y ou r
l ast f
u
n
d
rai se?
C hart 10: H ow m
u ch are y ou p
l an
n
i
n
g
to rai se?
66%
34%
Yes
No
30%
51%
6%
13%
< 1mn
1mn5mn
5mn10mn
10mn+
3%
13%
16%
19%
20%
75%
ICO
Other
Invoice finance
or debt finance
Bank financing
Crowdfunding
Venture capital
9%
12%
39%
40%
7%
18%
37%
38%
Investor
information
requirements
Agreeing terms
Finding suitable
investors
Distraction for
your team
2018
2017
Note: Respondents able to select multiple answers
6
EY Fast Growth Tracker 2018
Sector focus: Technology
Despite confidence in their
own g rowth p rosp ects, tech
en trep ren eu rs are p
l an
n
i
n
g
f or an ex i t
L][`]flj]hj]f]mjkj]eYaf[gffi\]flafl`]aj
ability to scale their businesses. Nearly 60%
of the technology companies we surveyed in
2018 expect to grow revenue by 50% or more
this year. The majority plan to fuel this growth
by raising more money.
7
6
%
of en trep ren eu rs
b el
i ev e that v al
u ati on s i
n
the techn ol og y
sector are i
m
p
rov
i
n
g and they plan to capitalise
on that by launching a funding round in the next
12 months.
Despite the optimism surrounding their own
companies tech entrepreneurs aren't convinced
that the UK start up ecosystem will support
more 'unicorns'. 58% agree that the UK
entrepreneurial environment is currently not
conducive to producing 'unicorn' technology
companies. Moreover,
7 2%
p
l an
to ex i t thei r
b
u si
n ess wi thi n
the n ex t 5
y ears an
d
25
%
i
n
u
n
d er 3 . In a similar manner to the 2018 Fast
Growth Tracker cohort, an exit to an international
corporate is the most attractive option for 60% of
tech entrepreneurs.
C hart 13
: W
hat rev en
u e g rowth d o y ou ex p ect to
achi ev e thi s y ear?
C hart 14
: D o y ou ex p ect to rai se f
u
n
d s i
n
the n ex t
12 m on ths?
C hart 15
: W
hat are y ou r ex p ectati on s f or v al
u ati on s
of b
u si
n esses l
i ke y ou rs?
7%
13%
21%
59%
50%+
20%50%
10%20%
< 10%
77%
23%
No
Yes
3%
21%
76%
Worsening
Stable
Improving
7
EY Fast Growth Tracker 2018
Preparing for an exit
For the secon
d
y ear ru
n
n
i
n
g
an
acq
u
i si ti on
b y an i
n tern ati on al
corp orate i s the p ref erred ex i t
rou te f or U
K
f ou
n
d ers
6
7
%
of en trep ren eu rs ex p ect to ex i t thei r
business within five years. This is consistent
with the 2017 Fast Growth Tracker, however just
22% expect the exit to come under three years
compared to 30% in 2017. Thi s i
m
p
l
i es that
som e en trep ren eu rs are starti
n
g
to rev
i se
thei r own ex i t ti
m
etab
l e
, with near term events
like Brexit creating market uncertainty.
An exit to an international corporate remains the
preferred exit route for 60% of entrepreneurs,
a seven percentage point decrease from 2017.
In comparison just 11% of startup founders are
considering listing on an international stock
exchange and 14% plan to exit to private equity.
C hart 16
: W
hen d o y ou ex p ect to ex i t?
C hart 17
: H ow are y ou p
l an
n
i
n
g
to ex i t?
2%
20%
45%
13%
20%
2%
28%
34%
14%
22%
< 1 year
13 years
35 years
> 5 years
No plans to exit
2018
2017
53%
19%
14%
11%
3%
60%
14%
11%
15%
Sale to an international
corporate
Sale to a domestic
corporate
Sale to private
equity
Listing on a stock
exchange
Other
2018
2017
8
EY Fast Growth Tracker 2018
The challenges ahead
S
tru ctu ral chal l en
g es i
n
the U
K
con ti
n
u e to create
b arri ers to en trep ren eu ri al
su ccess
Perhaps unsurprisingly Brexit remains a pressing
concern for UK entrepreneurs, with 76%
concerned about its impact on their companies
and 18% identifying it as their biggest concern.
In addition, 49% of the founders surveyed do not
believe that the current environment in the UK
is conducive to producing a 'unicorn' company.
This implies that there is more work do be done
by the public and private sector to support UK
entrepreneurs. Maintaining the UK 's status as an
attractive market to build a company will be of vital
importance if the economy is to thrive in the future.
C hart 18: A
re y ou con cern ed ab ou t the i
m
p act of
B
rex i t on y ou r b
u si
n ess?
C hart 20: ' The U
K
en trep ren eu ri al en
v
i ron
m
en t
i s cu rren tl y n ot con
d
u ci
v e to p rod
u ci
n
g
'
u
n
i corn '
techn ol og y com
p an
i es. '
58%
24%
18%
Yes, but I have more pressing
concerns
No
Yes, it is my biggest
concern
C hart 19
: W
hat d o y ou b el
i ev e are the m aj or b arri ers
to f em
al e en trep ren eu r su ccess (
i
f an y
)
?
39%
20%
9%
9%
23%
None (equal opportunity)
Lack of relevant role models
Women prioritise a work/
life balance
Limited access to funding
Other
2%
14%
35%
33%
16%
Strongly agree
Agree
Neither agree nor disagree
Disagree
Strongly disagree
9
EY Fast Growth Tracker 2018
Key contacts
R
i chard Gool d
Partner
Fast Growth Platform
+ 44 20 7951 0603
rgoold@uk.ey.com
J oan
n a S an ti
n on
Partner
Entrepreneur Of The Year
+44 20 7951 5510
jsantinon@uk.ey.com
A
n
n a Fael ten
Associate Partner
Corporate Finance
+ 44 20 7951 3063
afaelten@uk.ey.com
C
on tri
b
u
tors
The EY Fast Growth P
l atf orm
The EY Fast Growth Platform provides a tailored suite of professional services
and support to fast growing tech companies.
For more information, visit www. ey . com
/
u k/ FastGrowthP
l atf orm
EY En trep ren eu r O
f The Year
EY Entrepreneur Of The Year has been celebrating, supporting and
[gff][laf_]flj]hj]f]mjkkaf[]alfijkldYmf[`]\afl`]MCegj]l`Yf*(q]Yjk
ago. The programme recognises successful entrepreneurs making a positive
impact on their society and the economy, and the legacies they're building.
For more information and to enter next year's competition,
visit www. eoy . co.
uk
B eau hu rst
Beauhurst provides research and insight on the UK's high-growth companies.
The data platform allows professionals to discover and track Britain's most
ambitious businesses in unrivalled detail.
For more information, visit www. b eau hu rst. com
About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services
o]\]dan]j`]dhZmad\ljmklYf\[gffi\]f[]afl`][YhalYdeYjc]lkYf\af][gfgea]kl`]ogjd\gn]j&O]\]n]dgh
outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a
critical role in building a better working world for our people, for our clients and for our communities.
=Qj]^]jklgl`]_dgZYdgj_YfarYlagf$Yf\eYqj]^]jlggf]gjegj]$g^l`]e]eZ]jfijekg^=jfkl Qgmf_
Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited
by guarantee, does not provide services to clients. For more information about our organization, please
visit ey.com.
Ernst & Young LLP
The UK firm Ernst & Young LLP is a limited liability partnership registered in England and Wales with registered number OC300001 and is a
member firm of Ernst & Young Global Limited.
Ernst & Young LLP, 1 More London Place, London, SE1 2AF.
2018 Ernst & Young LLP. Published in the UK.
All Rights Reserved.
ED None
EY-000081087.indd (UK) 12/18. Artwork by Creative Services Group London.
In line with EY's commitment to minimise its impact on the environment, this document has been printed on paper with a high
recycled content.
Information in this publication is intended to provide only a general outline of the subjects covered. It should neither be regarded as comprehensive
nor sufficient for making decisions, nor should it be used in place of professional advice. Ernst & Young LLP accepts no responsibility for any loss
arising from any action taken or not taken by anyone using this material.
ey.com/uk
EY | Assurance | Tax | Transactions | Advisory