Our CEO Simon Philips spoke with StartUps Magazine about the funding gap that exists between the traditional models of venture capital and private equity.
“Tech Nation’s ‘The future UK tech built’ 2021 report, published earlier this year, revealed that the UK currently sits third in the world for venture capital (VC) investment in tech companies, behind only China and the US, with $15bn pledged last year. Great news for the UK’s emerging businesses, right? Well, Simon Philips, CEO of ScaleUp Capital, tells a different story.
Fundamentally, the issue is that VC funding is not right for most early-stage tech companies which are not hyper-growth. Only a tiny percentage of VC-backed startups make it – four percent are sold for more than $50m, one percent make it to ‘unicorn’ status, but seven in ten fail.
There are lots of great businesses out there with revenues of up to £20m and good (if not explosive) growth. Yet in many cases they are simply not given the time of day by investors because they don’t fit the VC or private equity (PE) model.”