Boom in UK Start Ups, But Not Scale Ups

Recent research into UK entrepreneurship highlights the fact that it is easier to start a company than to scale it; easier to exit a company than to accelerate it.

Britain boasts more start up companies than ever before (mostly in the south of the country), and increasing numbers of entrepreneurs are successfully exiting their businesses. A recent survey conducted by Barclays and the equity investor Business Growth Fund (BGF) reveals that start ups in the second half of last year increased by 3.7%, taking the number of total active UK companies at end-2014 to 3.14m. Moreover, entrepreneurs exiting at £200,000 or more over the period increased by 6% to 1,562.

But while the start up scene in the UK is healthy, scaling up clearly remains tough: the Barclays/BGF survey shows that the proportion of “high growth” companies, with revenues between £2.5m and £100m, declined from 23% to 21%. This is explained by a combination of a lack of growth financing (it is easier to source seed and early stage financing than growth capital), the challenges of attracting skilled, experienced staff, and the lack of mentoring and expert advice from proven business builders.