Slides from a recent keynote speech at the Business Funding Show on the latest trends in UK SME finance, including the importance of regional clusters and how a warm introduction improves your chances of getting investment.

1. www.british-business-bank.co.uk
@britishbbank
Equity in UK SME finance
Alice Hu Wagner
MD Strategy, Economics,
Business Development

2. 1
55%
of SMEs consider
one provider when
seeking finance
Awareness of alternative finance
% of all SMEs
Many SMEs are not aware of options
53%
89%
P2P lendingLeasing /
Hire purchase
14%21%
52%
41%
Business
Angels
Aware of
finance type
Know who to
approach
Source: British Business Bank 2018 Business Finance Survey

3. 2
Share of high-growth firms using equity
Equity supports high-growth firms
17%
26% 29% 32%
42%
40-60%20-40% 60-80% 80-100% 100%+
Did not
use equity
finance
Used
equity
finance
Increasing turnover growth
Source: Beauhurst & Scale Up Institute, “The Scaleup Index 2018”
2%
of all SMEs use
external equity
(it is not right for
all firms)

4. 3
Exit routes for Business Angels
Angels back riskier, early-stage firms
Trade sale 33%
6%IPO
Secondary
sale
6%
6%
Management
buy-out
8%Other
42%Liquidation
Source: BBB and IFF research

5. 4
68%
of Angel and VC
investors are based
in London
Distribution of high-growth firms and
equity deals
Access to equity is not uniform
20%
48%
80%
52%
Equity dealsHigh-growth
firms
Outside
London
London
Source: British Business Bank analysis of Beauhurst data and ONS

6. 5
Grants can be a great way to start
5%
of SMEs use grants
(only 2% use
external equity)
Source: British Business Bank 2018 Business Finance Survey

7. 6
Clusters surround
leading universities
Equity finance is concentrated in clusters
Westminster,
Hackney & Camden
Bristol
& Bath
Cardiff
Oxford
Manchester
Leeds & Sheffield
Newcastle & Durham
Belfast
Glasgow &
Edinburgh
Source: British Business Bank analysis of Beauhurst data (2016-2018 deals)
UK equity investment clusters

8. 7
Pitchdecks
received by
VCs…
Warm introductions go further
10% 10%
50%
8%
82%
39%
…that
receive
funding
Warm
Pre-existing
relationship
Cold
No prior
contact
Outbound
Contacted
by VC
2.1x
‘Benefit’ from
coming in warm
-6.0x
‘Penalty’ from
coming in cold
Source: British Business Bank research, “UK VC & Female Founders”

9. 8
Finance Hub offers impartial advice
www.british-business-bank.co.uk/finance-hub/

10. Thank you