Creating more billion-dollar businesses in Scotland and nurturing the next generation of talent is the aim of a project that has been launched by a start-up accelerator, which argues that more support is required to boost firms beyond their initial stages.
Entrepreneurial Spark today unveiled details of its ten-week “elite programme” Scalerator, which it says is to help promising Scottish start-ups in any sector scale up to potentially exceed $1 billion in value.
The organisation noted that in Scotland, only two businesses, Skyscanner and FanDuel, classify as “unicorns,” start-ups that have reached at least $1bn through fundraising.
Entrepreneurial Spark said: “Despite a growing number of entrepreneurs in Scotland, growing innovative businesses to the £1m turnover mark, many lack the skills and experience needed to scale to £10m and beyond. In short they get stuck.”
The programme, set to launch in autumn next year, aims to help firms scale up and prepare entrepreneurs for the mindset of this process.
Jim Duffy, chief executive of the entrepreneurial venture, said that the danger is that once new business have successfully launched and grown, they “fail to reach their true potential when the leader reaches their competency threshold can be redefined for scale”.However, this threshold can be developed “with the right development and enablement,” he added.
Duffy added: “Most accelerators and business support agencies focus on start-up. Support for businesses in the growth stage tends to focus on specifics such as marketing, export and business development, for example.
“There is little outside of formal executive education programmes that address leadership in the context of the market in which businesses are operating,” he said.
Polly Purvis, chief executive of trade body ScotlandIS, told The Scotsman that while Scotland has a “great ecosystem around the start-up community, with a thriving business-angel and early-stage finance network,” the lack of locally based venture capital (VC) to propel their ambitions to expand rapidly in global markets becomes a “major constraint to growth”.
Most firms have to go to London and increasingly the US for this, she said, so therefore “we do need to close the so called ‘equity gap’ with locally based VC money, here in Scotland”.
Scaling was at the very “heart” of an event being held yesterday , according to its organisers. Several Scottish set-ups were set to travel to the Engage, Invest, Exploit (EIE) conference in London, which was offering the chance to meet and pitch to more than 100 investors.
According to Barclays and BGF Entrepreneurs Index data, published yesterday, the number of businesses starting up in Scotland grew by 7 per cent in the year to March, but the proportion of high-growth companies fell by 2.8 per cent year-on-year to 22.4 per cent in the year to December 2014.