Leadership & Productivity
What makes a successful scale-up company – and do businesses and investors agree?
4 min read
13 November 2017
A recent study has found that there is something of a perception gap between businesses and investors in terms of what makes a successful scale-up company.
There are lots of factors that contribute to a successful scale-up company – but which attributes are most highly prized by businesses and investors?
Everyone knows the attributes that make a successful entrepreneur – drive, determination, a good head for figures, all of these things will always come in useful. However, things changed when you look at a scale-up company.
There are more than a few factors at work here, and a recent report by Innovate UK has highlighted some of the main ones according to a survey of businesses and investors.
Here are some of the ones that were voted “very important” by respondents:
• Strong management team (89 per cent)
• Strategy and vision (69 per cent)
• Market demand (67 per cent)
• Access to finance (54 per cent)
• Skilled workforce (47 per cent)
However, there was some significant differences when the results were broken down by businesses and investors.
While both kinds were most likely to vote for a strong management team as being very important to scale up successfully, 96 per cent of investors said this compared to just 82 per cent of businesses.
Yet while businesses undervalued management teams, each overvalued the rest of the workforce – 59 per cent of business respondents claimed a skilled workforce was very important, compared to just 33 per cent of businesses.
While nobody would suggest that a business doesn’t need a skilled workforce, it’s worth knowing if you’re planning a pitch to investors that values this.
This was not the only perception gap between businesses and investors either.
Where the differences lie
Aside from over-estimating the value of a skilled workforce, there were also a few factors that businesses undervalued.
For example, 84 per cent of investors viewed communication skills as a deal-breaker – compared to just 46 per cent of businesses. In addition, 87 per cent of investors placed a high value on adaptability and resilience, and 78 per cent on good chemistry – compared to 58 per cent and 53 per cent of businesses respectively.
It is worth noting here that these deal-breakers are the softer skills, something that can easily be over-looked. Many business owners will obsess over figures and reports and cash-flow forecasts, but presentation and communication skills should never be taken for granted.
Every time a business owner goes into a pitch, they need to consider how they’re coming across as an individual – they are the face of the brand.
“Building a company is very high risk and there is almost inevitably going to be a disaster along the way…and you want to know that team will survive,” explained one UK investor in the survey.
Success is never guaranteed, but it’s certainly worth knowing how an investor is likely to think if a scale-up company will live or die on the back of an injection of finance.