The Boris effect on small business

It's been one week since Boris Johnson took on the role of Prime Minister. Now with conversation turning to Boris' Brexit strategy what should small businesses come to expect? Our partners IW Capital delve into the possibilities in their latest blog.



With Boris Johnson’s first week as Prime Minister behind him, and a new cabinet appointed, small businesses and investors are looking for answers. The cabinet has mostly been filled with MPs who back Brexit and many have made clear their intention that on the 31st of October the UK will leave the EU, with or without a deal. Now the conversation will begin again on what this exit will look like, with the possible permutations for small businesses high on the agenda.

Business as usual

As the conversations around Brexit have rumbled on over the last three years, most businesses have increasingly looked for certainty and strong leadership; and yet the small business sector has remained resilient throughout.

Equally, investor appetite has not floundered amidst Whitehall shifts. New figures show that the first half of 2019 saw the second highest amount of investment in SMEs on record. The amount invested in equity deals grew 15% from the second half of last year to £4.5 billion, with the number of deals rising by 10% to 889.

New figures from Beauhurst show that the first half of 2019 saw the second highest amount of investment in SMEs on record. These statistics reveal the confidence in small businesses looking to grow and scale, despite uncertainty around Brexit and who might succeed Theresa May.

The statistics released last week may come as a surprise given the uncertainty that has existed in both continued Brexit negotiations and leadership elections. However, in the small business community, this is supportive of the sentiment that we have seen over the past year or so. Our investor base is as keen as ever to fund the fantastic range of innovative small businesses that the UK has to offer. And in terms of the desire to grow and raise funds as a business, we have seen record deal-flow and ambition as firms look to get on with business.

One of the most encouraging parts of the report is the bounce-back of the number of seed stage deals. After a dip in 2018, it shows real confidence in what can be the most rewarding area of investment. Alongside this, growth-stage deals reached an all-time high, demonstrating the desire to expand and take advantage of opportunities that exist for entrepreneurs and innovators. Small businesses are better able to pivot and adapt to the changes that Brexit could bring about, with opportunities undoubtedly existing.

The SME arena contributed £1.9 trillion to the UK’s economy in 2017 so supporting this community through investment is of the utmost importance. As the backbone of the private sector, SMEs will be a huge factor in determining the success of Brexit and onwards. Encouraging investment into starts-ups and scale-ups will stand the UK economy in good stead for the future, both in the short and long term.

IW Capital are looking for Non-Executive Directors who are interested in investment opportunities; to consider on a deal-by-deal basis new portfolio companies who are looking for investment. They cater for both capital growth and more secure income-generating investment opportunities. Moreover, IWC allow investors to specifically handpick individual companies through the portfolio model approach and become involved if appropriate. They are looking for experienced investors who will assist their SME's in growing and transforming into successful, profitable companies. If you are interested in finding out more about these opportunities, please get in contact with IW Capital to see how we can help you.

To find out more about IW Capital, or for more information on investment and non-executive opportunities, please speak to a member of the IW Capital team today on 020 7015 2250, or email [email protected]

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