Enterprisesuccess of cloud-based financial services software companies such as Xero and FinancialForce.com, which enable small businesses to tackle tasks such as accounting, billing

In this issue:Supporting businesses to scale and fulfil their potentialThe latest from the ScaleUp Institute

BlipparIncreasing customer engagement through augmented reality

The blockchain Nicolas Cary on why it’s time to consider your blockchain strategy

Tax-advantaged fundingWhat does the future hold?

Awards seasonCelebrating the UK’s best high growth and scale-up companies

Enterprise

The rules of business are changing

Winter 2016/17

Thought leadership for entrepreneurs, growth companies and their advisers

High touch, peace of mindTechnology is a great enabler, but some of the ways it’s changing our lives may not always be for the better.

I’m not talking about an increasing addiction to consulting our mobile phones at almost every opportunity (although this is a personal concern – I almost walked into an unsuspecting lamppost the other day!), but the fact that the sheer depth and breadth of the information available is impacting our behaviour. We’re all turning into so-called ‘experts’ on matters that we previously knew little or nothing about. The ‘internet of everything’ has arrived, enabling us to be increasingly independent through apps and other resources, most of which are either free or very cheap.

Nowhere is this more prevalent than in the world of financial services, where online information and advice are prolific. We used to think that DIY just applied to home improvements. Now you can, in theory, run your entire financial life using online information and resources.

I call this phenomenon the ‘world of free’ — a world where we’ve become used to someone else paying for our consumption — for example, the advertisers on Google and Facebook, who pay for them to deliver the services we use. This has spawned a host of other high tech, low cost, DIY service providers, who often provide a bit of software and a helpline.

Foreword

Follow us on Twitter @SmithWilliamson and on LinkedIn for comments and links to current tax and accountancy news.

A little knowledge can be a dangerous thing and, in the financial world, mistakes can be costly. For example, details of tax legislation and the guidance that can be found online don’t come close to the practical advice and guidance available from a seasoned tax practitioner. Similarly, the advice of an experienced accountant, corporate financier or investment manager simply can’t be replicated online.

The drivers behind the DIY approach are generally twofold — a lack of understanding on behalf of the user or a desire to save money. While the latter may be tempting, it’s worth remembering the old adage: ‘if you think professional advice is expensive, try the amateur variety’.

At Smith & Williamson, we don’t believe in the low touch, DIY model. True value and peace of mind can only be achieved through a high touch, expert-led service, where real people with relevant experience can help clients navigate what is an increasingly perilous financial journey.

We hope you enjoy this latest issue of Enterprise.

Until next time.

2 Enterprise | Winter 2016/17

Guy RigbyHead of Entrepreneurial Services

t: 020 7131 8213 e: [email protected]

3Enterprise | Winter 2016/17

Guy RigbyHead of Entrepreneurial Services


The ScaleUp Institute’s CEO, Irene Graham, explains what the organisation has been doing to help create the most effective environment for growth businesses to ‘scale to the future’ with benefits across the UK economy.

Britain has traditionally been a trailblazer in establishing world-leading institutions that advance public understanding on national issues. The ScaleUp Institute is one of the newest of this illustrious breed. Founded in 2015, its purpose is to make the UK the best place in the world to scale a business and advance understanding of the importance of scale-ups in delivering prosperity, economic benefit and opportunity to the nation as a whole.

The ScaleUp Institute’s work builds upon the findings of the Scale-Up Report, which was published in 2014. The report concluded that if the UK could close the scale-up gap — the extent to which our companies lag behind others in the G8 economies in their capacity to achieve global scale — we will secure significant economic value and a competitive advantage for Britain for generations to come.

As a private sector, not-for-profit organisation, the ScaleUp Institute has attracted support from a broad ecosystem, including the Goldman Sachs Foundation, Google, the Business Growth Fund, the London Stock Exchange, Innovate UK and several universities, as well as Smith & Williamson.

With a clear focus on how the UK “leans in” to support its growing businesses to scale up, the ScaleUp Institute has taken a strategic view of the ecosystem. The Institute is helping to stimulate new activity and spread best practice. It’s undertaking research, delivering thought leadership, and working with partners in areas where it can have a lasting impact in helping ambitious businesses fulfil their potential.

Effective collaborationThe Institute is collaborating with Nesta and the Start Up Europe Partnership on best practice and top tips for effective corporate collaboration. The work — Scaling Together — gives practical guidance on the issues faced by growth companies when seeking to work with larger businesses.

With Barclays and the universities of Oxford and Cambridge, the Institute has carried out a more detailed review of the finance and skills needs of scale-up businesses and the practical policy steps that can be taken to address them.

The ScaleUp Institute also partnered with the CBI, Lloyds Bank and Aston Business School to publish a report highlighting the critical role that scale-ups play in solving the UK’s productivity puzzle.

Education programmesWith the support of the Goldman Sachs Foundation, 10,000 Small Businesses UK and Innovate UK, the ScaleUp Institute has held two of its certified education programmes on ‘Driving Economic Growth through ScaleUp Businesses and Ecosystems’, led by Professor Dan Isenberg of Babson Executive Education and Columbia Business School.

Through interactive lectures, exercises, case discussions, working groups and projects, these programmes have brought together more than 80 Local Enterprise Partnerships (LEPs), Growth Hubs and local business leaders to focus on the growth and scale-up challenges affecting their specific areas.

www.scaleupinstitute.org.uk

Advancing the scale-up agenda


The rules of business are changingHow long before a robot can do your job?

Do you remember the world before the internet? Just 25 years ago there was no email and few people had mobile phones. Businesses relied on landlines, fax machines and the post to communicate. We found out what was going on in the world by reading a hard copy of a newspaper or watching and listening to the news on television and radio. To buy anything — from groceries and clothes to furniture and domestic appliances — you had to physically enter a shop. To a millennial, this must seem ridiculous now.

Technology is changing everythingSince the internet started to become part of everyday life in the 1990s, technology has fundamentally changed the world and the way business works. We are inundated with information on our smartphones 24-7. We use the internet for almost everything and for many people it would be impossible to imagine life without it. In fact, it’s now perfectly possible for people to never set foot in a shop or office again.

The millennial generation, born between about 1980 and 2000, will form 50% of the global workforce by 20201. Having grown up with technology, their ability to use it sets them apart from the generation that went before. And their career aspirations are different too; they don’t necessarily want a job for life — they want flexibility, and varied and interesting roles that give them a sense of purpose. Attracting and retaining talented and tech-savvy millennials will be key to the future success of any organisation.

Email, the cloud, video conferencing, social media and virtual offices have globalised the business world. These technological developments have paved the way for increasingly flexible working practices, such as working from home and in co-working spaces.

Online platforms make it easier for firms to find the people they need, and for freelancers to advertise their skills. The rise of the so-called ‘gig economy’ has empowered people and given them freedom to pick and choose short-term roles and projects.

Robotics leaves the sci fi realmAs technology and artificial intelligence (AI) become more sophisticated, experts say we are on the verge of an automation revolution, with everything about the way businesses produce, manufacture and deliver goods about to change.

The large tech companies are all investing heavily in AI technology, developing everything from self-driving cars to medical diagnostic tools. In fact, 2016 has been dubbed by some ‘the year of the robot’, marking a turning point in the balance between work done by robots and humans. The conventional wisdom has been that those in the creative industries have less to fear from robotics, but think about this: Google has recently announced that its AI system, Google Brain, has learned to write poetry.

AI is also a key component of the internet of things — where devices connect with each other and communicate with us to get work done, among other things. And we can be sure that many of the 3D printing or ‘additive manufacturing’ applications now being developed are causing a rethink in many industries.

Finance for everyoneThe nature of finance has been transformed too. The financial technology industry or ‘fintech’ is booming, with billions of dollars of investment flooding into companies that are revolutionising the way we lend, invest and make payments. The online alternative finance market grew by 84% to £3.2bn in 20152. This innovative, technology-led approach is giving entrepreneurs and SMEs access to the finance they need and which might otherwise be impossible to secure, through various new types of equity, debt and reward-based opportunities. Internet-based crowdfunding and peer-to-peer lending is fuelling this ‘democratisation’ of finance.


Then there’s the blockchain, explained in Nic Cary’s article on page 10, which has the potential to completely overhaul the global banking system.

The world of freePeople are increasingly expecting more for less. During the most recent recession people got used to not paying for things or only buying at a discount. We pick up free newspapers and magazines on our way to work, we build up points on loyalty cards for bonus coffees and once at the office we use the company internet for nothing to log into our free email and Facebook accounts.

The economy may now be stronger, but many people still don’t want to pay for many of the things they used to, or can’t afford to. Thanks to Google you can find out almost anything you need to know on the internet. There’s an obvious correlation between tough times and innovation, which we can see in the success of cloud-based financial services software companies such as Xero and FinancialForce.com, which enable small businesses to tackle tasks such as accounting, billing and supply chain management by themselves.

This DIY industry is flourishing and is a serious challenge to the normal order of business. It’s putting traditional professional providers of these types of services under pressure to differentiate themselves and go the extra mile to add value.

Fast forward to the futureThese technologies and changing attitudes towards work mean that industries all over the world will need to completely transform everything from strategy and customer engagement, to operations and compliance. Business leaders need to prioritise planning for these rapidly changing rules of business and capitalise on them — not just for success, but for their future survival.1 www.catalyst.org/knowledge/generations-demographic-trends-population-and-workforce

2 www.nesta.org.uk/publications/pushing-boundaries-2015-uk-alternative-finance-industry-report

How safe is your job? Visit www.bbc.co.uk/news/technology-34066941, where you can type in your job title and find out how likely it is that it will be automated within the next two decades.

6 Enterprise | Winter 2016

Are you blipping yet?

Not to be confused with virtual reality (VR), augmented reality (AR) is a term that more of us are becoming familiar with. Think of mobile games like Pokemon Go. But what exactly is AR and what are its uses beyond gaming? To find out more, we take a look at Blippar, an AR and visual discovery solutions company bringing the technology to the mass market.

Blippar was founded in London in 2011. Since then it has grown rapidly to become one of the UK’s most successful scale-up businesses in recent years. The company focuses on AR used in the commercial space and has an impressive client list including L’Oréal, Sony and Nike. The technology allows users to ‘blipp’ objects in the physical world using an app and the camera on their tablet or mobile device. Focusing on an object with the camera unlocks content on your device, such as more details about a particular product or service, allowing companies to increase their customer engagement. It may sound futuristic, but the tech is gaining ground all the time.

Hard work, late nightsThe road to Blippar’s current success was a challenging one. As with many businesses in the start-up phase, the directors initially faced hurdles relating to finance, staffing and establishing the product. Speaking at a recent Smith & Williamson entrepreneurs event, Blippar co-founder and director Jess Butcher recalled all the hard work and long hours put in at the beginning. She explained that the company pitched itself anywhere and everywhere and as awareness and appreciation grew, it rapidly acquired funding from multiple investors.

Scaling upThe scale-up phase of the business required different skills, as Blippar went from being a “scrappy and agile” business to a major player in its field. The directors recognised they needed to adapt their approach, empowering others in the organisation to take ownership of different parts of the business so it could expand effectively. It now has offices worldwide and a valuation of over US$1bn.

As first-time entrepreneurs, the directors had to learn quickly while staying true to their vision — to make the verb ‘to blipp’ part of our everyday language, in the same way that Google has achieved. There is some way to go before this becomes a reality, but the management team’s vision holds true.

www.blippar.com

Are you scaling-up? If you find your business growing rapidly and need guidance, we can help. Talk to us about our extensive range of commercial, financial and taxation advice for owners and their businesses.

Guy Rigby Head of Entrepreneurial Services t: 020 7131 8213 e: [email protected]

7Enterprise | Winter 2016

Confidence rebounds as businesses eye new opportunitiesSmith & Williamson Enterprise Index Q3 2016

Optimism among UK SMEs has recovered since the shock of the Brexit vote, but business owners are increasingly uncertain that Theresa May’s Government will help them seize the opportunities, according to Smith & Williamson’s latest quarterly Enterprise Index.

Almost three-quarters (73%) of business owners were confident in their own prospects for the next 12 months, a surge of 20 points on the previous quarter. While business confidence has recovered significantly, SMEs’ faith in the Government’s commitment to supporting private enterprise fell five points to 54%, its lowest level since 2014.

The index, which measures the views and confidence of some 250 owner-managers and entrepreneurs in the UK, moved almost 10 points higher in Q3 from 97.7 to 107.4 (its baseline being 100).

A number of Enterprise Index records were set in this quarter: 69% of those exporting expect their

turnover to increase over the next 12 months, 59% of respondents expect to increase headcount over the next three months and over 75% of businesses are planning for growth or acquisition in the next 12 months, a 16% rise on the previous quarter.

Almost one in two respondents expects the economy to improve over the next 12 months, a 16% increase over the previous quarter.

Overall, these strong results seem to suggest a growing sense among the entrepreneurial community that the UK can make Brexit work.

The Smith & Williamson Enterprise Index measures the views and confi dence of owner-managers and entrepreneurs in the UK.

Enterprise Index Q3 2016

Smith & Williamson LLP Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International.

Starting from a benchmark 100 in January 2013, the Index now stands at 107.4, up from97.7 in Q2 2016.

69% of businesses that export are expecting their turnover to increase

To have your say in our Q4 survey, please visit bit.ly/SmithWilliamsonQ42016

27%believe leaving the EU will have a positive impact

59%plan to increase headcount in the next quarter

73%are optimistic about their own prospects

2014 Q1 - 108.7 Q2 - 107.7 Q3 - 106.2 Q4 - 106.82015 Q1 - 104.4 Q2 - 119.4 Q3 - 114.4

20162015

Q3Q2 Q2Q4 Q1 Q3

76%are planning

for growth or acquisition in

the next 12 months

86% say the Autumn Statement needs to include measures that support smaller businesses

EIIRCHANCELLOR

OVO Energy - winner of the Smith & Williamson Scale-Up Business of the Year Award

OVO Energy was established in 2009 by entrepreneur Stephen Fitzpatrick. Seven years on OVO has grown to 700,000 customers, created more than 1,200 jobs, and has offices in Bristol and London, as well as regional field force and retail teams.

Stephen comments: “Starting a business was not the hard part — what has felt like a bigger challenge is keeping our culture internally and externally while growing at the pace we have. Our aim is to work as a sustainable, mature business while also staying agile and innovative to ensure we meet and exceed our customers’ expectations.”

www.ovoenergy.com


Smith & Williamson Scale-Up Business of the Year The National Business Awards 2016

Search intelligence specialist Captify’s unique semantic technology analyses 14 billion

monthly searches to interpret the intent and interests of over a billion users, powering brand and ‘direct response’ advertising campaigns across display, video and mobile formats.

To date, Captify has raised US$15m in investment backed by Panoramic Growth Equity and Smedvig Capital. In London, New York, Paris, Hamburg and Kiev, a global team of 130 is achieving growth of over 150% year-on-year.

www.captify.co.uk

Carfinance247 was founded in 2006 by brothers Reg and Louis

Rix, offering a wide range of online car finance products at market-leading rates.

Louis says: “2016 has been incredibly successful for the business with continued record growth and increasing our head count by 157. It’s a real testament to the commitment of our team to push the boundaries of technological innovation as well as delivering exceptional customer service.”

www.carfinance247.co.uk

Day Webster is a leading UK healthcare recruitment business, supplying high quality healthcare staff to NHS Trusts and care homes around the clock.

Since its launch in 2009, the company has achieved fast and significant growth — winning NHS healthcare framework agreements, developing a same-day pay model that attracts high calibre candidates and diversifying its client base. Since 2012, the number of employees has grown from 42 to 190 and clients have increased from 112 to 320.

The company was voted fifth-fastest growing company in the Sunday Times Fast Track league of 2015, and third in 2014 — the only recruitment company listed in the top ten.

www.daywebster.com

As a corporate founder of the ScaleUp Institute, Smith & Williamson was delighted to support the inaugural ‘Scale-Up Business of the Year’ Award at the National Business Awards 2016. Here we profile OVO Energy, which was crowned winner, and the other eight finalists.


IT Lab is one of the largest technology and managed services providers in the UK, with a

turnover of more than £30m, a 325-strong team and over 850 clients. For the past six years it has been ranked as one of the Sunday Times Best Companies to Work For.

CEO Peter Sweetbaum says: “Reaching the scale-up shortlist demonstrates that our continued investment in our capabilities, insights and people has created a business that is client-centric, delivering the highest levels of service, while remaining profitable and growing at an exponential rate.”

www.itlab.com

M&M Contractors provides turnkey telecommunication and electrical infrastructures, encompassing civil engineering, construction, and cabling installation/testing solutions.

Since CEO Gareth Loye’s appointment in 2011, customer satisfaction and retention have reached 92% and 100% respectively, while turnover has risen from £1.5m to £12m and its workforce from 12 to 120.

This is the result of a three-year growth strategy, which has seen the business make the leap from being a regional specialist to becoming an international principal contractor. In 2011 M&M Contractors did not trade overseas, but exports now account for 85% of the company’s income. Projects span the UK, Republic of Ireland, USA, Canada and the Netherlands.

www.mm-contractors.com

MVF is one of the UK’s fastest-growing tech companies and is an international leader in customer acquisition and lead generation.

The company was set up in 2009 and has transitioned from start-up to established global business, working across 120 countries. MVF uses proprietary technology, data driven analytics and in-house digital marketing expertise to provide several leading brands with new customers.

Titus Sharpe, CEO of MVF and winner of the 2015 NBA Entrepreneur of the Year Award, says: “It’s been a pivotal few years for MVF where we have seen consistently high annual growth, expanded to the USA, and trebled in size. It’s great to be celebrated as one of the fastest growth businesses by the National Business Awards.”

www.mvfglobal.com

RateSetter is a peer-to-peer lending platform, which links

lenders directly with borrowers. The platform allows retail, institutional and corporate lenders to invest at interest rates set in an open market.

When it launched in 2010 RateSetter invented the Provision Fund, an investor protection product which has ensured that, with more than £1.5bn lent, no individual investor has ever lost a penny, according to co-founder Peter Behrens. RateSetter now has 300,000 investors and borrowers. Backers include Woodford Investment Management and Artemis.

www.ratesetter.com

Commercial interior design company Thirdway Interiors was established in 2009,

helping businesses with everything from making their first move from serviced offices to their own premises, to establishing a European headquarters.

Ben Gillam, the co-founder and CEO, says: “We knew we could offer a different approach in a market flooded with poor practices, false promises, mass pitching and margin slashing. We like to think of ourselves as the ‘third way’ — championing dependable, reliable, client-focused design and build. We are proud of our own growth, but also feel really privileged to have partnered with companies from all industries to help design and build the office space needed for their own scale-up stories.”

http://thirdway.co/

About the awardRecognising a market-leading increase in sales, headcount, profitability, market share or geographical expansion over the last three years, this award goes to the business demonstrating the highest levels of growth and a robust plan for sustainable financial performance. Open to any UK-based scale-up with a current turnover of more than £5m per annum, judges look for the business that can best demonstrate the following qualities: market-leading growth, strong financial performance, outstanding leadership and management, innovation in products, services or processes, exceptional customer service, high levels of staff engagement, and an ethical approach to business.


Serial entrepreneur Nicolas Cary is president and co-founder of Blockchain, a leading financial technology and data company with more than nine million wallets. As the name suggests, its mission is to build an open, accessible and fair financial future, one piece of software at a time.

From Shanghai to London to New York, few ideas have captured the imagination like blockchain technology. The World Economic Forum has called it a key component of the Fourth Industrial Revolution, which is building on the Third — the digital revolution that’s been taking place since the late 1970s. We’ve seen some truly transformative innovation over the past few decades as huge efficiencies have been gained via the digitisation of services. We used to develop photography, physically distribute our music, movies and books, and even send stamped mail through the postal service. Now, we can take photos with our smartphones, we can create and consume media on any device, and beam electronic messages around the world instantly at near zero cost. But what about money? Why hasn’t banking really improved?

In many ways, the financial services sector has not fundamentally changed much over the past century. The infrastructure doesn’t lend itself to innovation. Amazingly, over two and a half billion people around the world don’t have access to financial services today. A surprising statistic is that four billion people don’t have credit cards. One big thing that’s changed is that in just 20 years, almost everyone has a cell phone. The other major shift is consumer expectations. We now use software interfaces to access and manage many of the services we used to do in analog.

Ground-breaking technologyGoldman Sachs released a report last year that profiled millennials, digging deep into their behaviours and values. A really interesting data point struck me. About 33% didn’t expect to have a bank account in five years’ time. If you combine millennials with all the people underserved by financial services globally, you can start to get a picture of how the tectonic plates in the finance industry are starting to re-adjust.

Enter the blockchain. A fundamental innovation conceived by the bitcoin network which has ignited a conflagration of interest and intrigue. Just like other technical improvements were made on the advancements of yesteryear, the development of the blockchain synthesised decades of work to build a protocol capable of eliminating the intermediaries that currently exist to facilitate economic transactions.

Simply put, the blockchain is a transaction network that relies on the principles of open source technology and a decentralised ledger to settle and clear transactions without a central authority. So what does that mean? Think of it this way: it’s like a big spreadsheet in the cloud that anyone can use to track who owns what, but nobody can alter the history. It’s an immutable record-keeping system and it’s a computer science masterpiece.

The blockchain: is it about to change all our futures?

The blockchain has many practical uses, but let’s start with a basic one. Today, international payments are tedious to execute, slow to process, and quite expensive. By using digital currencies like bitcoin, anyone can sign up for a ‘wallet’ instantly and initiate a transaction with anyone else on earth. The transactions are fast, secure, and nearly free (the fees that go to the network operators are less than a couple of pennies). Compare that to the three-day settlement period for most bank wires, or the several-day and very costly remittance systems like Western Union and Moneygram.

Changing the way we workNew waves of innovation are building on top of the blockchain which are non-financial and extremely exciting. For example, several teams are working on digitising land registries and issuing certificates encoded into the blockchain. Other firms are implementing supply chain and trade finance systems that track the provenance of goods as they move to market, bringing unprecedented transparency to fragmented networks. Some of the most cutting edge research and development is being done on distributed identity systems to help improve how individuals manage their privacy.

Over US$1bn of venture capital has already been invested across this industry with no signs of a slowdown.

In 2000 a lot of businesses were asking, “What’s our internet strategy?” It’s now time to ask yourself, “What’s our blockchain strategy?”

Find out moreFollow Nicolas @niccary or visit www.blockchain.com


… it’s like a big spreadsheet in the cloud that anyone can use to track who owns what, but nobody can alter the history.


… in an environment of continuing low interest rates and restrictions on pension contributions, the future of tax-advantaged funding looks bright.


A sunny outlook for tax-advantaged funding

Adrian Walton discusses the latest rule changes to venture capital schemes and what Brexit could mean for their future.

As showcased on pages 14 and 15, all eight finalists in our Growth Champion of the Year category at the Growth Investor Awards have received funding under one or more of the venture capital schemes. These comprise the Seed Enterprise Investment Scheme (SEIS), the Enterprise Investment Scheme (EIS) and investment from Venture Capital Trusts (VCTs).

The use of these schemes, attracting income tax, capital gains tax and inheritance tax benefits (the latter not for VCT investment) for individuals investing in unquoted trading companies, are often crucial to companies surviving and/or growing in their early years. The fact that in 2014/15 (according to the most recent figures from HMRC) £1.7bn was raised under EIS (up £90m from 2013/14) and that £338m was raised under SEIS by 4,300 companies in the two years to April 2015, is testament to the importance of these schemes.

Business as usual after Brexit?So, what is the future of the schemes following the Brexit decision? In the short to medium-term, given that the mechanics of exiting the EU are unlikely to kick in until 2019, the implications of Brexit are likely to be minimal and it will be very much ‘business as usual’. However, in the longer term, there could be significant effects, which are likely to be positive.

The schemes come within the EU state aid provisions as tax-advantaged ‘risk-based schemes’. Historically, many of the changes to the schemes (which typically restricted the types and size of companies that can take advantage of them when raising finance) have emanated from the EU. The UK has therefore had little option but to play ball and amend its legislation in order to ensure that the schemes retain their tax advantages.

Examples of recent changes (which took effect from November 2015) include restricting qualification to companies less than seven-years-old (with certain exceptions), a lifetime funding limit under the schemes of £12m and fewer than 250 full-time employees (£20m and fewer than 500 full-time employees for ‘knowledge-intensive’ companies).

Once the UK has exited the EU, we might not be beholden to the EU in relation to state aid rules. If so, the Government would be able to amend the rules of the schemes as it sees fit, for the continued benefit of small and medium-sized UK businesses. Ultimately, this could mean more flexibility in terms of the types and sizes of companies that can qualify for investment under the schemes.

Time will tell, but in an environment of continuing low interest rates and restrictions on pension contributions, the future of tax-advantaged funding looks bright.

Speak to a specialist If you’d like to find out more about venture capital schemes and how they could help your business, contact Adrian Walton.


VCTs/EISs are unquoted investments which are highly illiquid, with investors potentially having difficulty in realising their investment at a given time. They should therefore only be considered as a long-term investment, i.e over five years. They also carry the risk of potentially losing all or part of your capital investment and therefore the return of your capital is not guaranteed.


Eve Sleep wins award for venture capital-backed companies

2016 Growth Champion of the Year

At the 2016 Growth Investor Awards Eve Sleep was crowned Growth Champion of the Year. Eight outstanding growth companies were competing for the award, which was supported by Smith & Williamson, for the business considered to have made the best use of Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS) or Venture Capital Trust (VCT) funding to scale-up.

Between them, the eight finalists received over £120m of venture capital, with an average investment of just under £17.5m. Together, they employ more than 2,800 people and are expected to achieve turnover in excess of £310m in 2016. Half of the finalists are already expanding overseas and three of them are located outside London.

From luxury beds to camping necessitiesInitial seed funding enabled Eve Sleep to launch its direct-to-consumer ‘mattress in a box’ concept and scale up its marketing to secure ‘first mover advantage’. Starting with four founders round a kitchen table in February 2015, Eve Sleep now has more than 50 staff and offices in London, San Francisco, Germany and France, with further European expansion planned this year.

At the other extreme, GO Outdoors (GO) sells everything for the outdoors, from tents, camping and fishing equipment to climbing gear, running kit and ski wear. Launched in 1998 as a single store in Sheffield, the initial investment helped fund a management buyout and further investments allowed the company to make acquisitions and accelerate the number of stores in operation. GO now has 2,000 employees and operates from 57 stores across the UK, as well as an e-commerce website.

Taking mobile gaming to the next levelAward-winning mobile game developer Outplay Entertainment received venture capital finance in 2014. This enabled it to build crucial support capability in marketing and data driven insights into how to play its games. Outplay has 133 employees at its Dundee studio, making it one of the largest mobile games studios in Europe. Outplay currently has seven live games, and plans to release a further two games by the end of 2016.

Dine out or cook at home Contemporary bar restaurant company Darwin & Wallace has so far raised £7m of funding via the EIS. Founded in 2012, there have been recent openings in Clapham, Richmond and Chiswick and the company now employs around 175 staff. Its strategy is to expand the brand to further sites in Greater London, and in time, outside the capital.

Capital from multiple rounds of fundraising has enabled the fast growth of ‘recipe box’ company Gousto. It’s projected to deliver two million portions in the second half of 2016, growing from just 12 customers a week in 2012. It expects to have 200 employees by 2017.

Shall we go by car or plane?The team at Car Wow has grown from 15 at the start of 2015 to more than 80 in its central London offices. Launched in 2013 it acts as a marketplace where a user can compare the prices of new cars from car dealerships all around the UK. In March, the company launched in Germany and plans to expand into other territories over the next three years. With one million users in three years, Car Wow hopes to hit two million users by mid-2017.

Founded in 2011, FlyVictor has developed sophisticated technology to match end users with private jets 24/7 — enabling transactions, settlement, and customer servicing. FlyVictor has access to a global fleet of 7,000 aircraft, has more than 60,000 registered users and employs 77 staff. Growth funding has helped the company expand into North America, with the acquisition of a California-based broker and an East Coast presence, with offices in New York.

Unique gift ideasFrom humble beginnings of two co-founders in 2006, Notonthehighstreet.com now employs over 200 people. The business received its first external investment from Spark Ventures a year after its inception, which accelerated the business through a significant investment in technology. This investment led to gross sales of £127m in 2014, delivering a compound growth rate of 135%. International expansion is the next initiative: in 2015, the company shipped to 154 countries.


Between them, the eight finalists have received over £120m of venture capital, with an average investment of just under £17.5m.

About the Growth Champion of the Year award An online public vote counted for one-fifth of the overall tally for each finalist, after which five judges reached a decision based on a number of growth metrics, including revenues, job creation and regional/international expansion, to determine the outright winner.

To view exclusive interviews with founders and senior management of each company, visit growthinvestorawards.com/vote.

For the second year running Smith & Williamson is working with Fresh Business Thinking to identify 100 of the most influential and inspiring people in the UK’s entrepreneurial ecosystem. This will be an entirely new list to add to our 2016 alumni.

From start-ups to scale-ups, the 2017 Smith & Williamson Power 100 will include those helping to shape policy, champion, mentor, support and promote entrepreneurs and entrepreneurship. You can see 2016’s star-studded list by visiting: www.freshbusinessthinking.com/smith-williamson-power-100.

The Smith & Williamson Power 100

Smith & Williamson is a member of Nexia International, a worldwide network of independent accounting and consulting firms.

Offices: London, Belfast, Birmingham, Bristol, Cheltenham, Dublin (City and Sandyford), Glasgow, Guildford, Jersey, Manchester, Salisbury and Southampton.

Smith & Williamson LLP Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International. The word partner is used to refer to members of Smith & Williamson LLP. Nexia Smith & Williamson Audit Limited Registered to carry on audit work in the UK and Ireland and regulated by the Institute of Chartered Accountants in England and Wales for a range of Investment business activities. A member of Nexia International.

We have taken great care to ensure the accuracy of this newsletter. However, the newsletter is written in general terms and you are strongly recommended to seek specific advice before taking any action based on the information it contains. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. © Smith & Williamson Holdings Limited 2016. Code: 16/1176 Expiry: 21/05/2017

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Nominate the UK’s champions of entrepreneurship

If you’re an owner-manager, entrepreneur, adviser, or if you work with a scale-up business, we’d love to hear from you! Please speak to your existing Smith & Williamson contact or contact our team to discuss how we can help.

Telephone: 0808 164 0100

Email: [email protected]

Website: smithandwilliamson.com

Twitter: @SmithWilliamson

LinkedIn: Smith & Williamson

Nominate your champion To nominate an influential person in the entrepreneurial community, please visit: http://bit.ly/SWPower1002017.

Nominations close on Monday, 12 December 2016

Documents

Enterprisesuccess of cloud-based financial services software companies such as Xero and FinancialForce.com, which enable small businesses to tackle tasks such as accounting, billing