It’s been three months since our move into the Northern Irish market and it feels like we’re starting to become a part of the ecosystem. There is a truly entrepreneurial outlook here and a large number of companies with huge growth potential. The question for many of these businesses, as with our own, is how do we grow to the next stage?
Well, for starters, you’re in the right place. There is a significant and concerted effort to increase the number of scaling businesses in Northern Ireland. With so much political and economic uncertainty at present, the adventurous nature of young companies in particular mitigates many of these risks by targeting a global market. Fortunately for those companies who are ready to scale, there is a great local ecosystem willing to help them on that journey.
Belfast is home to Catalyst Inc., a world leading incubator for young companies that have ambitions to scale. iMultiply is supporting the Connect program which includes a mentoring programme where finance, legal and business experts from the local community dedicate time to provide growth advice. The Northern Ireland Chamber of Commerce also takes the task of promoting growth very seriously and connects entrepreneurs across Northern Ireland with their target markets.
Owner-managed family businesses are prominent across the country and perhaps this is where the potential for scale is at its greatest. Many of these SMEs have remained relatively static in recent years but could realise their potential by either taking on investment or by growing internationally. The manufacturing and food & drink sectors in particular boast many fantastic local businesses which could fulfil their potential by expanding into new territories. Northern Ireland is privileged to have a highly skilled and entrepreneurial community already in place to drive this growth.
Tap into the right funding
Fortunately for businesses who are looking to scale, there are an abundance of local funding options to facilitate this journey. There are, of course, the banks who will be the first port of call for many companies and are worth speaking to for mainstream types of lending. In addition to bank debt there are some innovative independent debt finance options, such as Upstream Working Capital and Whiterock Capital who may have the appetite to fund companies which potentially don’t meet current banking criteria.
The local private equity and venture capital market provides another avenue for rapid growth. Equity funding is on the rise within Northern Ireland, making it a growing part of the £1.7bn value of M&A deals completed in 2017. We can expect that as further funders arrive, such as the Business Growth Fund, we will see more businesses turning to equity to achieve the required scale.
Supplementing the many funders in the local market, are a number of professional advisors who are adding real value to indigenous companies. Northern Ireland is fortunate to have a some very impressive legal and accountancy firms who understand the requirements to scale a business and some of the more complicated issues that businesses need to resolve to achieve their potential.
Complimenting the advisory firms are some of the bodies who see the requirement to scale as central to Northern Ireland’s economic progress; Invest NI is involved at all stages and sizes of businesses, with a particular focus on outward looking companies who have aspirations to export. They help to provide a great deal of capital for fund managers to make available for aspiring businesses.
Learn from your community
We can learn from the inspiring success stories of local businesses who truly believed in their offering and focussed on high growth. For instance, Kainos PLC, founded and headquartered in Belfast to provide software solutions in healthcare and finance went to IPO in 2015. The company is a fantastic example of what can be achieved through an entrepreneurial outlook and building the right strategic community.
Similarly, First Derivatives only formed in 1996 but now operates in Europe, North America, Asia & Australia and has recently been valued at £1bn. More recently, there have been local success stories such as Fusion Antibodies who recently listed on AIM following rounds of local investment from the likes of QUBIS. Cirdan Imaging raised £2.9m from Kernel Capital’s Bank of Ireland Fund in 2016 and were able to open a new office in Australia and win a £1m contract.
What lies behind these successes is fairly simple; talented people. Talent is a company commodity which investors back and who customers trust to buy from.
Transversely, a perceived lack of capability to deliver the business plan, coupled with poor or no corporate structure, is often the barrier to securing growth capital, regardless of the quality and potential of the product offering.
iMultiply has a strong track record of working closely with scaling companies who are looking to grow a talented finance function. As a growth company ourselves, we understand the highs and lows of scaling and are enjoying working with local businesses, advisors and organisations who share our entrepreneurial values.
Please send your comments to Jamie Watts, iMultiply Manager at firstname.lastname@example.org.