EY Fast Growth Tracker 2018

Helping to raise Series A investment for tech companies.
The report is a fascinating survey of founders and CEOs of some of the UK's most exciting businesses, offering insight into their plans (and hopes and fears) for the year ahead. In such an unstable climate, access to finance and talent shortage remain at the top of the list of worries.
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Fast Growth Tracker EY Fast Growth en trep ren trep ren eu ren eu rs Entrepreneur
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Helping to raise Series A investment for tech companies.
About Techcelerate Ventures

Tech Investment and Growth Advisory for Series A in the UK, operating in £150k to £5m investment market, working with #SaaS #FinTech #HealthTech #MarketPlaces and #PropTech companies.
Fast Growth Tracker EY Fast Growth en trep ren trep ren eu ren eu rs Entrepreneur
EY Fast Growth 
Tracker 2018
A survey of UK 
entrepreneurs
December
2
EY Fast Growth Tracker 2018
1
EY Fast Growth Tracker 2018
Executive summary
EY is pleased to share the second annual Fast Growth Tracker, a survey of the UK's leading entrepreneurs and startup founders. 
Entrepreneurs are vital contributors to innovation and growth in the UK and the cohort we surveyed in 2018 are no different. We're 
proud to present their views on the UK startup ecosystem and the issues they consider most important.
Entrepreneurs play a vital role in the UK economy. The products and businesses 
they create drive innovation, economic growth and generate jobs. In 2018 we turned 
to entrepreneurs for their views on the startup ecosystem, surveying the business 
leaders of tomorrow to determine what comes next for UK founders. 
The 2018 Fast Growth Tracker proves that 'Fast Growth' companies can be found 
across the country and come in all shapes and sizes. The startups surveyed in 2018 
Yj]qgmf_2-1Yj]mf\]jfin]q]Yjkgd\&@go]n]jl`]k][gehYfa]k`Yn]ka_fafi[Yfl
ambition. 
O
v er 5 1%
 ex
p ect to g row rev en
u es b y  5 0%
 or m
ore thi s y ear and 43% are 
planning to add 10 or more people to their team in the next 12 months.
Our survey suggests that 
U
K
 en trep ren eu rs hav e a stron
g
 ap
p eti te f or 
f
u
n
d
i
n
g
 as they  l ook to f
u el  i
n
n ov ati on
 an
d
 d el
i
v er on  thei r am
b
i ti ou s g rowth 
targ ets. 66% expect to raise capital in the next 12 months and 70% of this 
group are planning to raise 1m or more. Crowdfunding and initial coin offerings 
 A;Gk!g^^]jY[[]kklgf]ohggdkg^[YhalYd&@go]n]j^gj/-g^]flj]hj]f]mjk
ljY\alagfYd]imalqfifYf[af_naYn]flmj][YhalYdfijekj]eYafkl`]hj]^]jj]\kgmj[]
of funding. 
For the second year in a row the m aj ori ty  of  U
K
 en trep ren eu rs are p
l an
n
i
n
g
 to 
ex i t to an  i
n tern ati on al  acq
u
i rer (
5
3
%
)
,  wi th 6
7
%
 ex
p ecti
n
g
 to ex i t wi thi n
 the 
next five years. This hints at a larger trend within the UK startup ecosystem, with 
many founders choosing to leverage the resources of a large parent organisation and 
accelerate growth rather than remain independent.
There are of course challenges to entrepreneurial success. The 2018 survey 
highlighted two obstacles that are affecting startup founders: access to f
u
n
d
i
n
g
 
(
5 1%
)  an
d
 a tal en t shortag e (
4
5
%
)
 rem ai
n
 cri ti cal  b arri ers to g rowth.  This is 
consistent with the 2017 survey, implying that further work in the public and private 
sector is required to help resolve these issues.
There is also evidence that 
m
arket v ol ati
l
i ty  an
d
 u
n certai n ty  ov er the U
K
' s f
u tu re 
hav e started  to i
m
p act the M
&
A
 l an
d scap e. 29% of entrepreneurs plan to pursue 
M&A in the next 12 months and just 17% believe that now is a favourable time to exit. 
This appears to be, in part, attributable to Brexit. Over 75% of UK founders are 
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biggest issue.
Maintaining a supportive environment for entrepreneurs who want to start and build 
companies in the UK will be vitally important to the country's economic future. We 
live in a dynamic and fast-changing world. Innovation is at the heart of this and we're 
proud to provide a voice to the entrepreneurs across the country who are working to 
invent the future.
R
i chard  Gool d
Partner 
EY Fast Growth
J oan
n a S an ti
n on
Partner 
EY Entrepreneur Of The Year
A
n
n a Fael ten
Associate Partner 
EY Corporate Finance
J
n
n
S
n
i
n
n
2
EY Fast Growth Tracker 2018
Our annual survey of UK entrepreneurs offers an insight into the minds of the country's most innovative business leaders. We asked them 
about their priorities, frustrations and plans for the future. In 2018 we received 380 responses from startup executives and founders ... 
About the 2018 Fast Growth Tracker
Total  resp on
d en ts
380
34%
14%
52%
1%
Venture
Growth
Seed
Exited
C hart 1:  R esp on
d en ts b y  g rowth stag e
C hart 4
:  R esp on
d en ts b y  i
n
d
u stry  sector
C hart 5
:  R esp on
d en ts b y  l ocati on
C hart 2:  C om
p an y  ag e
19%
19%
40%
21%
< 2 years
25 years
> 10 years
510 years
C hart 3
:  P
ri or y ear rev en
u e
56%
24%
8%
8% 3%
1%
< 1mn
5mn10mn
50mn250mn
1mn5mn
10mn50mn
250mn+
6%
5%
5%
5%
14%
30%
35%
Other
Media &
Telecoms
Leisure &
Entertainment
Retail
Industrials Business &
Professional
Services
Technology
2%
3%
6%
6%
6%
6%
6%
15%
16%
34%
Other
South
West
North
West
Wales Northern
Ireland
Midlands North
East
South
East
Scotland London
3
EY Fast Growth Tracker 2018
Perspectives on growth
U
K
 en trep ren eu rs rem ai
n
 
op ti
m
i sti c ab ou t thei r f
u tu re 
g rowth p rosp ects
O
v er 4
4
%
 of  en trep ren eu rs were ab
l e to g row 
rev en
u es b y  5 0%
 or m
ore l ast y ear and this 
is expected to increase over the next twelve 
months. Thi s b
u
l
l
i sh ou tl ook i s p arti cu
l arl y  
stron
g
 i
n
 the techn ol og y  sector
 where 59% of 
respondents expect revenue growth to exceed 
50% this year.
L on
d on
 an
d
 the S ou th East are the m ost 
op ti
m
i sti c reg
i on s, with 56% and 60% of 
entrepreneurs respectively expecting to grow 
j]n]fm]Zq-(gjegj]&@go]n]j$o`ad]l`]
overall outlook remains bullish there is evidence 
to suggest that growth expectations in other 
parts of the country are starting to soften. 
38% of respondents in Scotland expect to grow 
revenues by 50% or more this year compared to 
56% in 2017. Moreover, growth forecasts in Wales 
have followed a similar trend with the number 
of entrepreneurs expecting >50% growth falling 
from 67% to 38%.
C hart 6
:  W
hat rev en
u e g rowth d o y ou  ex p ect to achi ev e thi s y ear?
12%
46%
25%
17%
North East
4%
32%
41%
23%
Northern Ireland
33%
10%
19%
38%
Wales
20%
22%
20%
38%
Scotland
28%
29%
43%
North West
8%
23%
23%
46%
South West
26%
26%
48%
Midlands
18%
9%
17%
56%
London
2%
10%
2%
28%
60%
South East
< 10% 10%20% 20%  50% 50%+
4
EY Fast Growth Tracker 2018
Startups are looking to fill 
sal es an
d
 d
i
g
i tal  rol es i
n
 
ord er to f
u el  g rowth
As entrepreneurs continue to scale their 
companies access to tal en t b ecom es ev en
 m
ore 
cri ti cal . Responses to the 2018 survey suggest 
that some of the biggest gaps exist in sales and 
digital roles. 60% of entrepreneurs surveyed 
are currently looking to expand their sales team 
and 58% are actively seeking to improve their 
digital capabilities.
Hiring and talent
C hart 7
:  H ow m an y  p eop
l e d o y ou  ex p ect to ad
d
 to y ou r team
 i
n
 the n ex t 12 m on ths?
C hart 8:  W
hi ch areas of  y ou r b
u si
n ess are y ou  l ooki n
g
 to hi re f or?
26%
32%
25%
11%
6%
22%
35%
21%
14%
8%
< 5
510
1020
2050
50 +
2018
2017
13%
26%
50%
51%
56%
58%
60%
Other
Finance
Support &
admin staff
Marketing &
communications
Business
development
Digital
capabilities
Sales
Note: Respondents able to select multiple answers
5
EY Fast Growth Tracker 2018
V en tu re cap
i tal  rem ai
n s the 
p ref erred  sou rce of  f
u
n
d
i
n
g
 
f or U
K
 en trep ren eu rs
The pools of capital available to entrepreneurs 
`Yn]af[j]Yk]\ka_fafi[Yfldqafj][]flq]Yjk&
Startups can now explore crowdfunding and 
initial coin offerings (ICOs) in addition to 
ljY\alagfYd]imalqYf\\]ZlfifYf[]&@go]n]j^gj
75% of entrepreneurs venture capital remains the 
primary source of funding. 
In a similar manner to 2017, team
 d
i stracti on s 
and the identification of suitable investors 
remain the most difficult part of fundraising 
i
n
 2018. Although undoubtedly challenging, 
our experience is that these obstacles can 
be overcome through careful planning and 
preparation in advance of a fundraise.
Raising capital
C hart 9
:  D o y ou  ex p ect to rai se f
u
n
d s i
n
 the n ex t 
12 m on ths?
C hart 11:  W
hi ch sou rces of  f
u
n
d
i
n
g
 are y ou  
con si
d eri
n
g
?
C hart 12:  W
hat was the tou
g hest p art of  y ou r 
l ast f
u
n
d
rai se?
C hart 10:  H ow m
u ch are y ou  p
l an
n
i
n
g
 to rai se?
66%
34%
Yes
No
30%
51%
6%
13%
< 1mn
1mn5mn 
5mn10mn 
10mn+
3%
13%
16%
19%
20%
75%
ICO
Other
Invoice finance
or debt finance
Bank financing
Crowdfunding
Venture capital
9%
12%
39%
40%
7%
18%
37%
38%
Investor 
information
requirements
Agreeing terms
Finding suitable
investors
Distraction for
your team
2018
2017
Note: Respondents able to select multiple answers
6
EY Fast Growth Tracker 2018
Sector focus: Technology
Despite confidence in their 
own  g rowth p rosp ects,  tech 
en trep ren eu rs are p
l an
n
i
n
g
 
f or an  ex i t
L][`]flj]hj]f]mjkj]eYaf[gffi\]flafl`]aj
ability to scale their businesses. Nearly 60% 
of the technology companies we surveyed in 
2018 expect to grow revenue by 50% or more 
this year. The majority plan to fuel this growth 
by raising more money. 
7
6
%
 of  en trep ren eu rs 
b el
i ev e that v al
u ati on s i
n
 the techn ol og y  
sector are i
m
p
rov
i
n
g  and they plan to capitalise 
on that by launching a funding round in the next 
12 months. 
Despite the optimism surrounding their own 
companies tech entrepreneurs aren't convinced 
that the UK start up ecosystem will support 
more 'unicorns'. 58% agree that the UK 
entrepreneurial environment is currently not 
conducive to producing 'unicorn' technology 
companies. Moreover, 
7 2%
 p
l an
 to ex i t thei r 
b
u si
n ess wi thi n
 the n ex t 5
 y ears an
d
 25
%
 i
n
 
u
n
d er 3 . In a similar manner to the 2018 Fast 
Growth Tracker cohort, an exit to an international 
corporate is the most attractive option for 60% of 
tech entrepreneurs.
C hart 13
:  W
hat rev en
u e g rowth d o y ou  ex p ect to 
achi ev e thi s y ear?
C hart 14
:  D o y ou  ex p ect to rai se f
u
n
d s i
n
 the n ex t 
12 m on ths?
C hart 15
:  W
hat are y ou r ex p ectati on s f or v al
u ati on s 
of  b
u si
n esses l
i ke y ou rs?
7%
13%
21%
59%
50%+
20%50% 
10%20% 
< 10%
77%
23%
No
Yes
3%
21%
76%
Worsening
Stable
Improving
7
EY Fast Growth Tracker 2018
Preparing for an exit
For the secon
d
 y ear ru
n
n
i
n
g
 an
 
acq
u
i si ti on
 b y  an  i
n tern ati on al  
corp orate i s the p ref erred  ex i t 
rou te f or U
K
 f ou
n
d ers
6
7
%
 of  en trep ren eu rs ex p ect to ex i t thei r 
business within five years. This is consistent 
with the 2017 Fast Growth Tracker, however just 
22% expect the exit to come under three years 
compared to 30% in 2017. Thi s i
m
p
l
i es that 
som e en trep ren eu rs are starti
n
g
 to rev
i se 
thei r own  ex i t ti
m
etab
l e
, with near term events 
like Brexit creating market uncertainty.
An exit to an international corporate remains the 
preferred exit route for 60% of entrepreneurs, 
a seven percentage point decrease from 2017. 
In comparison just 11% of startup founders are 
considering listing on an international stock 
exchange and 14% plan to exit to private equity.
C hart 16
:  W
hen  d o y ou  ex p ect to ex i t?
C hart 17
:  H ow are y ou  p
l an
n
i
n
g
 to ex i t?
2%
20%
45%
13%
20%
2%
28%
34%
14%
22%
< 1 year
13 years
35 years
> 5 years
No plans to exit
2018
2017
53%
19%
14%
11%
3%
60%
14%
11%
15%
Sale to an international
corporate
Sale to a domestic
corporate
Sale to private
equity
Listing on a stock
exchange
Other
2018
2017
8
EY Fast Growth Tracker 2018
The challenges ahead
S
tru ctu ral  chal l en
g es i
n
 
the U
K
 con ti
n
u e to create 
b arri ers to en trep ren eu ri al  
su ccess
Perhaps unsurprisingly Brexit remains a pressing 
concern for UK entrepreneurs, with 76% 
concerned about its impact on their companies 
and 18% identifying it as their biggest concern. 
In addition, 49% of the founders surveyed do not 
believe that the current environment in the UK 
is conducive to producing a 'unicorn' company. 
This implies that there is more work do be done 
by the public and private sector to support UK 
entrepreneurs. Maintaining the UK 's status as an 
attractive market to build a company will be of vital 
importance if the economy is to thrive in the future.
C hart 18:  A
re y ou  con cern ed  ab ou t the i
m
p act of  
B
rex i t on  y ou r b
u si
n ess?
C hart 20:  ' The U
K
 en trep ren eu ri al  en
v
i ron
m
en t 
i s cu rren tl y  n ot con
d
u ci
v e to p rod
u ci
n
g
 '
u
n
i corn '  
techn ol og y  com
p an
i es. '
58%
24%
18%
Yes, but I have more pressing 
concerns
No
Yes, it is my biggest 
concern
C hart 19
:  W
hat d o y ou  b el
i ev e are the m aj or b arri ers 
to f em
al e en trep ren eu r su ccess (
i
f  an y
)
?
39%
20%
9%
9%
23%
None (equal opportunity)
Lack of relevant role models
Women prioritise a work/
life balance
Limited access to funding
Other
2%
14%
35%
33%
16%
Strongly agree
Agree
Neither agree nor disagree
Disagree
Strongly disagree
9
EY Fast Growth Tracker 2018
Key contacts
R
i chard  Gool d
 
Partner 
Fast Growth Platform
+ 44 20 7951 0603 
rgoold@uk.ey.com
J oan
n a S an ti
n on
 
Partner 
Entrepreneur Of The Year
+44 20 7951 5510 
jsantinon@uk.ey.com
A
n
n a Fael ten  
Associate Partner 
Corporate Finance
+ 44 20 7951 3063 
afaelten@uk.ey.com
C
on tri
b
u
tors
The EY Fast Growth P
l atf orm
The EY Fast Growth Platform provides a tailored suite of professional services 
and support to fast growing tech companies. 
For more information, visit www. ey . com
/
u k/ FastGrowthP
l atf orm
EY En trep ren eu r O
f  The Year
EY Entrepreneur Of The Year has been celebrating, supporting and 
[gff][laf_]flj]hj]f]mjkkaf[]alfijkldYmf[`]\afl`]MCegj]l`Yf*(q]Yjk
ago. The programme recognises successful entrepreneurs making a positive 
impact on their society and the economy, and the legacies they're building.
For more information and to enter next year's competition, 
visit www. eoy . co.
uk
B eau hu rst
Beauhurst provides research and insight on the UK's high-growth companies. 
The data platform allows professionals to discover and track Britain's most 
ambitious businesses in unrivalled detail. 
For more information, visit www. b eau hu rst. com
About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services 
o]\]dan]j`]dhZmad\ljmklYf\[gffi\]f[]afl`][YhalYdeYjc]lkYf\af][gfgea]kl`]ogjd\gn]j&O]\]n]dgh
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