Most Tech Founders Expect to Sell for £50m or Less
A new report from VentureFounders, in conjunction with Beauhurst, has found that 56% of UK tech founders expect that their business will sell for £50m or less, but 80% want to re-enter the tech ecosystem and support it post-exit.
Other key findings:
- Most UK tech founders are intending to exit within 2-5 years, despite recognising the risks of exiting too early.
- If founders think they will sell for more than £50m, it would be to an overseas buyer.
- The longer a company has been generating revenue, the lower the valuation they expected on exit.
Quoted respondents include James Meekings of Funding Circle, Justin FitzPatrick of DueDil and SwiftKey's Jon Reynolds.
No ambition gap
James Codling, CEO and co-founder of VentureFounders, believes that, despite the £50m figure, there is no ambition gap among UK tech founders:
"Our report highlights the challenges faced by scale-up entrepreneurs and how critical it is for the UK to continue to nurture the scale-up ecosystem. While UK founders do expect to exit earlier, 80% of them want to go back in to the ecosystem and support it, after they've exited their own business. We hope the government's Patient Capital Review will address some of the key findings from this report.
"We are also commissioning a further piece of work to look at the cost to scale a business in the UK and the funding gap that businesses experience. On the back of this, we expect to make a number of policy recommendations."
Toby Austin, CEO at Beauhurst, commented: “At Beauhurst, we have observed what I suspect are the beginnings of a shift in the funding landscape. Late-stage companies have been able to find the support and capital they need in the UK recently, although much of the money has come from foreign investors. The findings of the report support my belief that the UK is brimming with exciting, ambitious businesses and the ecosystem simply needs to catch up — hopefully it has already started to do so.”
(Source: VentureFounders)
