Dec 4, 2023

East Midlands investment gap opening up as third of SMEs struggle to find the right investor Search Stock.adobe.com/Stephen Davies New findings from YFM Equity Partners’ inaugural Entrepreneur Economy report, a study of the 1.1 million entrepreneurial SMEs in the UK, reveal that 8% of the nations’ entrepreneurial SMEs are based in the East Midlands, contributing £82 billion to the UK economy. Entrepreneurial SMEs in the East Midlands are eager to scale up Analysis by YFM Equity Partners and the Centre for Economics and Business Research (Cebr) found that the East Midlands leads the UK in entrepreneurial SMEs using venture capital trusts to grow, with 16% of such businesses in the region relying on this funding source, compared to a national average of 13%. Many East Midlands entrepreneurs have also turned to private equity to access funding, with over a quarter (27%) of founders taking this route. Finding the right investor remains a key challenge However, the report also highlighted the difficulties that entrepreneurial SMEs in the East Midlands had in raising investment, especially in comparison to SMEs elsewhere in the country. 37% said they found it hard to find the right investor, compared to 29% nationally. East Midlands entrepreneurial SMEs were also among the most likely (33%) to state they faced a lack of clarity on the best funding options for their businesses. Spotlight on regional success: Leicester One particular East Midlands success story is the city of Leicester, which ranks ninth in the UK for entrepreneurialism and has the sixth highest ‘business to people ratio’: 6,057 businesses per 100,000 people. Leicester also boasts the eighth highest rate of new businesses founded between 2022 and 2023, with 607 businesses launched during that time period. Stephen Murray, investment director, YFM Equity Partners, said: “The East Midlands Entrepreneur Economy has great deal of potential. But, our report has pinpointed several barriers keeping local founders from scaling up their businesses. “Although it’s positive to see that many regional entrepreneurs rely on venture capital and private equity for funding, there are still severe struggles identifying the right investor and accessing the most suitable option for them. “It’s therefore of outmost importance that there is sufficient guidance and information available for them to make an informed decision based on their needs. “Receiving the right financial support is vital in the survival of the region’s businesses but it won’t be possible without improving access to professional capital.” A message from the Editor: Thank you for reading this story on our news site - please take a moment to read this important message: As you know, our aim is to bring you, the reader, an editorially led news site and magazine but journalism costs money and we rely on advertising, print and digital revenues to help to support them. With the Covid-19 pandemic having a major impact on our industry as a whole, the advertising revenues we normally receive, which helps us cover the cost of our journalists and this website, have been drastically affected. As such we need your help. If you can support our news sites/magazines with either a small donation of even £1, or a subscription to our magazine, which costs just £33.60 per year, (inc p&P and mailed direct to your door) your generosity will help us weather the storm and continue in our quest to deliver quality journalism. As a subscriber, you will have unlimited access to our web site and magazine. You'll also be offered VIP invitations to our events, preferential rates to all our awards and get access to exclusive newsletters and content. Just click here to subscribe and in the meantime may I wish you the very best. Share