Difficulty accessing finance has been identified as one of the biggest barriers facing growing businesses in the South West.
Bristol prides itself on its innovative, entrepreneurial culture, but the region as a whole is home to just two per cent of the nation’s scale-up companies, according to a recent report by financial and professional services firm Smith & Williamson.
Only Northern Ireland has a lower number of scale-ups, with one per cent.
More than half (55 per cent) of the growing businesses in the region with a turnover of more than £1m are actively looking for external finance, according to the Dream Bigger: Funding Ambition report.
Yet, despite the appetite for growth, the research established that failure rates remain high, with 70 per cent of businesses being turned down on their first attempt.
Some 39 per cent failed to secure finance more than three times and nine per cent have applied unsuccessfully more than five times.
Peter Ball, scale-up lead at the Bristol office of Smith & Williamson, says part of the problem is lack of training around how to approach potential investors.
“Securing investment into a business shouldn’t be a blind leap of faith,” he said.
“Preparation is key. To be investor-ready, businesses must ask themselves difficult questions, ensure a strong management team, something that is crucial in the eyes of investors, and have a clear plan of action in place.
“A lot can be learnt from the successes of scale-ups which are often ambitious and certain on their future plans.”
The report also notes that raising funds can be all-consuming for businesses and it found 55 per cent of companies that have successfully secured money admitted to wasting both time and resources by pursuing the wrong type of investor.
The problem facing scale-ups is one that is recognised and organisations such as Business West and Engine Shed have rolled out funding initiatives and training to help founders secure the money they need to help their companies grow.