Getting high growth companies and entrepreneurs back to business

Two Barclays experts describe how the pandemic has impacted high growth businesses across the UK – and why a holistic approach to supporting these major employers and creators of income is vital to the recovery of the British economy.

High growth businesses encompass a broad range of industries, from technology to hospitality, and the challenges they have faced through the coronavirus crisis have been varied. Alongside specific sector obstacles, they have had to adapt to changes to fundraising, furloughs, cash flow maintenance, fluctuating sale cycles, the difficulties facing co-working spaces and getting employees back to work safely.

Barclays has long been committed to helping high growth businesses thrive – with strategic initiatives including Unreasonable Impact, Rise, Eagle Labs, and the Barclays Scale Up UK Programme available to help innovative companies find financial backing, grow their networks and gain access to expert advice.

This support has never been more essential to the country’s financial recovery, given that the UK startup community – and the businesses within it – are worth £196bn a year to the economy.

“High growth firms disproportionately drive wealth creation, employment and economic impact,” explains Richard Heggie, Head of High Growth and Entrepreneurs Proposition at Barclays. “They are the job-creators and employers and creators of income amongst the population. If we are facing a higher unemployment rate in the post-coronavirus period, making sure that Barclays is positioned to help them to grow is more important than ever.”

Juliet Rogan, Head of High Growth and Entrepreneurs Coverage at Barclays, adds that the innovative approach of many of these companies could come to play an important new role in helping the population navigate a ‘new normal’.

“A lot of high growth businesses are technology-led and have an innovative aspect to them, so their resilience has been evident – not only because they’ve been quick to adapt and early adopters of technology, but because they are able to pivot and change their business models relatively quickly.

“In a lot of ways existing trends have been accelerated and compressed through the importance of digital adoption during the pandemic. For example, with remote working, the technology

has existed for a number of years but the pandemic has encouraged wide scale adoption. Going forward, people and companies will be more digitally enabled, so there is clearly a growth opportunity for companies that can commercially leverage these changes.”

Rogan and Heggie point out that not all businesses have faced financial challenges. New consumer demands have seen some grow, forcing them to cope with the usual stresses of entrepreneurship in an unusual environment.

“The ones that are doing well have continued to hire people but it’s much more difficult in this environment to do that at scale, which is what many of these businesses have been used to,” says Rogan.

How is Barclays backing high growth businesses?

Financial support has been a particular concern for high growth businesses during the pandemic, as many companies rely on external investment and funding.

Barclays has been supporting these businesses through government-backed schemes, including CBILS and the Bounce Back Loan Scheme. But, while clients have made use of furlough schemes and grants, not all businesses are eligible for the government’s coronavirus loans.

“The challenges that some high growth businesses have had in terms of accessing the loan guarantee schemes has been around the fact that they tend to reinvest everything into growth and would therefore show losses on their P+L (profit and loss),” Rogan says. “The reality is that debt isn’t always the right solution for early stage growth companies.”

This is where the government’s £500m Future Fund is particularly effective. Launched in April by the Chancellor Rishi Sunak, the convertible loan is formed of a government loan of up to £5m, matched by a private third-party investor, and has been well received in the market.

“It’s clear that this facility has been designed specifically to bridge equity gaps, which is what a lot of companies are struggling with in this space,” she says. “It will be managed through match funding so the private investors will be doing due diligence on a lot of the companies in order to be able to access this government support. She says the scheme, which is available until the end of September 2020, has been particularly effective at unlocking private capital in the market.

High growth and entrepreneur support beyond banking

But financial support alone will not ensure the survival and growth of these businesses – which is why Barclays takes a holistic approach, backing entrepreneurs through mentoring, dedicated events and innovative programmes which help upskill management.

During the crisis, the bank has been on hand to help clients access sector-specific expertise via webinars. “Making sure our clients and customers know where to go and who to speak to during the crisis has been critical,” says Rogan.

She says Barclays has found new ways to support clients: from a free ‘Back to Business’ online toolkit, created with Cambridge Judge Business School to help businesses stay resilient, to the ‘Get Local’ partnership with Nextdoor, which can help early stage entrepreneurs connect to their local communities.

Meanwhile the Female Founders Forum, a group for female entrepreneurs, is continuing to support women-led businesses through a focus on resilience and recovery. A series of webinars, dedicated fortnightly emails covering key developments, virtual regional hubs, and bi-monthly Zoom meetups are all helping those in the network adapt their strategies and negotiate a post-coronavirus business landscape.

Barclays has also expanded and digitised its Scale Up UK Programme, which offers modules on business growth taught by world class experts. Its focus has shifted to ensure that it meets the needs of businesses operating during the pandemic.

“We’ve changed the content of the programme to adapt it to the current crisis, so there is more of an emphasis on crisis leadership, business model disruptions, supply chain disruption and e-commerce,” Heggie explains. “We looked at different ways we could help businesses adjust and reapply their growth strategies in the current environment.”

Looking after the mental health and wellbeing of startup founders

In addition, colleagues at Barclays Eagle Labs, a community which provides resources and opportunities to allow UK entrepreneurs to flourish, are recognising the impact of the crisis on the wellbeing of founders and colleagues.

“I’m really proud of the work the Eagle Labs have done through their digital portal to highlight the importance of wellbeing,” Heggie says. “Mental health is an issue that isn’t talked about in the high growth community, but we knew before the crisis that founders were probably twice as likely to suffer mental health issues than others.

“It makes sense when you think about the pressures of trying to scale up a business. The crisis will have a profound effect on wellbeing, and I think the community will feel that strain even more. That also has a very real economic impact on businesses.”

Looking forward, Rogan says that Barclays will continue to shape its support to cater to the needs of high growth businesses: “We are considering the specific challenges of growth companies through the scale up challenges of access to finance, infrastructure, talent, markets and leadership capacity and working through each one to see where and how we can add more value.”

Heggie adds: “We’re using our network and our connections as part of our proposition to help businesses at each stage of growth to get access to everything beyond banking. We’re here for our clients as their financial partners.”