Seven in 10 Bristol businesses that have attempted to raise capital have failed at least once, according to new research.
Two in five businesses seeking investment have not been able to secure funding more than three times and 9% have made five or more unsuccessful attempts. 
The figures emerge from a report called Dream Bigger: Funding Ambition from national accountancy group Smith & Williamson, which has an office in Bristol.
Securing funding is not only crucial in supporting businesses to get off the ground but also plays an important role in helping enterprises scale quickly and maximise their potential. However, it’s not always plain sailing.
The reasons behind this are varied, says the report. By far the most common explanation given by founders is that their management team wasn’t strong enough (45%), exceeding the number of firms which said their business model wasn’t good enough (27%).
Nearly three in ten (28%) founders said their business did not meet the criteria for investment and 22% admitted to not having a good enough handle on their finances.
Scale-up firms, defined as those undergoing rapid growth, tend to enjoy more success securing investment, according to the newly published data. Nearly half (45%) gained funding on their first attempt compared to 16% of non-scale-ups.
Indeed, the very nature of these businesses makes them attractive to investors and lenders, but, scale-ups are also more likely to have had a concise business plan in place (52% vs 29%). They are also more likely to know exactly how much money they need to raise from the outset (39% vs 24%) as well as the route they want to pursue (39% vs 23%).
For scale-ups that have failed to raise capital, some 55%, the barriers mirror those faced by others. Well over two fifths (43%) of scale-up founders stated the reason they were unable to secure external finance was the lack of strength in the management team, followed by their business failing to meet the criteria for investment (29%).
Smith & Williamson Bristol office scale-up lead Peter Ball, pictured, said: “Securing investment into a business shouldn’t be a blind leap of faith. 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 who are often ambitious and certain on their future plans.
“The team in Bristol are very proud to have been involved in the recent £3.5m fundraising for cyber security software firm CybSafe, which is a great example of a successful scale-up. At the time of fundraising, CybSafe was a strong and fast-growing business which was fundraising to invest in its people and platform infrastructure. We play an active role in many of these businesses, from the start-up phase through to funding, growth, sale and life post-sale.”
