The North West of England is rapidly cementing its position as a hub of entrepreneurial innovation. From thriving tech businesses in Manchester to advanced manufacturing in Liverpool and professional services in Chester, the region boasts a dynamic and ambitious business community.
Yet, despite this vibrant ecosystem, many entrepreneurs in the region remain hesitant to seek external investment, writes Dan Freed, Partner at YFM Equity Partners.
According to YFM Equity Partners’ Entrepreneur Economy report, 41% of entrepreneurs in the North West still rely on personal savings to fund their businesses.
This “bootstrap barrier” is a challenge for many regional business owners, who often see self-funding as the safest path. While bootstrapping can work in the early stages of a business, it can also limit opportunities for rapid growth. To truly scale, entrepreneurs must consider alternative funding options, including private equity.
Private equity vs. bootstrapping and bank funding
Bootstrapping has its merits — it allows founders to maintain complete control and build their business at their own pace. However, it often comes with significant financial strain and can restrict growth due to limited resources. Bank funding, while another common option, requires regular repayments that can strain cash flow and prioritises the lender’s returns, often placing pressure on the business regardless of its performance.
Private equity, on the other hand, offers a different path. At YFM, we align our success with that of the businesses we invest in. This alignment fosters a collaborative relationship, with investors acting as long-term partners focused on sustainable growth. Unlike debt financing, private equity doesn’t come with the burden of regular repayments. Instead, we work alongside management teams, providing capital, expertise, and strategic support to help businesses scale.
Debunking the myths of losing control
One of the most persistent concerns we encounter is the fear of losing control. Many entrepreneurs worry that bringing in an external investor means surrendering their decision-making power. But that’s not the reality.
Private equity isn’t about taking over—it’s about partnering with entrepreneurs to help them achieve their vision. At YFM, we succeed when our partners succeed. We invest in businesses that align with our values and ambitions, fostering mutual trust and respect. This collaborative approach ensures that entrepreneurs remain in the driver’s seat while benefiting from the resources and support of an experienced partner.
Empowering growth in the North West
The North West has all the ingredients for success — ambitious entrepreneurs, a thriving business ecosystem, and a culture of resilience. But to unlock its full potential, we need to break through the bootstrap barrier. By educating business owners about the advantages of private equity, we can help them make informed decisions about their growth strategies.
Our track record at YFM speaks for itself. The British Smaller Companies VCT fund had a record-breaking year in 2023, and our latest fundraise is already exceeding expectations. This success reflects the growing appetite for private equity among ambitious, fast-growing companies across the UK.
For entrepreneurs in the North West, private equity represents more than just funding – it’s a partnership. It’s about empowering business leaders to achieve their vision while sharing the risks and rewards of growth. As we continue to build trust and educate the business community, we’re committed to making private equity an accessible and valuable tool for the region’s entrepreneurs.
The North West’s entrepreneurial future is bright, and private equity can be the catalyst that drives it to new heights. Together, we can overcome the challenges, seize the opportunities, and shape a thriving regional economy. It’s time for the North West’s business leaders to think bigger, grow faster, and embrace the possibilities of partnership.
