There is a “global recognition” that entrepreneurs in the UK have much more ambitious exit targets than they have had previously, according to GP Bullhound co-founder and managing partner Manish Madhvani.
Speaking at the Seven Hills Future of Growth Summit 2015 at Bloomberg HQ, Madhvani told delegates that entrepreneurs are now setting out looking for exits more to ten times higher than they hoped for just a decade ago.
“For European companies, and particularly UK companies, the ambition levels have been propelled,” he said.
“It was always spoken about 10 years ago that a £50 million or £100 million exit would be fantastic news and people would take that.”
But due to renewed global interest in European companies, particularly from across the Atlantic, entrepreneurs are now starting to think bigger as a matter of course when eying up eventual exits.
“There’s been a fundamental re-shift in the ambition levels of entrepreneurs and the investors who are backing them,” he continued.
“Now with these companies like a Spotify, TransferWise or Funding Circle, an environment exists that allows them to move on to a billion dollar valuation.
“I think we’re going to see the first $10 billion company coming out of Europe very soon, and that’s obviously very attractive for US investors.”
Speaking on the same panel, entrepreneur and angel investor Sherry Coutu agreed that “exits are growing and the creation of companies is improving” in Europe.
But she warned of another “disturbing trend” in the European markets.
“There’s been a decrease in the number of businesses that are scaling up. I have been calling for an increase and I would link that with tremendous economic growth.”
Coutu also pointed to figures, released yesterday, that suggest quarter-on-quarter growth for the most recent period is up 41% to a total value of $2.6 billion. Despite the increase of total value the number of deals has fallen – but Coutu does not see this as a negative.
“I take this as very good news because it means more money is going into those companies that are getting better market fit,” she continued.