There’s something of a Tardis feel to PwC. It feels bigger on the inside than it is in on the outside, both in terms of the scale of its London headquarters, perched above Charing Cross Station in central London, and the services it offers.
The interior of One Embankment Place is vertiginous and huge and promotes a funky start-up atmosphere instead of the buttoned-up accountant culture I had been expecting. And, rather than just offering dry-as-dust accounting audit, PwC offers a range of consultancy services to growth businesses, anything from strategic advice to help with raising finance and making key executive appointments.
PwC offers two different propositions for start-ups that are looking to raise true external finance for the first time (post friends and family): the Raise Programme and Raise Investment +
The Raise Programme works with eight handpicked scale-ups to raise their first round of institutional funding. The five-day workshop course focuses on getting scale-ups investor ready. At the end of the programme, participants take part in a Dragon’s Den-style pitch to over 60 venture capital and family offices. PwC charges 5pc of funds raised.
This is a course lasting anything between five and nine weeks, consisting of a one-on-one mentoring course, designed to prep a start-up to raise anything between £1 million and upwards of £20 million. It is aimed at scale-ups generating over £1m in revenue annually.
PwC also runs multiple scale-up masterclasses to help businesses that have already raised Series A funding. They cover growing sectors including cyber security, insurance technology and sports technology. Scale also offers programmes aimed at regions, including the Midlands, Yorkshire and Manchester.
Future Scale programmes are planned to cover women entrepreneurs, AI and health, as well as specific regions including the Thames Valley and South West.
Growth Business sat down with Suzi Woolfson, who leads PwC UK’s private business to explain what PwC offers small- and mid-sized businesses.
Woolfson works with entrepreneurs and family businesses on how they can grow their businesses and meet their business goals. Her varied client base includes retailers, technology, property and manufacturing clients, which, in the past have included anything from Arm Holdings to the well-known Tangle Teezer hairbrush.
A warm and self-deprecating woman, Woolfson has been with PwC for 33 years. We meet at a time when optimism in private businesses is rapidly diminishing. According to PwC’s own figures published last month, growth expectations among UK businesses have fallen to 49pc, down from 69pc last year. That’s more than twice the rate of European counterparts.
How do you see your role as leading PwC’s private business arm?
As well as being an audit partner, I see myself as a trusted adviser. In my career at PwC, I’ve worked in tax, consultancy, finance plus I’ve personally invested in a number of businesses myself, so I do know the growing pains.
How many businesses does PwC advise in any one time?
Over the last three years, Raise has worked with 1,400 start-ups and 3,000 scale-ups which have reached the two- to three-year phase.
What services does PwC offer start-ups and scale-ups?
People may automatically think of PwC as an accounting but we’re the number-one professional services firm.
It’s a well-kept secret that this firm is interested in start-ups and large family businesses. We work with companies you would know – and those you wouldn’t – but what they have in common is growth. If you just want your start-up to be a lifestyle business, then we’re not the right firm for you. We’re about increasing stakeholder value.
What you get from PwC is hands-on experience, we’re not just accountants. If you took everybody in our private business arm out of PwC, we’d still be larger than Grant Thornton.
To help a business grow and to really get to the heart of a firm, an entrepreneur has to trust you.
Our view is that if you partner with an acorn, you stay with them until they’re an oak tree.
What advice would you give any start-up?
- Have you got a strategy and a business plan?
- Cash flow – do you have a cash flow model?
- People are your biggest asset in a business, so how do you motivate and manage staff?
- Get the right processes in place and KPIs but equally the tax structuring because the way you structure things is really important.
- Don’t build up a finance department – use cloud software so you’ve got the right KPIs and use that data to help grow your business.
For any business, you need a strategy underpinned with a business plan and the right people helping you.
Give me a practical example of how you’ve helped a start-up
One entrepreneur came to me who had FDA approval to create a medical device around a stoma bag [an external post-op bag that collects urine and faeces]. He’d had Crohn’s disease all his life and, being a typical entrepreneur, what he realised was that if you stoma bag bursts, it’s not good for your confidence and certainly if you’re out in public. So, he created a medical device and he needed funding. I helped him raise his first £600,000. I then gave him the right tax advice; we helped him on how to expand into the US, which needs a different structure when it comes to sales tax. I also helped him find a CFO.
To give you another example, I worked with the CEO of a business that we helped become a £20m turnover business. He walked away because he wanted to set up on his own in the cosmetics industry. He said, ‘Suzi, I want to work with you. You helped me understand what the challenges are, because I want to get it right. I want to exit in three years, and I want to ensure we’ve got the right KPIs and the right tax structure, and you gave me that challenge, but you also partnered with me and helped me.’
What would you say to a start-up that says, well yes that’s all very well, but it’s PwC and they charge hefty fees?
What’s lovely about our Raise and Scale programmes is that for lots of it, we work on a contingency basis. Unless we can add value and close external funding or we can increase your revenue, we don’t take any money.
As I said, it’s about building trust and partnerships, and the only way is by working with those smaller companies from the beginning. And if we can’t add value, we absolutely tell them. It’s not about charging large fees.
When you start, don’t be afraid of coming to a PwC. It’s about finding the person who you can pick the phone up to and be honest as to what you’re worrying about. It’s about building trust. You need to trust someone who’s going to be along with you for the entire journey.
We’re bloody good at what we do because we’ve got the best people, the best networks and the best client relationships. Our hardest thing is getting the message out.
What do you want to see from start-ups who approach you?
I want to understand what your vision is; where you want the business to go, what is it that makes you unique, what’s your potential market, how do you achieve it, what are the challenges? You might not know it all, but if you’re prodded, it might prompt you to go away and think about it.
‘With businesses I’ve invested in, the ones which don’t succeed are the ones who don’t listen.’
What’s the most common problem you see with start-ups?
With businesses I’ve invested in, the ones which don’t succeed are the ones who don’t listen. The most unsuccessful business I’ve invested in, the entrepreneur would not listen and wasn’t prepared to be pushed and pulled. That’s why I need entrepreneur who’s prepared to listen. If your so single-minded you don’t listen, we’re not right for you. It’s got to be people who where we can add value and who will listen.
Can PwC help me when it comes to recruiting staff?
With a great idea and no management team, you’ve got no hope. With a really good management and even a mediocre product, you’ll get it away.
Banks talk about wanting to help start-ups but when I talk to entrepreneurs, they say that’s not true.
My view is that when you’re a start-up with no assets, it’s very difficult. Unless you’ve got some assets, you can securitise, it’s very difficult. No credit committee is going to lend to something in start-up phase. Banks are not happy to take risk.
Can you introduce me to external finance?
If you’re early days, that would be our Raise programme – they will push you on your business plan, then they’ll introduce you to the right investors. The beauty of a firm like this is, we have the most phenomenal network.
Yes, we have access to banks and smaller VCs and private equity, but it may be that the right investor for your start-up is a corporate.
We help link start-ups, which may have some disruptive technology, but they don’t know how to connect into the corporate world. Yet we have a cadre of corporates who are desperate to find start-ups, who come to us and say, ‘This is the bit we’re missing and we’re looking for a tech start-up who can help us stay nimble.’
You also have strong contacts with family offices, especially in the US, don’t you?
A family office is another well-kept secret because they might have a particular interest, whether it’s a sector such as health or a particular country.
A family office tends to get set up when a family has either sold their business or a part of it and made some money. They then decide they’re going to invest that money in different pots to spread the risk. Each family office may have its own passion from property to technology to medical devices. We work with enough of them, so we know that makes them tick.
What are the hot sectors right now for scale-ups?
Digital disruption. Anything that digitally disrupts, whether it’s insurance, fintech, healthcare… anything that creates a different way of doing something. Every sector needs to think about what its business will look like tomorrow, and a start-up will probably get there faster than you. Because a start-up is an entrepreneur who see a need in the market and know how to fill it.
What keeps you awake at night?
- Cyber security – cyber attacks are a threat that haven’t gone away. Are you protected? We all think it won’t happen to us, but we’ve all been there.
- Corporate governance – as a director, do you have the right governance to protect yourself and your employees?
- Cash flow – do you have enough cash in the bank? I don’t care what anybody says, cash is still king. We have a cashflow monitor that’s really useful.