Features | YFM Equity Partners: The Reality of Scaling UK Businesses with Jamie Roberts

In the landscape of UK private equity, few firms possess the longevity and track record of YFM Equity Partners. Having been in operation for 43 years, YFM has seen the evolution of the British entrepreneurial spirit firsthand. On this episode of the Beyond the Boardroom podcast, Managing Partner Jamie Roberts explains how the firm bridges the gap between early-stage startups and massive corporate success.

Professional Investing: Reality vs. TV

Many people's perception of investing is shaped by shows like "The Apprentice" or "Dragons' Den". While these platforms are excellent for providing entrepreneurs with a stage to showcase their skills and products, Jamie Roberts points out that the behavioural reality of professional investing is quite different.

In reality TV, the investor is often portrayed as obtuse or aloof. Whereas in reality, if YFM behaved that way, they would cease to exist. Because they enter into long-term journeys with businesses—averaging five to seven years—they must work hard to win the opportunity to invest in a great company. As Jamie says, the other 1% of the time we are saying, we desperately want to invest in your business. Please choose us.

The UK vs. US Investment Landscape

There is a common question in the British business world: why doesn't the UK build massive companies like those in the US?. Jamie suggests the answer is twofold. First, the US market is simply much larger, which naturally leads to larger exits. Second, there is a cultural difference in how risk and success are viewed.

Jamie notes that in the UK, it is often seen as rude to be open about money, whereas in the US, there is a visible "sizzle" of business energy. Furthermore, while the UK has the best tax advantages in the world for individuals to invest in early-stage businesses (such as SEIS, EIS, and Venture Capital Trusts), that support often disappears once a business reaches a certain size, such as 20 million pounds in revenue. This creates a "success ceiling" that YFM works to help companies break through.

How YFM Facilitates Scaling

YFM Equity Partners manages about 56 portfolio companies at any given time. Their role is to provide the strategic direction and the "firepower" necessary for a business to grow from a small team where the founder does everything to a multi-layered organisation. Scaling requires meticulous "people planning" and organizational design. Jamie explains that they often look five years into the future to determine what the company's organogram will need to look like to deliver 50 million pounds in revenue. This might involve:

• Providing capital to recruit a high-level Sales or Marketing Director.

• Opening doors to a network of non-executive directors and consultants who can help a business "look around corners," especially when expanding into new markets like the US.

• Using data and software tools to help founders manage the "numbery" questions of a growing business so they can focus on operations.

The Strategy of White Space

When evaluating growth potential, YFM looks for "white space"—markets that are currently small but exploding. Jamie contrasts this with entering a well-served market where a product must be materially better to convince customers to undergo the heartache of switching. By identifying these exploding markets and backing top-notch people to execute within them, YFM continues to foster the next generation of British success stories.

Interested in more?

▶️ Watch the full episode and so many more on the Aleksandra King YouTube Channel.

➡️ Read more about How Investors choose investment opportunities and what the success criteria are.

➡️ Check out our latest feature in The News Letter! They’ve covered our recent Beyond the Boardroom podcast episode with Lewis Raymond Taylor.

Published by Aleksandra Media