UK business owners take on investment too early - UKFast CEO Jones

Lawrence Jones explains why it is better for UK firms to wait before taking on external investment

UK business owners have a tendancy to take on outside investment or sell up too early, according to UKFast CEO Lawrence Jones.

Speaking at CRN's MSP North conference in Manchester, Jones (pictured) talked the channel audience through his decision to take on private equity investment at the end of last year, nearly 20 years into UKFast's existence.

UKFast took on external investment later than many businesses, with the firm already at nearly £50m in revenue when Inflexion bought a 30 per cent stake in the firm.

Jones' advice to business owners was to hold off bringing in investors until the business is up and running and the concept is proven.

"I think there's a propensity, as entrepreneurs, to try to sell to early to get that money, or to give up after 10 years. You get that inch and think you're just not as far ahead as you thought you'd be.

"How many businesses give up on that idea after 10 or 11 years? It's a phenomenal percentage.

"I know if we look back at the first 10-year period, we could have easily given up. I'm sure I could have been making a lot more money working for big corporations.

"But it felt like it was not the right time [to sell the business] and we felt we had to keep going. So I would say you always keep going; never ever stop.

"My advice to anyone would be to hold off as long as you possibly can. I don't understand why you would give away equity for an idea. Prove the concept, get it going, and then you'll go and get more for your money for it."

Jones explained that by resisting taking on investment earlier, UKFast has become one of the few businesses to hit such revenue organically.

"We built a business and not many people have done this because it's difficult," he said.

"Building from £5,000 investment into something that is valued at in excess of £400m without any dilution of shares and injection of cash - I don't know many stories globally where that has happened

"Many have gone bigger but they have had the investment - we got to the point where we can take on the American giants and we are going to need more cash to do this properly."