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BGF’s minority investment approach: What makes us different?

BGF is the world’s most active growth investor and we are unique in our approach as a provider of minority investment and minority investment only. Ever since our inception in 2011, our mission has been to help the brightest and most innovative British and Irish businesses realise their growth potential by providing patient capital. This article explains why we are a committed minority investor and what sets us apart from the rest.

Why we are committed to minority investment

Unlike other investors in the business funding landscape, BGF focuses exclusively on minority investment. Minority capital isn’t just part of our offering, or something we favour for certain businesses, it’s the bedrock of our growth funding model.

We are committed to the approach of minority investment because we believe entrepreneurs are best able to realise their potential when they are free to navigate their own path for growth. Minority investment means investing as a non-controlling partner. We invest with conviction, and we offer support in terms of knowledge, expertise and capital, but ultimately the management teams are in control.

Our investment period can vary from as little as 12 months to many years. The key thing is that the management teams we back are the ones who determine the schedule for exiting the investment, whether that be by selling to another company, an investor or listing on a stock exchange. More than 100 companies backed by us have achieved exits.

We are able to make minority investments because of our “evergreen” funding model, which allows us to take a flexible approach to investment. Our funding is provided by our bank shareholders.

What does a minority investment from BGF look like?

Hundreds of businesses with big plans for growth have blossomed because of patient, minority funding from BGF. These are the cornerstones of our investment approach:

  • We are committed to minority investment. That means management teams stay in control of their business. Our deals generally involve an equity share of 10-40%. We frequently invest alongside other investors.
  • We provide expert guidance as a junior partner. Our investors have the expertise and the contacts to make a huge difference to your company’s growth, but our non-controlling stake means we are a minority partner.
  • We typically provide initial funding of between £1-15 million. We back businesses at a variety of stages of growth and with all manner of plans, including early-stage, scale-up and quoted companies.
  • Opportunity for follow-on funding. Many of our portfolio companies go on to receive multiple rounds of additional funding from us to finance the next stages of their growth.
  • We will not impose drag rights on our new investee businesses. Drag rights give an investor the ability to force a sale at a time they choose. This is not what we wish to do.
  • Unrivalled support from the BGF Talent Network. Minority investment from BGF gives investee businesses access to our network of over 6,000 board-level non-executives. We could introduce you to your next non-executive chair or director.
  • We offer expertise on demand. Our Talent Network can also introduce you to experienced business leaders on an interim or consultancy basis, thanks to our Expertise on Demand service. These talented individuals can help you with a specific project or problem.

Could your business be BGF’s next minority investment?

Our model of patient, minority funding has proven transformative for the hundreds of companies we have backed. Over the last decade, we have filled a gap in the business funding market, giving businesses the tools they need to grow as quickly and sustainably as possible. We make an average of one new investment every week, and we’re always on the lookout for the next brilliant and innovative company to back.

We have investors in 16 locations across the UK and Ireland, so wherever your business is located, we have a dedicated team nearby that can help you reach the next stage in your development. Our track record speaks for itself – we’ve invested more than £2.5 billion in more than 400 businesses in the UK and Ireland, and we’ve already helped over 100 of our portfolio companies achieve a successful exit on a schedule determined by them. To learn more about how we can help your business fulfil its potential, contact our team today.

BGF Insights 10.28.2021

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