Why ISH - The £1m ARR Junction?

Adam Reynolds

The scenario is as follows: over a number of years you’ve worked to grow your business, you founded the business, followed an idea, got those first customers, built the platform, hired some people, learnt a lot of things. It’s likely that you’ve toiled but ultimately you've had some great success. 

You’ve now built the business to somewhere between £1-2m in recurring revenue, usually through either bootstrapping the set up, some investment from friends & family or an angel stage. You know everything about the business, functionally, administratively and culturally. The business is constantly reinvesting to get to the next step, you have a small, loyal, dynamic team and you’re looking at the next level of growth, you are at the “junction”. 

You know the next major milestone is to move up to £5m ARR, this is a big step as it’s increasing the business by 5 times, it’s probably taken you a number of years to get to where you are and you want to get to this next step quicker than the last. You look into the market and find that traditional Private Equity isn’t really interested in your business. In reality it doesn’t start looking at businesses until they’ve already reached £5m ARR, before that there is a distinct lack of interest, valuations are bordering on insulting and they don’t want to help you solve the challenges that you have. 

At ISH we think there are lots of great businesses at this level, you have a successful business but also a number of new challenges. Up until this point the founders can usually run most of the key functions, this might mean long days and wearing several hats but you can find a way to make it work. You are getting to the stage where you need to build a team which has some specialist resources, usually you may be looking at Finance, Sales, Marketing, Security, Architecture, Development as areas that need strengthening. A senior team is expensive, who do you hire first, what's the most important issue to solve. Whereas you’ve been happy to undertake several roles, usually this new team, wants to then build their own team, utilising their experiences. At a scale of 20-40 heads do these people make sense, does the capital required make sense, can you still grow at the levels required with the burden of the extra payroll, do you invest in people or projects?

As a team we’ve been there, we know this junction, we know it’s the most important stage in your business. We’ve made it our mission to help businesses of this scale grow to the next stage. We combine a willingness to invest in organisations of this size, to work with founders or the incumbent leadership team. At the same time we are able to inject specialist resources into the team to support the needs. This can be support in scaling the growth function, enhancing security, developing the financial team, reporting, analytics, digital marketing, moving from public infrastructure & many more. Our team is flexible to work around your requirements on a specialist project or longer term basis. We help facilitate the growth of the business and inject capital to support core requirements and projects. We also intend on maintaining the culture you’ve built and helping take all aspects of the business to the next level.

Our view is that turning the business from good to great only requires a few key steps, it’s a key stage in the lifecycle and it can be tough, we’re here to help you understand the nuances and subtleties of those steps and ensure that we pass through this junction and on to the next one.