Too often, Britain’s financial revolution has been attributed to the logics of market forces and new technologies. Reforms are deemed to have been inevitable, and often appear faceless. As the concluding chapter reaffirms, Survival Capitalism has sought to restore intent to this history. It has assessed responses to a whole range of factors by a host of actors and institutions as they reacted to threats and opportunities. It has traced an evolutionary process and shone light on the ways in which reforms were crafted by real people and shaped by their concerns and existing historically specific conditions. Accordingly, it has revealed the highly mediated and contingent nature of Thatcherite reforms and the constructed nature of markets – even international financial markets. Although informed by an over-arching philosophical framework, the Thatcher government was, in fact, as flexible and adaptive as the market approach it constructed. Deregulation was motivated by economic nationalism as well as free market ideology. The Government sought to deliver its monetary policy, maintain credibility and fund its reform programme at as low a cost as possible. It also sought to protect British interests and was not averse to intervening in markets when the need arose. Undoubtedly, the short-lived Truss administration applied the wrong lessons from British economic and financial history of the 1980s. As Big Bang 2.0 is an imagined growth strategy for the 2020s, Survival Capitalism is a timely reminder of the need to take seriously the importance of networks and culture when seeking to effect change.

This chapter will provide an overview of impact investing and how to finance social entrepreneurs. Social entrepreneurship is emerging at the intersection of three sectors: the public sector, the private sector, and the third sector (including non-profit organizations and civil society). It challenges the perceived boundaries between sectors and provides innovative solutions for social needs that are not adequately dealt with by public authorities, businesses, or traditional non-profit organizations. We view social entrepreneurship as a field of practice and social entrepreneurs as the individuals who set up and manage social enterprises. Social enterprises can adopt various legal forms and can be characterized by pursuing a social mission while competing in the market economy. In this chapter we refer to social enterprises as the organizations in which impact investors invest. They can pursue social and/or environmental objectives.

Investments in early-stage ventures are characterized by being private and by their ‘equity nature’, as discussed in the previous chapters, stressing the mutual dependence between investor and entrepreneur. Moreover, the investment is typically temporary and done between so-called ‘perfect strangers’ – that is, both parties have large information asymmetry and are faced with agency challenges yet will be condemned to one another because of the illiquid nature of the investment.

Investors, such as venture capitalists and business angels, should have the exit and return on their investment in mind from the outset. The main goal of this chapter is to discuss how investors in entrepreneurial firms time the exit of their investments and choose between different exit routes.

This chapter will provide insights on an alternative path to entrepreneurship: entrepreneurship through acquisition. Rather than starting a company from scratch, you can acquire an existing company through a management buy-in or management buyout, or even buy a company in distress and use that company as a platform to pursue your entrepreneurial ambitions. Given the number of companies that change ownership every year and the risks involved in starting from scratch, for many individuals this might be a worthwhile route to consider when aspiring to entrepreneurship. The process of buying a company requires a special skill set and mindset that differ from the traditional startup method. We also describe the situation whereby the entrepreneur would acquire a company in a distress situation, having experienced hard times, whether self-inflicted or the result of external conditions not entirely managed or manageable. The main goal of this chapter is to provide you with a step-by-step guide to the key questions to consider when buying a company.

Beset with the economic and political conditions of the 1970s, the Conservatives in opposition and early office were, according to insider Sir Adam Ridley, ‘dealing with what they thought were existential problems, about the survival of capitalism’. This chapter introduces the concept of ‘survival capitalism’ as a term for the responses and strategies that were developed by a myriad of actors and institutions in reaction to seemingly existential threats. They crafted these using networks of influence to ensure capitalism not only survived but thrived in a challenging period of global economic change. Ultimately, this led to the expansion of capitalism as it became an agent of change, driving popular capitalism. The chapter argues reforms were culturally informed and highly contingent while the role of capital was complex; it was harnessed by the nation state for reasons of statecraft and not simply a vector for change. The literature on Thatcherism, conservatism, neoliberalism, the City and the Big Bang is explored, and the stock market system explained. Methodologically, the focus is on archival sources and oral histories. The benefits of attending to culture and intent are expounded. Both cut across structure and agency and take account of circumstances, ideas, policies, culturally constituted institutional preferences and objectives, actions and reactions. Finally, structure is explained. The book begins with the authorities – the Government and the Bank of England – before moving to the London Stock Exchange which forms a bridge with two case study chapters on elite stockbrokers Cazenove and Lloyd’s of London.

Corporate venture capital (CVC) is defined as equity investment by an established corporation in entrepreneurial ventures. CVC investors play an important role in the entrepreneurial ecosystem, accounting for one-fifth of total funding disbursed and a substantially higher fraction in specific sectors and geographies. As the name suggests, the practice consists of established corporations that set out to act as venture capitalists and fund entrepreneurs who develop and scale innovative technologies and solutions. Similar to venture capital (VC) investors, CVC investors receive an equity stake in return for the provision of capital. A major distinction concerns the motivation and structure of corporate investors. Financial returns are an essential consideration for CVC investors, yet often strategic objectives motivate the parent corporation and its CVC activities. Moreover, there is substantial variation in the structure of corporate investors. While most VC investors follow a limited partner–general partner (LP–GP) structure, different corporate investors have different structures.

This chapter will go deep into the process of searching for a business to acquire as a way of becoming an entrepreneur in an existing business. Similar to Chapter 17 on management buyouts and buy-ins (MBOs and MBIs), the entrepreneur is not starting from zero, but looking to acquire an existing business that they can then run and enhance as an equity-owning CEO. Unlike what we saw in Chapter 17 with MBOs/MBIs, in the case of a ‘searcher’ the company to acquire has not yet been identified and most of the process is devoted to the search for the ‘dream’ company. In both cases, and as we have seen for startups looking for financing from external investors, the idea is to search for a business, acquire it, run it for some years, and then sell it, allowing the investors and the searcher to have a healthy internal rate of return (IRR), in general of around 30 per cent.

This chapter shows how the elite stockbrokers Cazenove responded to the Big Bang deregulation of the financial sector, using social networks and inherited practices to navigate what was an ostensibly technical and modernising revolution. The Thatcher administration’s reform of the London Stock Exchange was an economic enterprise intended to end restrictive practices, open the City to competition and, Survival Capitalism argues, secure the mechanism for selling gilts. On the face of it, a more open meritocratic financial sector marked the ‘death of gentlemanly capitalism’ and coalesced with a political agenda for entrepreneurialism and popular capitalism. Yet this case study shows how Cazenove’s culture drove its strategy, that privilege and hierarchy were sustained by influential cross-sector networks, and that there was resistance to change, even though technological change and new financial instruments were embraced as part of a strategy which mixed innovation with tradition. Essentially, elite networks persisted in the 1980s deregulated economy as established relationships were used to optimum effect and became more important after Big Bang. A more mutually supportive relationship between finance and industry than has hitherto been imagined is also demonstrated. By showing how a modernising revolution was navigated using social networks and traditions, this chapter restores the role of culture to financial history. It contributes to a body of work in twentieth-century British history which challenges the perception that neoliberal ideas were consistently applied under Thatcherism and complicates the notion of a coherent Thatcherite project.

This chapter will act as your guide as you begin your journey in entrepreneurial finance. It will serve as a roadmap, allowing you to choose between reading the book from start to finish or, if you are looking for specific advice, to jump directly to the relevant chapter or topic. We will look at the differences and similarities between entrepreneurial finance and more traditional fields of finance, such as corporate finance. Finally, we will discuss the different stages that a new venture may go through as it grows, and some of the financial challenges that both the founders and investors in the business might meet along the way.

The logic is simple: you can be as thorough as you like with your due diligence or portfolio strategies – in the end, none of this will help you to reach attractive investment returns if your process is flawed from the very beginning. If the selection process was carried out poorly, then you will most probably either lose some money or lose a lot of money. You will lose some money if you find out in the course of due diligence that your target is not really a target. You may lose a lot of money, however, if you find out after the investment has been made that your portfolio company is unlikely to succeed. Thus, the process of deal sourcing and the screening process are of utmost importance. Let’s get started!

Chapter 5 opens with a White House ceremony in which the President of the United States presented five astronauts with the Lloyd’s Silver Medal for Meritorious Service in 1984. The British Ambassador deemed the ceremony ‘a brilliant stroke of public relations genius’ by Lloyd’s after it had successfully commissioned a space odyssey – at a cost of $180m – to rei two rogue space satellites. The event exemplified Lloyd’s pioneering spirit and leading edge in world insurance, signified it was a major force in the United States and hinted at Lloyd’s influence with government. This chapter’s ethnographic approach highlights tensions between tradition and modernity at Lloyd’s and show how beliefs, meanings and historic memory impacted modern business practices. Lloyd’s skilfully navigated Thatcherism, demanding government support and recruiting from government on the one hand and resisting government interventions on the other. Relationships with the British Embassy and the UK Treasury were successfully exploited when Lloyd’s strove to retain beneficial trading arrangements with the US to the relative detriment of US domestic companies. State intervention in, and protection of, markets extended to the ‘Reconstruction and Renewal’ of Lloyd’s in the 1990s, which amounted to an early example of a networked rescue package for an institution too big to fail. Challenging vested interests and ending restrictive practices is a hallmark of neoliberalism long associated with Thatcherism. Yet, by demonstrating government pragmatism, classical forms of governance, and the failure to disrupt privileged interests and restrictive practices, this chapter disrupts traditional understandings of Thatcherism and neoliberalism.

This chapter traces the Bank’s concerns and detailed planning, both in its own capacity and as tasked by the Government, throughout the Stock Exchange reform period. Overwhelming evidence that reforms emanated from the Government and Bank challenge the notion that the Big Bang was the ‘unintended consequence’ of government action and, indeed, the Bank’s official position, designed to carry the market, that reforms were practitioner-led. In the face of change, the Bank’s overriding aim was to maintain a central stock market, controlled and regulated by the authorities. Ensuring the Stock Exchange built and controlled the market’s electronic hardware and software was a means to this end, and guarded against fragmented, unruly markets. Ultimately, prudential regulation was sacrosanct whereas precise trading arrangements and even foreign ownership of firms were not. Control of the central market outweighed later stated objectives of attracting international capital and strengthening London as a world financial centre. Indeed, it was only after reforms had been agreed in principle that the Bank turned its attention to the impact of international capital and foreign competition on the City. An evolving awareness of the likely impact of reforms on British firms, stark choices and interventions to protect British interests show that then, far from embracing international capitalism, the Bank sought to protect national interests, often imperceptibly through the exercise of soft power. In the end, protectionism proved insufficient, but revealing intent challenges the ‘death of gentlemanly capitalism’ thesis which claims the authorities betrayed the City by not protecting it.