Inside the ELITE ecosystem

ELITE is designed to help ambitious companies scale up, structure for growth and be more competitive in the global marketplace. Combining education, business support and mentoring, it also connects business owners to vital sources of funding, be that through venture capital, private equity, an IPO or innovative, customised funding vehicles.

“The programme was established in 2012,” explains ELITE CEO Luca Peyrano, “with the precise intent of supporting SMEs and high-growth companies to access capital in an alternative format. For most private businesses seeking capital for growth, there are a number of options. One is venture capital or private equity funding. Another is to go through some kind of investment partnership, merger or acquisition. And finally, there is also the IPO as a potential outcome.”

A structure for support

The London Stock Exchange Group’s understanding of the marketplace led us to believe that there was a real need from businesses for support as they prepared to talk to investors and prepare themselves to enter the capital markets, even well before an IPO might take place. In so doing, we effectively created a new asset class composed of private companies that are ready to go and well equipped to face the next phase of their growth in terms of capital raising and engagement with investors.

“On the one side, ELITE is a capacity-building programme,” Luca says. “But it’s much more than that. It’s a networking ecosystem within which companies can interact and network among themselves, and also meet and engage with investors and advisers at a very early stage, as they prepare for the next phase of their growth.”

The growth of ELITE itself is proof that there was a real need for such a platform among SMEs. It now has 1,150 members, representing 40 different countries and more than 30 sectors, including food and drink, technology, manufacturing and healthcare. While the UK and Italy are still the dominant clusters geographically, a growing number of ELITE companies are spread across Europe and beyond, with North Africa, West Africa, Latin America and the Middle East all represented.

The companies may propose themselves as candidates, or they may be invited to join by ELITE itself or by our partners, which include banks, brokers and law firms. All of them are private companies, all are filtered and vetted in terms of quality, and all go through a structured programme of preparation and networking workshops that cover key topics from finance to strategy, from internationalisation to digitalisation, down to corporate governance. Over a period of 12–24 months, they are prepared to raise capital in the most appropriate way for their business needs and ambitions.

A platform for partnership

“Over its lifetime, ELITE has further evolved, acquiring many characteristics of a fintech platform,” Luca says. “For investors, it has become an excellent source of potential candidates for investment, and many venture capital and private equity houses use it to identify target companies. In 2017, we created ELITE Club Deal, which is a private placement platform within ELITE, where companies that have been through the preparation phase can raise capital privately, either in preparation for an IPO or independently of one.”

In recent years, shifts in market conditions have created a fracture between private companies seeking funding and potential investors. ELITE seeks to bridge this gap, leveraging technology and creating new products that enable smaller companies to raise capital automatically, in harmony with market participants. These include not only intermediaries and brokers, but also investors from private equity to venture capital, as well as alternative investors in growing categories such as family offices.

Luca explains: “We have also developed a number of innovative solutions when it comes to product design, in particular the Basket Bond, a model through which companies come together in pools to raise capital, sharing the fixed cost of the transaction. It’s a great example of how ELITE is fulfilling its mission to get private companies closer to the capital markets, offering them solutions where capital can be offered at a lower cost.”

In short, we believe that the combination of education, capacity-building and finance it offers makes the ELITE programme unique – as is each one of the exciting, ambitious, fast-growing companies we represent.