Best Practice: Jeffreys Henry’s Justin Randall

BATTLE LINES are being drawn among accounting firms keen to carve out their own potentially lucrative share of Britain’s burgeoning market for early-stage technology companies.

Big Four giant KPMG recently announced it is willing to plough £75m worth of investments into the sector, albeit on a global basis, having already set up an office in London’s burgeoning Tech City. While last year Beever and Struthers made a foray into the area when it merged with specialist media, digital and technology business, The Company Books, to create a 30-person London office. 

According to Justin Randall, partner at Jeffreys Henry, the firm is benefiting from early entry into the market. Randall and colleague Jon Isaacs have spent the last four years building the firm’s presence with tech and digital businesses in Tech City, the UK’s equivalent to Silicon Valley. However, its involvement with early stage tech companies pre-dates that.

In the dotcom boom JH was “very active” in advising companies and raising funds. By happy coincidence the firm’s office, which has been near Old Street roundabout for over 25 years, is now at the “epicentre” of Tech City’s “buzzing” scene.

Indeed, according to UHY Hacker Young, over 15,720 new businesses were set up in the EC1V ‘Silicon Roundabout’ area between March 2012 & March 2013. The attraction to firms big and small is clear – while some of the businesses will shrivel and die, there is an opportunity to get involved with some tantalising growth rates.

“Over the last two years we have seen other firms try and establish a presence here. They take a desk in a service office and claim they are in Tech City. Ultimately people don’t buy into that,” Randall says.

Randall explains that the firm has been able to build a good relationship with companies wishing to raise finance through the Seed Enterprise Investment Scheme (SEIS), set up in April 2012 to help small early-stage companies raise finance by offering a range of attractive tax reliefs to investors because of its “proximity” to the market.

But location is not enough. To be successful, Randall says, accountants have to be part of the “ecosystem” by attending networking events, running seminars and getting in at the “ground level” with start-ups. For instance, Jeffreys Henry has built strong links with business accelerators such as Telefonica’s Wayra UK, which provides up to €40,000 (£33,218) in start-up capital.

“Some of these businesses are very much at the ideas stage,” says Randall. This offers firms like Jeffreys Henry an opportunity to provide advice on accounting, tax and financial matters including SEIS, EIS and Patent Box – as well as guidance on funding options and future exit strategies.

Randall also says it is worth playing the long game when deciding when to start charging for advice. For a limited time, the firm provided free company formation and initial finance/accounting/tax advice to local technology and digital start-ups. “You can’t expect to spend time building a relationship with entrepreneurs and then send them a bill for it,” says Randall.

Nevertheless, the strategy has proved successful; in the past four years Jeffreys Henry has picked up over 100 fast growth tech clients generating a fee income in excess of £1m.

That growth has seen the firm’s business support team expand 25% over the last year, with additional staff providing tax advice on reliefs to the creative sector, R&D tax credits and Patent Box and others advising on raising finance through SEIS.

But what does Randall make of accounting giants such as KPMG bulling their way into the market? Ultimately, he doesn’t see them as competitors. “I don’t consider myself to be in the same business as them. They are not set up to deal with tech businesses at our level.”

Jeffries Henry in numbers

Top 50 ranking: 82
UK fee income: £5.5m
UK offices: 1
UK partners: 8
Bluffers guide: The firm, established in 1880, created the international network Jeffreys Henry International more than 30 years ago and is available in more than 55 countries. The firm ranked 11th in the country for AIM clients in the Q1 2014 Adviser Rankings table

Justin Randall CV
1994- Present Jeffreys Henry as one of four equity partners
1992 -1994 Senior manager
1990 -1992 Manager at Leigh Carr
1986 1990 Trainee at Leigh Carr

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