What are investors looking for in training providers?


As an apprenticeship and vocational training provider, it can make a lot of sense to explore the idea of external investment – but it’s not always easy to know where to start.

One person who knows all about the investment process is Simon Rouse. He’s spent over two decades leading large businesses, including four years as Group Managing Director at PeoplePlus Group.

Simon is now a consultant who acts as a bridge between investment companies and training providers. He helps training providers to shape their business proposition so that they’re more attractive to investors, and helps investors find great training providers.

We spoke to Simon to understand the challenges training providers face when raising investment and, crucially, what investors want to see before signing on the dotted line.

Embrace digital transformation

Simon believes that technology now plays a central part in securing investment. However, while a lot of training providers have made steps in the right direction, many still have a long way to go before they can realise the benefits of true digital transformation.

“The pandemic forced providers to confront the need to go digital, and a lot of them moved quickly,” said Simon. “But in my observations, many of the systems they’ve moved to aren’t fit for purpose – there’s now a real need to move onto the next stage of digital transformation.”

Many training providers opted for low-cost systems that offered a quick fix during the pandemic – but these only solved one part of the total training delivery process. For instance, a Learning Management System (LMS) would be coupled with a separate solution for their Individualised Learner Record (ILR) return.

The result is a series of disparate systems that don’t talk to each other. It requires data to be input manually multiple times, which leads to inaccuracies and compliance risk. Adopting systems such as this will not truly digitally transform a business.

Read more: Why flexible platforms allow mistakes to creep in

Whether you’re looking to embark on digital transformation for the first time or thinking about investing further, here are some of the reasons why investors believe your company’s technology impacts its value.

Drive greater efficiencies

Investors will want to see that providers have a strong management system in place, that the business is running as efficiently as possible and that it can easily scale. Simon points out that this is made all the more important in today’s economic climate.

“The cost pressures in the marketplace through inflation are now so great that driving more efficiency through your systems and processes is vital. If it’s a really efficient business, it means they can see an opportunity to grow that business without having to do the big investment themselves to turn it around,” he said.

Simply put, with the right platform in place, investors will know that a training provider can increase their trainer caseload while maintaining quality and learner outcomes.

Investors can also be confident that the training provider is gathering all the evidence required to support their funding claims, including ALS.

Prove scalability with artificial intelligence

Artificial intelligence is an increasingly useful tool for improving efficiency, helping providers to onboard learners, manage trainer caseloads and develop curriculums. However, it will also be critical from an investor’s perspective, because it provides a clear path to scale.

With the right AI tools in place, investors can be confident that a training provider can significantly increase learner numbers while delivering training that’s more tailored and effective than ever. It’s a powerful tool to help to reduce the perceived risk of the investment and provide the reassurance needed to get their buy-in. 

Still struggling to navigate the fog of AI? Our whitepaper covers practical ways to use new technology in the apprenticeship space, including:

  • Four key opportunities to use AI within training
  • The risks of AI for providers and learners
  • The future of generative AI for apprenticeships
  • How to be the first to try Bud’s new AI features

Give peace of mind around compliance

Having an up-to-date, watertight digital operating platform will also give investors the confidence that you’re collating all the right evidence for your Ofsted inspection. 

Bud’s platform has been designed with compliance in mind. It’s built into every stage of the system, from enrolment to EPA. For example:

  • Digital enrolment processes can be completed remotely or face to face, ensuring proof of eligibility is captured at the outset
  • Skill Scan ensures you can evidence every learner is on the right programme
  • ILRs are automatically generated and updated in real-time
  • Evidence of every interaction and learning experience is recorded together with evidence of ALS
  • Progress is accurately tracked – trainers can see when to provide stretch and challenge
  • OTJ is completed and tracked
  • All compliance evidence is stored and easily accessible for your ESFA audit

Automating data collection in this way improves accuracy whilst reducing administrative burden and the risk of errors. And when hard close (R14) comes around, you’ll have all the evidence needed for the final submission. These are aspects that will be high on the list of priorities for potential investors.

Gain a competitive advantage

Simon explains that investors would still consider a training provider that hasn’t been through the digital transformation process. However, they will always be looking at how they could bring those tech capabilities in sooner rather than later.

“There isn’t a world in which a successful training provider is not going to need to do digital transformation. So if you want to market yourself to investors, it’s better to be in a position where the value is already in the business,” Simon said.

“This way, you get a better price for it than having a business where you need somebody to come in and add that investment and capability, because your value to that investor is naturally lower.”

Digital transformation also gives training providers a key competitive advantage with employers. Clients are increasingly looking for providers that can offer a seamless digital experience for learners or they’ll go elsewhere.

There isn’t a world in which a successful training provider is not going to need to do digital transformation. So if you want to market yourself to investors, it’s better to be in a position where the value is already in the business.


Five tips to improve your proposition

Embedding technology into the business is clearly a key priority for training providers looking to raise investment, but what else can be done alongside this?

Here is Simon’s advice:

  1. Know that you’re operating in an attractive marketplace. “Investors are used to far more complex marketplaces, so they get comfortable with things like the levy and the regulatory environment quite quickly,” Simon said. “This is a very investable sector.”
  2. Develop a clear strategy. “The investor will want to see a very clear strategy on your market proposition and how you’re competing. They’re looking for an executable plan that can grow.”
  3. Invest in your management team. “Make sure you’re upgrading and building your talent. You need to have confidence that, as investors explore the organisation, they’ll find really good people.”
  4. Create a compelling, competitive position. “Do this in terms of the quality of your teaching, curriculum and learning, but also provide evidence of this through a compelling client list.”
  5. Have a clear sales and business development strategy. “Provide proof points for your numbers and demonstrate an understanding of the route you’re taking to achieve those numbers.”

Read more: What are the top five revenue risks for training providers?

Book a discovery call now

Bud’s industry-leading platform is built around compliance. We help training providers streamline their processes and improve efficiency – it’s exactly the kind of digital system that appeals to investors.

Find out more about how Bud can support you with your digital transformation or book a discovery call today.