Why Scale-Ups Fail (Even with Funding): What Economic Development Programmes Keep Missing 

Why Scale-Ups Fail (Even with Funding) What Economic Development Programmes Keep Missing 

What does it really take for a business to move from start-up to scale-up? 

Most Economic Development Programmes and Grant-Making Foundations would point to the obvious answers: capital, infrastructure, market access, and technical assistance. These are all essential. But when we look at why some SMEs falter as they grow, even when those resources are in place, the missing link is often more human than structural: entrepreneurs aren’t equipped with the internal leadership or support systems to navigate the messiness of scaling. 

And this is where mentoring becomes not just helpful, but transformational. 

Growth Isn’t Just a Strategy—It’s a Stretch 

Entrepreneurs at the scale-up stage are facing something different than in their start-up phase. They’re no longer proving viability—they’re stretching

• from managing tasks to leading people 

• from gut-feel decisions to strategic systems 

• from survival mode to sustainability and purpose 

This transition is challenging because it demands a shift not just in what the entrepreneur does, but in how they think, relate and lead. According to the OECD, while start-ups are often celebrated, it is scale-ups that drive most net job creation. And yet, too many promising businesses hit a ceiling or stall out—not because of flawed models, but because their founders lack the leadership agility and relational support to grow through complexity. 

So Where Does Mentoring Fit In? 

When designed well, mentoring plays a unique role in bridging this growth gap—offering support that is: 

Relational, not transactional 

Responsive to context, not prescriptive 

Built on trust and reflection, not just performance metrics 

For example, in our work with the GoRise Programme, we saw entrepreneurs move from high-potential to high-impact by partnering with mentors who didn’t just offer answers—they asked powerful questions. Questions like: 

• “What’s getting in the way of you stepping back from the day-to-day?” 

• “What conversations are you avoiding with your team?” 

• “What would scaling look like if it stayed aligned with your values?” 

These conversations sparked self-awareness and clarity. They helped entrepreneurs take bolder decisions, delegate more effectively, and reframe failure as learning. 

Challenging Our Own Assumptions 

As economic development actors, we often focus our support on external enablers—funding, policy, access to accelerators. What if we expanded that lens? 

What if your next programme also asked: 

  • Are we investing enough in the relational infrastructure of entrepreneurial ecosystems? 
  • Do we prepare mentors with the skills to truly support the emotional and strategic weight of scaling? 
  • Are our entrepreneurs learning to lead themselves, or just their businesses? 

Scaling businesses without growing the human capacity behind them is short-sighted. The entrepreneurs we support don’t just need capital—they need a sounding board. Someone who can walk alongside them when the weight of growth becomes lonely. 

What Effective Mentoring Looks Like in Scaling Contexts 

Not all mentoring is created equal. For mentoring to make a difference during scale-up, it needs to be: 

  • Structured but flexible – Clear roles, expectations and boundaries, but space for honest, evolving dialogue. 
  • Skilled – Mentors trained in active listening, holding space, and challenging constructively. 
  • Context-aware – Relevant to the growth stage, the sector, and the specific dilemmas of the entrepreneur. 
  • Embedded in wider systems – Integrated into other programme elements, not treated as a bolt-on. 

In the Imarisha Programme, mentoring didn’t just support entrepreneurs—it strengthened their entire support ecosystem, building trust across networks and enabling long-term resilience. 

A Call to Action: Invest in the Who, Not Just the How 

If you’re running an economic development initiative or funding entrepreneurial support, it’s time to ask: 

👉 Are we truly equipping entrepreneurs to lead at scale? 

👉 Do our programmes go beyond tools and tactics and into the relational dynamics of leadership growth? 

👉 Are we supporting the mindset shifts required for entrepreneurs to lead themselves, before they lead others?

👉 Are we holding mentors to a high standard of practice—or assuming good intentions are enough? 

At The Human Edge, we offer specialised training for mentors, mentees and programme managers to build the kind of mentoring that supports real growth—not just business metrics, but human clarity and confidence. 

Explore our solutions: 

Mentoring Skills & Practice – for mentors supporting scale-up stage businesses 

Make the Most of Mentoring – for entrepreneurs to engage meaningfully in mentoring 

Running Effective Mentoring Programmes – for programme managers to embed impactful mentoring into wider initiatives 

Mentoring Entrepreneurs: The Insider’s Guide to Shaping Success – our practical guide for mentoring entrepreneurial leaders 

If we’re serious about sustainable growth, we need to stop treating mentoring as a ‘nice-to-have’. It’s time to see it for what it is: a critical part of the scaling equation

Want to explore how mentoring can amplify your programme’s impact? 

Let’s talk.