30 January 2018

City AM: Brexit spurs more UK startups to set up in Europe

One in four British firms will launch their business outside the UK, but will remain headquartered in the country, up from the one in five who said the same last year, according to an annual survey of more than 1,000 startups by Silicon Valley Bank.

And 14 per cent of entrepreneurs are considering moving their headquarters to Europe, up from the 11 per cent who were mulling a move in 2017, according to an annual survey of more than 1,000 startups by Silicon Valley Bank.

Business confidence among founders, however, has slightly improved, with almost half saying they believe 2018 will be better than last year and 42 per cent that their outlook remains the same. The share of people saying they believe things will get worse fell to nine per cent, down from 16 per cent in 2017.

And the fundraising environment has never been better. 28 per cent said it was not challenging, a larger proportion than any year since 2014 when the Startup Outlook survey first began, while 61 per cent said it would be somewhat challenging, the smallest proportion since since 2014.

With such a positive outlook, the Brexit effect could in fact be spurring startups to be more ambitious.

"Reading between the lines and from what we've heard anecdotally from startups they would be looking to expand further afield anyway," said Erin Platts, managing director of commercial banking at Silicon Valley Bank in the UK, noting that it's "rare to see a UK-only company".

"Now [with Brexit] it's more of a priority and they're doing it quicker than expected. Forcing them to do it more quickly is not necessarily a bad thing, it’s expedited the process," she said.

The survey also signals a hint of grander ambitions for UK startups. One in five founders now say their long-term goal is an IPO.

Concerns over access to talent remain the biggest concern, however, and one that's growing: 82 per cent said it was the biggest public policy issue for them, compared to 76 per cent a year earlier.

The issue of international trade also grew, with 46 per cent saying it was important versus 30 per cent who said the same last year. [...]

Full article on City AM

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