Brexit - Our Opinion
The vote to leave the EU last week has certainly caused a host of whispers and rumours on what will happen now. The fact is that until the UK Government decides exactly what they want to do with the recommendation that is the Referendum outcome, there will be few certainties and for many entrepreneurs it will be business as usual.
It might be worthwhile at this time to consider some of the positives for SME’s in the UK.
The majority of regulation and under which early stages businesses work, especially from a financial perspective, will roughly remain the same. Crowdfunding and P2P lending for instance in the UK operates under specific UK regulation with less reference to the EU and mechanically it is UK investors and UK borrowers and so there will be little disruption. The Financial Conduct Authority in the UK has been enormously innovative as well as rigorous in their approach to support early stage companies in the UK and there is no reason to believe that this will change.
It might be worthwhile remembering that many of the UK’s most successful startups were initiated during the last recession, so there’s no reason to believe that this will lead to a decline in the UK’s startup scene. In fact, true entrepreneurs thrive in these uncertain environments and we are likely to see a host of new opportunities emerging.
The current UK Government has been very clear in their support for startups, recognising the fact like many of their peers that a strong startup ecosystem lies at the heart of a growing economy. I think it would be useful if the government could now maximise on the fact we are seen as a nation that supports tech and drive that forward further. The government could support the startup sector more in terms of PR perhaps, highlighting the strong skill base we have and making us more attractive to other countries from a startup point of view.
From an investor perspective we need to remember that the UK has a very well developed Angel investment infrastructure and many VCs will look for opportunities irrelevant of borders. EU-based investors will continue to invest throughout the continent as well as the UK. When you look at the success of UK based start-ups in recent years, particularly the fintech sector, we can easily assume that opportunities here will remain attractive.
It comes down to the UK government in the end and it will be naive to imagine that a strong economy and hence a strong startup eco system will not be at the heart of many of the negotiations they will engage in and the choices they will make over the next few months and years.