Startups – walls and bridges

Written by Mark Evans

Silicon Valley Bank has released its latest Startup Outlook report, polling over 1,000 startup founders and executives looking at the perceptions of technology and healthcare startups on business conditions, Brexit, fundraising, hiring and policy issues.

In particular the UK respondents are wary of the challenges and opportunities of Brexit, and whilst 53 per cent say they don’t plan to expand outside of the UK, one in four (25 per cent) UK startups expect to establish a European outpost, an increase from 21 percent in 2017.

In fact 3.5 per cent say they may move their headquarters to Europe, and just under 2 per cent to locations outside of the UK and Europe.

“Eighteen months on from the Brexit vote, the UK remains a strong pillar for innovation in Europe,” said Phil Cox, head of EMEA and president of Silicon Valley Bank’s UK Branch. “Despite uncertainty, entrepreneurs and startups are forging ahead, creating jobs and raising capital to enhance the UK’s global competitiveness. Whilst one in four will be opening a European outpost – up from one in five in 2017 – slightly more than half of UK startups do not plan to expand outside of Britain. Despite challenges relating to regulation, cybersecurity and consumer privacy issues, many UK startups are of the opinion that 2018 will be better than 2017.”

Other issues that appear on the radar of startups are in the attraction and retention of talent (made worse by the Brexit uncertainty), followed by issues of international trade, cybersecurity and consumer privacy.

Fundraising, naturally, also figures, with 72 per cent say the fundraising environment is somewhat or extremely challenging, however there is a drop in the expectation that venture capital will supply the required capital (47 per cent, down from 56 per cent in 2017). Correspondingly, 49 per cent say their realistic long-term goal is to be acquired (compared to 55 per cent in 2017); while 21 percent expect to pursue an IPO (compared to 16 per cent in 2017).

None-the-less almost half of respondents (49 percent) say they believe business conditions will improve in 2018 when compared to 2017.

Full report here.