As members of our growing WhatsApp community will already know, we backed and pointed entrepreneurs in our network in the direction of two letters from different corners of our ecosystem this week. Both have something in common that should pique the interest of the Chancellor — they’re about removing friction rather than spending money.
The Free to Start and Scale letter argues outdated employment practices are holding back Britain’s start-ups and scale-ups. In March 2025 I wrote about Nando de Freitas posting on X arguing Europe should copy California in banning non-competes. This week, he was a founding signatory of a letter calling for exactly that. As the letter argues:
“Labour mobility is a classic collective action problem. Competition for technology talent is fierce, and no company wants to lose out. Not all start-ups and scale-ups can unilaterally disarm, when the dominant technology companies use contractual restrictions to make competing harder. But the current status quo is bad for workers, businesses, and the British economy.”
To be clear, non-competes aren’t a priori bad. It’s really an empirical question. But one where the evidence points towards a ban. Enforceability does give firms a reason to invest in people and ideas, raising intangible investment by around 8%. But innovation has more inputs than company investment, and non-competes suppress mobility and new firm formation, which the evidence suggests matters more. After all, as Mann Virdee argued, Silicon Valley hasn’t done too badly from California’s 1872 law against enforcing non-compete clauses.
In 2023, the Government rejected a ban and settled on a three-month statutory cap. The cap was never legislated. Instead, in November last year the Department for Business and Trade went back to the beginning, publishing a working paper on four options including an outright ban. The Competition and Markets Authority responded in February by backing reform.
Read the letter and add your name here.
The second letter, organised by Odin, calls for a UK Exempt Reporting Advisor regime. It’s prohibitively expensive to start a VC fund in the UK. A $10 million US fund loses roughly 4.5% of commitments to admin and compliance over its life; the UK equivalent can reach 14%. This goes some way to explaining why the median US venture fund was $21 million in 2024 against £70 million in the UK.
Today a new fund manager needs the Financial Conduct Authority’s permission before raising a penny, or has to rent it from a firm that already has it. Odin’s proposal is that a narrow category — funds that don’t borrow, that lock investors in for a fixed term, and that raise only from institutions and sophisticated investors — should simply have to notify the regulator instead.
Read, sign and respond to the consultation here.
Daisy Chain
Daisy Cooper MP, Deputy Leader and Treasury Spokesperson for the Liberal Democrats, has written inviting you to respond to the party’s Plan to Get Britain Growing Again. It covers investment, enterprise, innovation and trade, and proposes a new Department for Growth bringing together economic, tax, business and trade policy. Feedback goes through a short form.
To be clear, we would circulate this sort of opportunity for any party, and have done so. Our job is to get founders in front of whoever is drafting the policy. If you have a particular allegiance, say so when you join us — we sometimes pass things on directly to a party, and it helps to know who wants what.
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