In his most recent Forbes column, the Entrepreneurs Network’s director Philip Salter speaks to five ambitious startup entrepreneurs to find out about their business, challenges, and plans for the future.
Read his interviews with Marco Del Lago (co-founder and CEO, CLARA Swiss Tech), David Hellard (co-founder, Zipcube), James Poulter (co-founder and CEO, Pronto), Weerada Sucharitkul (co-founder, FilmDoo), and Udi Liberman (co-founder, PayBox) in full here.
The World Bank’s annual Doing Business report has again placed Singapore in top position for doing business.
The UK came in sixth place, the US in seventh, but Blighty isn’t the best place to do business in Europe: that honour went to Denmark. Doing Business 2016 presents quantitative indicators on business regulations and the protection of property rights that can be compared across 189 economies – from Afghanistan to Zimbabwe – and over time.
In his most recent Forbes column, The Entrepreneurs Network’s director Philip Salter writes:
“It gets to the nitty-gritty of issues such as dealing with construction permits, getting electricity, registering property and trading across borders.
“The world is getting easier for entrepreneurs who want to start and grow a business. As consumers we will all benefit in countless ways, and this is what will eventually end the absolute poverty still plaguing this planet.”
Read the article in full here.
In his most recent Forbes column, our director Philip Salter writes on the role of genetics in the likelihood and success of entrepreneurship.
Speaking to Nicos Nicolaou, Professor and the GE Capital Chair of Mid-Market Economics at Warwick Business School and a world-leading expert on this subject, we learn first that:
“The heritability estimates for entrepreneurship are around 30-35 per cent. This actually means that environmental factors are actually much more important than genetic factors in recognising entrepreneurial opportunities and starting new businesses.”
And on the subject of whether buy ativan online australia entrepreneurial success is determined by genetics, Nicolaou tells us:
“Entrepreneurial success is not determined by genetics. It is crucial to emphasise that a genetic predisposition to entrepreneurship should definitely, unequivocally, not be confounded with genetic determinism. While genes may influence the likelihood of engaging in entrepreneurship, we are merely talking about likelihoods, and nothing more. Genes do not determine entrepreneurship.”
Read the article in full here.
When I consider some of the changes that have happened in Britain recently, I am reminded of the Chinese curse: “May you live in interesting times”.
Why a curse? There’s an idea now that anyone can start a company, that there are countless opportunities. There’s an idea of an “entrepreneurial spirit” taking over the country, and this is a positive thing. From Thatcher onwards, many people have been supportive of that idea; now that the Conservatives are in power, the public is generally pro-business. As a result, I think many people believe there are plenty of opportunities for entrepreneurs, and that regulation is fading away, and they see that as a good thing.
There is, however, a very strange paradox at the heart of society at the moment. It’s to do with the much bigger philosophical question of who we are and where we’re going. When I think about the night time, I wonder about what kind of country we want to live in and what kind of cities we want to participate in.
But first, I’d like to give a little snippet about me to offer an insight about the inspiration behind the Night Time Industries Association. I spent around a quarter of a century putting on events around the world and about 20 years ago I co-founded The Old Truman Brewery, a 25-building, 11-acre site in Shoreditch. At the time it was considered an “Objective Two” area in terms of employment, social issues and housing – issues that were very problematic at the time. We had been promoting and doing events all over the West End and people would tell us we were crazy, that no-one would ever go there, that they’d stay in Soho and that we should forget it.
You might think this was great news and a good story, especially when organisations like the World Bank started citing it as an example of urban regeneration. And you’d think that everyone had participated in the great news, that everyone valued the businesses and creative industries that had contributed towards the great regeneration. But instead, we found ourselves under fire in a really significant way. And then we realised that some very weird things were happening in areas like licencing and policing – things that weren’t normal. It was almost like the police had been instructed to come and find issue with what we were doing. There we were thinking: we’ve created hundreds of jobs, paid an enormous amount in business rates and created a great brand value for the area. Tower Hamlets were keen to be associated with all of the positive PR value of the new activity of creative enterprises. So what’s happening here?
In fact, we spoke to some of our colleagues in the industry in London and across the UK, and people everywhere – except for Manchester – were experiencing similar things. What we begun to understand was that the problem was with policy and the relationship between politics and the state. It was having a significant effect on entrepreneurs and regulation.
What’s happening is that the “night time” is being talked about in the context of crime. There’s a “fear of the night” in policy, of bad behaviour and a rise in crime. But it’s an old-fashioned script, one that associates many of the problems that do arise – and some that don’t but could – as deriving from and being created by night time entrepreneurs.
Up until quite recently, the night time economy – drinking, going out – was often seen in the context of silly pictures of women with mini skirts round their head, heels dangling. Or you’d hear a discussion about drunk tanks or crime spikes. But we need to take a step back and understand the situation.
Around a decade ago, when the new 24-hour licensing for bars and nightclubs was put forward, there were scare stories of binge drinking, crime and people behaving out of control. In fact, as Christopher Snowden of the IEA revealed recently, we’ve actually since seen A&E levels stabilise and people spreading their drinking patterns across the hours. Around 40 per cent of young people today describe themselves as teetotal. Unless you’re in the business of just selling alcohol, you might see this as fantastic news.
None of the nightmare visions have come true, and we’ve become a more interesting society, one with huge variety in how it is entertained. However, this isn’t the view of the police. Met Commissioner Sir Bernard Hogan-Howe came out around the time of all this good news and said: “You can make money from bars and restaurants and nightclubs, but the reality is councils around the country and particularly London are saying if we want to get crime down then we’ve got to get rid of 50 per cent of them”.
Everyone gasped. No one could believe he really said that. But I actually saw it as a good thing: it got everything out in the open. Here was a senior police commissioner saying we need to cull a British industry – one which generates £66bn per annum and 300 million visits a year from 8pm onwards from people who are coming in on EasyJet and the Eurotunnel into Manchester and Gatwick; not just to see Madame Tussauds or the theatre, but to go to Fabric, the Sub Club, XOYO. Night time industries have become a really significant part of what Joseph Nye called soft power and the UK’s brand internationally.
Sir Bernard Hogan-Howe’s comments were a real shock to many in the industry, highlighting a disconnect between policy and thinking. Here we were being viewed as borderline criminals, as creators of crime rather than stakeholders in a community that employs a lot of young people (at a time when one in four young people in London were unemployed), which provides a lot of secondary and tertiary employment and which has created regeneration. We all realised it was good thing that it was out in the open, but it was also a problem.
There needs to be a conversation in Britain about what the role of police should be. The police are having 20 per cent of their resources cut, stations are being closed and resources removed. It’s an unenviable position, but we’re now seeing many police authorities becoming increasingly statistics-obsessed. In conversation just recently, home secretary Theresa May asked: “Why are you spending so much time on burglaries and not on child paedophilia?” And the police responded: “OK, now if you want us to do burglary, you have to send us an email, because we can’t do that”.
Policing has become based on stats. The police are now pointing to performance and have created a rod for their own backs. It’s had a huge effect on entrepreneurs and the night time economy.
For instance, if someone loses their mobile phone, they’ll need a crime reference number to make an insurance claim. To get that number, they’ll have to call the police and say where that phone was lost or stolen. At one of our venues, for example, I had 80 passports in my office. They hadn’t been stolen: people had mislaid or lost them, possibly because they’d had a few drinks. But giving out all these crime reference numbers means borough chiefs across the country are unfairly linking venues with a spike in crime.
The increase in crime hotspots is being completely influenced by people losing things. Now, if I were to put it to the British public, I suggest that they wouldn’t think lost or even stolen phones were a big crime issue today. But even if theft were a big issue, even if there was suddenly a sharp rise in armed robberies at banks, in muggings or shoplifting at Westfield, in car theft at Ascot or in violence at Lord’s, no one would suggest closing banks, shopping centres or sporting events. If a haulage company knocks someone over, no one will close them down (assuming they’ve conducted their business properly and have done due diligence).
The night time industry is one of the most creative and innovative. It has had an effect not just in terms of how we make drinks or how we entertain people, but has played a part in every cultural phenomenon from The Beatles through to Wiley. We’ve got London Fashion Week here at the moment, but imagine fashion without the dance floor, without bars and clubs. The frisson, the sense of possibility, DJs, management companies – think about how they all interrelate with one another. Without the night time industry, all this would have been very difficult. The industry has had an enormous cultural contribution and an enormous economic contribution. And yet there’s a call for it to be culled. So one of the key goals in the Night Time Industries Association is for us to be treated as an industry. We want people to be held personally responsible when they commit a crime.
It sounds like such a normal, obvious thing to say, but if someone today commits a crime near or outside a venue, they’ll be asked where they had their last drink. This has worrying implications – it suggests that we’re not autonomous, rational decision-makers, but we’ve been programmed by the venue to act in a certain (criminal) way. It says nothing for millions of decent, ordinary citizens who don’t commit crimes. It says that entrepreneurs are responsible for individuals’ behaviour. And, as a result, we’re seeing greater regulation and intervention.
Yet the issues and responsibilities that are being increasingly imposed on many of our members are limiting, even stifling, businesses. According to Resident Advisor, people are now choosing Berlin and Barcelona over London, because being searched, having your biometrics taken, being surrounded by security guards and constantly told, nudged and pushed to conduct yourself in a certain way is a deterrent. In Cambridge, venues like McDonald’s now have breathalysers; Police Scotland has initiated a system where people are being swabbed at random while they wait in club and bar queues.
British serious crime has decreased and diminished significantly over the last decade, people are drinking less than ever before, people are tweeting about non-alcoholic drinks and we’re not seeing street fights all the time. Yet there’s this idea of British citizens and visitors as an out-of-control mob that needs to be constantly regulated. And that puts an enormous pressure on entrepreneurs, because some, quite rightly, don’t want to have an ID scanner in their establishments, it makes it feel like a prison or airport. Despite the British public never voting for compulsory ID, these days if you want to go out you need an ID to get into most places. And of course, most of the people that are really the problem get round such things. It’s the ordinary people that have to go through this rigmarole, and meanwhile it puts multiple impositions on the industry to the extent that we’re now seeing nightclubs and bars close.
There needs to be discussion around the importance and value of the night time. It’s when we make great friendships, when we get inspired, when we take in what people wear and how they dance. There needs to be discussion about how we organise our cities. We need to think about reversing the knee-jerk approach to policymaking today – the temptation to regulate, regulate, regulate – and to ensure there’s a more relaxed attitude towards allowing businesses to just get on and do what they do.
Let’s not forget that in the end, businesses and residents and visitors all have an interest in reducing crime. Everyone’s a stakeholder – and everyone can work together. Ultimately, we need to realise that people aren’t criminalised for the idea that they want to go out after 10 o’clock at night.
Uber is facing a massive crackdown after a new Transport for London consultation proposed new regulations that would ban some of the minicab-hailing app’s key features.
It’s bad enough that our government should want to regulate against the public interest and limit innovation to protect black cab drivers from competition from Uber and similar firms, says The Entrepreneurs Network’s programmes director Annabel Denham in the Huffington Post. But more worrying is an article from Steve McNamara from August 2015, in which the General Secretary of the Licensed Taxi Drivers’ Association (LTDA) proposes a range of regulatory changes. They were said to dictate (among others):
– A minimum five-minute period between booking and pick up;
– That operators must not show vehicles available for immediate hire – either visibly or virtually, via an app;
– That the fare must be specified at the time of booking;
– That drivers can only work for one operator at a time;
– No ride sharing;
– That operators must record destinations at time of booking;
– That operators must offer a pre-booking facility – up to seven days.
These – published a month ago – are almost word-for-word what TfL is now proposing. Oh, and the LTDA has a seat on TfL’s board. Can we really be surprised that commentators are (rightly – in my opinion) crying “regulatory capture”?
As Charlotte Bowyer of the Adam Smith Institute has pointed out: “It’s hard to see how a mandatory wait time between booking a vehicle and it arriving can provide any value or security to consumers”. It only furnishes the “flag down” black cab trade with a competitive advantage. In addition, restrictions on the number of operators a driver can work for will only shackle hard-working, entrepreneurial drivers who combine shifts at traditional minicab companies with flexible and ad hoc hours with Uber. Ultimately, this will hurt passengers by reducing the supply of drivers.
“The TfL proposals are anti-competition, anti-innovation, and anti-entrepreneurship. Technological progress may seem inevitable, but history is testament to the fact that good or bad politics plays a huge role in a country’s global competitiveness. Lawmakers here in Britain rarely shy away from self-congratulation for our growing economy: it’s time they stopped promoting policies that slow growth and hinder economic opportunity.”
Read the article in full here.
I founded Funding Circle with two friends from university. We quit our jobs at the end of 2009, launched in 2010, and we now have offices in San Francisco and London and employ about 350 people. We’ve raised around $300m of equity capital for the business.
We’ve lent over $1.3bn to businesses through our platform, and I expect us to do between $1bn and $1.5bn over the next 12 months. We’ve funded around 12,500 businesses – connecting investors to businesses who want to borrow money.
We have around 50,000 different investors. They range from people who have savings to invest, central government, the British Business Bank and local government. We also have institutional investors, which are long or speciality funds lending through our platform.
We’ve historically grown between 120% and 170% a year on average. But although we’ve grown consistently, we see cycles – growth isn’t always linear or exponential and we have phases where we grow and other times where we consolidate.
I remember in our original business plan, we drew a lovely hockey stick and we’ve been able to achieve those growth plans, growing faster than we imagined back then. (Although I would add I’m pretty sure we were meant to be hugely profitable by now and that has yet to be the case.)
Before I get started, full disclosure: we weren’t the first business to adopt this model. Zopa, which was set up by a bunch of guys who worked at Egg (the first internet bank) applied the model to consumer loans; we’ve since applied it to small business loans. We’re the leader in that globally and it’s probably fair to say we’re the only real global presence in terms of peer-to-peer lending.
The following are some of the challenges I think are really important with growth.
Short-Term Versus Long-Term Targets
In the process of setting up the business I spoke to investors, mentors and other business people. You’ll get a whole bunch of people who will talk to you about the importance of iterating, getting things done quickly and producing a minimum viable product. They’ll say move fast and break things, get it out quickly, and test-learn-test-learn. Others will suggest investing for long-term goals and achievements.
I think it’s analogous to politics. You often hear more experienced politicians – those in the House of Lords or retired – talk about an inability when they were in power to make longer-term decisions, because they had to get elected. The same can be said in some businesses, and, for us, because we are venture capital-backed, we’ve had to demonstrate that we’re growing, meaning there can be pressure on making trade-offs.
We have managed this well, but we were very fortunate to have really supportive venture capital investors who really believed in the long-term project, allowing us make appropriate trade-offs, especially when investing in our product and tech.
This challenge changes over time. When you first start you have to iterate really quickly and then as you get bigger, the impact of failure or things not working out as you’d planned is larger and therefore you need to invest more time, effort, energy and planning into the longer term. It’s something I’ve always wrestled with and it’s a difficult thing to do.
Growing a People Organisation
When we first launched Funding Circle we had five people, including the three founders. We grew the team to eight people and before we knew it we were hiring one person every week. But we were still in the same location working together and we still knew everyone in the office. Then we got to about 60 or 70 people, we acquired a business in the US and although they only had 10 people we were growing in two locations, and communication became more difficult.
I’ve learnt that with a business like ours, which is trebling every year, some people change and grow with the organisation, but some people who helped get you to where you are today aren’t going to get you where you want to go tomorrow. As a business leader and founder, I wrestled with the balance between my loyalties to those who have helped us achieve what we have, while making sure that we’re bringing in the right people so we can all achieve what we want to in the future. Different members of the team are going to take that conversation differently.
Some will feel like they can’t give up what they’ve previously been doing. Perhaps they’ve owned all of risk analytics and suddenly you need to compartmentalise and split some of their tasks among others. Some will embrace change and see it as just a natural progression of growth, but others will find it very difficult – I think the skill is making good, quick and fair decisions about how you grow people, how you develop them, and how, frankly, you deliver the results to make sure your team delivers. This is one of the most important and challenging things in growing a company and I think learning to make sacrifices and being led by a level of integrity in how you treat people is vital because others in the team will see that. But, equally, you need to be honest and say: “this person isn’t scaling, isn’t growing at the same rate as the company and we need to take action on that.”
Building Controls and Structure
The third area, which is really important and something that you rarely hear about – especially during the tech start-up meetups I take part in – because it’s not sexy or interesting, is how you put in more controls and structure. For most people entering a start-up these are extremely negative ideas. Obviously, most people acknowledge that they’re important but I think it’s something that needs to be thought about more.
Inevitably controls and structure have an impact on the culture that’s created. At Funding Circle, we identified our culture quite early on and we developed a set of values. If you’d asked me when I first set up Funding Circle what I thought of creating values for companies, I would have thought they were nonsense, artificial and that no-one cares.
But as a founder of a company, developing the values was a great process. I really think they’re super important, though only if everyone buys into them. You have to make sure everyone fits within those values, lives those values and that ultimately their success is associated with them. Otherwise, they’re viewed like they are at large companies – where people just don’t believe that they are relevant.
We now have traditions that help reinforce how our culture operates, which should stand us in good stead as we bring in controls and structure to the business. I’m not going to lie to you: it’s really complex. But the inevitability of our growth is that we need these controls and we need structure, and I think bringing that together in a way that actually changes your culture, your core values and core style of the company – what I think of as the soul of the company – is the same.
We evolve and we change, but someone coming into Funding Circle today still has the same fundamental experience as people who came in years before. That’s something we worked really hard to achieve and has been very important to our growth. Without it, no matter how much control or structure you put in, you will lose the important things that got you to where you are today.
Communication is Key
Encompassing all of these three points is how you decide to communicate across your business. When we set up Funding Circle, I was more worried about making sure that we’ve got loans out and it got executed properly, but communication is fundamental to and key to our success.
One of our values is about being open and transparent. We’ve focused hard on making sure our communications are really good and that we’ve been open. But there is a trade-off for being open and transparent – and it’s not talked about enough. I don’t think it’s as difficult for me as a founder as it is for the next tier of management; being open and transparent for them is an extremely difficult thing to execute, because some of the more traditional ways of managing and leading is to control communications. For example, (not that we communicate people‘s salaries to each other) why can’t we just tell everyone what everyone’s salary is and deal with it that way? Well, clearly there are downsides to it.
We’re open as far as we can be given privacy issues. When we have an issue, or something comes up, or we’ve decided to do something with our business, or we have a failure or success, we’ve been open. We have made sure that, whether it’s a success or failure, it’s shared and people aren’t embarrassed about it. We’ve avoided an over-control of communication.
These are my main thoughts about what’s really important about growth, what’s made us successful and what we’ve implemented to give us the ability to grow further.
Andrew Mullinger is co-founder of Funding Circle. This speech was made at a Power Lunch sponsored by Radius that took place on 15th September 2015.
Can “entrepreneurship” be taught? The value of the MBA to aspiring business leaders may be hotly contested, but even if you don’t go on to become the next Phil Knight, the chances are you’ll graduate and get a great job, writes Programmes Director Annabel Denham in today’s City A.M.
On the one hand, programmes at the top schools cost around £50,000 – and wouldn’t that time be better spent building a prototype or researching the market? The longer spent in the classroom, the greater the chance of someone else beating you to the punch. And, for those without an idea, there’s no guarantee of a lightbulb moment in the lecture hall.
However, business schools are responding to entrepreneurship’s rising popularity. Not only are they equipping students with the essential cheap ativan canada skills needed to run a business (time management, innovation, entrepreneurial finance), but they also offer invaluable extra-curricular opportunities like mentoring or financial and administrative support.
And these courses are attracting the world’s top talent: the top 10 programmes have an acceptance rate of less than 10 per cent. The people you rub shoulders with could become your future business partners, or your future go-to network.
Fundamentally, however, MBAs are broad-based degrees, teaching the basics of everything – from finance to risk to law. So even if you decide that you’d rather work for an investment bank or large corporation, the MBA will give you two risk-free years and it’s likely you’ll still come out with a great job.
Read the article in full here.
As the dust settles on Corbyn’s election as leader of the Labour Party, The Entrepreneurs Network’s Programmes Director Annabel Denham considers what his appointment might mean for UK entrepreneurs.
“On the one hand, Corbyn’s plans to freeze business rates for small businesses have been warmly welcomed, and his pre-election pledge to address the skills gap through a National Education Service was encouraging. But we can also expect policy announcements that will shift the burden of taxation from consumption to income and wealth. This might make sense from a redistribution perspective, but taxing wealth, capital and savings doesn’t make economic sense. It’s distortionary, pushing people to consume now what they would otherwise save and invest – which is bad for entrepreneurs and the process of wealth creation. As Jeff Lynn, the entrepreneur behind online crowdfunding platform Seedrs points out: “a Labour government under the leadership of someone who understands the role that wealth creation plays in social progress could be good for entrepreneurship”. The fear is, that someone isn’t Corbyn.”
Read her column in full on The Huffington Post’s Politics page here.
There has been a 6% rise in the use of zero-hours contracts by UK businesses in the last year, according to data from the Office for National Statistics (ONS).
But far from a form of employment equivalent to modern slavery (as they are often portrayed), zero hours contracts have boosted UK employment and acted as a vital crutch as the country emerged from the Great Recession, says The Entrepreneurs Network’s Programmes Director Annabel Denham in the Huffington Post.
Former problems with the contracts – such as exclusivity causes which prevented people from working for more than one employer – had led to employees being treated unfairly. However, these were rightly scrapped earlier this year. Recent polls now show that employee satisfaction among those on zero hours is greater than those in full-time employment: 65% are happy with their work-life balance, compared with 58% of average workers (the CIPD found).
As she points out:
“But whether or not the number of people on zero hours contracts is on the up (the ONS has warned against that conclusion, saying that it could just be that more people are aware of the contracts), they are here to stay. “We should not lament or celebrate an increase in the number of people using them,” James Sproule said last week, but rather acknowledge that they are a small – but important – part of the UK’s flexible labour market.”
Read the blog in full here.
The Prime Minister’s judgement was questioned by business leaders and politicians after he appointment of Michelle Mone as the UK Government’s “start-up czar”, with one executive suggesting he must have “lost his marbles”.
While Work and Pensions Secretary Iain Duncan Smith said no-one was “better qualified to help young entrepreneurs from deprived backgrounds”, others, including Scottish tech entrepreneur Ian Ritchie and GAP Group director Douglas Anderson, have questioned her credentials. One Scottish Tory added: “She’s a personal brand rather than a serious businesswoman”.
But in her latest Huffington Post column, our programmes director Annabel Denham suggests that the problem is not with Mone – who has since been appointed a Tory peer and whose success story is “extraordinary” – but with the very notion of “czarships”. As she points out:
There is little evidence to suggest that plucking someone from a particular industry, giving them direct access to ministers and use of government resources in exchange for “expert advice” is a good idea. As Ruth Levitt, senior research fellow at King’s College London, recently pointed out: such informal arrangements are “vulnerable to ministerial idiosyncrasy, opaque procedures, lack of accountability, and things can go wrong”.
However, in the right role or environment, using expert advisers from a given industry can add value to government policy and enhance the overall quality of advice given to ministers. But instead of taking on fluffy or ambiguous titles, entrepreneurs should instead respond to consultations that they can directly influence, should attend events held by organisations like The Entrepreneurs Network, and if they’re truly passionate about a certain issue, they should write about it.
Read the blog post in full here.
We know that more and more women are choosing careers in entrepreneurship. So why aren’t there more high-growth, female-owned companies, asks our programmes director Annabel Denham in today’s Huffington Post.
While the number of female entrepreneurs increased by 9.6 per cent in the two years to 2013, compared with a 3.3 per cent rise for men (according to the Office for National Statistics), data also show that women-led businesses are not scaling up at a rate even close to male-led companies.
Research has also shown that the main challenges confronting growth in women-owned businesses relate to a combination of access to finance, fear of failure and lower perception of opportunity. But it is that fact that women are much less likely to use private equity or venture capital, and are more likely to be discouraged from borrowing, that is particularly worrisome.
Speaking to Blackbullion founder and member of The Entrepreneurs Network Vivi Friedgut, the author concludes that:
“The government could help. It is positive that coding has already been added to the curriculum for every five year old – but we need more girls to be inspired and encouraged to study and build careers in the science, tech, engineering and maths (STEM) sectors. We need more campaigns like WISE, which aims to get 1 million more women into the UK STEM workforce. And we need the government to work more closely with schools and universities to promote these subjects.
Female entrepreneurs are a huge untapped resource. “There’s a gap in the market that will be filled by women,” says Friedgut. And angels and VCs will capitalise on that. It’s just a matter of time.”
The Huffington Post column can be read in full here.
In the week that Labour leadership contender Jeremy Corbyn pledges to back entrepreneurs through his “better business” plan, The Entrepreneurs Network’s programmes director, Annabel Denham, asks whether, 100 Days in, the Tories have been good for entrepreneurs.
“The government has already served up some good policies for entrepreneurs. But our position as one of the best buy ativan canada online countries to start and grow a business is not inevitable, and it is relative. Talent is increasingly mobile: if entrepreneurs can build a bigger, better business elsewhere, they probably will.”
Read her full Huffington Post article here.
Which policies to support entrepreneurs do MPs value the most? Which do they feel could have a negative impact on entrepreneurial activity in the UK? Are our elected representatives knowledgeable enough on the initiatives already in force to support entrepreneurs?
These are the questions The Entrepreneur’s Network sought to answer in our 2015 Parliamentary Snapshot: MPs on Entrepreneurship, which was conducted by YouGov and supported by law firm Bircham Dyson Bell.
It came as little surprise to learn that Conservative and Labour MPs are ideologically split on tax, regulation and increased government spending. For example, 89 per cent of Tory MPs support the lowering of business taxation; but just 48 per cent of Labour MPs agree. And while 63 per cent of Labour MPs support spending more on government grants and loans, this is the least popular policy among Conservative MPs, with just 36 per cent thinking it would buy ativan mexico have a positive impact on UK entrepreneurial activity.
MPs from the two main political parties do see eye to eye on some policies, however. Spending more on the skills of the domestic workforce, for example, saw 85% support from Conservative MPs and 93% from Labour. Making it easier for entrepreneurs to move to the UK is the second most positive policy among MPs – receiving 80% support from Conservative MPs and 66% from Labour.
But the biggest divergence was in response to the UK’s membership of the EU, and the regulations coming over from Brussels. Although some commentators suggest the Labour Party is as Eurosceptic as the Conservative Party, the survey reveals Labour MPs are significantly more pro-Europe than their Tory counterparts. Over half, 58%, of Conservative MPs think withdrawing from the EU would have a positive impact on entrepreneurial activity in the UK, but 95% of Labour MPs believe it would have the exact opposite effect.
It is positive that MPs have such strong opinions: we want our politicians to analyse and scrutinise the multiple, complex policy options open to them. But our Snapshot also exposes a worrying lack of knowledge about the policies already in place to support entrepreneurs. Too often, MPs are in the dark about established initiatives – or if they have heard of them, they don’t know enough to decide whether they are effective. Which means they don’t know enough to vote on important policy changes that could affect the startup community.
Conservative MPs may believe that tax cuts offer one of the best ways to support entrepreneurship in the UK, but over half, 56%, either haven’t heard of the Seed Enterprise Investment Scheme (38%), or didn’t know enough about it to decide whether it was effective (18%). And just 45% support the Enterprise Investment Scheme, down from 68% last year. Both these initiatives offer tax relief to investors in smaller companies, and are rightly seen by startup community as essential to the UK’s entrepreneurial success.
Similarly, many Labour MPs think spending more would be the best way to boost entrepreneurship in the UK, with 63% supporting spending more on government grants and loans, and 61% supporting more spending on government support services. However, many are unaware of government spending already in place. For example, 61% of Labour MPs haven’t heard of the lauded Innovate UK (which runs competitions for government funding), or don’t know about it well enough to determine whether it is effective.
It’s certainly encouraging that MPs are increasingly vocal about supporting Britain’s entrepreneurs. But in order to improve policymaking, we need more knowledgeable MPs. And we need a more outspoken entrepreneurial community to tell them which initiatives are working on the ground.
Following the release of our new Parliamentary Snapshot 2015 today, The Entrepreneurs Network’s director has highlighted the importance of government policy on entrepreneurial success – in any country.
Entrepreneurs, Philip says in his most recent Forbes column, are not a loyal bunch – and if they can build a bigger, better business elsewhere, they probably will. Read his take on the findings of our report here.
It’s the first Conservative budget in 23 years, but Chancellor George Osborne has introduced a policy that is bad for the most vulnerable workers, bad for entrepreneurs, and bad for the UK.
Studies have shown that minimum wages in fact reduce employment and slow jobs growth. The Government should leave such decisions to the Low Pay Commission – which was set up with these problems in mind.
If the Chancellor really wanted to help low paid workers, he should have cut Employers’ National Insurance, 70 per cent of which is paid for by the employees.
As Sam Bowman, Deputy Director of the Adam Smith Institute, said in response to the announcement:
“This move will condemn tens of thousands of people to long-term unemployment.. If the Office for Budget Responsibility’s estimates are to be believed, today the Chancellor will have put 60,000 people out of work.”
Read my Forbes article on the National Living Wage in full here.
The Alternative Investment Market (Aim) – a sub-market of the London Stock Exchange that allows smaller companies to participate with greater regulatory flexibility than applies to the main market – is today celebrating its 20th anniversary.
Aim has seen over 3,600 companies join since its 1995 launch and is now home to around 1,100 small and midsized companies. A less tightly regulated market than the main exchange, Aim provides a lower-cost alternative for small and mid-sized companies seeking investment.
But crucially, once afloat firms can raise further finance from their shareholders without going through the procedures enforced on those listed on the London Stock Exchange. And in a bid to ensure the flexible ambitions of SMEs are served even further, acquisitive companies and those looking to be acquired encounter far fewer controls than those on the main market.
Many successful companies have listed on Aim, including:
Arbuthnot Banking Group
Arbuthnot Banking Group, previously known as Secure Trust Banking Group, listed on the Alternative Investment Market (having previously been listed on the London Stock Exchange). Over the past five years, share prices have steadily risen, and have seen a 22.66 per cent rise in the past 12 months.
Asos
Asos, the online fashion retailer, is one of the most famous success stories since Aim’s debut in 1995. Asos was initially priced at 3p and share prices once soared as high as £70 (now close to £38, after a major swing in value). Since the beginning of the year, shares have risen by 49 per cent.
Fevertree Drinks
In 2005, Charles Rolls and Tim Warrillow joined forces to change the face of tonic water, finding an alternative preserver to sodium benzoate and instead using high quality quinine. A newbie to Aim, share prices have soared 65.51 per cent in the past six months. Today, the company sells more than 60m bottles of its premium mixers in 50 markets.
Fitbug
Fitbug tracks sleep, steps, and estimates calories burned, and was founded in 2005 by ex-management consultant Paul Landau. At around £40, the Fitbug Orb device affordable compared to its competitors and it is now stocked by major retailers. Its share price soared late last year, and despite a correction this January, is still up 675 per cent in the past 52 weeks.
GW Pharmaceuticals
One of Aim’s great success stories, GW Pharmaceuticals – the biopharmaceutical company founded in 1998 and best known for its MS treatment product Sativex – is listed on both the Nasdaq Global Market and Aim. In the past five years, share prices have rocketed from just over a pound, to 655p today.
Majestic Wine
A favourite tipple of investors in the Aim for years, Majestic Vintners opened its first wine warehouse in Wood Green in 1980. In 1996, the company floated and it now has 200 stores and an online platform. Despite a rocky 2014, Majestic’s share price has risen 4.67 per cent in the past year.
Portmeirion
You may be surprised to learn that a company specialising in tableware has become one of the most successful in the UK today. Over 40 per cent of its sales are to the North American market, and the company sells almost as much to South Korea as it does to the UK. Portmeirion has never cut its dividend and has been paying out since 1982.
Nevertheless, the market has been plagued by poor returns and a host of corporate failures – including buy ativan online some high profile fraud cases (the Langbar International fraud was once branded “the greatest stock market heist of all time”). And let us not forget that the market has performed pretty poorly over the years, with annualised total returns of -1.6 per cent per year when measured over the past two decades.
Nonetheless, Aim shares have surged in popularity since 2013, when they became eligible for inclusion in Isas. The high-risk factor had previously stopped the government from removing the restriction, but a desire to ensure that small and medium-sized companies – which are driving the economic recovery – have sufficient access to funding led to it reversing this decision.
It was the right choice: without Aim, there was a risk these companies would have turned to Nasdaq, or simply failed to grow. Research from Grant Thornton has also revealed that the companies listed on Aim paid £2.3bn in taxes in 2013 and directly employed 430,000 people at the end of that year.
For investors, Aim shares remain one of the most tax-advantaged options. If held through an Isa, benefits include no capital gains tax (CGT), no tax on dividend income, and no stamp duty. In addition, once certain Aim shares have been held in an Isa for a two-year period, they can qualify for Business Property Relief (BPR) and thus up to 100 per cent exemption from inheritance tax (IHT).
But the market is volatile: in 2008, for example, it lost around two-thirds of its value. Neither does the market offer plain sailing for the smaller companies that choose to list on it. Analysts predict that floating on Aim can cost anywhere between £400,000 and £1m – so for businesses with a projected market capitalisation of less than £25m, it may not be worth considering. 2014 research from accountancy firm UHY Hacker Young found that professional fees paid by companies to brokers and nominated advisers for a placing on aim accounted for 9.5 per cent of all funds raised.
And many of the mining, oil and gas companies (which account for a whopping 40 per cent of the market) that listed on Aim have since gone bust – among them ScotOil, African Minerals and Independent Energy Holdings. Firms involved in exploration for natural resources are among the riskiest of all: if a company digs for oil and there’s none to be found, the money raised for exploration has all but gone down the drain.
But should the government be doing more to serve the needs of smaller companies? Xavier Rolet, chief executive of the London Stock Exchange, certainly thinks so. Compared to the US, there are relatively few UK companies that progress to mid-size (and then on to become multibillion pound corporations like Facebook or Google). And as Rolet recently told the CBI:
“The entire business and financial community is working to nurture and celebrate these firms. But we must continue to challenge the status quo and not become complacent. We need to carry on fostering, through policy and practice, a richer, more diverse entrepreneurial ecosystem, so that the UK’s high-growth firms can take root and flourish.”
Rolet is right. Although floating your company isn’t the only way to grow a business, it needs to remain a workable option: particularly if we are to get the share-owning democracy that so many in the current government crave.
Launching a radio station may not be an obvious choice among most entrepreneurs – but Gavin Oldham isn’t like most entrepreneurs.
As he tells TEN’s Philip Salter, Oldham has recently sold close to 11 million shares in Share plc – the retail stockbroking business he founded a quarter of a century ago – to raise finance for his radio station. He previously founded the Share Centre back in 1991, which provides investment and trading services for c. 250,000 personal investors, company employees and shareholders generally. And in 2005, Oldham established The Share Foundation, which offers a Junior ISA scheme for children and young people in care.
Read the interview in full in Philip’s Forbes column here.
For his most recent Forbes Column, our director caught up with Josephine Goube, director of partnerships at Migreat.com and author of Open Borders to Entrepreneurs & Innovators.
First, she explains the origins of the entrepreneur visa. She then discusses how the progressive rigidity of immigration systems across the globe has made it so difficult for entrepreneurs to qualify for and receive a visa to start a new venture – particularly in Europe. And finally, where to buy ativan online in canada Goube details which countries have the best policies in place for foreign entrepreneurs – and why.
Read the fascinating interview in full here.
Through our work on the next Parliamentary Snapshot, we’ve come up with 20 government initiatives to ask MPs whether they support. This list also doubles up as a useful summary of government initiatives for entrepreneurs. It’s neither ranked nor exhaustive (such a list would number in the hundreds), but it should nevertheless be useful.
Manifestos are like buses: slow and rather dull. Labour’s Manifesto, which was launched today, proved no different.
If you’re a dyed-in-the-wool Labour supporter you’ll be content enough with the content. While if you’re political predilections swing the other way, the Manifesto won’t be enough to persuade you to cancel that one-way ticket to Monaco on 8 May.
In truth, most entrepreneurs are too busy running their business to worry about Westminster’s machinations. But there is no denying that the outcome of next month’s election will have an impact on the state of entrepreneurialism in the UK.
To save you the bother of reading the eighty odd pages, following are the key Manifesto promises that could impact entrepreneurs.
Corporation Tax
Labour has committed to keep corporation tax low:
“With Labour, Britain will continue to have the most competitive rate of Corporation Tax in the G7.”
But they’ll reverse the Coalition’s cut, reinstating the 21% rate:
“Instead of cutting Corporation Tax again for the largest firms, we will cut, and then freeze business rates for over 1.5 million smaller business properties.”
Putting the 20% versus 21% debate to one side, the answer to the business rates debacle is a swift revaluation, rather than a freeze. This may not be the popular move, but it’s the economically literate one.
High-Speed Broadband
It’s amazing how quickly technological miracles become the source of rage. For those of us who grew up on dial-up internet, today’s internet speeds are the first, second and third wonder of the modern world. Yet the moment our connection drops – if only for a second – we turn from Dr Jekyll into Mr Hyde. My heart goes out to those living out in the sticks with a tardy connection and Labour is promising to fix this:
“Labour will ensure that all parts of the country benefit from affordable, high speed broadband by the end of the Parliament. We will work with the industry and the regulator to maximise private sector investment and deliver the mobile infrastructure needed to extend coverage and reduce ‘not spots’, including in areas of market failure. And we will support community-based campaigns to reduce the proportion of citizens unable to use the internet and help those who need it to get the skills to make the most of digital technology.”
But though it’s a noble aim (and one close to my heart), the evidence suggests that this might not be the best use of public funds. The What Works Centre for Economic Growth recently reviewed the literature, and it seems to conclude that there isn’t a great deal of evidence to support ploughing millions into this policy.
Small Business Administration
Labour has taken inspiration from the US in its plan to set up a Small Business Administration:
“Small businesses are the backbone of our economy. Their creativity and dynamism are vital for raising productivity and competing in the global economy. Labour will give them a voice at the heart of government – a Small Business Administration, which will ensure procurement contracts are accessible and regulations are designed with small firms in mind.”
Ensuring government procurement is opened up to small businesses and regulations are proportionate is vital, and a Small Business Administration could prove useful to those ends. Or it might not.
Banking Reforms
Labour’s Manifesto contains plans for banking reforms:
“We will develop a banking system that works for businesses in every region and every sector in Britain. The long-standing problems of our banking system mean that too many small and medium-sized businesses cannot get the finance they need to invest and grow.
Labour will establish a British Investment Bank with the mission to help businesses grow and to create wealth and jobs. It will have the resources to improve access to finance for small and medium-sized businesses, and will support a network of regional banks.
We will increase competition on the high street. Following the Competition and Market Authorities inquiry we want a market share test and at least two new challenger banks. And we will deal with the scourge of household debt by introducing a new levy on payday lenders, using the funds raised to boost low-cost alternatives like credit unions.”
Over the years, banks have been quasi-nationalised through mounting regulation (and since the Financial Crisis fully nationalised in a number of instances). The British Investment Bank is the next natural step in this process. Whether you think this is a good thing will depend on the degree to which you think the blame for the Financial Crisis lies with banks versus regulators. Perhaps more interestingly, we are seeing the rise and rise of crowdfunding, which is relatively unregulated and may prove to be the remedy to the problem that Labour is seeking to solve.
National Minimum Wage
Labour will raise the minimum wage:
“Too many people do a hard day’s work but remain dependent on benefits. We will raise the National Minimum Wage to more than £8 an hour by October 2019, bringing it closer to average earnings. We will give local authorities a role in strengthening enforcement against those paying less than the legal amount.
And we will support employers to pay more by using government procurement to promote the Living Wage, alongside wider social impact considerations. Our Make Work Pay contracts will give tax rebates to businesses who sign up to paying the Living Wage in the first year of a Labour Government. Publicly listed companies will be required to report on whether or not they pay the Living Wage.”
It’s difficult to argue with the sentiment behind raising the minimum wage, but good policies aren’t made on sentiment alone. When instituting the national minimum wage, the previous Labour Government set up the Low Pay Commission – an independent body that advises the government on what rate to set it at. The very existence of this Commission is a tacit acceptance that raising the minimum wage comes at a cost. More often than not this cost is articulated as a cost to employers (which it is), but it’s also a cost to wannabe employees who cannot command the minimum wage and are therefore unemployable. Politicising the setting of the minimum wage is a mistake (Labour aren’t alone in this). The experts at the Low Pay Commission should be left to do their job.
There are lots of policy areas not covered in the Manifesto but I suppose we should be grateful that it’s not War and Peace. In any case, the odds are that the next Government will be a Frankensteinian coalition, in which Manifestos have been torn up and replaced with an agreement decided behind closed doors. And whether you think that is a good thing will depend on you faith in democracy versus politicians.
