- The Future Fund – the startup support package announced last week – was broadly welcomed across the sector, though not without caution.
Beauhurst highlighted that just 27% (7,629) of the startups they track are eligible. SeedLegals concluded that “few startups will qualify, and for those that do it’s a bad deal”. Coadec noted that while it is a welcome development, “there are still some big challenges to overcome”. Check Warner (Ada Ventures) made the point that “diversity must not be sidelined” in the distribution.
On the latter point, Emma Sinclair and Hephzi Pemberton have launched a petition calling on the chancellor to align the diversity agenda and the Future Fund. Sign it here.
Many organisations and individuals have set out thoughtful recommendations on how to improve the scheme. These include:
- reducing the historic equity raise to £100k (Coadec & Beauhurst);
- compatibility with SEIS / EIS (too many organisations to count);
- defining matching funds as broadly as possible (Coadec & Check Warner);
- reducing the match funding minimum to £50k (SeedLegals);
- reducing the redemption premium to 20% (Beauhurst).
- allowing startups to seek ‘pre-approval’ for matching (Coadec).
- CBILS – the Coronavirus Business Interruption Loans Scheme – has lent just £2.8bn to 16,600 businesses. There are now 52 accredited lenders, but the Telegraph reports “dozens” are still waiting to be accredited. The chancellor is now preparing 100% loan guarantees for the smallest firms; a welcome development given just last week he was “not persuaded” by the idea.
- The Job Retention Scheme saw 435,000 applications in the first three days last week, with employers applying to furlough 3.2m workers. Separate polling by BCC suggests that 71% of companies have furloughed staff.
- The Independent has picked up on a flaw in the Small Business Grant Scheme that is leaving hundreds of thousands of small firms ineligible for the £10k grants.
- The FT features a LocalGlobe survey of 200 startups. The key finding is that 40% of respondents have a runway of less than a year.
- Now is the best time to launch a tech startup (Roxanne Varza, director, Station F)
- To get us out of this mess, the government must go for growth (Matt Kilcoyne, deputy director, Adam Smith Institute)
- The world needs diverse founders more than ever (Katja Toropainen, founder, Inklusiiv)
- Opportunities for entrepreneurs in the pandemic and beyond (Daniel Isenberg and Eric B Schultz, former CEO, Sensitech)
- Why businesses need to accelerate digitally to beat not just coronavirus – but any crisis (Elliot Maher, co-founder, Rising Tyde)
- Fleet-of-foot fintech firms will play a part in the recovery (Anthony Persse, financial solutions director, bePayd)