As the United Kingdom goes closer to breaking away from the European Union, more startups are thinking of setting up a new outpost in Europe.
One in four British companies will launch their business outside the United Kingdom. However, they will remain headquartered in the country, an increase from the one in five who said the same during last year.
According to an annual survey of over 1,000 startups that was conducted by the Silicon Valley Bank, 14 percent of entrepreneurs are considering relocating their headquarters to Europe, up from the 11 percent who were pondering on a move last year.
However, business confidence among company founders has slightly improved, with nearly half saying that they believe that this year will be better than the past year and 42 percent said that their outlook remains to be the same. The share of people saying that they believe that things will get worse dropped to nine percent, down from the 16 percent in 2017.
Also, the environment for fundraising has never been better. 28 percent said that it was not challenging, a bigger proportion compared to any year since 2014 when the survey on Startup Outlook first started, while 61 percent said that it would be slightly challenging, the smallest proportion since 2014.
With such positive outlooks, the effect of Brexit could, in fact, be encouraging startups to become more ambitious.
The managing director of commercial banking at Silicon Valley Bank in the United Kingdom, Erin Platts, stated: “Reading between the lines and from what we’ve heard anecdotally from startups they would be looking to expand further afield anyway,” She noted that it is “rare to see a UK-only company.
“Now [with Brexit] it’s more of a priority and they’re doing it quicker than expected. Forcing them to do it more quickly is not necessarily a bad thing, it’s expedited the process.”
The said survey also indicates a hint of grander ambitions for startups in the United Kingdom. One in five founders currently says that their long-term goal is an IPO.
However, concerns over access to talent remain to be the biggest concern and one that is increasing as 82 percent said that it was the biggest public policy issue for them, as compared to the 76 percent a year earlier.
There was also an increase on the issue of international trade, with 46 percent saying that it was important versus the 30 percent who said the same during the past year.
Founders stated that while Brexit involves complicated hiring, it has always been a difficulty in the long term. According to the figures, startup hiring is anticipated to remain robust and largely the same for the year ahead, as well as on par with the United States.
Meanwhile, the number of women that are in c-level positions also increased. Over half of firms or 59 percent said that they had at least one woman that has a leadership position, as compared to the 42 percent in 2017. While fewer reported women that are serving in board positions, that also increased from 27 percent to 34 percent.