The Government has backed a new ‘Startup Britain’ initiative. I find it hard to see it as much more than a spin of optimism to smooth over a messed up economy (…cynic that I am…) “Recently lost your job? Don’t be too upset.. it’s an opportunity – start your own business!”.
It comes at a time when the funding axe is hitting Regional Development Agencies. These will either be reconfigured or will disappear. The days of generous match funding are closing.
This is both a bad and good thing.
Bad because it’ll make it harder to start a business – and good for exactly the same reason. Free-flowing funding has encouraged the seeding of new businesses which don’t have solid models, and supported business owners who don’t have total commitment to their ideas. Alongside this, many third-party benefactors of funding (i.e. suppliers) know that the system has been abused by inflated costs and unsuitable delivery.
I’m not sure where this twin prong of startup evangelism and tight purse-strings will lead. I hope it will enthuse a slice of smart entrepreneurs with well-formed business ideas and lean spending trajectories, but there’s a risk that it offers false hope to many who fall into starting a business because it seems like the only open door, one that the government is ushering them towards, and one that they’ll painfully fail at.
That’s not to say that new businesses can’t get money. For tech businesses, funding is available via loans (via JEREMIE in the North East) and private capital is available at a few levels- both will are likely to cast more scrutiny on your plans than has been the case for RDA match funding. This is a good thing.
For the first three months of this year I’ve been running a new business through The Difference Engine tech accelerator with my business partner Oli. It’s been an honour to do so and an amazing personal journey. Our project idea was selected by potential to allow us to enter the programme- and we’ve been able to bounce it round some very sharp business types to hone it into something that has a decent chance of success. We have some seed funding in exchange for a small amount equity and had a fostering environment to grow it so that it’s now market launched (though currently private for testing). The scheme has been an fantastic launchpad, because it combines practical help with a smatter of capital for some promising ideas/teams – and we’ve all worked damn hard for it.
The strongest element has undoubtedly been the steering we have received. All rookie entrepreneurs should harbour a strong desire for mentorship to help them along.
Due to the RDA kickabout, I’m not sure what will be happening to The Difference Engine next year- I hope it continues to run in some potent form. It’s worth keeping an eye on alongside its spiritual sister, Springboard, which is entirely privately funded.