Bure Valley Group is an investment introducer platform which links successful investors with exciting, innovative UK startups seeking funding. This content is for information purposes only and should not be taken as financial or investment advice.
The UK is an attractive place for startups to do business. Yet the UK market carries intricacies that need to be thoroughly understood before founders (and their investors) take the plunge. In this article, our investment team at Bure Valley Group share five unique features to the UK that we hope will be useful in your due diligence process. To find out more about our EIS project and other investment opportunities, visit our portfolio page here. To enquire regarding our latest projects and funding (for investors and founders, respectively), you can reach us via:
+44 160 334 0827
#1 British culture
It is difficult to generalise about any group of people. Yet there are broad similarities in the ways that many British people like to invest, buy and do business. Firstly, British people typically seek to minimise (or avoid) confrontation. If you try to sell to them, for instance, you rarely get a rude “No”. Instead, they will feign some interest and may show a bit of interest, to be polite. Secondly, British people are often indirect. They are not usually pushy during sales conversations and like to engage in small talk. Creating relationships matters.
Thirdly, UK investors are often cautious and unwilling to take needless risks. Startups need to demonstrate, as much as possible, a track record and robust research into their market and business model to give confidence to potential UK investors. Make sure your startup culture and sales process accommodates these cultural facets.
#2 Angel investors
The UK government has taken many steps to encourage startups and funding, through the passage of various laws (e.g. the Financial Services and Markets Act 2000) and tax-mitigating schemes such as EIS and SEIS. The latter two allow UK investors to claim back 30% or 50% of the value of their investment, respectively, from their income tax bill. Capital gains is also free from tax if certain conditions are met (e.g. shares are held for at least 2 years). Make sure you understand the range of schemes that you and your investors could benefit from.
#3 A thriving startup ecosystem
London currently holds second place (after New York) in the list of best cities for starting a business. Each year, over 700,000 new startups emerge in England alone. There are over 270 acceleration programs and incubators across the country, with 70 of these located in the capital. The UK’s angel investors number over 15,000 and there are over 1,300 venture capital funds. Transport links across the UK allow for convenient innovation across regions. Check to see where in the UK might be most favourable to your business – there are lots of choices!
#4 Research & development
The UK seeks to be a driving force in the world for research, development and innovation. In fact, many startups can claim 33% of their R&D costs back from the UK government via the R&D Tax Refund Scheme – potentially saving significant sums of money and boosting potential returns for investors. The process can be completed fairly easily by a qualified UK accountant who can find and submit the relevant forms.
#5 The Golden Triangle
The UK has three locations, in particular, that are close geographically and which act as key innovation hubs – with easy transport links between them. These are Oxford, Cambridge and London. Not only does significant capital reside there – i.e. in the form of high net worth (HNI) individuals and institutions – but also some of the UK’s best universities. Having these close is very beneficial to a startup, especially those in sectors such as technology and healthcare. The UK also has three “golden triangle” elements that offer startups significant advantages: capital (London), companies (HQs of important international companies are nearby) and customers (67bn people in the UK, powering over £2.7tn in GDP).
Conclusion & invitation
Many international markets are difficult for startups to gain traction due to unfavourable laws, customs and infrastructure. The UK, conversely, largely represents a “blue ocean” of opportunity for startups. There is a wealth of talent to draw from and there is a continuous stream of new technology driving innovation. The market, overall, is still very open to new ideas and startups which could provide faster, cheaper and more flexible solutions.
Interested in finding out more about the exciting startup projects we have on offer to investors here at Bure Valley Group? Get in touch today to start a conversation with our team and discuss some of the great investment memorandums we have available here:
+44 160 334 0827