Tag Archives: UK government

How the British government could help your start-up get off the ground

Image by Adam Derewecki from Pixabay

With Brexit (maybe, possibly – at the end of the day, who really knows?) looming on the horizon, this is a frustrating and scary time for UK-based entrepreneurs. No one knows what the future might hold for businesses, especially those just starting out, and economists aren’t much help when the future of the country is terribly unpredictable and stuck in limbo.

However, all is not entirely lost. An analysis of economic data by consumer research firm NimbleFin recently concluded that the United Kingdom is the second-best country in Europe for start-ups and the British government has made great strides in recent years in the support it provides to start-ups.

Funding

There are several government-backed funding routes for start-ups in the UK, such as a range of grants provided by the Department for Business, Energy & Industrial Strategy and the Start Up Loans scheme, which offers loans of up to £25,000 at a fixed interest rate of six percent per annum for new business ideas. A successful applicant will also receive guidance on writing a business plan and up to 12 months of free mentoring.

If you’re feeling lucky, there’s also a range of funding competitions offered by Innovate UK, a government agency that funds and connects UK businesses to develop new products, processes and services.

Setting up in the nation’s capital isn’t necessarily the most cost effective move but being in the thick of it all can provide motivation, access and – perhaps most importantly – better Wi-Fi than elsewhere in the country. London-based start-ups can apply for support from the London Co-Investment Fund.

This program was established by the London Economic Action Partnership (LEAP) – which contributed £25 million – supported by the Mayor of London, and delivered by Funding London and Capital Enterprise. The money is earmarked for investment in seed rounds of between £250,000 to £1 million.

Other possible options include the Seed Enterprise Investment Scheme (SEIS), which offers tax relief to individual investors who buy new shares in a company; Research and Development tax credits, which allows companies to claim back some research and development costs; and the EU’s Horizon 2020 funding pot, which UK companies may still be allowed to access post-Brexit.

Connectivity

The UK government hasn’t always had the best reputation when it comes to digital connectivity. It notoriously failed to hit many of its targets for superfast fibre-optic broadband provision and consistently lags behind the internet access available in other European countries.

However, last year, the government unveiled plans to make the UK world leader in digital connectivity in its Future Telecoms Infrastructure Review. It aims to give the majority of the population access to 5G mobile internet, connect 15 million premises to full fibre-optic broadband by 2025 and across all of the UK by 2033.

The government claims that it was providing superfast broadband coverage to 95 percent of premises in the UK by December 2017 and is introducing a broadband Universal Service Obligation that aims to give everyone in the UK a clear, enforceable right to request high-speed broadband by 2020.

Visas

Like many industries, the technology sector has repeatedly warned that access to international workers that they need to bridge the digital skills gap is far too restricted by immigration regulations, an issue that is sure to be compounded by the effects of Brexit, whether or not the country actually leaves the European Union, due to the rise of anti-immigrant rhetoric and uncertainty about the future.

In the 2017, the government attempted to allay these concerns, doubling the number of visas available through the Tier 1 (Exceptional Talent) route from 1,000 to 2,000. In March, two further visa routes with no cap on the number of applicants came into effect as replacements for the Tier 1 (Graduate Entrepreneur) visa: these were the Start-up visa and the Innovator visa.

Foreign workers who want to run a business in the UK can apply for an Innovator visa if their idea is endorsed by an approved body, they come from outside the European Economic Area (EEA) and Switzerland and they meet the remaining eligibility requirements. They must also have at least £50,000 in investment funds for a new business, unless their business is already established and has been endorsed for an earlier visa.

Alternatively, they can apply for a Start-up visa if they come from outside the European Economic Area (EEA) and Switzerland, meet the remaining eligibility requirements and are endorsed by an authorised body that is either a UK-based higher education institution or a business organisation with a history of supporting UK-based entrepreneurs.

Other forms of support

The Department for Business, Energy & Industrial Strategy maintains a database of schemes offering expertise and advice and the Business is Great website provides information on subjects ranging from how to  intellectual property issues to tax.

Tech.London offers advice on setting up London, including local workspaces, events, mentorship programmes, job boards and funding tips, as part of a collaboration between the Mayor of London, investor portal Gust and lead sponsor IBM. London & Partners also offers support and advice for scale-up companies looking to set up shop in the capital.

Overseas start-ups can seek free guidance from the Department for International Trade’s (DIT) Global Entrepreneur Programme (GEP), while London-based businesses can apply for a place on Techstars London, an accelerator providing access to investment, mentorship and collaboration with top entrepreneurs.

Further guidance is available at Tech Nation, a government-funded body which provides a range of support for technology companies, include schemes like the Future Fifty, which has given successful start-ups access to expertise across both the public and private sectors, and the Digital Business Academy, a free online learning platform for budding tech entrepreneurs to learn digital skills.

Blockchain and the UK

Depending on who you ask, blockchain is either totally overhyped or its going to save the world, your business and your country’s economy in one fell swoop. It’s also wildly overcomplicated, confusing and often misunderstood.

Put as simply as possible, blockchain is a series of digital information (the blocks) stored in a public database (the chain).

Blocks are made up of three things: information about transactions; information about the people or entities involved in a transaction, using a unique digital signature devoid of any identifying information; and information that distinguishes blocks from other blocks so that identical transactions aren’t mixed up with one another.

When a new block is added to the blockchain, it becomes publicly available for anyone to view and users can sign up to connect their computer to the blockchain in order to receive automatic updates when a new block is added.

Each computer in the blockchain network holds a copy of the blockchain, creating thousands of copies and making the information incredibly hard to manipulate.

Cryptocurrency protocols are often built on blockchain – they are essentially electronic cash systems that are fully peer-to-peer, without the involvement of a trusted third party, such as banks or governments who are usually involved in such systems.

Despite the continued inaccessibility of the technology, companies and countries alike have already started finding new, innovative applications for blockchain. Here are just a few of the ways that blockchain is being used in the UK.

Innovate UK

In 2018, the UK government’s “innovation agency” pledged a total of £19 million to fund innovative ideas for new products, processes and services in the fields of “emerging and enabling” technology, including distributed ledgers or blockchain, and health and life sciences.

The government specified that the projects must have the potential to transform a wide range of markets and generate significant economic growth, and provide business growth, productivity or an export opportunity for at least one small or medium-sized enterprise (SME) and be applied in more than one industry, sector or market.

Alongside blockchain, the government also considered projects looking at bio films and energy harvesting, big data and cybersecurity, robotics and sensors, and satellite communications and Earth observation, among many other topics.

Isle of Man Global Hub

Earlier this year, the Digital Isle of Man, an advisory body based on the self-governing British Crown dependency located in the Irish Sea, launched a global hub for the development of blockchain initiatives.

The body also opened the Blockchain Office to “guide blockchain businesses through current and future regulatory landscapes”, and Isle of Man Sandbox, a “testbed” for innovative new blockchain projects.

The Office’s main function is to “facilitate a dialogue between business and local and international regulators”, and to “help blockchain platforms design and future-proof their concepts” in-line with regulation. It will also provide guidance and marketing support, and encourage collaboration.

Meanwhile, the Sandbox is intended to be “a collaborate space” for companies to “live-test” their product, service or delivery mechanism in an environment where risk to “ordinary financial consumers” and the financial systems are contained.

Also read: Best Crypto Exchanges to Trade Bitcoins, Altcoins

“The response . . . has been tremendous, with a number of premium blockchain businesses and emerging starts-ups approaching the Office for early participation,” Lyle Wraxall, CEO of Digital Isle of Man, said in a statement issued by the island’s government. “There are no signs of interest slowing, and we look forward to collaborating with these innovative pioneers…”

Cryptoassets Taskforce

The UK government convened a Cryptoassets Taskforce in May 2018 to research and outline the country’s policy and regulatory approach to cryptoassets and distributed ledger technology in the financial services sector as part of the government’s overarching FinTech Sector Strategy.

The taskforce consisted of Her Majesty’s Treasury, the Financial Conduct Authority (FCA) and the Bank of England, and released its final report in July of the same year.

It commits the authorities to take actions to “maintain the UK’s reputation as a safe and transparent place to do business in financial services”, ensure high regulatory standards and protect consumers in financial markets, guard against potential future threats to financial stability, and allow innovators in the financial sector who “play by the rules to thrive”.

FCA Innovate

This is a sandbox initiative set up by the United Kingdom’s Financial Services Authority (FCA) which allows companies to request support and also test out their service within a regulatory sandbox. Although the project is not explicitly focused on blockchain, 40 percent of the firms selected for the initiative’s fourth cohort were blockchain based.

For example, Fineqia is a blockchain-based digital platform that enables companies to issue and administer debt and equity securities, including bonds backed by cryptoassets, and 20|30 is a distributed ledger-based platform that allows companies to “raise capital in a more efficient and streamlined way”.