been the undisputed startup hub in Europe for many years. Startup unicorns like
Revolut, BrewDog and Deliveroo
have chosen the United Kingdom as the siege for their headquarter.
of European Venture Capitalist are based in the UK and around 10B$ are invested
every year in startups in Great Britain.
International, smart, innovative, cosmopolitan. This is London. This is the reason why it is always been the startup epicenter on the east side of the Atlantic.
2016 Brexit referendum, the long discussion between “deal” or “no deal”, the “hard”
Brexit positioning which emerged in the last months, could drastically change
entrepreneurs Brexit represents the axial opposite of the world they have been
building. They worked to lower barriers and to create wider communities beyond
languages and national borders and they are now foreseeing limitation on
talents mobility and an increase in regulatory complexity. In this contest, it
is not a surprise that 87% of tech entrepreneurs see negatively the Brexit impact
and believe that it has already damaged London’s international
reputation, as reported by the research commissioned by tech entrepreneur network Tech
One out of
four startups in the United Kingdom is currently considering leaving the
country and while some are contemplating this option,
others are putting this in place. It is of the last hours the news that the
German based neo bank, N26, has decided to quit UK two years after the launch
in the country. Beyond
company leaving, the birth rate of new companies, is another valuable indicator
of the Brexit consequences and, already in 2018, the number of new startups fell
are the key issues for startups when it comes to Brexit? While the details of
how it will materialize are still being shaped, some key issues are already clear.
New immigration law, restricting the mobility of EU residents, will
impact one of the key assets of startups: their people. By limiting the
possibility to attract and hire talents outside the country, the new reality will
hamper the competitive advantage of having the right people to transform a
great business idea into a solid commercial reality.
The country regulation will evolve independently from the European’s one.
This will have a direct effect on the legal commitments with employees,
customers, suppliers and partners. UK based businesses might end up dealing
with two different set of regulations: one to sell in the UK, one to
sell in Europe. It will also
be harder to claim back VAT for EU trades adding complexity, in the best case,
and bottom line impact, in the worst.
Data Protection Rules
May 25, 2018 represented a scaring date for many business. GDPR
became effective in Europe and it required several operational and structural adjustments
for all the business collecting data of their customers. The effort to put in
place by business to comply with the new regulation – and to avoid the
astronomical fines in case of data breach – has often been defined as a “nightmare”
from many tech entrepreneurs. For the UK based companies all this could happen
again to transit from GDPR to UK-GDPR.