Things are tough all over. I’m based in Sheffield, and we have an Advanced Manufacturing Research Centre and obviously a rich history of manufacturing and engineering across the city that pioneered chrome steel. But the process for new enterprises always seems the same, you get some small, timid spinout from one of the universities, that spends years iterating through various crumbs of grant money, and maybe finds a corporate partner to commercialise some tech. Everyone’s excited about Northern Gritstone, the new regional VC which has raised £300m and deployed about £40m so far, but even that is itself basically a university spinout.
I was at an event recently where everyone was excited about a programme to create thousands of new apprenticeships in the steel industry in the region, and sat at the one table of tech people I couldn’t help feel they’d probably do better if you just taught them to code, even in this job market. Or alternatively if we actually want a steel industry to challenge China let’s do that. But no half measures.
The UK has vanishingly little risk capital compared to the US. It has very few exits and almost no secondary, so what angel money exists is often tied up long term. The British Business Bank are trying to convince more pension funds to expose their assets to the risk/return of VC funds but that’s a long and controversial battle. Startup investing is largely driven by income tax breaks rather than dreams of outsized returns. And of course property is such a reliable investment in the UK that it sucks up most of the free money anyway.
A lot of this is (the lack of) network effects and we get grumpy if you say it’s a cultural thing. But just once I’d love to hear someone saying they’re investing in their local ecosystem, or creating an accelerator, or whatever, because they want to make loads of money. That isn’t something you can comfortably say out loud at most startup events in the UK. Lots of talk of Impact Investing, an endless merry-go-round of gobshites wanting to give advice and mentoring, or “do you have any “SEIS left?” Lots of tech agencies working on making other people’s ideas go big, selling reliable hours instead of unreliable equity. And a good enough quality of life that all this is fine!
But it can be really hard to find somewhere to plug into and get the energy from. Kudos to those that are making/have made the slog here.