New Government start-up fund ‘encouraging’ but must be managed well
3rd August 2017
By Chris Sheppardson, Trustee - The Brand Foundation
News this week that the Government has announced it will set up a national investment fund to help smaller startup businesses to thrive and also to compete with US competition, even after Brexit is good news indeed.
This is highly encouraging for those considering launching a new business in the near future especially as entrepreneurs do need the extra support namely because it has been a hard road for them since the start of austerity. However, there are two caveats:
- This fund needs to managed/governed by those that do understand business. Under the Blair Government, there was a scheme provided that gave entrepreneurs £250k if they had no assets. Of course, this was a nice idea initially but illogical as those with no assets are not always the ones to back. What happened was the wrong people took the investment and the scheme subsequently failed.
- This new proposed scheme needs to be entrepreneur friendly with not too much red tape. In theory the banks were open to be highly supportive to startups after 2009/10 but this proved not to be an easy route and left many entrepreneurs exasperated and frustrated. On the flipside other businesses that did not need extra funding were being granted extra support.
The key is to have a board of proven entrepreneurs working alongside the Treasury to manage the fund. The UK can be a world leader in new innovation, which can be a credit and show case for the Government but the set up has to be right.
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