According to this month’s Wired we are set to experience a significant boom in the London tech startup scene. The UK now has the largest percentage of GDP contribution attributable to internet related activity of any of the top 20 developed nations at 8.3 percent. London is the focus of this activity with a rapidly expanding startup eco-system and a large population of smart phone enabled citizens from all over the globe.
The Government has helped to create a regulatory and financial environment that favours investment in startups, with initiatives such as SEIS, Startup Loans, Patent Box and Growth Vouchers.
The TechCity Investment Office, part of BIS, is right to sing the praises of what is happening in London. There is reason to believe that we are on the brink of a revolution. We are about to experience a shift in economic activity from the discredited banking sector into innovative and productive startups with the potential to place the UK at the centre of the new world economy.
If all this seems pie in the sky, then just look at the thriving early stage scene. Each day the capital hosts 2 or 3 startup events, many at Google Campus, acting as a magnet for entrepreneurs. Over 20,000 passed through Campus during it’s first year of operation. The healthy networking scene is an indication that the grass-roots is extremely active. This combined with the underlying strength of the internet sector will ensure an increasing pipeline of startup successes in the future.
London has everything in it’s favour; the most culturally diverse population of any city in the world, strong software engineering and creative sectors and good universities producing a constant stream of potential entrepreneurs.
We need to build confidence in young people to grasp the ‘internet’ opportunity and choose to pursue entrepreneurialism as a route to future success. The Startup Loans scheme is a good stimulus for this. It provides for loans of up to £10K at interest rates of 6.2% with a repayment holiday. This level of funding is enough to set up a simple internet business or to create an MVP for a more complex platform. For follow-up funding the UK has been the first to adopt equity crowd-funding as a viable option. All this means that startup founders no longer need to rely exclusively on friends, family and fools.
In the words of Rohan Silva, senior policy advisor to the Prime Minister, the London startup scene is about to explode. It is incumbent on us all to make sure we maximise this opportunity to create a sustainable model for the future.
Dreamstake www.dreamstake.net is Europe’s fastest growing platform for early stage internet startups. Our objective is to help build robust new businesses by providing access to knowledge, resources and funding. We run weekly Dreamstake Academy workshops as well as larger networking events at Google Campus. We also provide Startup Loans and access to angel investment.