72% of entrepreneurs say fundraising environment is challenging, survey reveals
An overwhelming majority of entrepreneurs (72%) say the fundraising environment is somewhat or extremely challenging.
That’s according to Silicon Valley Bank’s ninth annual Startup Outlook report, which also found that 70% of startups believe the outlook for international fundraising will remain as it is or improve this year.
Just under half of those surveyed (47%) said they expected their next source of funding to come from venture capital – decreasing from 56% of respondents who said the same last year.
Some 49% of participants said their realistic long-term goal was to be acquired (compared to 55% in 2017), while 51% said they expected to pursue an IPO (16% said the same last year).
Overall, 89% of startups said they expected to see at least as many acquisitions in 2018 as last year, compared to 85% in 2017
“Eighteen months on from the Brexit vote, the UK remains a strong pillar for innovation in Europe,” said Phil Cox, head of EMEA and president of Silicon Valley Bank’s UK Branch.
“Despite uncertainty, entrepreneurs and startups are forging ahead, creating jobs and raising capital to enhance the UK’s global competitiveness. Whilst one in four will be opening a European outpost – up from one in five in 2017 – slightly more than half of UK startups do not plan to expand outside of Britain. Despite challenges relating to regulation, cybersecurity and consumer privacy issues, many UK startups are of the opinion that 2018 will be better than 2017.”
Brexit and talent
Although 53% said they didn’t plan to expand outside of Britain, one in four UK startups said they were looking to establish a European outpost – up from one in five last year.
Of that group, 14% said they may move their headquarters to Europe (a slight increase from 11% in 2017), while 6% said they would consider locations beyond the UK and the Continent.
Talent continues to be one of the main gripes for entrepreneurs, with 82% of respondents saying that being able to access it was the most important public policy issues affecting companies like theirs. This was followed by international trade (46%) and cybersecurity (36%).
A vast majority of startups (95%) said it is somewhat or extremely challenging to find workers with the skills needed to grow their businesses
Despite this, 83% of those surveyed said they plan to expand their workforces this year.
Cox continued: “UK startups say that access to talent continues to be their greatest concern, and ongoing Brexit negotiations lead to uncertainty around the future of immigration and international trade. However, efforts are under way to help ensure that startups are still able to attract and employ the best talent. For example, the UK government announced in November that it would be doubling the number of specialist technology visas available to high-skilled workers entering the UK from outside the EU. This will be a significant boost to British startups that have feared a post-Brexit skills shortage and underscores that the UK continues to be a strong place to start and grow a business.”