For better or worse? – The UK plans big changes for startup investment | Hacker News Reader

For better or worse? – The UK plans big changes for startup investment

eu.techcrunch.com

23 pointsllambda7 comments

I run a UK startup (www.scirra.com) and recently secured angel investment. I keep hearing about how much the UK government wants to encourage UK startups, but so far I've not read anything relevant to me, heard from anybody useful, or generally seen anything the UK government might be doing that interests me in any way. Are they just full of hot air or am I supposed to be doing something I'm not? Right now I feel very much like our business is fighting alone with no help from the government at all, despite all their talk...

If you do a few (relatively simple) qualifying steps your investors can qualify for EIS tax relief which makes angel investment more attractive as it reduces the downside.

"no help from the government at all"

I'm not sure what kind of help a government can realistically offer a startup - other than tax breaks, we had angel investors who benifited from EIS and I saved a chunk of CGT because of the tapering relief rules that were in place at the time meaning I only paid 10%.

Based on my own experiences I'd be very wary of any other "help".

Make NCAs illegal. Make it so your employer doesn't own what you do in your spare time. A truly nuclear option is to bar discrimination based on previous employment history.

One major peril for erstwhile startup founders is that if you fail while bootstrapping, it can be hard to get a job because people, for some stupid reason or another, consider you to be unemployed. That problem is a non-issue in the valley but I do wonder if it will have to be solved by brute force elsewhere.

"Make it so your employer doesn't own what you do in your spare time"

The simple answer to that is to avoid employment contracts that claim that - the only time I've had a contract that claimed that was when I was CTO of a VC backed company and one of the investors insisted. My own lawyer suggested that it was unenforceable anyway - as many things are in employment contracts.

If they really wanted to encourage startups, they should allow 'employment at will' (like one can do in the US).

Theoretically, someone would be paid a little more for the risk that they could be fired at any time for no compensation. OTOH, small businesses would be able to hire 'frictionlessly', since the risk of each employee is dramatically reduced.

In fact, that's a major factor in stopping my business opening an office in the UK.

The current UK government support for starting a business seems to be almost entirely based around three things:

(a) promoting outside investment

(b) tax incentives (sometimes the same thing...)

While these are all welcome, and of course things like tax breaks are always nice, I can't honestly say that any of them would make or break any of the businesses I've started.

Meanwhile, try setting up an on-line business in the UK that takes credit card payments, particularly if you want some sort of recurring/subscription model. To say that the banking/financial sector is hostile to small businesses is a laughable understatement.

Or try to get a straight answer about what regulations do apply and what you have to do to comply with them. Even the government itself doesn't seem to know half the time, but of course that is no defence if you come up for a tax investigation because you put up someone's red flag.

If you can't create a low-overhead operating environment where businesses can get on with doing what they do without all the peripheral stuff getting in the way all the time, how are you supposed to be competitive, even if you get a few percent off your tax bill for the first few thousand of revenue?

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