By Anthony Rose, SeedLegals
In the UK, the largest, most comprehensive funding rounds will always take place in London. The capital city is a thriving ecosystem of some of the world’s best investors and start-up enterprises.
However, the pandemic has destabilised this dynamic as more entrepreneurs reassess their priorities and question what they want from their business. Half of Londonders reported wanting to move away from the capital for a better quality of life and lower costs of living. If so many business owners and employees plan to move, London businesses must be or must plan to be dispersed across the UK. We’re faced with the question: could your business still be viable and receive investment outside the capital? The answer is, yes: in the right circumstances. Just because a company isn’t in London, this shouldn’t mean they will be overlooked.
You’ll want to find the best environment for your business and depending on your sector, London might not be the place to start the ball rolling on investment rounds. When you’ve figured out where your company would best function, you can then focus on getting it to a stable position before seeking more investment or resources.
Take advantage of hybrid working
We’ve all experienced one major side-effect of coronavirus: we’ve changed how we communicate and work together. With advances in video calling, instant messaging and collaboration tools, and wider take-up of this tech, founders are less likely to want to headquarter their company in an expensive city like London.
With hybrid working becoming the norm, tech employees have greater freedom to choose how, when and where they work, including opting to live in cheaper areas of the country. Although it’s likely that London will retain the best tech talent as the leading European hub for entrepreneurs, many recruiters are starting to find skilled candidates in other cities like Bristol and Manchester – with one company being founded per 143 people in Manchester in 2020. These growing regional talent pools will be an attractive option for early-stage founders looking to bring on experienced developers without a London price tag. By building an experienced team – not just tech but senior management too – founders will build trust with potential investors and continue to attract the best talent.
Work from home – and near your customers
As well as hybrid working, entrepreneurship has become more popular. With widespread job losses and employees reassessing their work-life balance, there’s been a boost in the number of people starting their own companies, with over 95,000 new businesses created between July and September in 2020, a 5.3% increase from the same period the previous year. Many of these new businesses attempt to solve problems highlighted by the crisis, with an emphasis on sustainability and social responsibility. For these businesses, the right location is where they can best reach their customers.
At SeedLegals, we find that smaller companies like this can do well seeking investment from regional angel investors, or through ‘bootstrapping’ (raising money from family and friends). Then, when they’ve grown large enough, they can seek investment in an area with more active investors, such as London.
Grow your local network
The good news for any start-up is that there are many funding options available to you. There are more ways than ever before to raise money for your business without being in London: you can combine larger amounts from VCs with more democratised forms of investing such as crowdfunding and social media campaigns. It’s never been easier to search for, encounter and approach potential investors, partner companies and customers.
Although online tools are one way to meet people, regional hubs are often very good at fostering a sense of community among entrepreneurs and it can seem easier to find your feet in a smaller pool of businesses and freelancers. It’s worth researching what’s on offer at regional founders conferences, and via digital platforms such as Tech Nation’s Founders Network or websites like Founder’s Factory. You’ll find events and networking opportunities in every area of the UK. Some organisations offer even more, such as pairing entrepreneurs with a mentor suited to your sector to help you navigate the early stages of growing your business.
Put down some roots – but stay flexible
From your perspective as a founder, the best location for your business will be in an environment where you and your team can thrive, for the stage of development you’re currently in. Tap into your regional business ecosystem to find opportunities, events and active investors in your area. No matter where potential investors are based, you’ll be able to use digital tools to meet them and demonstrate your company’s steady, sustainable growth.
You won’t yet know where your company will be in ten years, or even in five years’ time. But if you stay open to the idea of moving, then you’ll be ready if that’s what the company needs.
To find out how SeedLegals can help you set up Founder Agreements, speed up funding rounds, qualify for SEIS/EIS and more, visit Seedlegals | Start