We’re always keen to find out what our customers think about current events which could impact their business. Brexit has been a huge talking point for the past two months and we wanted to discover what our community thought about the business landscape now things have settled a little.
We polled our customers to ask them about their confidence in the future of UK business, as well as alternative investments. Over half (52%) of respondents agreed that London would retain its position as a global centre for innovative new businesses, while only 16% said they believed London would lose out to other international hubs and the remainder (32%) said they did not know.
The sectors predicted to see the strongest opportunities for growth over the next 12 months include professional services such as law and accountancy (cited by 29% of respondents), manufacturing (21%), financial services (20%), IT and telecoms (20%), hospitality and leisure (17%) and property (16%).
Entrepreneurs’ biggest concerns post-Brexit focus more on uncertainty about the future, rather than by potential lack of access to business finance. Forty one percent said their key worry was uncertainty regarding regulatory change and the same proportion said they were most anxious about losing European trade. Low growth levels were cited by 35% of entrepreneurs and losing foreign direct investment by 33%, while 27% said rising unemployment was a concern. Only 15% said they were worried about lack of access to business finance post-Brexit.
When asked their opinion about why there may be an increased level of appetite for alternative investments following Brexit, the main reasons given by investors were portfolio diversification (93%) and tax benefits (48%). Others cited a lack of correlation with mainstream asset classes (39%) and the fact that alternatives have produced strong medium to long term performance returns. Of those planning to increase their own investment allocation in alternatives, 69% said they expect to invest more heavily through crowdfunding.
We also asked some friends of Seedrs to give their input on what Brexit meant for the UK and alternative investment.
Seedrs CEO and co-founder Jeff Lynn:
“We haven’t seen any slowdown in investment activity since the referendum, and we believe strongly that the UK remains highly attractive for inward investment. Our research supports the view that London will continue to be one of the top destinations for entrepreneurs looking to set up a business. It also shows that equity crowdfunding is still a great source of capital for entrepreneurs looking for first, second or even third round finance.”
Simon French, Chief Economist at Panmure Gordon:
“Economies across the globe are facing similar political upheavals, and investors are fully aware when deciding where to locate capital. We believe that a negotiated ‘soft Brexit’ rather than a ‘hard Brexit’ will enable the UK to remain dynamic and stay ahead in the global race for talent. The UK can use Brexit as an opportunity to broaden its horizons beyond Europe and reject the ideas of protectionism.”
Gray Stern, COO and Co-Founder at successful peer-to-peer lending specialist Landbay:
“If I were launching Landbay again in the current climate, London would still be my number one choice, Brexit or no Brexit. New startups can benefit from the economic conditions in London and as long as they keep their messages focused, digestible and realistic they will continue to secure equity investment.”
Julian Sutton, an early-stage business investor:
“There’s real potential for small firms to take advantage of the opportunities that will be created by Brexit. Even if there is an economic downturn post-Brexit, businesses that launch during a perceived higher risk climate can often result in better quality businesses due to the challenges they have had to manage through. It is still vitally important to support startups during this time to ensure the continued growth of the innovative early stage business ecosystem here in the UK.”
More than a month on, how do you see Brexit impacting the early-stage business ecosystem and investment landscape?
