Well I’m not sure how many of us were expecting a vote in favour of Brexit – from either side of the campaign.
So we add this to the list of questions and issues that dominate our day-to-day decision-making in the start-up and scale-up world. An uncomfortable lengthening of the uncertainty and decision-making sclerosis that has been a feature of the last six months or more.
A few very early and hence necessarily imprecise thoughts or views:
- Brexit is going to take many many months to come into effect – even for the serious negotiations to start perhaps. A trade deal could take up to 10 years. Expect limited immediate changes, for example as regards:
- EU grants
- Multinational research and development projects
- State Aid rules
- UK Government support for growth businesses
… although longer term these areas will undoubtedly be subject to change
- There is an even bigger elephant in the room – the possible disintegration of the EU as a result of Brexit – although there is a balancing theoretical possibility of a more substantive renegotiation of the UK’s relationship with Europe and another referendum. Overall message? It’s messy and long
- Interest rates are likely to stay low for longer
- Foreign Exchange and Stock Market volatility is a given at least in the short term.
- Overall UK economic growth will probably be lower than forecast – I have seen a variety of estimates suggesting a halving of the growth rate from 2% area to 1%
Investors and customers hate uncertainty. Unfortunately we have plenty now, and no foreseeable return to stability. This will undoubtedly reduce propensity to invest.
In this uncertain environment, Quantiply believes that, for growth companies looking for funding, proper preparation is even more important, and that access to the right investor is crucial.
It will be more difficult now. Investors may become more demanding in negotiating terms and valuation, or may simply stay on the sidelines. The overall volume of angel and crowd investment could reduce as investors seek safer options for their savings. Having access and frequent contact with the full range of investors will be key, and that is what we are looking to deliver.
Although we by no means expect things to be easy, we are confident we can help start-ups and scale-ups to weather this storm, and even perhaps to benefit from the opportunities that any kind of disruption eventually offers.
We are here to help.