Tips from a venture capital investor on dealing with Brexit uncertainty
Startups' has welcomed Nic Brisbourne as its new guest columnist. This month, the Forward Partners founder has got Article 50 on his mind - should businesses "keep calm and carry on"?
Our relative nascency as a tech hub in London, as well as across the wider UK, means we are a little more vulnerable to ambiguity and shocks in the wider economic environment.
So, if you’re a start-up founder or an aspiring entrepreneur, you’d be forgiven if the events of June 23 2016 and the Brexit press coverage over the past nine months have left you feeling rather uncertain about the future.
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Part of my job as a venture capitalist (VC) is to future gaze and take ‘bets’ on businesses and markets which could deliver the unicorns of tomorrow.
My role also requires me to understand the economies in which start-up investments operate – both today and in the future. With this in mind, I’ve spent significant time considering what Brexit means for start-ups and what founders should do about it.
Below I’ve outlined some key points which I think are useful to bear in mind as we enter these uncharted waters…
My first piece of advice to founders and entrepreneurs is do not panic. UK start-up investment remains strong, indeed just last week we at Forward Partners announced a £60m fund to invest in the next generation of start-up talent.
Our friends at 83North also announced a significant new fund last week so be assured that, regardless of Brexit, investment in talented UK entrepreneurs and start-ups will continue.
Know your USP
However, it is worth highlighting that in times of uncertainty in the wider environment, I’m compelled to advise founders that it’s crucial, more than ever, to develop and communicate your unique selling point (USP).
Focus on developing your product/service’s unique edge and communicating this to key stakeholders, both within your business and externally.
If you’re looking to raise investment, capitalise on what sets you apart from the competition and be absolutely passionate about why you feel a VC should invest in your business over an alternative. If you’re not confident in the superiority of your offering then it’s unlikely an investor will be.
Keep this in mind in all pitch material and ensure that you have a concise, clear view on why your business is the one to back.
Really knowing your USP is good advice at all times, but becomes more critical when uncertainty reduces investors’ appetite for risk.
Communicating a clear vision of the future to all parts of your business is always important, but especially so at the moment.
From your team to your suppliers, it’s vital that everyone knows where they stand and feels reassured that, for the next two years at least, changes and upheaval will be minimal. It’s also important that everyone is aware that you are building plans for the areas of your business which may be affected by Brexit.
Open and clear communication is vital to ensure that all team members remain engaged, motivated and passionate about the journey that your business is on. Whilst it’s hard to be certain of anything currently, it’s always reassuring to see that businesses are planning for both best and worst case scenarios.
Don’t believe everything you hear
For the most part, the sensationalist rhetoric being pumped out by the many factions in the Brexit debate is unhelpful.
It’s worth remembering this so as to not get bogged down in the different narratives being banded around. Know that our tech community is vibrant, forward thinking and full of world class talent and, whilst Brexit is not the outcome we hoped for, it will not change the spirit and ambition of our start-up ecosystem.
Keep calm and carry on investing in your business
It’s incredibly important at this juncture to stay calm and keep on hiring. It will be almost two years before the UK’s divorce from the EU is finalised and start-ups that stop investing in their future will lose out to those who hold their nerve.
To cast your net as far and wide as possible, it’s worth considering the Tech Nation Visa Scheme which, for the uninitiated, was specifically designed to allow tech companies to hire non-EU talent quickly by fast tracking the visa application process. To do this, Tech City brokered a deal with the Home Office.
Most of the form filling has been condensed into a neat package and all they ask is that the applicant can demonstrate being ‘Exceptional’ (experienced hire) or can demonstrate ‘Exceptional Promise’ (junior hire). Note: This is open to operational talent as well as developer talent and there are multiple routes for entry – see the criteria here.
However, I think it’s important not to shy away from hiring EU talent. Regardless of the political landscape, we can only ever operate within the current policies and laws as they stand.
It is therefore unhelpful to try and second guess what Brexit will mean and allowing that to dominate recruitment strategies – hiring the best candidate regardless of nationality is always a sensible approach.
Seize the opportunity
Time and time again, we see that challenging times set the strong apart from the weak in the tech ecosystem. This point in time is no different and I’m a firm believer that, in times of adversity, the truly determined rise to the top.
Be brave and don’t let the uncertainty around Brexit lead to uncertainty within your business – it’s key to stay absolutely focused on the mission at the heart of your business and avoid letting issues outside your sphere of influence curb your enthusiasm or ambitions.
Nic Brisbourne is founder and managing partner of Forward Partners, one of the UK’s leading early-stage investors in start-ups.