Why I’m excited about the next generation of entrepreneurs

At the start of this year, the number of founders under the age of 35 receiving Start Up Loan funding from Virgin StartUp hit an astonishing 47%. These founders are part of a growing number of generational peers interested in starting a business.

This might surprise some of today’s commentators. Young people – Gen Z specifically – have been termed the anti-ambition generation. But the requirements, hours, and not to mention personal sacrifices that go into starting your own business cannot be underestimated.

I know what it’s like, having started my own business when I was in my early 20s. Creativity, passion, and perseverance are all essential skills for any new startup founder; and it takes a certain type of person and attitude to go it alone.

Virgin StartUp’s own research from the start of the year showed that 46% of 18–24-year-old UK adults polled in January were interested in setting up a new business in 2023, compared with 26% across all ages.

So what’s behind this sudden increase in entrepreneurial interest amongst Gen Z? Is starting a business during a cost of living crisis, madness, or genius?

(Don’t) forget about the price tag

As the UK’s community of student entrepreneurs returns to their university dorms and campuses this autumn, they are just finding their feet in the business world. It’s a daunting proposition. Still, for many it’s no worse than the prospect of an uncertain jobs market.

Given the financial burdens already hanging over graduating students, and the lack of working opportunities for new job seekers starting their careers, it’s understandable why young people might be drawn to the idea of launching and scaling their side hustle.

After all, if the past few years of lockdowns and economic insecurity has taught us anything, then the saying “if you want something done well, do it yourself” has never rang so true for many young entrepreneurs.

Lack of finance might be viewed as a barrier to young founders straight out of school. The Start Up Loan programme offers a viable option. With interest fixed at 6% and a huge amount of support to boot, we can help young people turn their business dreams into reality.

Time for a change

Another factor driving Gen Z’s entrepreneurial spirit is their passion for people, places and the planet. This generation has different core values and expectations.

They are deeply concerned about climate change and social issues, and they want to see mission-driven brands prioritise purpose with profit. It’s even a key consideration when applying for a job.

Many are turning to take matters into their own hands, and building solutions to some of the world’s biggest problems. Like Cemal Ezel. In 2015, Virgin StartUp supported Ezel’s new social enterprise called Change Please. After a trip abroad, Ezel had decided he no longer wanted to trade numbers in the City all day and instead wanted to do something to address the growing issue of homelessness in the UK.

He launched a coffee company that trained homeless people to be baristas and invested profits into a new foundation that has supported thousands of homeless people to help them turn their lives around.

We also know that this generation is driving forward progress when it comes to diversity and inclusion in the workplace. The startup sector has its own role to play here in ensuring equitable opportunities in funding and support for all new business founders.

At Virgin StartUp we launched a 50/50 pledge in 2019 to equally fund women and men founders. This year, we introduced our Empower 100 accelerator programme to support Black, Asian and Ethnic Minority Founders, disabled founders and female founders. But we all need to do more to empower the UK’s next generation of business leaders. 

The Gen Z entrepreneur skill set

For those sceptical of the capabilities and experience required to develop an idea and run a business at a young age, it’s worth remembering that many 18–24-year-olds already have strong digital skills and technical knowledge – two in-demand business traits.

Business and financial management skills are often missing in Gen Z founders. But these can be easily taught. We know that for many young startup founders, mentorship and additional support is invaluable and can be the missing piece to the puzzle when it comes to succeeding in business.

Arguably, young founders are the most receptive to learning new skills. These can be attained by working alongside an assigned business advisor or mentor. Or, via a formal business programme, such as Virgin StartUp’s Investment Readiness Bootcamp.

Businesses supporting business

Over 99% of businesses in the UK are SMEs, which is another reason we need to encourage and protect those coming through who want to build a business themselves.

The increasing number of new businesses being set-up by young founders will only help to boost the small business community; and a thriving SME sector is paramount to the success of the UK economy.

Whether it is facing that epiphany moment for a career change or deciding not to embark on a traditional career path, it’s fantastic to see so many young people keeping the UK’s entrepreneurial spirit alive.

Now, we owe it to this next generation to help them to start, scale and succeed in business.

Andy Fishburn, Managing Director of Virgin StartUp

Andy has worked for Virgin StartUp, the not-for-profit home of entrepreneurship at the Virgin Group, since it began in 2013. He was the Head of Investments for five years before taking over as Deputy MD, then MD in January 2019. Prior to his role with Virgin he worked at Deloitte, specialising in private equity and venture capital. He also has his own experience of founding and scaling his own company.