How do we Save Our Startups?
Last year, UK startups received $13.2bn in investment — more than France and Germany combined! However today, Covid-19 threatens to derail this thriving ecosystem, and jeopardise the innovation and entrepreneurship which in 2019 created 77 unicorns alone.
“The secret of change is to focus all your energy not on fighting the old but on building the new.” — Socrates
Last week Funderbeam’s CFO Tom Davies joined the growing list of founders, shareholders, and customers to support the Crowdcube Save Our Startups (S.O.S) Petition. The petition seeks to address the shortfalls of the current Coronavirus Business Interruption Loan Scheme (CBILS) which was introduced by Chancellor Rishi Sunak to provide financial support for SMEs during the pandemic.
Although the scheme aims to deploy £1billion to help support struggling startups, the conditions of the loan have meant that only profit-making companies are able to benefit from the scheme. This leaves a huge gap in the startup landscape which, without intervention, will not be able to access government support.
What does the petition look to address?
The petition outlines a three-point plan to help protect the UK’s startup and high growth businesses. These points are summarised as follows:
- The government needs to provide an equity-based liquidity package suitable to save startups at risk.
- The Government must fast track payments to startups from public funding schemes — in particular, R&D tax credits and Innovate UK funding grants.
- The Government must change EIS, SEIS and VCTs to simulate private equity investment into startup and high growth businesses
Although these changes will not guarantee the future of companies in the long run, it will provide much-needed cash flow and allow the majority of the UK’s 30,000 startups to continue to work through the crisis whilst also encouraging the UKs investor community to start investing again.
What is Funderbeam doing to support startups?
Unfortunately Funderbeam is unable to push through government legislation or fast track grants and R&D tax credits, however over the last two years, we have already been helping startups to raise money and list.
We want to offer what support is possible for any fellow signatories and businesses potentially impacted by this gap in funding.
We can offer:
1. Access to Liquidity. We are providing employees with the tools to protect their finances. Our marketplace runs 24/7 and enables the trading of vested shares freely amongst themselves or with our community.
2. Quick communication. We streamline all shareholder communication through our platform and empower CEOs and founders with a suite of easy-to-use reporting and discussion tools. Companies therefore can spend less time answering the same questions twice and spend more time running, and protecting, their business.
3. Funding facilitation and support. We facilitate the arduous process of managing convertibles. During the conversion event, we have a network of 15,000+ verified investors that can support the round.
We are optimistic that the necessary support for our innovative startups and future unicorns will be offered, and we are eager to continue our support as we have in recent years.
We encourage everyone to sign the petition here and please contact uk@funderbeam.com to hear more about how we can support your company or employees.
