Britain – and London’s – ability to attract entrepreneurs and investors from Europe and beyond is well documented. However, now that the prime minister has officially triggered Article 50, there are some concerns about how long this can last. And joining the chorus of concerned parties is 83North, the VC firm.
The company has a strong track record of supporting British and European startups over the years. And now that it’s closed its new $250m fund, it’s looking for MORE European startups and scaleups to invest in. However, the VC says that Brexit could potentially pose a risk to British entrepreneurial landscape. Speaking exclusively to Elite Business, Laurel Bowden, a partner at 83North who’s based in London, says that even though the firm is adamant in its belief that the British capital will “remain the leading tech hub in Europe”, the divorce from the EU could end up having some negative consequences. Referring to worries that post-Brexit changes to immigration rules could make it harder to do business in the UK, Bowden said: “Theresa May has clearly not attempted to alleviate these fears in any way. As a result of this, it is possible that an EU citizen who was considering basing their business in the UK because it’s the main EU tech hub might instead decide to stay in their home country.”
Another risk posed by new immigration restrictions is that UK-based businesses founded by entrepreneurs from an EU country outside of Britain “may decide to spend the next couple of years expanding their presence in another European city”. Bowden continued: “In both these cases, the UK will lose out and of course some of our funding – which would have been in the UK – will now go to Europe.”
Still, Bowden points out that London has many benefits, which makes her confident that some of the new fund will find its way to British startups in the capital. “The UK has always been very open, has created an environment where it is easy to do business and is very tech and entrepreneur friendly,” she says. “In addition, English is the language most tech entrepreneurs speak, so this in itself makes it the logical place to do business. As a result, there is a great choice of talent in London, making it easy to build and expand teams. London also remains a world-leading city to live and work in.”
Even though there clearly are concerns about the future of the UK’s startup ecosystem, it’s good to see that VC firms like 83North still believe in the potential of the country’s entrepreneurs.