Hot on the heels of the budget, which promises new funding for UK startups from the Business Bank, employment allowance, and the possibility of extended Funding For Lending Scheme, Chancellor George Osbourne has announced a partnership with the Tech City Investment Organisation (TCIO) to support 50 fast growing businesses in the UK.

Kickstarting startups

The Future Fifty program will support businesses through mentorship and investment advice from both the government and private sector. This will help startups navigate the publically funded schemes available. The program will also make it easier for them to get on the UK stock market and rapidly accelerate growth. But the main benefit will be decreasing the expense of investing in smaller fast-growing companies via reduced tax.

Tech City is crying out for more investment. The Science and Technology Select Committee recently warned that the Government is failing to secure the necessary funding for UK startups. Unlike their US counterparts, UK startups face much fiercer competition for a much smaller pot of money.

In Silicon Valley, the market is much less conservative, and we’re seeing a lot more investment into the startup community from second and third time entrepreneurs. Whereas in the UK, there’s more reluctance to invest in a startup company, so businesses are left struggling to get off the ground so many are turning to overseas investors to secure the funding they need.

This is something that is proving to be a concern for many government and tech city officials. At the same event that announced the Future Fifty program, Joanna Shields, Tech City CEO, highlighted concerns about retaining great startups in the UK.

Investing in the future

The UK is a great place to start a company, the government now offers tax breaks to startups. Fledgling businesses, only need to pay 10% capital gains tax when they sell shares and, to encourage investment from other sources, angel investors now get a 50% tax relief on any amount they invest in startups. David Cameron recently pledged a $77.4 million (£50 million) investment into regenerating Tech City. There’s also a lot of new talent in the UK, and many highly skilled developers coming straight out of universities are now boosting creativity in new companies and attracting many overseas companies.

The government has a clear vision to “make east London one of the world’s great technology centers”, and the recent budget indicates that government is serious about keeping great British talent in the UK. Fingers crossed, each of these plans come to complete fruition and provide the UK startup scene with the support it needs to grow into a full-fledged ecosystem.

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