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British start-ups have months to survive without substantial government support, says new research

• New survey conducted in April 2020 represents the concerns of the c-suite across 277 UK start-ups on the impact of COVID-19 to UK businesses, in order to aid decisions of UK policy makers, investors and management teams
• The research showed that half of those working for start-ups will be on furlough by the end of April, and more than half of these companies have less than 6 months left to survive, which could wipe out a generation of innovation in the UK

ID: 1557573
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(businesspress24) - LONDON, UK, 21 April 2020 – According to new research conducted this month from proSapient, a machine learning executive research platform, over half (57%) of UK start-ups said they only had enough cashflow to survive a maximum of 6 months from now, even after undertaking cost-cutting measures.

It surveyed founders and c-suite executives from 277 start-ups in the UK – with almost half of respondents working in the software and services, technology hardware, and professional services sectors – representing an estimated total of £4.1bn in valuation. The findings highlighted that the lack of UK government support has created a very real risk that a generation of innovation and economic productivity will be consigned to history.

Top findings from the survey included:

1. Actual Revenue Impact – UK start-ups are now expecting revenues to fall 47% as an impact of COVID-19. There is a split of revenue impact, with many start-ups currently experiencing some positive impact on revenues due to their digital products, social impact, or ability to help in the current environment. At the other extreme, a quarter of respondents are expecting a decline of more than 75%.
2. Survival Prospects - More than half (57%) of companies only have cashflow to survive a maximum of 6 months from now.
3. Employment and productivity - The immediate impact on the start-up world has been notable, with respondents stating that nearly half of all employees will be furloughed by the end of April.
4. Breadth of funding - More than half (56%) of funding of UK start-ups comes from private individuals, compared with 18% from Venture Capital and Private Equity funds, and only 15% from other sources (including government and public markets), and 11% from EIS funds and Venture Capital Trusts.

“The current environment is extremely challenging for UK start-ups, a sector which employs over 330,000 people in the UK according to Crowdcube. Revenues, productivity, runway, and employment have been hit. The majority of entrepreneurs relief has been withdrawn. Start-ups are largely ineligible for the government-backed bank loans. And most founders have already bet the majority of their personal wealth on their businesses and are in no position to use any remaining assets as collateral to access further funding,” commented Jordan Shlosberg, co-founder of proSapient.



“With so much economic and social potential at stake, it is imperative that the UK government fully supports this generation of entrepreneurs. Policymakers have only days to make policies that will have multi-decade implications for millions of people.”

“While the new funding measures announced by the UK government over the weekend are an excellent start, they need to go further. The package is 30% smaller than similar schemes launched in Germany, despite the UK start-up ecosystem being nearly four times the size in terms of deal volumes,” Shlosberg concluded.

proSapient’s tech-enabled expert network and survey platform is used by investors to make smarter investment decisions. It has offered this platform and support at cost to the UK government in this period to help them make smart and quick policy decisions.



More information:
http://https://www.realwire.com/releases/start-ups-have-months-to-survive-without-substantial-government-support



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prosapient, start, up, uk, government, support, covid, 19,



Company information / Profile:

About the research
The initial survey was undertaken between the 7th and 9th of April 2020, utilising the proSapient market research platform. It surveyed 277 companies with 5 or more staff, representing a range of sectors. The final data has been cut to include only UK companies that employ 5 or more people, and only responses from founders and C-suite executives.

About proSapient
proSapient is a research platform which helps investment firms make smarter decisions. The proSapient platform allows clients to both interact with executives from around the world and launch rapid, targeted surveys. This unique access to primary research is overlaid with a number of unique features including automated transcriptions and instant messaging. proSapient works with the largest consulting and private equity firm’s globally.

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PressContact / Agency:

Octopus Group for proSapient
sarah.nadiff(at)octopusgrp.com



published by: RealWire
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Date: 04/21/2020 - 17:07
Language: English
News-ID 1557573
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