In 2019, the entrepreneur, investor, influencer, and podcaster Grace Beverley nearly crashed our website. It didn’t take much – Grace just posted a link on Instagram to her 1 million followers directing them to a report she was featured in as a case study. We had more traffic that day than at any other time in our 10 years. I was reminded of that this week as I got sent her LinkedIn post by multiple people highlighting new legislation threatening female investors and entrepreneurs.
As Grace writes: “On 31st January, new legislation will come into place that is going to impact the barriers to entry for women becoming angel investors immeasurably: As it stands, investors on angel investing platforms have to earn over 100k. New government legislation will see this raised to £170k. This will disproportionately impact the pool of female investors in the UK. In fact, there are some areas of the UK with NO women who earn over 170k.”
This isn’t the first time this issue has been raised, but this is the first time the stats have made the picture so clear. The chart, which is based on research carried out by Marla Shapiro of HERmesa Angel Syndicate and Roxane Sanguinetti of Alma Angels, is shocking. Based on 2020/21 earnings, this would mean huge declines in eligibility for investors across the board, but in some regions – namely the North West and Northern Ireland – no women at all would qualify as ‘sophisticated investors’.
Investors calling for wider tax breaks isn’t much of a story. But no women in entire regions of the UK being able to access investment reliefs is a very big deal. Clearly, it should rise with earnings inflation, but such a large amount in one go is a hammer blow to female entrepreneurs and investors alike.
Homophily is real: people invest in people like them. If this goes through, fewer female investors will mean fewer female scaleups. There’s clearly a balance to be struck between protecting investors and unlocking investors. But this isn’t balanced. Drop me an email if you want to be kept updated on this issue.
Fix Everything
On Monday, I went to Here East in the Olympic Park to see the Secretary of State for Science, Innovation and Technology deliver her #ScaleUpUK speech. In it, she announced the creation of a scaleup forum, pitching and investment opportunities, and a regulatory support service.
Alongside the speech, the Regulatory Horizons Council released a report on The Role of Regulation in Supporting Scaling-up, which echos some of the recommendations that our friends at Form Ventures have been making in their efforts to ‘fix the regulators’.
The announcements haven’t gone without criticism though. Jonny Clark went in with both feet in an article on UKTN. While I don’t agree with it all, I think he has a paragraph that should be taken seriously: “The main problems facing startups in the UK right now are education, tax, immigration, regulation, housing and transport-related. These are all exacerbated by sudden swings and changes in direction every couple of years to mask the inertia, overregulation and stagnation that permeates an increasing number of our civic institutions.”
Obviously none of this is in the power of Michelle Donelan MP to fix on her own, and we can still broadly welcome the announcements she made. But it can’t distract from the wider problems: we need to fix a whole lot more than just the regulators. Let’s hope Donelan uses her chair at the Cabinet table to get her colleagues focusing on all of those other issues Jonny mentions too.
Neurodiversity
We are busy writing a paper on neurodiversity and entrepreneurship and are looking for some case studies from people who have been diagnosed as such. Get in touch with Eamonn Ives if you would like to be considered.
New Year
I’m delighted to announce we have three new Advisers: Ilda de Sousa, Partner, Immigration at Kingsley Napley; Rodolfo Rosini, Co-Founder & CEO of Vaire Computing, and Daniel Astaire, Managing Partner at Grosvenor Law.
We’ve been drawing on Ilda’s deep expertise on immigration policy for years, so getting her involved is long overdue. Rodolfo is an incredibly smart serial entrepreneur who thinks big and will help keep us focused on the things that really matter. Daniel sat as a cabinet member on Westminster City Council from 2001-18, so, among other things, will bring that experience and interest in local government to the table.
Our Advisers are an integral part of the work we do. Drop me an email if you’re keen to get involved.
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