Coadec has launched new research on the concerns of VCs when it comes to the future of the startup and scaleup ecosystem in the UK and Europe as a whole.

The new report, based on 185 interviews (including 85 UK investors), flags areas of risk for the European tech ecosystem in the coming years.

Notable lines coming out of the research include:

• 86% of UK investors surveyed agree ‘The principle of designing policy and/or legislation in order to target specific companies (i.e. global giants) could lead to poor outcomes that inadvertently hurt or hinder tech startups’
• 76% of UK investors surveyed agree that ‘The overall direction of regulation affecting tech companies can be more reactive than strategic’
• 77% of UK investors surveyed agree ‘It’s vital that immigration policies are designed to help the best talent set-up and join tech companies’
• 71% of UK investors surveyed agree ‘A digital tax on turnover would drive tech entrepreneurs to set-up in other regions’
• 81% of UK investors surveyed agree ‘It’s vital that the Government invests in tech-related education and R&D to avoid negatively impacting the startup environment’
• 73% of UK investors surveyed agree ‘Placing liability [for online content] on tech companies would be more burdensome for startups/scaleups than the global giants, potentially allowing the giants to strengthen their dominance’
• 73% of UK investors surveyed think ‘More stability in policy and regulation would create a better environment for investing’

Tech in the UK faces a number of significant long-term challenges. Brexit threatens London’s place as the heart of European tech and investors are rightly concerned with the direction of travel for policy in both the UK and Europe as a whole. There are a lot of open questions for the Government – from the platform liability to immigration – and not enough satisfactory answers.

Crucially, investors are clear that a policy conversation about the future of tech dominated by the biggest companies in the world risks squeezing out everyone else – including even our most successful startups and scaleups. This isn’t good enough.

The report was conducted in collaboration with Allied for Startups, the umbrella organisation representing startup organisations from across Europe in Brussels-based policy discussions, as well as partners in France & Germany.

Lenard Koschwitz, Director of Allied for Startups said:

“Access to finance is a prime factor for startup-success in Europe. This survey shows us that the investors are highly conscious of policy decisions and changes like a unilateral tax or disproportionate liability rules will impact their decisions leading to less capital available for startups in Europe. We urge policymakers to understand the startup ecosystem as a whole.”

Download the report here.