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The response of this section of business, with nearly 800,000 new firms incorporated in 2020 and record investment in 2020 could herald potential 'golden age' for start-up.
The response of the investors who back them has been equally stirring, new figures showing that small firms received a record breaking £8.8 billion worth of equity investment last year.
This combination of entrepreneurial ambition and investor appetite has led many to look to the future and what the impact will be over the next few years.
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But with a return to normal fast approaching, is this trend set to continue or run out of steam? New research from SME investment specialist private equity house IW Capital suggests that this may be just the start. In a nationally representative study across 2000 respondents the data paints a picture of a nation ready to start up and support small businesses over the next few years and beyond.
Key statistics:
- 16 per cent of investors will look to back startups and small firms in 2021
- 13 per cent of Brits plan to start a business in 2021 (4,245,000)
- 58 per cent of Brits plan to shop more with small businesses and startups in 2021
- 19 per cent of UK workers who work at a small business have won large clients and grown as a business through Covid (3,687,000)
- 66 per cent of Brits say that their trust in small businesses and service providers has grown during the pandemic (29,607,000)
The data indicates that 2021 could be an even bigger year for startups and SMEs in the UK, with £4.5 billion of equity investment in the first three months of the year alone.
Step change
Luke Davis, CEO of IW Capital discusses the data and the prospects for Startups in 2021. He said: “The past year or so has signalled a step-change in the way we view startups in the UK, with trust in large firms dwindling and the trust for entrepreneurs and self starters growing rapidly. We all know someone who has taken the plunge into business as a result of furlough and lockdown and I don't doubt that many have started on a path toward Unicorn status.
"This desire to startup and go it alone looks set to continue in 2021 and beyond as the desire to support small firms grows from the point of view of both consumers and investors, as our research shows. This is also true of what we have seen at IW Capital, investing in a number of innovative growing businesses throughout the pandemic with the support of our investor base.
"The 20s could well be the decade of the startup and the Unicorn, perhaps it will be a few years before we see the true impact of this, but encouraging entrepreneurship and investment should be at the heart of the UK's economic recovery.
"Extending schemes such as the Enterprise Investment Scheme (EIS) could be a great way to boost this, as several companies receiving investment through EIS have now gone on to achieve Unicorn status.”
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Susie Hughes © Shout99 2021
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