By Daniel Hunter
Eighty three percent of technology start-ups in the UK anticipate positive business conditions in 2013, according to a report by Silicon Valley Bank.
Silicon Valley Bank surveyed UK based start-ups to gauge their perspectives on local business conditions and opportunities and challenges including hiring, raising capital and government support.
Start-up executives are positive about the coming year, following a strong 2012. Sixty six percent of the respondents report that business conditions had improved in 2012 compared to 2011 and 73% met or exceeded revenue targets last year. Of UK start-ups earning revenue, nearly half expect their company to be profitable this year, while just 26% of their US counterparts report the same.
“The tech scene in London has evolved dramatically since we started working on Conversocial in 2009. One of the most exciting changes is how much easier it is to hire great developers than just a few years ago," Joshua March, Co-Founder and CEO of startup social media business Conversocial said.
"Undertakings like Silicon Milkroundabout and the Tech City initiative, backed by so much government and press support, have turned 'start-ups' into a viable career path.”
Hiring is a key priority for UK based start-ups. Nine out of ten survey respondents plan to hire and 77% say that finding workers with STEM (Science, Technology, Engineering and Maths) skills is absolutely critical to the success of their business.
Despite the positive outlook, the potential for growth could be hampered by continuing stagnation in the UK fundraising environment. Thirty-nine percent of respondents say they are looking to raise capital from venture capital and angel investors, yet the Startup Outlook findings reveal that there is a significant funding gap between Seed and Series A funding.
Start-up executives say that reform of government initiatives would have a role to play in growing and supporting their industry sector. More than half (56%) want greater access to government grants and funds designed specifically for start-ups, while 52% would like to see tax reforms.
“The tech start-up sector is thriving, with one in five businesses beating their revenue targets for 2012, and another strong year predicted for 2013," Bindi Karia, Vice President at Silicon Valley Bank said.
"The flipside is that many executives have concerns around how they should fuel the next level of growth, since access to funding and talent are cited as challenges for many start-ups. Nevertheless, these are exciting times for the UK tech scene. Executives are optimistic and working hard to develop the ‘next big thing.’”
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