London's Tech City has grown enormously from its birth in 2010 to now become the sixth most significant area for Tech startups globally and the first in the EU. Figures out early January from Companies House have shown that of the 600,000 new businesses set up in the UK last year around 30 per cent were located in London. Despite the fear of escalating rents, London's popularity shows no signs of abating.
Here are five tips young entrepreneurs can implement to take advantage of the Capital's burgeoning innovation surge:
1. Grass roots support - make the most of it
Since the Conservatives backed the development of Tech City in 2010, there has been an increasing amount of schemes and reliefs available to attract startups and talented individuals. Schemes such as the Codecadamy and Maker's Academy and teach courses specifically to prepare younger people for entry level graduate Tech jobs.
The government are also championing the 'Future Fifty' programme, which supports the UK’s top 50 growth-stage digital companies, with successful alumni including Just Eat, Skyscanner, ao.com and Zoopla. The programme provides access to expertise within government and the private sector and offers tailored support to help builds links with the UK’s institutional investor base.
Corporates are catching on and offering free advice to startups. DLA Piper offers a free business startup pack to provide assistance and support to early stage startups who are looking to establish their business on a more formal business.
2. Cash incentives - take advantage of them
In the 2015 Budget, the government pledged £140 million to develop applications for the Internet of Things and smart cities.
There are several startup funding schemes which can be taken advantage of - including Entrepreneur First, EBAN: The European Trade Association for Business Angels, Seed Funds and Early Stage Market Players, Seed Camp and competitions, such as the Internet of Things Launchpad competition, offering a prize of one million pounds to the winning idea.
3. London's international access - use London's reputation to attract the best employees
Supported by government backing, Tech City UK was created in recent years specifically to market London abroad as a new Tech hub, encouraging foreign investment.
Indeed, investment prospects in London are currently so favourable that it is an even more desirable location than the Silicon Valley, according to recent analysis. Data showed San Francisco has a ratio of investors to startups of 2:1, whereas London is 3:1, showing the latter provides the favourable conditions for people seeking to invest in a startup.
London's connectivity with the rest of the world means not only is it likely to already possess the necessary talent, but it has the relationships and means to bring in more overseas talent where it is needed.
Some examples include visa schemes in place to encourage further skilled immigration. One scheme offers visas for 200 skilled Tech workers; another is the Entrepreneur's visa, which is available to individuals that already have £50,000 in funding, and are ready for the next stage of investment. In addition to these, there is a 'tier one' scheme for exceptionally talent skilled workers within IT, and a 'tier two' scheme, which enables 20,700 skilled workers per year from outside the EU to come to the UK.
4. IP is defendable - protect it
When you have a great idea, there is always the risk of competitors wanting to sell your ideas as their own. By protecting your IP, you not only remove this risk, but you can also boost the value of your business and make your business a more attractive acquisition target.
In the UK, protecting your IP is easier than you may think - the registration of patents or trade marks can be done (without the need for solicitors) through the intellectual property office website.
5. Tech hubs - choose the one that's right for you
As already mentioned, Tech City, located in East London, seems to dominate the London tech scene. For those involved in financial services, Tech City's location near the financial district would seem to make it the obvious choice; but Tech City need not be for everyone. Further East, the Olympic Park iCITY is emerging as a new hotspot, particularly for media and broadcasting startups, with BT Sport having recently moved its headquarters to the Press and Broadcast Centres here. Moving West, the area covering Soho, Fitzrovia and Covent Garden is the second most popular area in London on the tech scene, attracting film, television and special effect companies. This is to name but a few areas across London that are fast emerging as tech hubs in their own right.
So you've chosen what area you want to be in, what next? Office space. There are a number of incubators and accelerate programs across London that offer relatively cheap rent and high quality office space. WeWork is a great example of coworking office space with 8 offices at different locations across London; a location to suit every type of startup!
Rebecca Hughes is an associate in DLA Piper's Corporate team and adviser to London's tech industry. She can be reached at [email protected].