Many interesting initiatives underway by govt reviewing startup mechanisms

Startups that are not yet bringing in revenue will need targeted support as they approach the end of their funding runway. These are ill-suited to taking on debt, such as the Business Interruption Loans, and are unlikely to benefit from rates relief or grants, as many use co-working spaces. Startups will be responsible for a large proportion of job growth once this is over, and cannot be overlooked. Two measures should be targeted at them. First, grants aimed at small businesses that don’t pay rates should be extended to startups in co-working spaces. In lieu of accurate valuations, grants could be limited to at startups with fewer than 10 employees. Second, instead of loans the British Business Bank should back convertible notes of up to £500k for early-stage startups. The notes would convert to equity at a later date and avoid the problems of issuing loans for pre-revenue innovative businesses.”

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