Brexit Britain: where do businesses fit in?

Britain is the European leader for FDI inflows, and comes second only to the US in the most recent OECD (Organisation for Economic Cooperation & Development) report of the world’s 35 richest countries. Not what we thought we’d be hearing for Brexit Britain either. It is important to note that such a surge in investment hasn’t been observed since 2005. Even excluding the year’s mega-deals (e.g. Shell’s £34bn takeover of BG Group and ABInBev’s £79bn takeover of SAB Miller), the UK remains the top FDI destination in Europe.

The initial attractiveness of a low pound almost certainly plays a role in an investment surge, but if we dig deeper, the decision(s) of these firms seems to reflect an underlying confidence in the ability of the British economy, or at least its businesses. In simple terms, the investments the UK has been home to have been predominantly medium-long term, and as Maria Borga, senior statistician at the OECD’s investment division, puts it:

“[the rise in FDI in the UK] could be an indication that [buyers] think that sterling will recover in the future, in which case you’re buying cheap but hoping that the earnings that you’ll get in the future will be worth more.”

 

Why MNEs aren’t the only ones with a bright future

Maybe reading about countless mergers and acquisitions in the financial press has left you feeling somewhat deflated, and you’re starting to believe that investors only want to put their money into corporations they know have the knowhow when it comes to business infrastructure. In fact, this isn’t the case…

Many entrepreneurs and new business owners’ expectations have remained unscathed by Brexit, which can be seen from a recent analysis published by The Economist, stating that

eight out of ten company filings made by FTSE 100 firms this year do not even mention Brexit”

Given that Britain’s corporation tax (at an attractive 19%) is the lowest in the G7, it is really no surprise that investors are still so willing to put their money into the UK. Of all the crowdfunded deals, we have seen in the first half of 2017, a staggering 46% involved companies at the ‘Seed’ stage, with 37% involving companies at the ‘Venture’ stage of evolution (leaving 17% of deals concerning those already in ‘Growth’).

These figures should be ringing alarm bells right about now, and giving you, as a business leader, entrepreneur, or innovator, the confidence to contact an expert in helping companies like yours grow. Though the prospects are great despite the many political and economic shocks we have seen in recent years, this does not mean that having a great idea is enough.

A lack of experience and knowledge can be extremely off-putting for investors, however life-changing the product you hope to bring to market may be. Therefore, businesses need support from people who have been in their shoes, which is why CFPro Ventures do not merely prepare you to approach investors, we support you in learning how to run a successful business, right from day 1.

 

2017-09-12T14:57:30+00:00 September 12th, 2017|News|Comments Off on Brexit Britain: where do businesses fit in?