Virgin StartUp: “It’s time to ‘fix the front door’ to entrepreneurship”
Virgin StartUp is calling on ministers across Westminster to help widen access to entrepreneurship, as new research reveals a stark divide in who feels able to start and grow a business in the UK.
The latest findings from Virgin StartUp’s Founder Barometer report show that two thirds (67%) of founders from lower socio-economic backgrounds feel unsupported by the government, compared with just one third (33%) of founders from upper-middle socio-economic backgrounds.
That lack of support comes alongside greater mental health pressure on founders from lower socio-economic backgrounds. While one in three (33%) founders overall report worsening mental health – up from 18% this time last year – the figure rises to 43% among founders from lower socio-economic backgrounds, compared with just 15% of those from higher socio-economic backgrounds.
Financial pressure remains a barrier to growth
Access to finance remains a major barrier for the next generation of entrepreneurs. Just 27% of founders from lower socio-economic backgrounds feel financially confident, compared with 70% of founders from higher socio-economic backgrounds.
Financial pressures have remained the most persistent concern for SMEs for three consecutive years. Almost half (47%) of founders cite cost-of-living pressures as a major concern, rising to 59% among those from lower socio-economic backgrounds.
The pressure is particularly acute in the North East, where 63% of founders say the cost of living is their biggest concern.
Luke Johnstone, 37, from London, founded PACK’D at 23. Having grown up on a council estate receiving free school meals, Luke was living in a shed in his parents’ garden and working as a football coach while trying to turn his idea into a viable business.
Luke Johnstone said: “Everything takes longer when you don’t have the funds or social capital to access the right support. Talent is everywhere, but opportunity is not. We need more visible role models, better access to networks, more strategic investment and practical routes to market so that brilliant ideas aren’t held back by someone’s background.”
Today, PACK’D generates more than £7m in annual revenue and is stocked by major retailers.
Founders want government to listen
The Founder Barometer report also highlights a clear gap for underrepresented groups.
Just 37% of founders believe the start-up landscape supports female entrepreneurs – a challenge reflected in the fact that just 2p of every £1 invested through UK venture capital goes to female-founded businesses*. Confidence is even lower when it comes to perceived support for ethnic minority founders (33%) and for neurodivergent founders (25%).
Andy Fishburn MBE, Managing Director at Virgin StartUp said: “Britain is full of people with the ideas and ambition to build strong businesses. As someone from the North East, I know that talent exists in every part of the country, but a founder’s background still has far too much bearing on their chances of succeeding. If the UK wants to unlock its full entrepreneurial potential, we need to fix the front door to entrepreneurship by widening access to finance, networks and practical support. Supporting today’s start-ups must be an economic priority.”
Embracing technology and future outlook
Despite ongoing challenges, Britain’s entrepreneurs remain focused on growing their business. Nearly six in 10 (59%) of UK SME founders are prioritising sales growth when looking ahead to the next 12 months, and more than half (53%) have already adapted their business following last year’s Budget.
AI adoption is accelerating, though the Founder Barometer points to another significant disparity. 35% of SMEs are still not using AI, which rises to 39% among founders from lower socio-economic backgrounds. By contrast, only 11% of respondents of a higher socio-economic background are not using AI.
Virgin StartUp is calling on the new government to make widening access to entrepreneurship a central part of it’s economic agenda, so that talent, not background, determines who gets the chance to succeed. That means tackling barriers to finance, making support easier to access and recognising founder wellbeing as an important part of building a stronger, more resilient small business economy.
For more startup news, check out the other articles on the website, and subscribe to the magazine for free. Listen to The Cereal Entrepreneur podcast for more interviews with entrepreneurs and big-hitters in the startup ecosystem.
