Will David Cameron clamp down on UK startups making foreign hires?

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While each startup ecosystem is unique, given the global nature of the internet and work, all these hubs are intertwined, oftentimes with transcontinental traffic of workers, partners, and venture capitalists.

With all that in mind, 230 entrepreneurs, investors, and government officials wrote an open letter to UK Prime Minister David Cameron to protest possible new restrictions on the number of foreign workers technology companies can hire.

The UK government’s Migration Advisory Committee is considering raising the minimum salary requirements for Tier 2 visas that allow foreign professionals to come to work in the UK. The danger here is clear for technology startups who are either bootstrapped or held on a tight budget. It could price British companies out when competing with companies in other ecosystems trying to recruit tech talent from abroad.

“Raising the minimum salary threshold for these workers would significantly reduce the talent pool for UK based startups, putting us at a disadvantage on the global stage,” Debbie Wosskow, the chairman of sharing economy body SEUK, told the Telegraph. “We’re seeing more and more British startups compete effectively with Silicon Valley.”

Other countries opening up visas to entrepreneurs

Israel recently made headlines after it finally announced plans to implement so-called innovation visas specifically designed to attract foreign technology talent to the Jewish state. Israel joined countries like Australia, Ireland and Germany who have already implemented new startup-friendly visa protocols. Hillary Clinton earlier in 2015 mentioned the need to expand the number of H-1B visas for American companies. The news out of the UK is therefore considered regressive according to critics of the proposed changes.

Still, the Migration Advisory Committee is arguing that visas that have been given out in the past have been wasteful. The report that provoked the open letter “found substantial evidence of low-quality businesses” set up by those visa holders. Only 13,746 people have been granted Tier 1 entrepreneur visas according to the committee’s report, but recommendations would have that number cut back further.

“Finding talent with the right skills and experience we need to grow our businesses remains one of the biggest barriers to achieving that ambition,” the letter stated in response. “We are very concerned that changes to immigration policy will make it more difficult to attract and recruit the talent high-growth companies need to compete and succeed in a global marketplace.”

One step forward, two steps back?

The UK has been generous over the years with extending benefits to startups both in visas and tax benefits. Visas include variations of Tier 1 (including the entrepreneur visa) and Tier 2.

When Geektime approached CEO Reshma Sohoni of Seedcamp, one of the signatories to the open letter, she cautioned that, “If the government doesn’t enhance all three of these programs – Tier 1, Tier 2, and the Entrepreneur Visa – then yes, I think we could see a major brain drain from the UK at the worst possible time, which is where companies are finally getting beyond startup and scaling up impressively.”

The development is an odd one for local industry observers. The UK only two weeks ago announced the expansion of its Tier 1, Exceptional Talent Scheme with a new program called the Tech Nation Visa Scheme. The program offers the visa to people with any one of four newly listed qualifying criteria: aiding UK scale-ups, emphasis on Northern England, having “exceptional promise” (presumably in place of a lot of experience), and teams of five or more people from outside the European Union recruited by local companies.

Tech City UK, a publicly funded NPO hat supports the UK startup ecosystem, announced the Tech Nation Visa Scheme October 16 (image: Tech City UK)
Tech City UK, a publicly funded NPO hat supports the UK startup ecosystem, announced the Tech Nation Visa Scheme October 16 (image: Tech City UK)

Sohoni is one of those that have made the move to the UK from abroad. Born in India and having moved to the U.S. when she was young, she earned her BS in Economics and BAS in Engineering from the University of Pennsylvania. She came to Europe to earn her MBA from INSEAD in Fontainebleau, France before heading back to the U.S. By 2007, she was in the UK and founding Seedcamp, now a pan-European startup accelerator and venture fund based in London.

Seedcamp provides up to €200,000 in seed funding and has invested in more than 200 companies to date.

She adds the UK has been on point in her time with Seedcamp in helping the local startup ecosystem grow, but there are some factors moving against local business development. A number of plans like the Patent Box Scheme (lowering corporate tax 10%), an R&D tax credit increased by 225% and the SEIS and EIS tax relief systems for seed funding have been major boons for the UK startup ecosystem. Sohoni also cites the London Co-Investment Fund (LCIF), Angel Co-Fund and Tech City UK as important positive institutions in the local tech space.

She told Geektime, “Unfortunately, that system has gone through some cuts and patches. Current popular media sentiment in the UK is relatively unfriendly [on] immigration which really doesn’t help the matter.”

Reshma Sohoni, CEO of Seedcamp, at LeWeb12 Conference in 2012 (CC BY 2.0 OFFICIAL LEWEB PHOTOS via Flickr)
Reshma Sohoni, CEO of Seedcamp, at LeWeb12 Conference in 2012 (CC BY 2.0 OFFICIAL LEWEB PHOTOS via Flickr)

More input from VCs, or more red tape?

Applications and accepted applications have been going up consistently, at least between 2009 and 2013, but a simultaneously growing rejection rate as high as 50% by Q2 of 2013 has also been occurring, according to UK immigration resource site migreat.com.

The wording of the recommendations isn’t necessarily alarming at first glance or to an industry outsider. There is talk of letting industry experts have more of a say on who gets those precious visas instead of professional bureaucrats, ostensibly to make sure that the people coming in are going to set up quality businesses.

However, more review also means further delays and red tape. It’s very hard to see if London can integrate the way accelerators help startups form business plans into the way it selects deserving visa grantees.

The signatories to the open letter are more concerned than consoled by the recommendations. They feel they’ve got their finger on the pulse over the Underground, and don’t think the reform would be warranted in an environment that is showing promise and growth.

“We’ve seen direct benefits of that for our companies who raise money after Seedcamp,” Sohoni told Geektime. “It’s allowed our companies to scale faster and hire brilliant talent.”

The Letter

Dear Prime Minister,

We represent a cross-section of the UK’s digital startup and scale-up ecosystem, including the founders of Citymapper, DeepMind, JustPark and SwiftKey. The UK has the largest and fastest growing digital economy in the G20, worth over 10% of GDP.

During the election campaign you argued that the UK should be ‘the startup nation in Europe, and one of the great startup nations in the world.’ We share this ambition and applaud your government’s long-standing support for the UK’s tech community. From SEIS to support for FinTech and the sharing economy, you have championed entrepreneurs and innovators in the interest of securing our country’s long-term economic growth.

However, finding talent with the right skills and experience we need to grow our businesses remains one of the biggest barriers to achieving that ambition. The UK has become a global tech hub thanks in large part to startup founders, investors and employees from across the globe, including many of us who were not born in Britain but choose to invest our time and talents here. We are very concerned that changes to immigration policy will make it more difficult to attract and recruit the talent high-growth companies need to compete and succeed in a global marketplace.

The government’s Migration Advisory Committee is currently examining proposals aiming to further restrict the Tier 2 system of skilled work visas and to reform the Entrepreneur Visa. Further restrictions on skilled migration could restrict the growth of our businesses and hurt the UK’s digital economy.

We call on you to ensure that any future changes to the immigration system make it easier, not harder, for qualified digital entrepreneurs to come to the UK to start their business, and for growing startups to hire top international talent.

It is of course also vital that we continue to support the growth of digital skills within the UK, and we stand ready to do our part.

Sincerely yours,

Adam Horner Co-founder and CTO, Satago
Adrian Lloyd Founder & Partner, Episode 1 Ventures
Adrian Sevitz Co-founder, vzaar limited
Alain Falys Co-founder, Yoyo Wallet
Alasdair McPherson Partner, Craigie Capital
Alastair Paterson CEO, Digital Shadows
Alena Dundas Founder, Gymdeck
Alex Loizou Co-founder, Streethub
Alex Stephany CEO, JustPark
Alexander Asseily Founder, State, Jawbone and Elvie
Alexander Trewby Co-founder, Divide (acquired by Google)
Alexandra Depledge Co-founder, Hassle.com
Alexandre Dalyac Co-founder, Tractable
Alice Bentinck Co-founder, Entrepreneur First
Alice Taylor CEO, Makielab
Alicia Navarro CEO, Skimlinks
Alliott Cole Director, Octopus Ventures
Amy Lai Founder and CEO, Wittos
Andrew Evans Co-founder and CEO, Smart Pension
Andrew Fisher Executive Chairman, Shazam
Andrew Gibb Founder, Coldpress
Andrew Hunter Co-founder, Adzuna
Andrew Jervis Co-founder, Clickmechanic
Andrew Scott Founder partner, 7percent Ventures
Andrew Tibbitts COO, TechHub
Andrius Sutas Co-founder, AimBrain
Andy Bennett Founder, Knodium Ltd
Andy Hobsbawm Founder, EVRYTHNG
Andy Stephenson Founder, Weekend Box
Aneesh Varma Founder, Aire
Anirvan Lahiri Co-founder, The Stay Guru
Ankur Modi CEO, StatusToday
Anne Johnson Founder, Cunning Systems
Anthony Eskinazi Founder, JustPark
Anton Wellenreiter Partner, Charlotte Street Capital
Azmat Yusuf Founder, Citymapper
Ben Drury Co-founder, 7digital
Ben Gateley Co-founder and COO, The Eleven
Ben Medlock Co-founder/CTO, SwiftKey
Ben Perreau Co-founder, Synkio
Ben Whately Co-founder, Memrise
Bernhard Niesner Co-founder, Busuu
Bill Earner Managing Partner, Connect Ventures
Bindi Karia Startup expert, connector and advisor
Bo Pedersen Partner, Charlotte Street Capital
Brendan Gill CEO, OpenSignal
Bruce Beckloff Managing Partner, Bloc Ventures
Bryce Keane Founder, Albion Drive
Cecile Baird CMO, Credits
Charlie Newman Co-founder, Pinipa
Charlie Osmond Founder, TripTease
Charlotte Lacombe-Bar Co-founder, Mooshoo Labs
Chris Dawson Co-founder, One Utility Bill
Christian Hernandez Co-founder, White Star Capital
Christopher Hunter Co-founder, Odyssey Sensors
Colette Ballou Founder, Ballou PR
Constantin Bjerke Founder, Crane.tv
Dale Knight Co-founder, One Utility Bill
Damien Lane Partner, Episode1
Dan Bladen Founder, Chargifi
Dan Sutherland Founder, Carrenza
Daneal Bassiouni Co-founder, Homefund
Daniel Benamran General Manager UK, BlaBlaCar
Daniel van Binsbergen Co-founder, Lexoo
David Cleevely Founder, Cambridge Angels
David Fogel Deputy Director, Wayra UK
David Galsworthy Co-founder and CEO, TechSpace
Debbie Wosskow Co-founder, Love Home Swap
Demis Hassabis Co-founder, DeepMind
Devin Hunt Partner, Founder Centric
Doug Monro Co-founder, Adzuna
Douglas Bell Founder, London Innovators
Eamon Jubbawy Co-founder, Onfido
Edward Chin Co-founder, Supersolid
Eeswaran Navaratnam Managing Partner, 01Ventures
Elizabeth Varley Co-founder, TechHub
Emanuel Andjelic Co-founder, Squirrel
Emily Forbes Founder, Seenit
Emma Sinclair Co-founder, EnterpriseJungle
Eoin Hyde Co-founder, Innersight Labs
Eric van der Kleij Head of Level39 & MD Entiq
Evgeny Shadchnev Co-founder, Makers Academy
Faith Forster Founder, Pinipa
Felix Leuschner Founder, Drover App
Florian Stronk Co-founder, Koyoki
Frank Kelcz Founder, Excellerance
Gary Thompson Founder, GoRaise
Gavin Sathianathan Partner, Kingsley Capital Partners
George Bevis CEO, TIDE
George Marangos-Gilks Founder, The Tab
George Spencer CEO, Rentify
George Whitehead Chairman, Angel Cofund
Gi Fernando Founder, Freeformers
Gideon Farrell Co-founder, Converge
Gil Dibner Investor
Giles Andrew Executive chairman and Co-founder, Zopa
Giovanni Charles Co-founder, Fluently.io
Glenn Shoosmith CEO, BookingBug
Gus Ferguson Managing Partner, The Tetrad Consultancy
Guy Levin Executive Director, Coadec
Haakon Overli General Partner, Dawn Capital
Harry Briggs Partner, BGF Ventures
Helen Cammack Co-founder, interests.me
Henry Firth Founder, Pingtune
Hermann Hauser Partner Amadeus Capital Partners and serial entrepreneur
Hugh Collins Co-founder, Code Kingdoms
Husayn Kassai Co-founder, Onfido
Hussein Kanji Founding Partner, Hoxton Ventures
Ilya Levtov Co-founder, Craft.co
Irra Ariella Khi CEO, V Technology
Itamar Lesuisse CEO, Peak
Jack Huang Co-founder, TRULY Experiences
Jamal MonDesir Founder, MADFoundry
James Gill CEO, GoSquared
Jamie Edwards COO, Kayako
Jason Bolton Co-founder, Mooshoo Labs
Jeff Lynn Co-founder, Seedrs
Jennifer Arcuri Founder, InnoTech Summit
Jenny Griffiths Founder, Snap Fashion
Jeppe Zink Partner, Northzone
Jessica Williamson Programme Director, TechStars
Jo York CCO/CMO, Reframed.tv
Joe Cohen Founder, Seatwave
Joe Root Co-founder, Permutive
Joelle Hadfield Co-founder, FightsMe.com
John Hackett MD, ArenaFlowers.com
John Henderson Principal, White Star Capital
John Spindler CEO, Capital Enterprise
John Thompson CEO, UserReplay
Jon Bradford Co-founder, F6S & tech.eu
Jon Petrides Co-founder, Guevara & Penda Health
Jordan Emery MD, Quella
Josh Russell Partner, Rokk3r Labs
Joshua March Co-founder and CEO, Conversocial
Julian Carter Co-founder, EC1 Capital
Julian Ranger Founder, digi.me
Julie Meyer Founder, EntrepreneurCountry; CEO, Ariadne Capital
Kate Unsworth CEO, Kovert Designs
Kevin Price CEO, Reframed.tv
Kieran O’Neill Co-founder, Thread
Kristo Kaarmann Co-founder, TransferWise
Leonard Austin Co-founder, Ravelin
Lloyd Price Co-founder, Zesty
Lopo Champalimaud Co-founder, Wahanda
Luke Lang Co-founder, Crowdcube
Mads Holmen Founder, Bibblio
Mait Muntel Co-founder, Lingvist
Marcus Greenwood CEO, Universal Basket
Mark Russell Co-founder, Universal Basket
Mark Ryan Co-founder, Blooie
Marko Srsan Programme Operator, TechStars
Martha Lane Fox Co-founder, Lastminute.com
Martin Bailie Co-founder, Tailored
Martin Sweeney CEO, Ravelin
Matt Clifford Co-founder, Entrepreneur First
Melvin Salas Co-founder, Leaf.fm
Michael Thornton Co-founder, Carbon Analytics
Mike Butcher Co-founder, TechHub
Mike Lynch Founder, Invoke Capital
Mike Minett Co-founder and MD, The Positive Ageing Company
Monty Munford Founder, Mob76
Mustafa Suleyman Co-founder, DeepMind
Nabil Freeman Founder, Freeman Industries
Nic Brisbourne Managing Partner, Forward Partners
Nic Yeeles Founder and CEO, Peg
Nicholas Katz Co-founder, Splittable
Nicholas Russell Founder, We Are Pop Up
Nicholas Sharp Associate, Passion Capital
Nick Hungerford Co-founder and CEO, Nutmeg
Nick Lally Co-founder, Ravelin
Nigel Whiteoak Founder, LoveCrafts
Oleg Fomenko Co-founder, SweatCoin, bloom.fm
Oli Ashness Founder, Simply Cook
Oliver Pugh Founder, EarlyBird.fm
Patrick Stobbs Co-founder, Jukedeck
Paul McNabb Partner, Episode1
Paul Miller Partner, Bethnal Green Ventures
Paul Slater Co-founder, Fit Gurus Ltd
Paul Smith MD, Ignite and Campus North
Pip Jamieson Founder, The Dots
Prasanna Kannan Co-founder, Homefund
Pratik Sampat CEO, iHorizon
Raj Ramanandi CEO, #1Seed
Rajeeb Dey Founder, Enternships
Raph Crouan MD, Startupbootcamp IOT
Rashid Mansoor Co-founder, Adbrain
Razvan Ranca Co-founder, Tractable
Reshma Sohoni Partner and Co-founder, Seedcamp
Rhydian Lewis Co-founder and CEO, Ratesetter
River Tamoor Baig Co-founder, Hack Partners
Rob O’Donovan Co-Founder of The Eleven and CharlieHR.com
Robert Dighero Partner, Passion Capital
Robin Klein Co-founder, The Accelerator Group and LocalGlobe
Rohan Luvaglio Founder and CEO, Bizzby
Ruhul Amin Co-founder, Onfido
Russ Shaw Founder, Tech London Advocates
Ryan Kliszat Co-founder, Verticly
Saasha Celestial-One Co-founder, OLIO
Sam Mathews CEO, NEVERBLAND
Sam Michel Founder, Chinwag
Sam Oakley CEO, StashMetrics
Sandy Forster Co-founder, Pinipa
Sanford Dickert CEO, OWLR
Sarah Cochrane COO, Vetcloud
Sarah Wood Co-founder, Unruly
Saul Klein Founding Partner, LocalGlobe
Sean Seton-Rogers Partner, PROFounders Capital
Sherry Coutu Investor and non-exec director
Simon Edwards Co-founder, Shuttlecook
Simon Hill Co-founder, Wazoku
Simon Murdoch Managing Partner, Episode1
Spencer Hyman Co-founder, Navigator Commerce
Stefan Glaenzer Partner, Passion Capital
Taavet Hinrikus Co-founder, TransferWise
Tak Lo Director, TechStars
Tessa Cook Co-founder, OLIO
Tim Jackson General Partner, Lean Investments
Tim Spratt Co-founder, Permutive
Tom Allason Founder, Shutl (acquired by Ebay)
Tom Foster-Carter Co-founder, Curve
Tom Jones Partner, Charlotte Street Capital
Tom Watson Co-founder, Hubble
Tony Powell Co-founder, Sponsorlist
Tracy Dorée Founding Partner, Spring Partners
Tristan Deplantes Co-founder, Mooshoo Labs
Turi Munthe Founder, Demotix
Tushar Agarwal Co-founder, Hubble
Ultan Miller Co-founder, Release
Varun Shoor CEO, Kayako
Vincent Dignan Founder, Magnific
Vivian Chan Co-founder, Sparrho
Wil Benton Co-founder, Chew
Will Hodson Co-founder, The Big Deal
Will Wynne Co-founder, ArenaFlowers.com and Smart Pension
William Reeve Co-CEO, Hubbub.co.uk

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