I have had this conversation more times than I care to count. A smart developer, a talented product person, someone who has built something genuinely impressive, quietly announces they are relocating to San Francisco or Austin or Miami. Not because the weather is better. Because the conditions for building a company there are simply more favourable, and they have finally had enough of fighting the current here.
And the people making policy decisions in this country either do not understand why, or they do not want to admit it. Both possibilities are equally worrying.
I am not going anywhere. I have bootstrapped businesses in the UK for over seventeen years, I work with clients across the country on complex technology projects, and I am writing a book about going from startup idea to paying customers in a month. I am invested in this ecosystem. But I can see exactly why people leave, and pretending otherwise is not going to fix anything.
The Tax Environment Is Punishing the Wrong People
Start with the headline numbers. If you build a business in the UK and are fortunate enough to sell it, Business Asset Disposal Relief used to soften the blow considerably. You paid 10% on the first million of qualifying gain. The rate has since crept upwards and the direction of travel tells you everything about how government views people who take entrepreneurial risk.
The US has its own complexity around capital gains, but the scale of exits available there means the economics of building a company are just more attractive. When you are deciding where to invest the next ten to fifteen years of your working life, those numbers feed into the decision whether you consciously acknowledge it or not.
And then there is employer National Insurance. Every time a startup hires someone, the cost of that hire has gone up. For a bootstrapped business that is entirely self funded, adding headcount is already the most nerve wracking decision you will make. Making it more expensive does not encourage founders to hire British workers. It pushes them towards automating earlier, outsourcing overseas, or simply scaling back their ambitions.
I built CampSuite without external investment and funded every hire from revenue. I understand viscerally what happens to your business model when the cost of bringing someone on increases. You do not shrug and absorb it. You make different decisions.
The Culture Around Failure Is Still Holding Us Back
This one is harder to fix with policy, but it shapes everything. In the UK, if you start a business and it fails, there is still a social stigma attached to that. Not universally and not everywhere, but it lingers in ways that matter. People ask what went wrong. There is an implication that you were not quite up to it.
In the US, failed startup experience is practically a CV requirement in certain circles. You are expected to have tried things that did not work. The attitude is that you learned something valuable, dusted yourself off and came back smarter. That is genuinely the culture, not just the marketing materials from Silicon Valley PR departments.
I have started businesses that have not worked out. ProCube was one of them. The market was not where I needed it to be and I held on longer than I should have. But the experience directly shaped how I built CampSuite, which has been a far more successful business precisely because of those hard lessons. The cultural openness to talk about failure as part of the process rather than a character flaw is something the UK is still developing, and it matters more than most policy papers acknowledge.
The Investor Ecosystem Is Concentrated and Conservative
London has capital. There is no argument about that. But getting to it as a founder outside of a relatively narrow network is genuinely difficult. The density of seed funds, angel networks, and institutional investors per startup in London simply does not compare to what you find in the Valley, and venture activity outside London is even more sparse.
This is not a criticism of the quality of investors here. Some brilliant people are backing British companies and taking genuine risk on early stage ideas. But the sheer volume and risk appetite in the US is categorically different. You can pitch something genuinely weird and early in San Francisco and still find someone willing to back it. That is harder here, and the further you are from London, the harder it gets.
The government's answer to this has mostly been enterprise investment schemes and similar structures. These do help, and they have produced genuine successes. But anything that requires a specialist accountant to navigate properly is probably too complicated. The friction becomes a feature rather than a bug, and it quietly screens out founders who do not have the right advisers in their network already.
What Would Actually Make a Difference
I am not naive enough to think there are simple answers to any of this. But if I were in a room with someone who had actual power to change things, I would say a few things directly rather than dressing them up in diplomatic language.
Stop tinkering with entrepreneur relief at every budget. The uncertainty itself is a disincentive. Founders make ten year decisions. If the tax treatment of your eventual exit changes every eighteen months, you build that unpredictability into your planning. Pick a rate, hold it for a decade, and let people actually plan around it. Consistency matters more than the exact number.
Make employer National Insurance more progressive for small companies. A startup with three employees and a business with three hundred should not face the same marginal cost structure. The administrative burden is already disproportionate for smaller teams. Add some genuine relief for the first ten or twenty hires and watch what happens to employment in high growth companies.
Put serious sustained investment into technical education outside London. The talent density in some American cities is extraordinary because universities and community colleges have been producing software engineers at scale for decades. We have brilliant universities but we are not producing nearly enough technical talent, and the graduates we do produce tend to cluster in one city. That is a structural problem that needs a long term fix, not another pilot programme.
And stop treating entrepreneurs as a revenue problem to be optimised. There is a persistent attitude in parts of government that people who build successful businesses should be taxed more aggressively to fund public services. I understand the political logic and I am not arguing that successful people should pay nothing. But founders create jobs, generate corporation tax, employ people who pay income tax and NI, and build the companies that will drive economic growth for the next twenty years. The returns to society from a thriving startup ecosystem are substantial and long term. Taxing it like a nuisance is spectacularly short sighted.
The Honest Summary
I have not left. I am still here, building businesses from a motorhome, working with clients on complex technology projects, and contributing to an ecosystem I genuinely believe in. If you are looking for someone to help you think through the technology side of building or scaling something, that is exactly what I do through my consulting and advisory work.
But I understand completely why people leave. The conditions here are not as good as they should be, and in some respects they have got worse rather than better over the past few years. That is a problem that deserves honest conversations rather than another government press release about a new innovation strategy that nobody outside Westminster will ever actually encounter.
The entrepreneurs who are leaving are telling us something important. It would be worth listening before the people with the answers stop being available to ask.
