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The COVID-19 pandemic sparked a wave of panic among investors in the early months of 2020, with many investors fleeing early-stage startup deals.
By March, almost one-third of investors had pulled out of UK seed funding deals amid fears that the pandemic was about to trigger a global recession, according to data from SeedLegals.
And new research – put together by coworking space Plexel and market database Beauhurst – has revealed that more than 1,000 startups have collapsed in the UK since.
The data shows a grand of 1,067 high-growth businesses filed for administration, liquidation or dissolution since the start of lockdown in the spring.
In an effort to save Britain’s burgeoning tech scene from going under, Chancellor Rishi Sunak devised a £250 million “Future Fund”, managed by the state-funded British Business Bank, and designed to save promising startups from the brink of collapse.
The scheme has handed out some £588.8 million ($700 million) in assistance to date, exceeding its original target, across 590 companies. But in spite of Sunak’s best intentions, some founders attacked the scheme’s “egregious terms”, and warned that it risked excluding already-marginalized founders from disadvantaged backgrounds.
Business Insider spoke to six UK startup founders that were forced to endure the pandemic without support from the Future Future. They shared experiences shot with tough calls, personal sacrifices, and determination.
Read their stories below:
Soccer startup Flair revamped its entire business model to stay alive
Since launching in September 2018, “Flair Football”, as it was previously known, had attracted more than 20,000 young soccer players to its app, where they could create profiles, keep track of match outcomes, and swap skills.
But when Prime Minister Boris Johnson instituted a nationwide lockdown in March, outdoor sport was brought to a standstill – and Flair with it.
“The pandemic caught everyone off guard to some extent, but because our app relied on kids playing outdoor sport, we were hit particularly hard,” cofounder and CEO Nii Cleland told Business Insider.
With user numbers tanking and no end in sight, Cleland and the rest of Flair’s top team opted for a radical change in direction: shutting down the app and transforming the company from a sports platform to social enterprise, focuing on giving young people a voice on issues such as racial inequality.
Speaking about the decision, Cleland said: “We spoke to our board members and we were just completely honest. We put together a pitch where we pitted our current proposition versus the new one, and asked: ‘Who wants to stick with us?’
“You just have to be completely honest with yourself. Looking at the current situation, you have to think: ‘Would I try and start my company today, in this climate?’ If the answer’s no, it probably means you should do something else.”
Flair already has a number of partnerships with schools across the UK in place, and will start by surveying students and staff to better understand levels of racial inclusivity and awareness.
Asked about the Future Fund, Cleland said: “It was one of those things where…they couldn’t save every startup. They had …read more
Source:: Businessinsider – Tech