Are we at the end of the tech booming cycle in the UK? Investors are unhappy, Boris wants to make liquidity events more difficult than they should be, taxes are not founders friendly and, on top of that, the Silicon Roundabout is closing down.

In a survey, half of investors said they would significantly reduce the amount they invested in U.K. startups if the ability to exit was restricted, and a further 22.5% said they would stop investing in U.K. startups completely under a stricter regulatory environment.

Furthermore, 60% of investors surveyed said they felt U.K. regulators only had a “basic understanding” of the startup market, and 22.2% felt regulators didn’t understand the tech startup market at all.

That's MB quoting from a recent survey showing investors sentiment over Boris Johnson’s new takeover rules that are intended to make the international M&A harder for British entities.

Sure, it makes sense - bad legislation vs modern legislation, politicians vs dealmakers, senior people making decisions vs young people, old money vs new ways of making money. Those are grand themes you constantly come across countries from all over the world.

The idiots will always be in charge, the trick is to figure out a way in spite of that red tape. Britain's particular use case though is going the Brexit way, which seems less of a vision and more of an ego-reinforced accident, without any strategy in sight whatsoever. That has a particular flavour added to the macro context, and covid's not making it easier.

BJ is doing nothing but hitting the last nails in a seemingly end of a booming cycle for investors and tech startups in the UK, probably very well symbolised by the close of the Silicon Roundabout - now that that its intrinsic real estate value has increased, as some cynical people would argue (just follow the money, they say).

Here's what Martin Mignot of Index Ventures says:

Clearly, over the last decade London was the obvious place to start a business. The gap between London and the rest of Europe was huge. Fast forward to today, the gap has narrowed.

Martin also mentions that the single biggest issue for tech companies is laws around the taxation of stock options. That makes sense and he is right, of course, and the larger context that includes the startups in the equation is that London has increasingly become difficult to hire the first 10 employees, because talent is scarce and expensive and, the way things look, this particular problem is not only not being addressed, but also rather augmented intentionally. On top of that, paying in stock as a way of compensation is not worth it, as Martin says. 

But does that signal an end of the tech investment boom cycle in the UK?

I don’t think so. There’s simply too much money on the street and smart people always figure out a way to make things happen in adverse situations. And there's always an upside, the British separation and protectionism means more fragmentation and information asymmetry, which is always an opportunity in an entrepreneur’s book. It’s just that there’s going to be fewer international tech founders in the UK on the short term, and that means local higher valuation prices in an industry already under tremendous change pressures dictated by other drivers anyways. It's that turning moment in the history.

I do however fancy the 'Britain's only competitive advantage in Europe will soon be that it is an English-speaking country' theory. :D

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