What founders should be asking for from the November budget
Britain is still a nation of shopkeepers. It’s time we acted like it again
Each week at ThatRound, I speak with founders and investors trying to move their companies forward in an environment that feels tougher than it should. They’re still building and still backing innovation. Too often, though, it feels like they’re doing it despite the UK, not because of it.
We’ve long prided ourselves on being a “nation of shopkeepers” — entrepreneurial, self‑starting, resourceful. That instinct is alive and well. What’s missing is belief: belief that Britain still backs its own builders.
A few weeks ago I wrote that too many founders are asking whether there are more suitable countries to start up in (1). And it’s not just startups feeling this. Wealthy individuals, many of whom would otherwise be early‑stage investors in UK startups, are leaving or planning to leave, citing both tax uncertainty and anxiety about the direction of policy.
When the people building our most exciting, high‑potential companies decide they can grow faster elsewhere, it signals a serious lack of confidence in our startup ecosystem. So, ahead of the November 2025 Budget, here’s where I’d start in addressing the malaise affecting the UK startup scene.
1. Modernise SEIS and EIS — give investors a reason to stay (and invest more)
The Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) have long been the scaffolding of Britain’s startup economy. They were designed to make high‑risk early investment viable, yet the data suggests usage is slowing. In 2023, the number of companies raising under EIS fell by 20%, and total funds declined from £1.97 billion to £1.57 billion (2).
A new campaign called Growth Beyond Limits has already written to the Chancellor requesting increases to VCT and EIS annual and lifetime investment limits, to allow startups greater access to the tax‑incentivised capital these schemes provide (3). As the SEIS limit (now £250,000) was increased in 2023, further movement there may be less likely — but I’d back it if it happens.
Beyond this, government could more directly reward the people writing the cheques. That means either (or both) of:
Increasing the annual SEIS and EIS investment allowances for individuals (currently £200k and £1 million respectively), even temporarily, to unlock more private capital
Raising the percentage of tax relief on each investment — for example, moving EIS from 30% to 40% for a defined period — to reignite early‑stage appetite
Any of these changes would act as a stimulus: they’d encourage faster deployment of VC capital, draw in new investors, and re‑engage experienced angels who’ve stepped back.
2. Reform EMI — the single biggest unlock for startup talent and growth
When the Startup Coalition released Keeping Options Open last month, it confirmed what many of us already suspected: the UK’s Enterprise Management Incentive (EMI) scheme is outdated and holding startups back (4).
EMI lets founders offer share options that make joining a startup a rational career move. But the world has moved on. Startups scale faster, raise bigger rounds, and stay private longer, while the £30 million asset cap and 250‑employee limit haven’t changed in over a decade. Too many companies lose EMI eligibility just as they begin to succeed.
The Coalition found that 82% of employers say EMI helps them hire talent they couldn’t otherwise attract, and 92% call it a key motivator — yet growth itself has become a penalty. The number of startups raising over £30 million in a single year is up 375% since 2014 (3), underlining that the scheme no longer fits the ecosystem it was designed for.
Their proposed fixes:
Lift the asset cap to £150 million and the headcount cap to 1,000
Extend the option window to 15 years
Reinstate board discretion to allow liquidity access when other shareholders sell
Create an “EMI Growth” tier for scaling firms that still need equity incentives
These reforms wouldn’t cost billions; they’d restore EMI’s purpose — helping UK startups attract top talent globally and unlocking the world‑class people already here by tempting them out of large corporates.
3. Unlock pension capital — let Britain back Britain
According to British Progress, only 10% of the UK venture‑capital pool comes from pensions, compared with 72% in the US (5) — despite UK schemes controlling more than £2.5 trillion in assets.
While American pensions routinely back venture and growth equity, UK schemes remain heavily weighted toward low‑risk, low‑yield assets. The result: UK pension capital is relatively passive, while others use theirs to fund our most innovative companies. In fact, US pension funds profit more from UK innovation than our own do.
The government’s Mansion House Accord — under which major providers have pledged to unlock up to £50 billion for unlisted equities, including UK tech, by 2030 (6) — is a positive signal, but not enough. The commitment is voluntary, 2030 is a long way off, and only a portion of that capital will reach UK startups.
Given that around a third of growth‑stage founders back pension‑fund reform to unlock access to growth capital (7), it would be a huge boost were the Chancellor to set more ambitious near‑term targets or address the limitations, regulations, or risk appetite preventing pension capital from reaching UK startups and scaleups. Unlocking more of our pension assets could inject tens of billions into British startups — enough to transform our early‑stage market and show Britain backs Britain.
Confidence is contagious — and right now it’s in short supply
The AI, clean energy, and healthtech sectors — which now attract nearly half of all UK venture capital — are the foundation of our next industrial era. With the pace of innovation accelerating, we can’t afford to wait to improve the conditions for growth.
Max Bray recently argued that Britain’s economic gloom is as much about messaging around founders and success as it is about policy (9). I agree. Startup ecosystems don’t just respond to incentives; they respond to belief — and in recent years that belief has been eroded.
In the November Budget, the Chancellor has the opportunity to act on the many smart proposals already on the table. Doing so would stimulate growth and signal that Britain still backs its wealth creators. There’s more to be done, but that would be a start.
We have an opportunity, right now, to remind ourselves what being a “nation of shopkeepers” really means: a nation that builds, and invests in itself.
References
Wealth migration and the cost of losing Britain’s founders | ThatRound – https://thatround.com/blog/wealth-migration-and-the-cost-of-losing-britains-founders
Enterprise investment scheme, seed enterprise investment scheme and social investment tax relief statistics: 2025 | HMRC – https://www.gov.uk/government/statistics/enterprise-investment-scheme-seed-enterprise-investment-scheme-and-social-investment-tax-relief-statistics-2025
Growth Beyond Limits – https://www.growthbeyondlimits.uk/
Keeping options open: The case for EMI reform | Startup Coalition – https://startupcoalition.uk/reports/keeping-options-open-emi-reform-2025
UK pensions: funding the future of UK science and technology | British Progress – https://britishprogress.org/uk-day-one/uk-pensions-funding-the-future-of-uk-science-and-t
Lord Mayor welcomes landmark agreement to unlock pension funds | City of London Corporation – https://news.cityoflondon.gov.uk/lord-mayor-welcomes-landmark-agreement-to-unlock-pension-funds
The Tech Nation Report 2025 | Tech Nation – https://technation.io/wp-content/uploads/2025/06/The-Tech-Nation-Report-2025-Unlocking-the-UKs-Growth-Potential.pdf
Nations and Regions Tracker 2025 | British Business Bank – https://www.british-business-bank.co.uk/about/research-and-publications/nations-and-regions-tracker-2025
Tall Poppies | Max Bray – https://substack.com/inbox/post/175696793?triedRedirect=true
