If you want to see how London’s economy escapes from the Covid-19 economic disaster, look at a website called Otta.
A jobs site set up specifically for tech companies looking to hire, Otta is crammed with start-ups looking for new recruits, even in the thick of the crisis.
So, as we emerge, tech start-ups (and Otta is one of them), will keep us growing out of this mess.
They will expand faster than the rest of the economy, be more productive, and increase hiring at a much quicker clip.
Already, there are 30,000 of them employing 3.3 million people — largely in London.
However, many are in a cash crisis as revenues have temporarily disappeared.
Today’s launch by Rishi Sunak of a £1 billion pot of funding for them is a welcome first step.
Rightly, given the super-high risk of backing such early-stage firms, money will only be offered alongside co-investment from the private sector.
The risk, however is that the process of getting the money out takes too long, just as the CBILS system has.
Start-ups are by their nature light on staff and don’t have finance departments on hand to fill out endless forms and renegotiate terms with their shareholders.
Meanwhile, business angels using EIS don’t appear to count as eligible co-investors. Why not? A cynic might suggest the slick lobbyists in the VC funds community had been getting rather too much of a hearing at the Treasury.
Many start-ups rely on a combination of angels and funds, so to discrimnate against one set seems odd.
Overall, the scheme is well-intentioned, and will improve with tinkering, but in the meantime, the simpler plan to push £550 million more through the existing Innovate UK scheme — plus R&D tax credits — offer a faster lifeline.
Let’s put more through them now, for an instant adrenaline shot.
