UK tech start-ups have responded to the government’s decision to go ahead with a £30m advice programme by calling it “utter nonsense” and asking for the money to be reinvested elsewhere.
The Department for Business, Innovation & Skills (BIS) announced the Growth Vouchers programme in April and recently revealed that it aims to help micro and small businesses with up to 49 employees grow by providing them with money to supplement their consultancy costs.
Several start-ups said they thought the government would be better off investing the money elsewhere. For example, Roy Kimani, CEO of business video platform, Nideo, said spending money on equipment and premises would be a far better utilisation of capital in the early stages than paid advice.
Meanwhile, Guy Mucklow, CEO of address management platform, Postcode Anywhere, said the government would be better to spend its money on a series of online learning courses designed and developed by entrepreneurs who have the practical experience to back up the learning.
Jason Yeomans, CEO, PMGC Technology Group, a managed services company, even went as far as to say that the spending £30m programme was “utter nonsense”.
“They [the government] need to get their heads round the fact that SME’s typically know how to grow their businesses,” he said. “Instead, invest £30m in backing businesses for growth. This is simply more wasted time and effort and amounts to nothing more than political positioning.”
Others complained that the amount of money up for grabs was not enough and that businesses won’t want to spend vast amounts of time applying for small grants.
“In truth, pots of cash for as little as £100 are a waste of time,” said Rose Ross, founder of an enterprise tech start-ups programme, called Trailblazer. “How many busy execs in a start-up or SME are going to have time to do the red tape around this for that much money?”
However, some firms welcomed the news and respected the fact that the government is acknowledging start-ups and SMEs.
Peter Hopton, founder and CEO of Iceotope, a start-up specialising in environmental IT cooling, said: “A fresh perspective is extremely valuable for any start-up, with practical and meaningful advice often hard to come by and, when available, at a cost SMEs might not be able to stomach. This programme could act as the framework for businesses to get the advice they need and grow accordingly.”
Hopton believes that the process needs to be “quick, transparent and not cumbersome” in order for it to be successful.
Under the programme, BIS has said it will allocate subsidies of between £100 and £2,000, to provide businesses with up to 50 percent of the cost of obtaining external advice from suppliers in the private sector.
The exact amount of money that start-ups will receive from the £30m pot remains unclear.
However, a BIS spokesperson told Techworld: "We expect the vast majority of the £30m budget to go to small firms to help them identify and pay for advice. We are currently at the contracting stage for delivery partners who we expect to appoint in October.”
BIS is looking for at least 25,000 businesses to participate in the programme by March 2015 across the North West, the West Midlands, East of England, London, and the South East.
BIS has identified five areas that businesses find difficult and need additional help with, which will make up the core of the Growth Vouchers programme. They include: raising finance to fund business activities; developing an effective marketing strategy; exploiting the internet and digital technologies; increasing the capability of the management team; and expanding the workforce.