A bluetit mother in our garden has built a nest 20 feet high up a birch tree. Her chicks have now started early “flying lessons”, yet some are not ready, and fly precariously close to a grass bank, patrolled by a predatory dog and cat. A misstep is fatal.
One chick fell out of the nest and was stranded on the grass at the weekend, unable to fly and cornered by the cat. Our daughter stepped in, urging us to protect the chick, and invest 24 hours nursing and nourishing it back to full health in our home. Early promise failed to realise meaningful improvement and we released it back into its’ surroundings, a day later. It continues to hobble around but its’ survival prospects are sadly not great when last seen on Monday.
My point is we see the same in business today, early-stage businesses, entrepreneurs and their shareholders “begging” for government support. Their timing is unfortunate but they weren’t ready to fly when the pandemic event unfolded, and their vulnerability is all too apparent. Why should we save them?
If we do, using “levers” such as the UK’s Future Fund, are we wasting scarce time, money and resource for an inevitable and sad outcome? I ask because entrepreneurialism is as much about timing, as talent and judgement. Just because there is a systemic event, why should the taxpayer bailout these early-stage companies and their shareholders?
As a fellow entrepreneur, I am sympathetic to helping individuals but not their businesses. If we step in now, as the UK Government has done with a £250m convertible loan scheme, are we simply masquerading fundamental deficiencies in a great many business plans? Those that have outstanding prospects have or will receive substantial shareholder support. So what are we “saving” exactly?
To say we are protecting the UK, and in particular, London’s, position as a global tech and creative hub, is just PR fluff. Entrepreneurs will come, and they will roll the dice in future, knowing the harsh price of failure, irrespective of StateAid. That much won’t change. We are really protecting shareholders, and entrepreneurs with highly fragile and illiquid businesses, where a “normal” failure rate is north of 80%. Is that the best use of our money?
