What founders should be asking for from the November budget

Britain is still a nation of shopkeepers. It’s time we started acting like it again

Every week at ThatRound, I speak to founders and investors trying to move their companies forward in an environment that feels tougher than it should be. They’re still building. Still backing innovation. But too often, they feel like they’re doing it despite the UK, not because of it.

We’ve always prided ourselves on being a “nation of shopkeepers” — entrepreneurial, self-starting, and 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 how too many founders are asking whether there are more suitable countries to start up in¹. But it’s not just startups feeling it. Wealthy individuals, many of whom would otherwise be early-stage investors in UK startups, are leaving or planning to leave the UK, citing both tax uncertainty and anxiety about the direction of policy.

When people who build our most exciting, high potential companies decide they can build faster elsewhere, it shows there’s 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 impacting the UK startup scene.

1. Modernise EIS — and 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, but the data suggests use of the system is slowing. In 2023, the number of companies raising under EIS dropped by 20%, and total funds fell from £1.97 billion to £1.57 billion².

A new campaign called Growth Beyond Limits has already written to the Chancellor requesting increases to VCT and EIS annual and lifetime limits to allow startups more access to the tax-incentivised capital of these schemes³. As the SEIS limit was increased (now £250,000) in 2023, it seems unlikely that this might be an area for further movement – but I’ll back it if they do it!

Beyond this, the government could look at rewarding the people writing the cheques — the ones taking early risks. 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 claimed 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 to 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 already thought: the UK’s Enterprise Management Incentive (EMI) scheme is outdated and holding startups back.⁴

EMI gives founders a way to offer share options that make joining a startup a rational career move. But the world has moved on. Startups now 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. 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 2014^4, showing the scheme no longer fits the ecosystem it was built for.

The Coalition’s proposed fixes include:

Raise 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 — and let Britain back Britain

According to British Progress, only 10% of the UK venture capital pool comes from pensions, compared with 72% in the US⁵ — despite UK schemes controlling more than £2.5 trillion in assets.

While American pensions routinely back venture and growth equity, UK schemes are heavily weighted toward low-risk, low-yield assets. The result is that UK pension capital is 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 2030⁶, is a positive signal but it’s not enough. The commitment is voluntary, 2030 is a long way off, and only part of that capital reach startups.

Given that a third of growth stage founders back pension fund reform to unlock access to growth capital⁷, it would be a huge boost for UK startups were the Chancellor to signal more ambitious near-term targets, or to address limitations, regulations, or risk appetite that are 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 cannot afford to wait to improve the conditions for growth.

Max Bray recently wrote that Britain’s economic gloom is as much about self-destructive messaging around founders and success as it is about the policy.⁸ I agree. Startup ecosystems don’t just respond to incentives — they respond to belief, and in recent years that belief has eroded.

In the November Budget, the Chancellor has the opportunity to act on ideas from organisations such as The Entrepreneurs Network, The Startup Coalition, and many others who understand what founders need. Doing so would stimulate growth and send a clear message 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 “a nation of shopkeepers” really means: a nation that builds and invests in itself.