On 25 August 2020, the Scottish Government, in collaboration with Mark Logan, (the ex-CEO of well-known Scottish unicorn, Skyscanner) produced The Scottish Technology Ecology Review. Its purpose was to identify areas for development in Scotland's start-up and early stage technology ecosystem in order to make Scotland a world-class tech hub; and put start-up and early-stage tech companies at the heart of Scotland's economic recovery from Covid-19.
The report details 34 recommendations that can be created, implemented and built upon to ensure the success of Scottish business after Covid-19. It shows us how harnessing the power of, and investing in, tech start-ups can catalyse this process.
The report can be distilled into six key themes which tech start-ups and fledgling entrepreneurs can take forward as a successful company with its roots in Scotland.
1. The Eco-System
The report invites us to view the Scottish tech-industry as an 'eco-system' of sorts whereby we should be trying to find the conditions in which the industry can perform at its optimum – i.e. producing as many 'unicorns' as possible.
2. The Tech-Scale National Backbone
This involves identifying the backbone of the tech industry in Scotland and subsequently the creation of a nationwide network of hubs in Scottish cities where education can be delivered.
3. The Foundational Talent Pipeline
This is a renewed focus on early intervention ensuring the importance of the tech industry is emphasised as a potential career path from primary education up to university.
4. The International Market Square
This concept looks to expanding the reach of Scottish start-ups, mostly by means of international conferences.
5. Integrated Ecosystem Grant Funding
The report recommends splitting the provision of grants in accordance with demands of the Backbone, the Pipeline and the Market Square.
6. Investment Funding
This relates to a reinforced focus on the flow of investment: how it gets to those who need it. This will involve the likes of the creation of a partnership with the Scottish Government, a specific investment vehicle for female founders and raising funds internationally.
If implemented, these recommendations can act as useful tools in ensuring the success of Scottish tech companies post-Covid-19. Equally, these messages can be carried over into almost any kind of start-up. Start-ups even outside the scope of 'tech' will make a positive impact on the economy as we continue our emergence and recovery from the pandemic.
Start-ups and entrepreneurs will have lots to consider at the beginning of their exciting journey, including many legal questions. We have listed below some of the key legal considerations for entrepreneurs and start-ups to ensure they have the correct foundations in place:
- What is the best legal entity for my business?
- How do I protect any intellectual property that the business creates?
- How do I manage risk?
- How do I grow and protect revenue?
- If there is more than one founder, how should decisions be made?
- What type of investment do I want in the future?
Once these foundations are in place and as the business grows, owners should begin to consider investment strategy. The improvements recommended in the Government report seek to make the implementation of such strategies more straightforward.
From the incorporation of your start-up through to its life as an operational success, there will always be legal issues to consider. At Brodies we regularly advise start-ups, entrepreneurs and investors during the lifecycle of a company, from incorporation to listing (and everything in between). If you have any questions relating to the above, or any other matter, please get in touch with any member of the Corporate team or your usual Brodies contact.