Scottish startup founders weigh in on Thursday’s independence referendum

Will Scottish independence mimic Ireland’s business boom or endanger Scotland’s startup sector? That is the big question on Scottish startup professionals’ minds as they ponder whether to vote for or against independence from the U.K. on Thursday.

Though current polls show the vote is too close to call, a recent poll of 51 tech firms administered by Young Company Finance Scotland reports that more than half of tech startup founders hope the public votes no on the Scottish independence referendum. Though 15% think a yes vote would benefit their company and 28% remain undecided, a strong majority of 56% believe voting against the referendum would be the best outcome for the country. Founders cited concerns about the new currency as well as depleted funding from the U.K. as main factors influencing their no vote.

Neil Farish, CEO of healthcare startup Relaymed, its third startup after two successful exits, firmly believes that Scottish startups don’t want independence from the U.K. He questions why Scotts would want independence, asking Geektime, “What benefit would it bring to startups that we don’t currently have? I can’t honestly think of a single answer to this question. So do I think Scottish startups want independence? Quite simply, no.”

He mentions funding from Scottish Enterprise, the U.K. government, and the E.U. as part of a thriving startup ecosystem that he would rather not change. “So what’s missing? Nothing. Absolutely everything you need to be a success is already here” – might as well not fix something that ain’t broke.

Scottish startups skittish about independence

When talking to other startup founders of companies in Scotland, however, many seem to feel more mixed on the vote. Take Colin Hewitt, CEO and Co-founder of Float, a successful cash flow management app. He tells Geektime that voting yes for independence could benefit the country and the startup sector: “It feels right for Scotland to be working towards a devolved government where they can set their own policies, and budgets. I can see some benefits to startups – e.g. lower corporation tax could attract larger tech firms in the same way it has done for Ireland. That in turn brings a huge amount of experience into the startup community which filters through when folks leave to work on their own startups.”

However, he must also weigh the risks and potentially harmful economic consequences of such a decision when deciding how to vote. Since his company is in financial tech, he must be particularly wary of a yes vote: “If we do end up with a different currency, I can see life being more difficult within the fin tech eco system. For example, we use Stripe and GoCardless. Would we miss out on being able to adopt those platforms for payment?” Considering that Scotland’s GDP would likely decrease, he estimates that it could also take a while for international “support for the ‘Scottish Pound.’” His startup, like many Scottish companies, also depends on U.K. government funding, which could plummet in the short term.

Peter Gerard, co-founder of movie distribution platform Distrify and current Director of Audience Development and Content Operations at Vimeo, thinks startups’ stances toward independence often rely on where their income is coming from. Talking to Geektime, he explains that, “If your revenue is from outside the U.K. and you do not rely on state funding, then independence probably wouldn’t affect your startup.” But, “since so many startups in Scotland rely on state funding to get off the ground,” a significant number of them are, “concerned about the liquidity of the Scottish government post-independence.”

He is sure that while, “the Scottish government will want to do its best to foster a healthy startup community in Scotland, so they may have some clever solutions for these tax schemes … setting up a new country is going to be an expensive process,” and can understand startups’ worries about an independent state. 

Ultimately, both Hewitt and Gerard posit that the vote is an emotional issue, with startup implications being just one piece of the puzzle. Hewitt feels that the vote is, “about the future for our kids, education, and so many more things … Not an easy decision at all.”

Gerard conjectures that, “The yes vote is an emotional one. The no vote is a practical one.”