Executive Summary

Nearly half (48%) of entrepreneurs regard themselves as risk-averse, while 23% say they are risk-tolerant, and a final 30% believe they are neither risk-averse nor risk-tolerant. 

Thirty-one percent of founders who have run their business for more than five years describe themselves as risk-tolerant, compared to 17% of founders who have run their business for less than three years.  Moreover, a majority of founders (59%) agreed that they became more open to taking risks after launching their business. Only 19% of founders believed that they had not become more open to taking risks.

Three fifths of founders said that risk-taking is important to their business’ growth, compared to just one fifth who did not.

Forty-nine percent of founders believe it is affecting them. This is followed by supply chain disruptions (38%), and Britain’s unfavourable tax regime (27%). When asked what risks founders are most concerned about in the coming year, a difficult economic climate remained the most common fear, again followed by supply chain disruption and an unfavourable tax regime.

Not even a quarter (23%) of entrepreneurs believe the level of risk in the business environment will be lower in 12 months’ time. Nearly two fifths (39%), meanwhile, believe that the level of risk will increase, and a similar proportion (38%) believe it will stay about the same. When viewed by revenue, entrepreneurs with smaller businesses (less than £1 million in annual revenue) are far more pessimistic about what the level of risk in the business environment will be in 12 months’ time. Eighty-three percent expected things to either get worse or stay the same, while only 68% of entrepreneurs running larger businesses did.

The issue businesses most commonly require external professional support with is managing data privacy risks and ensuring regulatory compliance, with 71% of larger business owners and 49% of smaller business owners reporting ‘always’ or ‘often’ calling upon external professionals to help them do so. Protecting intellectual property and raising finance were the next most commonly selected issues entrepreneurs said they require external support on.

Entrepreneurs comfortably view politicians from the Labour Party as the most understanding of their business needs – with 43% believing that Labour politicians understand what their business needs to succeed, against 26% who disagreed, giving a net score of +17%. After the Labour Party came Liberal Democrats (+5%), the Conservative Party and the Green Party (both -2%), and finally the Scottish National Party (-3%).

Compared to entrepreneurs running larger businesses, those with smaller ones were less likely to think politicians – of all parties – understand what they need to succeed. They also held a particularly dim view of the Conservatives, with 45% thinking they do not know what their businesses need to succeed.

When asked about whether other important actors within the entrepreneurial ecosystem know what they need to succeed, founders are generally more positive. Sixty-one percent believe potential investors know what they need to succeed (against 11% who do not), 51% believe regulators relevant to their industry do (against 16% who do not), and 40% believe universities do (against 26% who do not).

Of entrepreneurs who came down on one side of the debate or the other, precisely half believe Artificial Intelligence threatens their current business model, while precisely half think the opposite. Yet, a sizable chunk also appears undecided – with 30% of entrepreneurs we polled viewing AI neither as a threat nor not as a threat. When asked whether AI was an opportunity for their current business model, among those giving an opinion one way or the other, 76% thought it was an opportunity versus just 24% who did not. Again, however, 30% of entrepreneurs appeared unsure – saying that it was neither an opportunity nor not an opportunity.

Nearly three fifths of entrepreneurs believe it will be easy to attract the funding their business needs or to achieve an appropriate market valuation within the next 12 months in Britain, against 13% who think it would be difficult. They are less sure about being able to do so in Europe (43% saying it would be easy, against 27% who think it would be difficult), and even more so in the US (34% saying it would be easy, against 34% who think it would be difficult). Founders of larger businesses appear far more bullish about attracting funding or getting an appropriate valuation than those of smaller businesses, in all three of the markets we asked about.