The government’s flagship new visa for overseas entrepreneurs is facing early problems as it emerges that few of the organisations required to endorse applicants are prepared to do so. Most of the official endorsing bodies for the newly launched innovator visa have told Free Movement that they are either unable to accept applications yet or are reserving them for businesses applying to their existing accelerator programmes rather than endorsing independent applicants.
Innovator visas and the endorsement requirement
Innovator visas are for experienced foreign entrepreneurs who are bringing or setting up an “innovative, viable and scalable” business in the UK and have at least £50,000 in capital behind them. Nichola Carter goes into a little more detail on the requirements in her expert analysis of the route this morning.
Launching the new route last month, immigration minister Caroline Nokes said:
Entrepreneurs and investors play key roles in creating jobs and driving economic growth and innovation in the UK. The Government is committed to ensuring our immigration system continues to attract individuals from around the globe who will create innovative businesses in the UK and make substantial investments in our economy.
The innovator visa duly opened for applications on 29 March 2019, replacing the now closed Tier 1 (Entrepreneur) visa. Unlike the old system, which involved applying directly to the Home Office with a business idea, innovator applicants need to be endorsed by a trusted organisation in the UK, such as a business accelerator or seed fund.
The move has been widely applauded as a sensible shift, which sees commercially minded techies rather than civil servants scrutinising business plans. It is conceptually similar to the system for issuing exceptional talent visas. These also require endorsement by experts in the field.
But exceptional talent visa applicants have a clear process to follow. They apply online to the Home Office, which funnels applications to an endorsing body for approval. There is detailed guidance for applicants and the individual endorsing bodies all have information on their own websites (see for example the Royal Society and Arts Council).
By contrast, innovator visa applicants are directed to 24 possible endorsing bodies. These are generally business incubators, accelerators or venture capital organisations that sift through business ideas for ones they think have potential and support them in various ways — in return for a stake in the business.
Importantly, under the innovator visa scheme they do not have to issue an endorsement unless the applicant is bound into the organisation through a business accelerator-type programme. Home Office guidance confirms that
You may decide whether to accept open applications or to only issue endorsements to business founders you are already working with through your existing activities.
This represents a major shift from an open to a closed system. It is also unclear that an established entrepreneur with a track record and a business that is, by definition, viable would wish to enter an accelerator (that would require giving up equity in exchange for mentoring etc) rather than operating independently. Nichola canvasses these structural concerns in more detail in her piece.
The innovator visa is live, but the endorsing bodies are not
The more immediate problem is that the approved endorsing bodies appear unprepared to handle the influx of applicants redirected their way by the closure of the Tier 1 (Entrepreneur) route. At time of writing, 22 of the 24 endorsing bodies had no public-facing information on their websites to advise would-be applicants on how to gain endorsement.
The Home Office itself says in a letter sent to the Immigration Law Practitioners’ Association today that “while not all are ready to endorse applicants immediately, we are confident that there is a wide spread of endorsing bodies available, in terms of both sectoral and geographical coverage”.
It adds that “the list is not fixed and we have received several enquiries from other organisations wishing to be added as endorsing bodies”. However, at least one of the existing endorsing bodies has already pulled out.
One of the only endorsing bodies to give any detailed information, Tech Nation, is already involved with exceptional talent visas. Perhaps because it knows how complicated a business endorsement can be, Tech Nation says it will be taking five or six months to design a proper process.
As Nicolas Rollason puts it over on the Kingsley Napley blog:
Setting up an endorsement scheme requires the endorsing bodies to establish their specific scheme assessment criteria and processes, appeal mechanisms, application forms, charging structures and terms and conditions under which it agrees to be an endorser. This all takes time and requires external expert advice, and it is clear that endorsers were not given enough time.
One organisation that does seem to be on the ball is life sciences outfit MedCity, which has an application process and contact details on its website. This is, so far, the exception that proves the rule.
Of the other endorsing bodies that say they are ready, most say that endorsement will be available only as part of their existing programmes — in other words, they will not be accepting “open applications” for endorsement. If someone already applying to, say, the Ignite six-month accelerator programme based in the north-east of England happens to need a visa, they can be endorsed for one. Independent entrepreneurs appear to have very few options at present.
One representative told Free Movement the organising bodies generally are “still trying to work out what’s going on”, having had minimal contact with the Home Office before being listed on its website and now being flooded with enquiries from budding entrepreneurs overseas.
The department is belatedly trying to put some semblance of structure in place. It has written to all endorsing bodies this week asking for more information about their organisation. This will appear against their name on the published list of endorsing bodies:
You can use this to explain whether you will only endorse certain applicants, to describe a programme that you run, the industry sectors that you cover, or any other aspect of your work as an endorsing body.
However, this will be limited to 140 characters (“including spaces”) and is not due until the end of April.
Responses from a survey of the endorsing bodies
We contacted each of the 24 endorsing bodies over the past week asking whether they are ready to endorse innovator applications. What emerges is a mixed bag: some say that they are ready to endorse applicants despite the lack of information online. These mostly stressed that applicants would have to be part of a business accelerator programme rather than completely independent of the endorsing body. Others were unresponsive or unsure.
The responses were as follows:
The Bakery gave no response to our enquiry, but one of our readers who has contacted The Bakery reports that it is still weighing up its process for issuing endorsements.
Seed Camp has a terse FAQ on its website:
Does Seedcamp offer endorsements for the Start up or Innovator Visa? Can I apply?
We are unable to provide support on visa applications for non-Seedcamp backed founders. As a result, we will not respond to enquiries about visas unless you have received investment from us.
Invest Northern Ireland told us that “Invest NI previously worked closely with UKTI and the Home Office to endorse Tier 1 visas for individuals and business teams joining its Accelerator programmes from outside the EU. We will continue to endorse visa applications in keeping with the ‘Endorsing Body Guidance’ issued by Home Office, specifically for the new Start-up and Innovator visa routes”.
When we asked whether it was able to endorse visa applications now, as opposed to at some point in the future, Invest NI told us:
Yes, we can do it now. However, it is important to note that Invest NI (as per the Guidance Notes for Endorsing Bodies) will only consider endorsements for:
– individuals/companies that require a Startup or Innovator Visa as part of their participation on our Accelerator Programme;
– individuals/companies that are an existing Invest NI customer.
Zinc: no response, but says on its website that “We anticipate being able to endorse applicants [for its Mission 3 Founder programme] for an appropriate UK visa”.
Deep Science Ventures said that “we’re happy to endorse from now”.
Wayra: no response.
Ignite said that “we only endorse applicants who are successful in applying to one of our accelerator programmes… we will be launching applications for our next Newcastle-based programme (starting Sept 2019) in the next few weeks – but will not be in a position to endorse anyone until the programme places have been offered later this year”.
Bethnal Green Ventures said that “there will be lead in time for us because it all depends on if the teams we want to offer investment and a place on our programme need a visa. We make offers at two points each year (are doing so now) and will do again in the summer”.
Codebase: we spoke to a member of staff on 29 March who was unsure of the position and said they would have to look into it. We haven’t heard back since. However, WH Solicitors have been in touch on Twitter to say that Codebase will be able to endorse from June 2019.
Capital Enterprise told us that for the time being it will only be endorsing people with whom they have an existing relationship. It is still working out whether and how it will open up the endorsement process for people who are not participating in a Capital Enterprise programme. There may be a fee for endorsing an independent applicant.
Cylon: no response.
Tech X: no response.
Seed Haus: no response.
MedCity said that “We are ready to start endorsing companies right away, although we are expecting demand to be a trickle not a flow. The initial part of the process will be largely similar and in line with the support we already provide to companies through our front door service”. Its website says that there is an application process already set up, involving a pitch and an interview, and that it does not require a stake in the business. This is much more in line with what practitioners were expecting. Thanks to Julia Voortman for picking this up.
Scottish Edge said that it is ready to issue endorsements now, but based on previous demand from overseas has only requested four out of a possible 25 allocations. A reader has been in touch reporting a written reply to his enquiry: “Unfortunately, we are not actively seeking businesses to endorse. Scottish EDGE is a bi-annual funding competition for Scottish based start-up businesses. We can only offer an endorsement in exceptional circumstances if one of our winners has a genuine issue with their Visa”.
The Royal Society of Edinburgh said “we only provide visa endorsement to our awardees who have received an RSE Enterprise Fellowship. We cannot support anyone who does not fall under this category”.
Tech Nation says on its website: “The Startup and Innovator visa routes may be operated by the endorsing bodies as either an open (public) or closed (selective) applications process. Tech Nation is currently developing its own operating procedures for these routes and will not begin accepting or processing applications until September 2019”.
The Natwest, Royal Bank of Scotland and Ulster Bank Entrepreneur Accelerators are all ultimately owned by RBS Group. Its press office told us that “our accelerators are approved endorsers, we are able to issue endorsements from our April intake onwards”.
SETsquared is a business incubator and enterprise partnership between five universities, four of which can issue innovator endorsements: Bristol, Exeter, Southampton and Surrey. The point of contact is a PR company which told us that none of the individual centres were able to offer any information on their participation in time for publication of this article.
Andrew Krisman of Qore Legal has had a response directly from the Southampton branch, though. It says “I imagine you got the SETsquared contact from the Home Office site. I’m not quite sure how we came to be listed there but I’m taking steps to be removed from the list. We don’t have the capacity to deal with this”. Looks like we’re down to 23 endorsing bodies, then…
With endorsing bodies still gearing up and the old Tier 1 (Entrepreneur) route already closed, it appears that it will be close to impossible for independent entrepreneurs to get a UK visa for some time to come.