By Sawdah Bhaimiya

Copyright cnbc

It’s not all doom and gloom, though, as the U.K. remains “Europe’s premier startup hub,” Routley said.

In 2024, £9 billion was invested into venture-backed businesses in the U.K., maintaining the country’s position as the third-largest VC market behind the U.S. and China, according to the British Private Equity & Venture Capital Association’s Venture Capital in the UK 2025 report.

Various incubators and accelerators have also been set up to encourage young people to go into business. Alongside Founders Factory, others include SETsquared, UCL’s Hatchery, and Techstars.

Additionally, 20VC’s Stebbings recently launched Europe’s equivalent of the Thiel Fellowship — a program which gives $200,000 to young people under the age of 22 who want to build innovative startups. Alumnis of the U.S. program include billionaire Lucy Guo to Ethereum co-founder Vitalik Buterin.

Stebbing’s Project Europe, backed by 128 different founders from firms including Klarna, Mistral and Soundcloud, is a fund which will award 200,000 euros ($234,684) to select founders who are 25 years old or younger.

However, the U.K.’s House of Lords’ Communications and Digital Committee warned earlier this year that the U.K. is at risk of becoming an “incubator economy” — as ideation remains strong, but the ability to scale and grow remains weak.

“If we can’t solve our pathways to capital markets and incentivise sovereign IP [intellectual property] to stay here, then we risk losing our best companies to better structured regimes with greater liquidity potential,” Routley said. “The ambition is there, but the ladder is missing a few rungs.”