The plight of London-based startups: relocation uncertainty due to Brexit

With Brexit looming, start-ups in the London ecosystem may ask themselves whether they are still in the right place for their business. Are they considering a move to the continent due to the ambiguous Brexit developments? This research analyzes the probability of international start-ups based in the London region relocating to another European entrepreneurial ecosystem. We use location decision theory and secondary data from the European Digital City Index to rank the most attractive eco-systems for the possible relocation of London-based start-ups. In addition, we interview London start-up founders asking how likely they are to leave and where they envision continuing their entrepreneurial endeavors. This study examines whether London will lose its top rank as the most attractive entrepreneurial ecosystem in Europe. We ask which of the competing ecosystems of Europe stands to gain from London’s possible loss. Our quantitative analyses show that Amsterdam is the most likely hub to benefit from any exodus. The qualitative analyses conveyed a mixture of concern and ambivalence as only three of the startups considered relocating their headquarters to another ecosystem. Six of the startups have either opened an office in another European ecosystem or are in the process of doing so. This allows them to watch and wait as they want to remain. The attractiveness of the London region, the social capital investments by team and partners, and the lack of finances to leave are the main reasons for not considering relocation of their headquarters currently.