BusinessIn Wales

Legal

Gareth Jones: Divorcing your co-founder

Gareth Jones: Divorcing your co-founder Gareth Jones: Divorcing your co-founder Gareth Jones – Founder & CEO, TownSq Subscribe to the Businessin Wales daily newsletter for FREE here.  I saw a fascinating statistic recently: getting married is less of a commitment than co-founding a business. The average length of marriage in the US that ends in divorce around eight years, in the UK the highest chance of divorce happens between the 4th and 8th anniversaries. It’s broadly accepted that growing a successful company can take a decade – overnight success is often years in the making. And yet, across Wales, founders enter into business partnerships every week with less legal protection than they’d get from a marriage certificate – but with just as much to lose. When you’ve found your co-founder, how do you make sure you’re both in it for the long haul? There are so many scenarios that can play out in this, but sometimes you only find out the true nature of your co-founder when the going gets tough. I’ve seen so many scenarios that justify taking this very seriously. It’s one of those things where planning and considering it in advance can save you a lot of time, money and heartache if things don’t go as hoped. It’s hard to remove a co-founder, but you ought to have an early chat as a founding team to lock in some rules and conditions that give you both security for the future. Splitting the pie This is where tools like earn-ins can make a lot of sense. Most often, when a company is started you will divvy up and split the equity between you based on what seems fair and meritocratic. If you’re equal founders then you might go 50/50, if one of you is putting in slightly more cash, or time, or assets then you might make it 60/40 in favour of one or the other. There are a million ways this could go. But you might choose to do something a little more based on proving your worth. An earn-in is an allocation of shares which are unissued but are agreed to be issued based on you doing certain things. What this means is that you get the shares, but only if you do the work. With an earn-in, these shares aren’t issued to you unless you hit key agreed milestones. They might be simple things like still being at the business after 12 months, or 36 months, through to delivering the product, securing your first customers, or hitting turnover targets. Earn-ins seem logical, but most companies get started so hastily you might not have the foresight or legal support to implement something like this. This is the big lesson if you’re pre-launch or early stage, try to invest the time to have these chats and not rush into something that might be hard to back out of. In reality, when so many businesses are started between friends, family, former colleagues, or people who are well networked, these conversations will feel uncomfortable. But they’re nowhere near as uncomfortable as the ones you’ll have two years down the line without them. Earn-ins can also imply an element of mistrust between you, which might feel like it’s getting off on the wrong foot, but it’s worth the uncomfortable conversation. When it goes wrong If you don’t want anything as complicated as earn-ins then you at least need to have some kind of good and bad leaver policies. I’ve known so many businesses where one of the co-founders hasn’t pulled their weight, or an equity holder has been super supportive at the start and then disappears. In one scenario the co-founder was painting the picture of being flat-out but it was only after they went AWOL that the others realised how little they had been doing – people hadn’t been paid and legal commitments hadn’t been completed. But even after they had left, they still held equity, and just as much as the other founder who was carrying the can and trying to tidy up the mess they had left behind. Even as a founder you can still be fired, and you could fire your co-founder if things aren’t going well. Bad leaver policies can give you protection, so if a co-founder doesn’t do their job, or stick at it, then they forfeit their equity. Defining what a good leaver is might be harder than judging a bad leaver, but you might use some specific things as examples of what makes them a bad leaver, like if they exit early or don’t do what they’re committed to – similar to earn-ins but in reverse. It might also give you each a way to get out when the time is right while still retaining some value that you have earned in the way of your shareholding. That might be a clause that says you can keep 10% but the directors have the right to buy the rest of your shares back at a reduced rate per share, regardless of the value of the company. These things shouldn’t be treated as an insurance policy for your company, but more of a way to keep everyone honest and incentivise behaving in the long-term interests of the company. Zombie equity One final point on this is that you don’t want any equity sitting with zombies. Those folks who sit on your cap table and stand to benefit if you ever sell the company without contributing anything for years. Equity is expensive, in that you can only give it away once. Be mindful of who you give any ownership of your business to, and only do so if you feel they’ve really earned it or can continue to provide support and create value down the line. You don’t want to look back in ten years at the 5% equity holder of your business who hasn’t spoken to you for nine and a half years but who you’ve now made very well off, when others in

Food & Drink, Tourism & Travel

Use it or lose it: Why Wales’ hospitality sector needs us now

Use it or lose it: Why Wales’ hospitality sector needs us now Use it or lose it: Why Wales’ hospitality sector needs us now Gareth Jones – Founder & CEO, TownSq Subscribe to the Businessin Wales daily newsletter for FREE here. When was the last time you booked a hotel in Wales? When was the last time you drove through Eryri National Park? When did you last pick a town on a map and go and explore what’s new there? We have such a rich and valuable food and drink sector across Wales, but so much of it is in a precarious spot right now. We can all play a role in ensuring its future success and prosperity. This is a sector under siege, whether perceived or in reality, but there is hope for renewed momentum. As a Gog living in South Wales, it astounds me how many people have never explored Ynys Môn or travelled to the furthest tip of the Llŷn Peninsula, and equally how many North Walians have never explored St Davids or Tenby. We have a deep history in every corner of this great nation: from the bluestones of the Preselis that ended up at Stonehenge, to Twmp Carrog, the legendary site of Owain Glyndŵr’s ancestral home and the location where he was proclaimed Prince of Wales in 1400, or Strata Florida Abbey in Ceredigion. That’s not to mention the headliners: Caerphilly and Conwy castles, Portmeirion, and St Davids Cathedral. Ordering a pint of Mŵs Piws at Y Goron, The Crown, in Aberffraw, or dining at Dylan’s in Menai Bridge overlooking the strait. Walking the aqueduct in Trefor, or, if you’re feeling up to it, doing the 7km run from the aqueduct to the viaduct in Chirk and rewarding yourself at The Trap while taking in two astonishing views. Or visit one of our fantastic distilleries, Aber Falls or Penderyn, for a start, or award-winning vineyards.  If you want something truly unique, you can’t beat a visit to Halen Môn. I never thought salt tasting would be such a memorable and lasting experience. As hospitality businesses prepare to wave goodbye to what feels like the wettest winter on record (I’ve given up asking Alexa for the forecast), the timing feels right to take stock of what’s on our doorsteps. There are 36-million-day trips made by Welsh residents to other parts of Wales, and 24 million day trippers cross the border from England each year, according to data from WalesGuidebook.com. Those figures matter because our hospitality businesses have been hammered over the last decade. £4.3bn was invested in hospitality businesses across the UK during Covid, 2.5 times more than other sectors by proportion of the economy. With typical six-year repayment terms, most are only now reaching the end of that debt cycle. Those that have made it through are not only ready for a good summer, they need it. And the context only gets harder. The introduction of the visitor levy next April is already causing consternation in the sector, layered on top of National Insurance and Living Wage increases that have quietly squeezed margins for the last two years. The businesses still standing deserve our support, and our custom. Next time you book an overseas trip, consider committing 20% of that cost to something closer to home. Wales doesn’t need your charity; it needs your custom. There’s a big difference. The food and drink sector here isn’t just a nice thing to have, it’s the connective tissue of our communities. Pride without ongoing investment is just sentiment. Before you book another European city break, take five minutes. Pick a corner of Wales where you’ve never spent a night. Find somewhere local to eat. You might be surprised by what’s been waiting for you. Want more from Businessin Wales? Why not follow us on our socials Linkedin X Instagram TikTok Listen to the Businessin Wales podcast YouTube Spotify Apple Podcasts

Commercial Property, Public Sector & Government

Business Rates in 2026 – What Welsh Directors Need to Know Right Now

Business Rates in 2026 – What Welsh Directors Need to Know Right Now Business Rates in 2026 – What Welsh Directors Need to Know Right Now Gareth Jones – Founder & CEO, TownSq Subscribe to the Businessin Wales daily newsletter for FREE here.  2026 sees significant changes to business rates rules that could lead to unexpected bills and disruption for many Welsh businesses. What are Business Rates? Business rates, often known as NNDR, or National Non-Domestic Rates, are taxes on commercial properties, set by the Valuation Office Agency (VOA) based on how space is used, rent paid, location, and property layout. The rateable value is subject to a multiplier that determines your actual bill – which is usually just over half the rateable value. Revenue is collected by local authorities, pooled nationally, then redistributed nationally to each of Wales’ 22 councils based on population, and to the police and crime commissioners – though these are due to be abolished in 2028. This generates around £1bn per year for services like education, highways, libraries, and social services, or wherever they choose. The VOA is merging back into HMRC in April as part of government efficiency measures, so expect these letters to come from HMRC going forward. What’s Changing in 2026? Draft valuations for 2026-2029 were released in November 2025, so you can see right away how much your rateable value is changing by searching. Check your postcode on the VOA website to see how your rateable value is changing, and appeal if you disagree. Welsh Government is subsidising the transition with £116m covering two-thirds of your increase in 2026-2027, and one-third in 2027-2028. The Small Business Rates Relief (SBRR) scheme continue at £137m per year, providing tapered relief for micro businesses and sole traders. The significant change in 2026 is a two-tier multiplier system. Small retail outlets (under £51,000 rateable value) get a reduced multiplier of 0.350, while larger shops face 0.515. Around 13,000 retail properties will benefit, saving £20m collectively. But here’s the critical detail: only actual shops qualify for this lower rate. That’s it. If you run a cafe, restaurant, pub, gym, or salon – any business selling services rather than goods, you don’t qualify. Around 13,000 retail properties will benefit from the local multiplier, saving around £20m collectively, but hospitality. Hospitality and leisure get nothing. The Hidden Tax Shock Since 2020, Welsh Government has provided business rates relief for retail, leisure and hospitality, capped at £110,000 per business. Worth £1bn over the last six years, that relief ends on 31st March 2026. The timing is brutal. Just as revaluation hits – with many businesses facing increased rateable values – the 40% discount disappears overnight. Add in Living Wage and NI increases disproportionately affecting hospitality, and it looks even worse. A cafe with £15,000 rateable value currently pays around £5,100 annually after 40% relief. From April 1st, with the standard multiplier of 0.502 and only transitional support, that jumps to £6,650. Whether you’re in Cardiff Bay, Caerphilly, or Caernarfon, everyone loses the 40% relief and faces the standard multiplier. No exceptions. Meanwhile, a bookshop or independent shop would pay around £5,250 under the new retail multiplier. This is a deliberate policy decision to help traditional retail compete with online shopping, while leaving hospitality and leisure to absorb the full removal of temporary relief. Whether this is the right call depends on your perspective. Retail faces existential threat from e-commerce, but hospitality and leisure’s existential challenges are slightly more woolly – if no less threatening. They’re the businesses that bring life and footfall to our town centres, making this a risky decision. Small Businesses in Shared Workspaces One other worrying development is how small businesses in shared workspaces will be billed from 2026 onwards – effectively introducing a stealth tax. In late 2024, there was a novel court case, Prosser v Ricketts, considering how barristers’ chambers are treated for rates. The Upper Tribunal ruled that barristers’ chambers should be valued as a collective unit rather than individual rooms due to their shared services. This precedent is now being applied to serviced offices, coworking spaces, and other shared workspace models. Previously, shared workspaces were assessed as individual units, rather than as a single building. This usually keeps the small business tenant’s rateable value low enough to qualify for SBRR. Now the VOA is increasingly valuing all firms in shared workspaces as one pushing the rateable value too high for relief. As an example: a building with 20 tenants could see each unit valued at £11,500 rateable value, under the £12,000 SBRR threshold meaning £0 business rates. Under the new approach, the entire building is valued at £230,000, so no business qualifies for SBRR. Each small business would go from paying £0 to around £5,750 per year. Up to 150,000 businesses in serviced offices, food halls, indoor markets, and pop-up spaces could be affected. This will also slow investment into flexible workspace, access to which regularly cited as a barrier to growth. With 94.7% of Welsh businesses having under ten people, this is a significant problem. What You Need to Do Now If you’re in hospitality, leisure, or services currently receiving the 40% relief, budget for a significant rates increase from April. Transitional relief will soften it over two years, but losing the relief while rates increase will sting. Check your draft valuation on the VOA website before 31st March. If you disagree, appeal. If these policies seem wrong make your voice heard. The Federation of Small Businesses Wales has already called for this, but Welsh Government needs to hear from affected businesses – especially with elections this year. For small retail businesses, this should be an advantage. While I doubt it will spark an immediate high street revival, it removes a significant barrier, and encourages the unlocking of underutilised high street assets – something it feels like we’re all agreed is a national priority. But be honest about the trade-offs. The £20m saving for small shops is offset by higher

Public Sector & Government

Budget 2025: Wage increases and NI changes put employers in a very difficult position

Wages need to increase – but this kind of wage growth is unsustainable Wages need to increase – but this kind of wage growth is unsustainable Gareth Jones – Founder & CEO, TownSq Subscribe to the Businessin Wales daily newsletter for FREE here.  Months of uncertainty have abated as the much-anticipated – and feared – budget has been delivered by the Chancellor. The rumour mill in the build-up has created great uncertainty, but now there is clarity it’s important to reflect on what this means for businesses in Wales. There is a full appreciation of how pressured the public purse is right now, but that appreciation needs to be reciprocated – not taken for granted. Early in November, before the budget, the Senedd approved a new approach to business rates that rebalances the pressure away from retail businesses to larger properties at the other end of the market. However, the higher multiplier would not apply to properties occupied by the public sector, including hospitals, surgeries, schools, colleges, museums, universities, courts and police stations. In the budget itself, there were increases to the National Minimum and Living Wage, ranging between 4% – 8.5%. Most employers I know love being able to offer someone a job, a means to feed their kids and pay their mortgage. It’s one of the main privileges and sources of pride in running a business.  Private sector employers aren’t penny-pinchers trying to find ways to skirt the rules. They’re in touch with the reality of how tight margins are right now, and the pressure they’re seeing from customers who are at breaking point after years of brutal inflation. The increase in the National Living Wage, but more punishingly the further changes to the NI contributions, put employers in a very difficult position – deciding whether to freeze hiring, cut their headcount, or pass on the cost to cash-strapped customers. For our own business, our NI contributions in our 2025 financial year were more than 2023 and 2024 combined. The changes to employer National Insurance are particularly acute. Since April 2025, the rate increases and the threshold drop combined means businesses now pay NI on significantly more of each employee’s earnings. For a business with ten employees on the National Living Wage, this represents an additional cost of several thousand pounds annually – money that could otherwise go toward training, investment in equipment, or simply keeping the doors open during what remains a challenging economic climate.  The doubled Employment Allowance to £10,500 helps, but primarily benefits only the very smallest employers. Since 2022, the National Living Wage has increased by 34%, so while the increase in 2026 is relatively modest, it is the cumulative pressure that is created in trying to make up the difference from the situation coming out of Covid. Wages need to increase – the cost of living crisis has left deep scars across society, but this kind of wage growth is unsustainable. If this approach is to continue, we need to see a bit of reciprocity – more public pension funds being invested into their communities to support the growth of the entrepreneurs that are staking their livelihood on the growth the economy needs rather than taking the safe bet of the secure pension and flexible work patterns in the public sector. But most importantly is the sense that the private sector is carrying the burden right now – and with 62% of private sector employment in Wales being with SMEs (under 250 employees) it feels about time that there was more recognition of the role they’re being asked to take in building the nation for future generations. My personal worry in all of this is the high likelihood that agentic AI will begin to create significant value for business owners in 2026, and that employers will be forced to question recruitment strategies at a time that a viable and cost-effective alternative emerges. The vital public services that we rely on – health, social care, education, etc. – are not going to see a miraculous improvement in years to come and will likely only get tougher.  If we are to continue to seek to see these services directly funded by wealth and job creators, we need to have a more open and fair dialogue on how that risk is spread and shared.   Want more from Businessin Wales? Why not follow us on our socials Linkedin X Instagram TikTok Listen to the Businessin Wales podcast YouTube Spotify Apple Podcasts No Posts Found!

Manufacturing

Learning from the best: How Wales can capitalise on the UK’s Industrial Strategy

Learning from the best: How Wales can capitalise on the UK’s Industrial Strategy Learning from the best: How Wales can capitalise on the UK’s Industrial Strategy Gareth Jones – Founder & CEO, TownSq Subscribe to the Businessin Wales daily newsletter for FREE here.  For the last 15 years, Welsh businesses have had a unique and little-known advantage through a partnership with one of the world’s most innovative institutions – the Massachusetts Institute of Technology. The Welsh Government has a one-of-a-kind relationship with MIT — as a member of the Industrial Liaison Programme (ILP) there are invitations to a series of events and conferences aimed at helping industry liaise with the research and unique output of MIT. Normally, this programme is restricted to industrial partners — blue-chip organisations like Mitsubishi, Rio Tinto, BT, Apple and 3M. However, the Welsh Ministers have a membership which allows them to extend an invitation to SMEs and start-ups across the Welsh ecosystem. The ILP runs themed events throughout the year and around the world to facilitate this connectivity between the membership and researchers of MIT. Everything from Startup Exchange Demo days, manufacturing, AI, sustainability, and global symposiums in cities from Bangkok to Vienna, Seoul to Madrid, all open to Welsh SMEs, founders, and directors. MIT has spent 80 years at the forefront of innovation, since the establishment of the Rad Lab in the 1940s. Research and development is a philosophy there, and it is completely unavoidable. Having the opportunity to get onto campus, soak up that culture, and begin to understand the difference is an important step toward creating our own national innovation culture. Encouraging and enabling more Welsh innovators to take advantage of the MIT partnership could be crucial to ensuring Wales gains the most from the realisation of the UK’s Industrial Strategy. With MIT’s track record of turning research into world-changing companies, and Wales’ established strengths across the Industrial Strategy’s priority sectors, this partnership represents more than just access to the campus – it can be a blueprint for building the innovation culture that Wales needs to thrive in the coming decades. A 2015 report estimated that – taken as a group – companies founded by MIT graduates would rank in the top tier of nations by GDP measures. Their impact and success are enormous, and show no sign of slowing. One tired headline that did the rounds for decades was the need for Wales to create its own Silicon Valleys, but these shallow strategies completely miss the point about the competitive advantage that regions have built up over decades. These kinds of things can’t be created out of thin air. During a visit in 2018, I met a founder who was discussing the details of her seed investment raise. Compared to fundraises back in Wales, one of the group quipped that it was more of an avocado seed than what we’re typically used to – it was 50x the size of investment rounds we see locally. Instead of trying to copy the MIT strategy, Welsh founders need to get over there, take it all in, make connections, understand the processes and lessons, and implement them into the things they have control over – their companies. The difference in their approach to innovation is akin to trying to explain mortgages to a lion. It needs to be seen, understood, and, most importantly, to see and appreciate the success on the other side, to really understand why it works. The next MIT ILP R&D conference is coming up in November and Welsh businesses can apply to attend for free – to not take advantage of opportunities like this feels negligent. Using the MIT partnership is a massive advantage for Welsh companies, and one that if we tapped into it more, could give us all a significant head start in the race for the next generation of growth. Without taking advantage of all of these opportunities, we face another generation of being left behind and not taking this moment to be ahead of the AI disruption curve, while we watch other regions capture the growth that could – should – have been ours. Now is the time to act. Want more from Businessin Wales? Why not follow us on our socials Linkedin X Instagram TikTok Listen to the Businessin Wales podcast YouTube Spotify Uncategorised Golley Slater becomes employee-owned after nearly 70 years in business Uncategorised Court orders closure of Lampeter hotel’s bar and cellar after cockroach infestation Food & Drink, Uncategorised Robertson Geo targets new international markets after global growth surge Sustainability & Environment, Technology & Innovation, Uncategorised Template Uncategorised

Marketing

From Hollywood to the Championship: Wrexham’s next decade will change everything

From Hollywood to the Championship: Wrexham’s Next Decade Will Change Everything From Hollywood to the Championship: Wrexham’s Next Decade Will Change Everything Gareth Jones – Founder & CEO, TownSq Subscribe to the Businessin Wales daily newsletter for FREE here.  The day after Wrexham’s historic promotion to the Championship with a victory over Charlton Athletic, I was at the Wrexham AFC vs Cardiff City women’s Cup Final. Taking my son to the loo during the half-time break, I bumped into a friendly looking chap with a beaming smile not something you often encounter at a football match, even in the posh seats. But watching Wrexham in 2025 is a different story, and one that Rob and Ryan have been writing and crafting in five years that has arguably changed the face of football in the UK (see Snoop Dogg). These owners have been a cheat code. All accusations of deep pockets have been undone by their exceptional strategy of creating a commercial powerhouse through the documentary. Their exposure has unlocked commercial deals that were otherwise unimaginable, and totally unfeasible. The fan ownership that enabled the club to survive the decade and a half prior to the takeover could never have convinced Meta, HP, Ancestry, United Airlines, TikTok, and Danone to commit to the kinds of commercial deals now in place. But that’s what I realised when I bumped into that chap – who happened to be a billionaire – in the bathroom. The club will never be owned by fans again. This season (on the pitch, not the show) is going to be fascinating. Over half of “heritage” fans based on age alone will never have seen the club play at this level. That percentage drops even lower with the new, global fanbase factored in. I’d say most fans (and this is a sweeping statement rather than backed up by solid research) really just wanted to see Wrexham competing at a good level again. Having a team to be proud of and reversing the depressing downward spiral. For most, the Premier League would be a fascinating experience but doesn’t feel like a realistic mission. And it is unlikely to be satisfying at this rate. The football in League One was truly dreadful, but it obviously got the job done. If you look at the likes of Brentford, Bournemouth, and Brighton – three disrupters in the last decade – their success has been built on data. The Wrexham recruitment strategy over the last three years has been more MLS than moneyball. Sustained success will need a change in approach, but that doesn’t sit well with a win-now plan. Consolidation in the Championship over the next three years would be a massive success, and would enable an evolution of the approach, but that isn’t very Hollywood. One of my best mates is a Luton Town fan, and they had an exceptional shirt launch campaign ahead of their 2023/2024 season, asking local fans who their Premier League team was. Two seasons later they’re back in League One, facing Cardiff City, Stockport County, and Port Vale. There’s no getting carried away in the fanbase, being a sustainable Championship team would be a successful outcome of this whole drama, but that’s just a fanbase perspective. Billionaire investors and documentary directors won’t be quite so understanding. If Wrexham are to become an established Premier League team, the club will have to grow to a valuation in the hundreds of millions. Brentford recently announced an investment at a valuation of £400m. According to TransferMarkt, Brighton have 19 players worth over €20m, and 15 more worth over €5m each. Bournemouth have already received more than £110m in transfer fees since the window opened at the start of July. Their most recent investment raise was reportedly at a £100m valuation. Earlier in the summer there were reports of the club seeking investment at a £350m valuation. This is a different ballgame, and winning at it requires different strategies. What Wrexham has gained in spotlight and success, it loses in community, authenticity, and connection. Increasingly, there will be more billionaires around the club. The Ivor Williams’ and Peter Gwyn Potatoes’ that got the club through the dark days will have less of a role to play. The club will look completely different in a decade, and the number of local kids done good who can step in and buy it back into local ownership once everyone has left the stage at a £1bn valuation might be limited. I’d like to have seen this recognised sooner, for fans to have had an opportunity to own a stake of the business (at least 25%, not a token gesture) and to give some long-term value back to the community, but this moment has passed. So in the meantime, we have another wild season to look forward to, and a decade of decisions that will continue to change the club forever.   Want more from Businessin Wales? Why not follow us on our socials Linkedin X Instagram TikTok Listen to the Businessin Wales podcast YouTube Spotify Apple Podcasts Audible No Posts Found!

Manufacturing, Public Sector & Government, Sustainability & Environment, Technology & Innovation, Transport & Infrastructure

Wales and the UK Industrial Strategy: Innovation challenges and opportunities

Wales and the UK Industrial Strategy: Innovation challenges and opportunities Wales and the UK Industrial Strategy: Innovation challenges and opportunities Gareth Jones – Founder & CEO, TownSq Subscribe to the Businessin Wales daily newsletter for FREE here.  The release of the UK’s Modern Industrial Strategy presents a significant opportunity for Welsh SMEs, but it also highlights that building an innovation economy is neither easy nor inevitable. For Welsh businesses to truly capitalise on this moment, we need to confront some uncomfortable truths about what innovation actually requires. The Innovation Challenge Innovation as a strategy is a no-brainer on paper. More innovative companies increase productivity, create wealth, and if they’re home-grown are more likely to set roots and grow locally. But the challenge with taking an R&D and innovation-centred approach is that it requires companies to rip up a lot of the conventional rule books. You have to be prepared to be wrong, able to suffer significant losses in the early years, and be willing to travel to an unknown destination. The mindset required to deal with that does not come as standard. You need to recruit a team that is also able to cope with the uncertainty and volatility of innovation. Innovation can look quite bleak and messy when you’re in the middle of it. You don’t know whether any of this thinking will lead anywhere, you’re too entrenched to turn around, and your team are low on stamina. You don’t need to have blind faith, but if you lose the faith and don’t believe it will succeed then the game is up. This reality is clearly highlighted in last month’s UK Modern Industrial Strategy itself: “In recent years there has been a slowdown in innovation, with the proportion of ‘innovation active’ firms decreasing… [despite continuing] to attract businesses to start up, we have a poor track record of scaling and retaining them.” The Welsh Context Wales faces its own particular challenges in this landscape. Without a mature venture capital ecosystem, getting innovation-focused companies through the valley of death can feel impossible. You need access to talent, resources, and expertise, which is short in supply and high in demand. If we want to succeed, and see SMEs in Wales make the most of the opportunity presented by the UK’s Industrial Strategy, we need to demand more resources, and use the tools and advantages that we have to hand. We need to face up to the fact that innovation-readiness is not a default state, and learn from past lessons and mistakes. Wales’ Strategic Position Across the IS-8 priority sectors identified in the strategy – advanced manufacturing, creative industries, life sciences, clean energy, defence, digital and technologies, professional and business services, and financial services – we already have a head start in Wales. But we’ve also learnt valuable lessons about how to drive innovation in those sectors. Through projects like Media Cymru, we’ve seen close up the mindset shift needed to encourage R&D innovation in the creative industries, moving beyond the skillset required for day-to-day operations. These positive outcomes can be achieved, but they need patience and investment. The creative industries are a perfect example that demonstrates that innovation culture isn’t just about having the right policies or funding – it’s about fundamentally changing how business leaders and teams think about risk, failure, markets, and long-term value creation. Learning from the Best While Wales builds its innovation capabilities and identity, we can learn from institutions that have spent decades perfecting the art of turning research into world-changing companies. MIT, for instance, has spent 80 years at the forefront of innovation, since the establishment of the Rad Lab in the 1940s. Research and development is a philosophy there, and is completely unavoidable. Having the opportunity to understand how mature innovation ecosystems operate – their culture, their approach to risk, their methods for progressing breakthrough thinking – is an important step toward creating and improving our own national innovation culture. Wales has a one-of-a-kind partnership with MIT that we need to fully take advantage of. The Path Forward Building innovation readiness requires more than just good intentions. It demands a systematic approach to developing the infrastructure, culture, and support systems that innovative companies need to make the most of the opportunity. This includes creating pathways for businesses to access the expertise and networks they need during the difficult early stages of innovation. It means building tolerance for the messiness and uncertainty that comes with genuinely breakthrough thinking. And it requires patience from investors, policymakers, and the broader business community as companies navigate the inevitable setbacks that come with pushing boundaries and seeking new frontiers. The UK’s Industrial Strategy provides a framework, but Wales must develop its own approach to implementation – one that builds on our existing strengths while addressing the cultural and structural barriers that have historically limited our innovation potential. We can’t just copy and paste what works elsewhere – we need to build on what we’re already good at while being honest about the barriers that have held us back. With Wales’ established strengths across the Industrial Strategy’s priority sectors, we have the foundation needed to build a thriving innovation economy. But realising that potential will require more than just recognising opportunities – it will demand the courage to embrace the uncertainty and long-term thinking that true innovation requires. The question isn’t whether Wales can benefit from the Industrial Strategy, but whether we’re prepared to do the hard work of building the innovation culture needed to make the most of it. Want more from Businessin Wales? Why not follow us on our socials Linkedin X Instagram TikTok Listen to the Businessin Wales podcast YouTube Spotify Apple Podcasts Audible Uncategorised Glide secures NatWest funding to accelerate UK broadband expansion Residential Property, Technology & Innovation, Uncategorised Principality Stadium set to host opening ceremony of EURO 2028 Tourism & Travel, Uncategorised Swansea: A city on the up! Finance, Public Sector & Government, Residential Property, Tourism & Travel, Uncategorised

Finance, Public Sector & Government

Wales has a multi-billion pound funding problem

Wales has a £multi-billion funding problem Wales has a £multi-billion funding problem Gareth Jones – Founder & CEO, TownSq There’s a lot to unpack when it comes to the challenges facing SMEs in Wales looking to fundraise. A Welsh founder who relocated from London recently asked me a quite important question that faces our nation: “Where is Wales’ first unicorn coming from?” I didn’t have a good answer. And that’s a problem. The numbers tell one tale Welsh businesses raised $32.4 million from VCs in 2024 while London secured $11 billion. That’s not a typo – it’s a 340x difference that lays out the scale of the divide. Part of this might be cultural, but it’s a very real indicator of the difference. SEIS and EIS (Seed Enterprise Investment Scheme and Enterprise Investment Scheme) data tells us Welsh businesses get 14x less investment per head than London companies. Even the North West of England gets 20-30% more investment than Wales. When it comes to Innovate UK funding, London companies secure 13x more. North West businesses get 5x as much. This isn’t about natural market forces. This is about creating the conditions for success – and we’re not doing it. I’ve spent years working with founders, and I’ve seen brilliant Welsh entrepreneurs relocate to London not because they don’t love Wales, but because they can’t get the backing they need here. Right now, it’s hard to see how our policy addresses this. Subscribe to the Businessin Wales daily newsletter for FREE here.  Learning from America’s mistakes The USA faces identical challenges. California receives more VC investment than 40+ other states combined. When we talk about the American “entrepreneurial culture,” we’re really talking about just four states: California, New York, Massachusetts, and Texas. Last month, the Right to Start movement published a strong argument for the fight back with development banks focused on entrepreneurs’ needs, featuring revenue-based investment, secondary debt markets, and matched funding approaches akin to the Yozma Fund. Wales already has enough of this infrastructure to have a head start. The Development Bank of Wales last month announced a very successful set of results, having invested over £150 million in 2023/2024, supporting over 500 SMEs. But British Business Bank data shows demand is 100 times higher than current supply. We’re not failing because we don’t have the tools. We’re failing because we’re not using them at scale. The grant dependence myth There is one tired narrative that gets peddled when criticising entrepreneurs in Wales. Critics claim Welsh businesses are “hooked on grants” and need to “get real.” This totally misses the point in my opinion. Elon Musk’s three flagship businesses – Tesla, SpaceX, and Starlink – are built entirely on US innovation grants and subsidies. They’ve collectively received over £15 billion in non-repayable grants and subsidised debt, plus over £23 billion annually in government contracts. These companies are now worth well over $1 trillion. This argument alone, to my mind, highlights that grants absolutely have a role to play, but that they have to be focused on the right goals. The other indicator here is that Wales isn’t even getting its fair share of Innovate UK grants, but you could argue the use of the word fair in that statement given that process should be meritocratic. That would lead to an implication that we don’t have the level of innovation activity that would demand increased funding, and to provide it without this would be unfair on clusters that are proving the success of their investments. Both scenarios demand immediate action and create opportunities to focus on doing better. Backing talent I think about the Welsh Government’s Digital Development Fund from the early 2010s. Small £10,000 grants that helped entrepreneurs develop digital innovations. You just need to look at where those entrepreneurs are now. So many of them are creating jobs and wealth – inside and outside Wales. If we looked at schemes like that over a longer-term we might see the real value that can be created by backing entrepreneurs. The solution doesn’t need to be complicated Welsh businesses desperately need better support to identify and execute their innovation potential. They need investment mechanisms that de-risk early R&D. They need novel financial products like convertible debt for immediate cashflow. Projects like Clwstwr and Media Cymru have shown in specific sectors how innovation can be trained, and R&D skillsets developed, but there’s still a gap in connecting this with traditional investors to make sure both sides are speaking the same language. A gap that is a very rewarding opportunity. Most importantly, we need joined-up funding that eliminates the current postcode lottery. The Shared Prosperity Fund has made things worse, creating a fragmented landscape where your address determines your funding chances, with none of it feeling focused or strategic. Our choice A new economic vision won’t change things overnight. But if we commit to developing and fostering the founders we have, we can create unprecedented prosperity for future generations. The question isn’t whether we can afford to invest in Welsh entrepreneurship – it’s whether we can afford not to. Every day we delay, we lose potential jobs, innovation, and wealth to regions that take entrepreneurship seriously. Every Welsh founder who relocates elsewhere in order to succeed represents a lesson for future economic policy. If we want to see job growth and economic independence then we really only have one choice, and we have to face up to how to deliver on it. 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Public Sector & Government

What is Wales’ vision for small businesses: The foundation of our economy?

What is Wales’ vision for small businesses: The foundation of our economy? What is Wales’ vision for small businesses: The foundation of our economy? Gareth Jones – Founder and CEO, TownSQ Small businesses are the Welsh economy. Around 70% of privately employed workers in Wales work for SMEs, but in Wales we’re facing significant challenges in how we nurture and develop these vital businesses. The most recent research by the British Business Bank showed that 21% of Welsh SMEs reported barriers to accessing finance, if this is true across all SMEs that’s around 50,000 companies that don’t feel confident that they can raise the capital needed to expand, create more jobs, and build sustainable businesses that bridge generations. Entrepreneurs create new employment; their growth is vital to our economic growth and revitalisation of our towns and cities. Without their drive and hustle, we’re restricting our future prosperity. The challenge of supporting SMEs SMEs are a difficult group to engage with, they don’t always have a lot of shared challenges and priorities. Every sector has its own unique requirements, and trying to generalise them under one banner can lead to policies that don’t work for anyone. The political agenda here is around productivity, but it’s very rare that I hear directors using language like this. Small business owners talk about survival, about cash flow, about finding the right people, not about abstract economic outputs. Productivity is such an abstract concept, but business owners do talk about wanting more hours in the day and feeling like they’re already working flat out. The constant political chatter about productivity can feel like further evidence of politicians being out of touch with the everyday struggles and frustrations faced by business owners and operators. When companies are growing, they need tailored support that recognises and deeply appreciates their unique challenges, not one-size-fits-all policies based on theory that misses the point and disrespects the needs of committed founders. Focusing investment strategies A few years ago, in the States when Amazon was being lured to different cities across the country, a counter campaign picked up momentum promoting the idea of supporting 10,000 independent workers rather than trying to attract 10,000 jobs through inward investment. This puts a key dilemma into sharp focus for Welsh economic policy. Inward investment is an important strategy, but buying temporary jobs is not going to build long-term value. We need to focus on sustainable growth from companies grounded and rooted in Wales. SMEs need an inward investment strategy that leads to robust supply chains, and sustainable investment – which is obvious – but SMEs need policies that ensure that subsidised market entrants are giving back, especially if they have an unfair advantage in the talent wars through the funding and brand awareness. One problem with the inward investment strategy in Wales is that a lot of SME directors feel frustrated by the lack of transparency and the sense that there are better incentives for outsiders coming in than for homegrown companies that wouldn’t dream of relocating. Strategies need vision We have a lot of mechanisms for investing in Welsh SMEs, but we need a clearer strategy on what the growth priorities are in Wales to help businesses understand better how to access appropriate support at the right time. That support must understand much better why directors of SMEs in Wales are not able to take full advantage of incentives such as EIS (Enterprise Investment Scheme) and SEIS (Seed Enterprise Investment Scheme), or why the Growth Guarantee Scheme hasn’t plugged the gap. The relationship Welsh Government has with MIT through the Industrial Liaison Programme offers an interesting perspective. Their suggestion highlights the difference between SMEs and IDEs (Innovation-Driven Enterprises), and the need for different strategies. SMEs are your everyday, foundational economy businesses that exist on every high street or in every community. There can be innovation, but innovation is not their bread and butter. IDEs are innovation driven – their approach can feel quite illogical to SME directors. Growth tends to come from IDEs, but it takes longer, and costs more to get to profitability. If this is our strategy, we either need to be transparent about it and make sure it is clearly understood and communicated, or we need to factor in how SMEs don’t go missing. We need to help SMEs understand how to innovate better and how to win over funders and backers to last the course. Either way, a focus on innovation can’t belittle or downplay the important role that traditional SMEs have in our economy, nor neglect to support their needs when it comes to investment and appropriate advice to unlock the potential that they see if they just had access to increased resources. Welsh founders need a vision for SMEs that balances nurturing homegrown businesses with attracting new investment, with practical support geared towards the needs of those directors, and that recognises and celebrates the diversity and resilience within our SME ecosystem. Without this vision, we risk missing an opportunity to build a resilient economy for future generations of Wales. 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