Startups with foreign directors attract more funding

Startups with directors who are not from the UK have been found to attract greater funding than those without.

Fresh analysis seen exclusively by City A.M. indicates small firms with more than two leaders from outside the UK have raised on average over four times more than those without any from abroad - £13.8m versus £3.5m

The data from startup Pivigo analysed more than 1,000 companies founded between 2004 and 2014 taking into account information from Crunchbase and Companies House. It identified more than 300 startups with comparable numbers of directors.

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And fintech was found to be one of the most diverse sectors where around two-thirds of startups had at least one direcotr from outside the UK.

The figures come amid growing fears over access to talent with Theresa May promising to stick to a long-held promise to reduce immigration to below 100,000 in her Conservative manifesto. The tech sector also hit back at the party's plans to double the cost of visas used by many to join UK startups.

“Investment is a crucial part of scaling businesses, which London needs to do to retain its position of a global leader in innovation," said Kim Nilsson, co-founder and chief executive of the data science startup.

"Brexit has the potential to impact not just access to talent, but the movement of entrepreneurial individuals that see London as a hotbed for investment, creativity and collaboration.

"As our government navigates its negotiations, we hope to see a deal that enables London to continue to be a diverse city - and businesses to build diverse teams that represent multiple nationalities, cultures and genders - not just at the senior level, but throughout the organisation too."

Read more: Meet the six startups working with TfL to make London a smart city

Maggie Rodriguez-Piza, chief executive of Funding London which runs the London Co-investment Fund, said: "Research consistently shows that companies with more diverse workforces perform better financially.

"We have found that the more diverse our companies are, the more they are able to win top talent, improve their decision making, and produce better returns."

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