At the risk of sounding negative in the middle of Brexit, there’s a lot wrong with the new innovator visa route. The main problem being that it is effectively closed to migrants, certainly those overseas.

Previous articles on the innovator route have focused on how the scheme works — and doesn’t work — in the abstract. In this post I want to build on these criticisms and add some early experience of how innovator visa applications are shaking out in practice.

Nice idea, shame about the execution

The innovator visa has belatedly replaced the reprobate Tier 1 (Entrepreneur) category. Its central, shining feature, its underpinning brainchild — that applicants need to be endorsed by organisations involved in encouraging entrepreneurship and new businesses — is, truth be told, its downfall.

It was a nice idea and one true to the Migration Advisory Committee’s 2015 review of entrepreneur visas. The review recommended third party endorsement, “partnering with reliable organisations in order to select migrant entrepreneurs”, where “the selection of entrepreneurs should be carried out by industry experts where possible”.

This was one of the committee’s better ideas. We all knew it, even the Home Office: its caseworkers were perhaps not the best people to assess the viability of business plans. It made sense to source this assessment out to business people or “industry experts”. The trouble is, dare I say it, how this endorsement might actually work in the real world was not properly thought out.

So, what’s wrong with the endorsement system? Well, to start with, few endorsing bodies, by their own admission, are ready to endorse. A route years in the making and nobody thought of giving these endorsing bodies the heads up.

Quite extraordinary reply from one of the endorsing bodies for the Innovator and Start-up visa categories. #InnovatorVisa #UKImmigration pic.twitter.com/edEwtN2E2m

— Andrew Krisman (@AndrewKrisman) April 5, 2019

One organisation on the list told us that they had a single conversation with the Home Office about becoming an endorsing body, and the next they heard about it was their appearance on the list.

Of serious concern is the fact that most of these endorsing bodies, as is the nature of seed funds and accelerators, provide or facilitate investment for equity. There’s little room for the entrepreneur who would rather not give away a stake in their business.

What would Bezos do?

Another pressing concern is the scope of the endorsing bodies.

They are largely tech incubators and accelerators. There are some exceptions such as MedCity (life sciences) and Deep Science Ventures (well, deep science, of course) but the endorsement offering is very esoteric, almost impossibly high-flying stuff.  

Take the noble-minded Zinc, for example, which has a nine-month full-time company builder programme: “Each programme has a single mission, to solve a social problem in the developed world which affects at least 100 million people.” What about more humdrum business ideas that might not tilt at world domination but nonetheless could properly contribute to the growth of the UK economy?

One wonders where Jeff Bezos’s idea for a website selling books would have gone for endorsement and whether he would have obtained it. There is nothing generally mercantile here, except for perhaps NatWest et al. This is a serious, short-sighted limitation.

How does one become endorsed? Well, whilst some have been very helpful, most of these endorsing bodies aren’t giving much away. Most have no information relating to endorsement on their websites and many don’t answer enquiries. Loose lips sink ships.

The 1 May update to the endorsing body list warns:

Please note that neither the endorsing bodies nor the business helpdesk will answer hypothetical or speculative enquiries.

Heaven forbid that migrants might seek from endorsing bodies information on how to become endorsed.

From what we’ve been able to glean, for the vast majority you need to be accepted on their programmes in order to be considered for endorsement. Only a handful accept open applications. It’s pretty much a closed shop.

As you’d expect from bodies set up to promote business growth in certain areas of the UK, it’s all very regional — good in one sense as we shouldn’t neglect the regions but there are very limited options for those migrants who might like to settle in London or the south-east, a destination of choice for many migrants in practice.

But the innovator visa is not really aimed at migrants at all, is it?

Migrant versus native entrepreneurs

Endorsement seems, at its core, to pit migrant entrepreneurs against resident entrepreneurs. They are all vying for limited places on limited schemes.

The would-be migrant entrepreneur has to fight off “native entrepreneurs”, with their home advantage, simply in order to gain a foothold for a visa application. And whilst this is perhaps unfair for the migrant, the situation also ignores the Migration Advisory Committee warning against the “crowding-out of native entrepreneurs”.

The guidance for endorsing bodies perhaps doffs the Home Office cap to this warning, stating that the department “will not accept requests to become an endorsing body from organisations which do not also support British citizen entrepreneurs, and which have been set up purely to facilitate immigration” (as if to facilitate immigration is necessarily a bad thing) but this restrictive approach to endorsing bodies has created the issue currently at the centre of this new visa regime. The endorsing bodies, the cornerstone of a visa regime, are in truth ill-adapted to the task in hand, i.e. to facilitate immigration.

Closed to overseas applicants

I return to my opening gambit, that this innovator route is effectively closed to migrants, certainly those overseas. These endorsing body programmes require attendance, in person. Even the few endorsing bodies that run open applications, such as MedCity, require an applicant’s attendance at a pitch and interview or something similar. There is, to our knowledge, no self-contained online application process or otherwise that might be completed entirely remotely. Overseas applicants need not apply.

Your resident Tier 2 or Tier 4 migrants might be able to participate in such programmes, but one imagines such demands would seriously clash with their work and studies. They are therefore also at a disadvantage.

How then might a wannabe overseas innovator seek and secure endorsement? Surely, there must be a way. Can they come to the UK as visitors in order to do this?

Alas, such an activity does not come under any of the “permitted activities” for visitors. The only possible option might be the prospective entrepreneur activities:

8. A visitor who can show support from one or more endorsing bodies for the Start-up or Innovator categories in Appendix W, as listed on the gov.uk website, may come to the UK for discussions to secure funding from any legitimate source, which they intend to use to set up a business in the UK.

Appendix V, Appendix 3

What about those would-be overseas applicants who need to come to the UK in order to attend an endorsing body’s programme but who don’t need funding? It’s not a permissible visitor activity. And in any event, a “prospective entrepreneur” would need a supporting letter from the endorsing body in question, which they are never going to get without being able to attend the endorsing body’s programme, or at least meeting the endorsing body to pitch their idea.

But there’s always the start-up route, right, to funnel good applicants into the innovator? Presumably this route has taken over seamlessly from the Tier 1 (Graduate Entrepreneur) system, with universities becoming endorsing bodies for start-up migrants, open to all applicants no matter who they are or where they are? Wrong. We haven’t been able to find one start-up endorsing body ready and prepared to endorse anyone but students or recent graduates (and usually only their own).

To cap it all, there is now no scope for migrants to invest in existing UK businesses. The Migration Advisory Committee pointed out that this “Investor-lite activity…may be injecting much needed capital investment to businesses that could struggle to raise finance from alternative sources”. A valuable source of fundraising for UK businesses has been closed in the middle of Brexit.

Twice in the last 24 hours I have had to tell legitimate business owners that foreign nationals who would like to come to the UK to invest in and join their business can’t from a visa perspective.

The reality of innovator applications

With all this in mind, it’s not a shock to discover that there have been zero innovator application visas in the opening weeks of the scheme.

I have a client with a brilliant business background and, I think, a brilliant business idea. It’s selling stuff through a website, (you know, like Jeff Bezos). She has also tapped into today’s healthy living zeitgeist — I think she’s on to something big. And she has her own funding.

Her existing visa expires soon and it very much seems that there’s nobody that can endorse her. NatWest has advised she can apply in due course for their October intake but her visa doesn’t last that long. She’ll have to return home and take her excellent business idea with her.

For all its faults, my client would have blossomed under the Tier 1 (Entrepreneur) category. How many more like her must there be before this endorsing body business is properly opened up?

In some ways I won’t miss the Entrepreneur category. I always found it rather hard to type the word, especially with its mysterious brackets, and I certainly won’t miss the inane Home Office interviews where caseworkers held the secret formula of valuing companies. But I’m worried more by what it’s been replaced with: a visa system for “high value” migrants that can’t apply for visas.