The Innovator Founder visa route was launched on 13 April 2023, designed for entrepreneurs looking to establish an innovative, viable, and scalable business in the UK. In line with the government’s wider ‘UK Innovation Strategy‘, this new route replaces the “Innovator” and “Start Up” routes, with the aim of providing greater flexibility and more streamlined eligibility criteria in an effort to attract entrepreneurial talent to the UK. But will this more streamlined version make any difference?

Below we provide an analysis of the new route, including considering whether the changes made from the previous route are sufficient. We then go on to provide an overview of the application process and eligibility requirements for the new visa.

What is the Innovator Founder visa?

The Innovator Founder visa is designed for individuals seeking to establish a business in the UK based on an innovative, viable, and scalable business idea they have generated, or to which they have significantly contributed. The applicant must have a key role in the day-to-day management and development of the business they set up in the UK.

Applicants can either be the sole founder of the business or apply as a member of an entrepreneurial team. In all cases, the applicant must have made a significant contribution to creating the original business plan and be part of the founding team. Applicants cannot apply to join a business that is already trading.

A key requirement is that the applicant must be endorsed by a Home Office approved endorsing body who will assess the business according to the categories of innovation, viability, and scalability.  As part of its assessment, the endorsing body will consider various factors, such as if the applicant has a genuine, original business plan that meets market needs, whether they already have, or are developing, the required skills to run the business, and if there is evidence of the potential for job creation and growth into both national and international markets.

The applicant’s spouse/civil partner or unmarried partner along with any children under the age of 18 may apply to come to the UK as their dependants.

What are the key changes from the previous Innovator route?

There are a number of key changes from the previous Innovator route.

Removal of the £50,000 investment

Under the Innovator visa, applicants were required to show that they had at least £50,000 available to invest into their business. This is no longer required, but if the business plan requires significant funds to start the business then endorsing bodies may still require applicants to evidence that they have the necessary funds available.

Minimum of two contact points

Applicants were previously required to stay in contact with their endorsing body at six, twelve, and twenty-four month checkpoints. The Innovator Founder visa now only requires a minimum of two contact points throughout the three-year visa. This should reduce administrative concerns and allow applicants to develop their business under a less pressured timescale.

Secondary employment allowed

Applicants were previously only allowed to work for businesses that they established in the UK. The Innovator Founder visa now allows applicants to undertake employment outside of their business, as long as this employment is sufficiently skilled (i.e. at RQF level 3 or above) and the applicant maintains an active key role in the day-to-day management and development of the business.

Do the changes go far enough?

The Innovator Founder visa appears to address some of the issues connected with the Innovator visa. For example, the reduction of the number of mandatory check-ins with endorsing bodies and the allowance for secondary employment could make the visa more appealing to entrepreneurs who seek less administrative load and who wish to earn additional income while setting up their business in the UK. These changes, along with the scrapping of the £50,000 investment requirement, could help to make the visa more attractive to entrepreneurs.

However, one of the major barriers to obtaining an Innovator visa was the endorsement process. Simplifying the endorsement criteria and making it more transparent could help to attract more applicants and investment into the UK. Moreover, other factors such as the high threshold for innovation, and the equally high threshold to meet the requirements for indefinite leave to remain will likely continue to play a substantial role in determining the success of the Innovator Founder route.

Nicola explained how the Innovator route was not fit for purpose when it was first announced. The quarterly statistics released in March 2023 confirm this, with only 299 people being granted the visa in 2022. There were also only 377 grants of Start-up visas. It remains to be seen if the recent changes will be enough to encourage a significant increase in the utilisation of the category. Any significant difference in the short term might be unlikely, as people continue to watch how the UK recovers its economy and global practices post-pandemic and Brexit. Trade, taxes, day-to-day economic growth and cost of living, as well as access to other immigration opportunities to grow the workforce will become particularly relevant for people considering whether to set up business in the UK or on mainland Europe; it is not just the details of this particular visa route that will be considered.  

The application process

In the following section, we provide a structured overview of the process for obtaining an Innovator Founder visa, before then delving into the critical aspects. Our emphasis will be on acquiring endorsement for the establishment of a new business, as opposed to securing endorsement for extension or settlement in the UK under this specific visa route.

The procedure can be divided into two primary stages: (1) the endorsement application and (2) the visa application.

Stage 1 – Endorsement application

To be eligible for an Innovator Founder visa, applicants must have an innovative, viable, and scalable business idea which is supported by an endorsement from one of four endorsing bodies:

• Envestors Limited
• UK Endorsing Services
• Innovator International
• The Global Entrepreneurs Programme

The fee for an endorsement application is £1,000. The applicant must research and evaluate each of the four endorsing bodies to understand their specific requirements and select the endorsing body that best aligns with their needs and the nature of their business. Each endorsing body maintains its own process for evaluating endorsements but they generally follow the same process. The fee for an endorsement application is £1,000.

The applicant must prepare a well-structured business plan and compile supporting documents. These should include consideration of market analysis, competitive landscape, financial projections and a clear business model. Consideration should also be given to the unique selling point and the potential impact of the business on the UK economy. Evidence should be given in relation to the applicant’s qualifications, relevant experience and previous successes. A pitch deck or presentation should be created for this purpose.

The applicant should submit their endorsement application to their chosen endorsing body and they will then need to prepare for an interview and pitch session, after which it can take four to eight weeks for the endorsing body to review an application.

If the application is successful, the endorsing body will issue an endorsement letter. This letter is valid for three months and must be submitted as part of the visa application. If the application does not succeed, the endorsing body should provide clear feedback about why the business does not meet the criteria for endorsement.

Stage 2 – Innovator Founder visa application

An applicant should prepare the required documents for submission, including the online application form and supporting documents. The application fee is £1,036 for those applying from outside the UK, or £1,292 for those switching to the visa from inside the UK. The Immigration Health Surcharge will also need to be paid (£624 per year).

It is critical to understand that even with a valid endorsement from an endorsing body, the Home Office may still refuse an application if they determine that the business idea lacks innovation, viability, or scalability. During the visa application process, the Home Office carefully assesses whether the endorsing body has rightfully issued the endorsement. They will generally take into account the quality of the applicant’s business plan and if there is any reason to doubt the genuineness of the applicant based on information that may not have been available to the endorsing body.

To improve the chances of success, the applicant should include the documents submitted as part of the endorsement application, as well as a cover letter explaining clearly and in simple language how they satisfy the innovation, viability, and scalability requirements, along with the applicant’s qualifications and experience. This should give the Home Office more context and lead to better decisions.

Other more standard visa requirements will also need to be evidenced, including proof of English language proficiency, ID documents and tuberculosis testing (where required). This list is by no means exhaustive and evidence submitted will vary for each applicant.

A decision should be received within three weeks of the Home Office receiving all supporting documents and biometrics data.

The visa is initially valid for three years, after which the applicant can apply for an extension or apply for settlement (indefinite leave to remain). The success of applications for indefinite leave to remain will be assessed using factors such as job creation, annual revenue, engagement in significant research and development activity and applications for intellectual property protection in the UK. It will also be necessary to meet other criteria including residency requirements, and knowledge of life and language.

Requirements for endorsement

The assessment of businesses by endorsing bodies is a comprehensive process that focuses on three key aspects: innovation, viability, and scalability. For an applicant to succeed in this evaluation, they must demonstrate a unique and original business plan that addresses market needs, offers a competitive advantage, and cannot be easily replicated. Innovation is the most challenging requirement and it must be a core element of the business. The Home Office advises that generic businesses with supplementary innovation (taxi or cleaning company with an app, for example) will not qualify for endorsement.

The applicant must also prove their ability to effectively run the business, possessing the necessary skills, knowledge, and resources to make their business plan realistic and achievable. This is the viability requirement. The applicant must also evidence that the business will work, that there is credible demand and that the financial projections are justified.  

Lastly, the business must exhibit potential for growth, with structured planning and the capacity to create high-quality jobs and expand into national and international markets. By clearly satisfying these criteria and providing research evidence to support their claims, applicants improve their chances of obtaining endorsement.

Business plan

Given the above, a meticulously researched and well-structured business plan is crucial. It is recommended that applicants include separate sections in their business plan addressing innovation, viability, and scalability, with the following details:

• Describe the business’s unique selling point and innovative nature. Explain the new or existing market needs the business aim to meet and how the business addresses these needs.
• Explain the competitive advantages the business offers and how they will contribute to your business’s success.
• Explain how the applicant has or is developing, the necessary skills, knowledge, experience, and market awareness to successfully manage the business.
• Develop a plan detailing the business’s projected growth, potential job creation, and expansion into national and international markets. A visual timeline would be beneficial.

The business plan should also discuss intellectual property, including listing any existing, pending, or anticipated intellectual property filings in the UK and any aspects of services that may be considered trade secrets.

Research and development activities should be outlined, including any activities, what outcomes are expect from future research and development efforts and analysis of research and development endeavours of both the business and others in the industry.

Interview

Upon finalising the business plan and supporting documentation, applicants will submit them to the endorsing body, which will then review the materials and interview the applicant. The interviews can be challenging, as the endorsing body seeks to ensure the applicant thoroughly understands the business plan and financials.

If they do not or the plan appears not to be the applicant’s own work, the endorsing body may refuse to issue a letter of endorsement. Alternatively, they may request that the applicant return with a more developed plan. The interview process is often likened to defending a thesis as part of a PhD, as the applicant, business plan, and financials undergo rigorous examination.

Once the endorsing body has reviewed the business plan, conducted the necessary interviews, and deemed the business innovative, viable, and scalable, they should issue an endorsement letter. The applicant can then submit the visa application to the Home Office, but must do so within three months of receiving the endorsement. If the endorsement is older than three months, the visa application will be rejected.

Comment

Moving forward, it is essential for applicants to stay organised and focused throughout the endorsement and visa application process. They must ensure that all required documents are in order and that they are prepared to answer any questions related to their business plan and financials.

Here are some additional tips for a successful Innovator Founder visa application:

• Practice presenting to build confidence in your ability to communicate your ideas effectively.
• Seek feedback from mentors or professionals in your industry to refine the business plan and pitch.
• Keep abreast of any changes to the Innovator Founder visa process or requirements, as Immigration Rules and regulations can change frequently.

By following these recommendations and maintaining a thorough understanding of the endorsement and visa application process, applicants increase their chances of obtaining an Innovator Founder visa.

This visa offers a valuable opportunity for talented entrepreneurs to develop and scale their businesses in the UK, contributing to the nation’s economic growth and job creation. It is certainly a more simplified version of the old visa routes and removing the restrictive (particularly financial) requirements means the route is in theory more accessible but the high threshold for innovation will likely continue to limit the uptake. However, its success also remains conditional on the success of the UK’s economy and this route is arguably not enough to ensure that the UK looks like a friendly and viable option for overseas nationals to begin a prosperous business, especially when compared to European counterparts.

Considering the above and the condition of high streets across the country, the government may wish to introduce a version which is focused more on local job creation, offering an accelerated path to indefinite leave to remain if the business creates at least ten jobs for the local workforce. Perhaps it could even have a requirement to only allow establishing new businesses outside of London, with an investment of at least £200,000 but ideally higher, to encourage levelling up the country.

 With thanks to Fran Rance, Lily Pope, Steven Bostock for their valued and expert input.