The last 2 weeks were the strangest weeks I’ve seen in the UK startup world. It started with a quick LinkedIn post I wrote. Nothing big. I shared what I saw at an event. Founders stressed. Investors confused. A lot of tension in the room.

Then I pressed “post” and moved on with my day.

A few hours later my phone was blowing up.

Comments. Messages. People tagging others.

Founders sharing stories.

Investors joining in.

Everyone had something to say.

It was clear that something inside the ecosystem was boiling for a long time, and this post cracked it open. People felt unheard. They felt tired. They felt worried about the direction of the country.

Then the news about the exit tax leaked.

And everything went insane.

Struggling to convert customers? Unsure how to build traction with your product? Don't know where to start with your marketing strategy?

Aura Growth Agency is here to cut through the chaos and unlock unstoppable growth through brand, marketing, product design, and tech-powered strategy.

Book a FREE consultation with Aura today here and kickstart your business transformation!

A lot of people misunderstood it. Even some investors didn’t get it at first. So let’s make it simple.

The exit tax was not a tax on selling your company.

It was not a tax on profit.

It was not a tax on “the rich”.

It was a tax for leaving the UK.

Nothing more.

The idea was pretty wild.

If you leave the UK, HMRC takes 20 percent of the paper value of your shares.

Paper value means exactly that.

Paper. Not cash. Not money in your account. Not money you can reach.

So imagine this.

Your startup is valued at £20M. Your share is worth £4M on paper. But you can’t sell it. No liquidity. No exit. Nothing.

You move abroad to grow your company.

The UK tries to charge you £4M in tax.

And if your company dies later?

Or drops in value?

Or you never sell your shares?

Too bad.

You still owe the tax.

In other words, the policy punished founders for building something in the UK and trying to scale it globally. It also punished ambition. If you tried to grow abroad, you would get hit with a bill that could destroy your life.

There is no polite way to explain this.

The idea was harmful.

Founders are used to pain.

We deal with stress every day.

Rejections. Burnout. Delays.

People quitting.

People not delivering.

Cash running low.

But there are two things that break founders fast:

The exit tax delivered both.

Overnight, founders felt unsafe.

They didn’t know if the UK was still a good place to build.

They didn’t know what the next policy might be.

They didn’t know if they should stay, move, or pause everything.

You could feel the panic.

I saw comments from founders who moved their companies into the UK because they thought this country supported innovation. Suddenly they weren’t sure anymore.

People felt betrayed.

The worst part was the message behind the policy. It signalled that founders need to be locked in. That they need to be “held tight” by the government. That success or growth abroad was some kind of threat.

If you want to attract talent, this is the wrong way.

If you want to keep founders here, this is also the wrong way.

You keep founders by treating them with respect.

Not fear.

If you step back from the drama, the whole thing was a political test. A lot of people inside government leak ideas before a budget to see how loud the public will scream. They test the waters. They push a few thoughts out there and track the reaction.

It’s a strange way to govern, but it happens.

This was one of those tests.

Someone floated the idea.

The ecosystem reacted with shock.

Founders and investors spoke up fast.

Media picked it up.

Politicians saw the blowback.

And then the government pulled away from the idea.

But even if it lasted only a week, the damage was done.

People saw how little thought went into something that could have destroyed early-stage innovation.

Even the podcast I listened to said the idea lasted “five and a half seconds” before it became obvious that it was dangerous.

That’s how bad it was.

This is the part I’m honestly proud of.

Founders didn’t stay quiet.

Investors didn’t stay quiet.

Operators didn’t stay quiet.

People spoke up.

People shared posts.

People explained the problem in simple words so others could understand.

Then Startup Coalition stepped in and pushed things forward. They framed the argument. They spoke with the right people. They wrote the open letter. They took all the emotion and turned it into something solid.

Almost 1,500 people signed the letter.

Founders. Investors. Operators. Advisors.

The pressure worked.

The Chancellor dropped the idea.

It’s gone.

The alert is over.

This moment showed something powerful.

When the community acts together, things shift fast.

When founders speak with one voice, the government listens.

When people are honest about their frustration, things don’t get buried.

We always think our voices don’t matter.

We think our workload is too heavy.

We think our focus should stay on the company.

We think politics is something someone else should deal with.

But this week proved something important:

the ecosystem is stronger than we think.

The exit tax was not the only issue.

It was a symptom of a deeper problem.

Founders don’t trust that the government understands how startups work.

They don’t feel safe.

They don’t feel supported.

They don’t feel seen.

The UK is trying to compete with global hubs.

The US is pulling talent.

Dubai is pulling talent.

Singapore is pulling talent.

Europe is getting stronger.

The UK is not alone in this race.

So when a policy like this shows up, even for a week, it hits deeper.

It reminds founders how fragile the ecosystem is.

How fast things can go wrong.

How one decision can change the direction of thousands of companies.

This is why the reaction was emotional.

People saw a threat to their future.

To their plans.

To their teams.

To their lives.

Founders aren’t sitting at home with millions.

Many are fighting to survive month to month.

Many are trying to raise.

Many are trying to ship product.

Many are on the edge of burnout.

An exit tax on paper gains is not some “small tweak”.

It’s a direct blow.

That week changed how I see the ecosystem.

I saw frustration I didn’t expect.

I saw fear.

I saw anger.

I also saw unity.

People didn’t hide.

People didn’t wait.

People didn’t hope someone else would fix it.

They spoke.

They pushed.

They acted.

And the government listened.

They reversed the idea.

They made the right call.

I’m happy this is over.

I’m grateful to everyone who helped.

I’m grateful to everyone who shared something online.

I’m grateful to everyone who signed the letter.

And I’m grateful to Startup Coalition for taking the lead.

The community showed strength.

We should remember that.

Here are a few simple lessons:

This time we blocked something harmful.

Next time we might help build something better.

✅ If this hit home, share it. There’s definitely a founder in your network who thinks “politics doesn’t affect me” (until it does).

(👉 Vote now — we’ll share the results in next week’s issue. All votes are anonymous.)

(Last week’s poll results)

👉 When you revive an old lead, what’s your go-to move?