Risk-averse parents are fueling Britain’s ambition crisis, VCs say

Concerns of an entrepreneurial ambition deficit in the U.K. have led some venture capitalists to question the role of risk-averse parents and a costly education system in disenfranchising young British people from becoming founders.

Last month, U.K. Business Secretary Peter Kyle said university students in Britain don’t have the same ambition to start their own businesses when compared with their peers in America.

“In Britain, if you went to a group of undergraduates, how big would that group have to be before you found someone that said their choice of going to university… was because they wanted to become a founder?” Kyle said at an event hosted by AI chipmaker Nvidia in London.

“The entrepreneurialism simply isn’t there – the drive, the vigour,” Kyle added.

Harry Stebbings, the founder of 20VC, a firm managing $650 million in funds, said one of the main barriers young people in the U.K. face when trying to get into entrepreneurship is their parents.

“Parents are a massive problem. Parents f*** you up,” Stebbings told CNBC Make It in an interview. “Parents are inherently risk-off and not risk on in the U.K. So they say: ‘Hey, get this job. Hey, you’ve been to university. Hey, I paid for all of your university. Hey, I pay for this. Get that job.'”

“And actually in the U.S., it’s much more: ‘Start a business. Go try that. Go join a startup.’ Very different mindset towards risk and careers, and I think that’s a really different element to how a child starts,” he added.

Stebbings comments are part of a broader debate on whether the U.K. fosters a culture of risk-aversion. One Forbes 30 under 30 founder, Tom Wallace-Smith, who launched nuclear fusion startup Astral Systems in 2021, previously told CNBC Make It that entrepreneurship feels out of reach to most people in the U.K.

Wallace-Smith said he didn’t even know entrepreneurship was a viable career path when he was completing his PhD at the University of Bristol, and expected to end up in academics or a corporate job.

He argued that the U.K. has no shortage of successful entrepreneurs, but the government and media “could do a better job of telling founders’ stories” and increasing exposure to startup environments.

“They [young people] still want to go and work at Jane Street. They still want to go and work at Goldman. They still want to go and work at McKinsey. It is astonishing to me, we do not have anywhere near the same entrepreneurial ambitions early,” Stebbings said.

Dama Sathianathan, a senior partner at London-based venture capital firm Bethnal Green Ventures, agreed that parents are more risk-averse in the U.K., but explained it’s likely because entrepreneurship is seen as a financially unstable path.

“It’s not being really infused, embedded in the whole scholarly curriculum … people opt to to pay incredible fees to just infuse their children with better chances in school and ultimately university. That’s sort of the traditional pathway for people, which is just so expensive, if you think about it,” Sathianathan said in an interview with CNBC Make It.

Private school fees in the U.K. were up 22.6% on average in January after the government introduced a VAT, according to the Independent Schools Council (ISC). The average termly fee for a day school in January was £7,382 ($9,799), including a 20% VAT, according to the ISC, compared with £6,021 last year.

Meanwhile, university tuition fees rose for the first time in eight years in 2025, with the annual maximum fee going up by £285 to £9,535 next year, an increase of 3.1%.

Although university fees tend to be much higher in the U.S., salaries also tend to be higher, meaning successful graduates can potentially take more risks such as starting their own business, compared to their U.K. counterparts.

A survey from the Federation of Small Businesses (FSB) and Simply Business in March, found that nearly 60% of young British people are interested in starting their own businesses but they cite a number of roadblocks holding them back.

Only 16% of the 2,079 people surveyed between the ages of 18 and 34 in the U.K., had actually taken the leap into entrepreneurship, with most saying a lack of formal business education was an obstacle.

As young people and their parents absorb high educational fees, pursuing the path of entrepreneurship doesn’t seem to offer worthwhile rewards.

“The risk appetite then is really a question about: ‘Will I have the chance to be financially stable in a cost of living crisis? Will I be able to actually make this into a career move when it doesn’t work out because entrepreneurship doesn’t always pan out,” Sathianathan added.