Letters to the editor for 21 May 2013

Startup ventures

[Re: Autonomy founder: City tech funding is dysfunctional, yesterday]

The issue of startup funding understandably exercises the minds of policymakers and business leaders. To create major technology companies, high potential UK businesses need access to capital in the same amounts as US competitors, yet this is far from the case. In 2012, venture capital investments were on average 5.5 times higher per company in the US than in the UK. The reason is a lack of UK venture capital funds of sufficient size, which severely hampers a fund’s ability to fund a company through its life-cycle. This often results in funds being forced to sell because they do not have the capital to continue their support. While there are a small number of UK funds of a significant size, more are needed to create a new generation of world-class UK firms. The UK invests in just as many startups each year as Silicon Valley. The challenge is to encourage a new generation of venture funds, equipped to give the financial support our entrepreneurial spirit deserves.

Tim Hames, director general, British Private Equity & Venture Capital Association

[Re: Let the optimists run the economy and innovation will charge growth, yesterday]

Optimists will thrive, regardless of how politicians tinker with taxation or any other lever. But this does mean creating the optimists in the first place – and that requires encouraging young people to take risks.
Lisa Sturridge

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