ALL we ever seem to hear these days is that the UK venture capital market is behind the US venture capital market. Yet direct comparisons between the two is not always helpful.

The US venture capital market is about 30 years old. By contrast, the UK (and European) venture capital market is only in its awkward teenage years. Not only that, development during its early years was slowed by the false dawn of the dotcom bubble during the late 1990s and its crash in the early 2000s.

The US market is not only more established than the UK’s, but a key ingredient in its success has been the recycling of skills, money and time from its home-grown entrepreneurs. This recycling has been typically lacking in the UK, with our entrepreneurs and start-ups seeking capital from bankers and financiers that may lack real-life experience in building a business.

However, over the past few years we have started to see the emergence of a new breed of entrepreneur-backed VC funds. Led by Index Ventures and closely followed by the likes of Atomico, Notion Capital, Open Ocean and ProFounders, these venture capitalists are reinvesting their essential experience and capital into today’s start-ups. This has provided a solid foundation for a more successful venture capital ecosystem in the UK and, in support of this, we saw an upswing in European funding and exits between 2009 and 2010. The UK and Europe’s venture capital and start-up ecosystem is now viable in its own right, rather than being dependent on the US.

Two main criticisms levelled at the UK venture capital market are that it is risk averse and that the funds are too small. It’s undoubtedly true that both the UK and European markets have been traditionally much more risk averse than their US counterparts. Just before the current economic downturn we were starting to see bolder investments, but as soon as the credit crunch hit this quickly slowed down. It is also true that there are more and bigger funds in the US; but again, given the disparity in maturity of each market this shouldn’t really come as a huge surprise.

The reality is that the US market is overheated. An over-supply of money has led to exceptionally high valuations, leaving start-ups under huge pressure to execute flawlessly just to be capable of living up to expectation. An example here is the latest rumoured valuation of Groupon at $11.4bn, an amazing price for a young business nowhere near turning a profit. There is a fine line between a healthy appetite for risk and throwing money at a business without due consideration. After all, it’s not like consumers and businesses have more money to spend – even markets going through major changes are ultimately finite in size.

In contrast, the European market has less competition and subsequently less inflation on deals and other costs associated with early stage businesses (hiring staff, office space), meaning that it is arguably better balanced than the US right now – and it’s actually possible to strike good deals at the right price. Add to this how different regions in Europe are demonstrating specific areas of specialisation and learning to work together, usually with London as the hub, and the case builds for investing in the UK and Europe.

Recently, Google invested in London’s East End Tech City, committing to a centre for start-ups. This isn’t just a US tech company with cash-reserves to burn; it’s a very clear sign that the market has global recognition and is worth investing in.

Jos White is an entrepreneur and co-founder of venture capital and advisory fund, Notion Capital.