AN OVERWHELMING number of London’s technology startups are being held back by a risk averse culture that has failed to create investment for promising firms, according to a report released today.
Silicon Valley Bank, the American lender which opened its first London branch last summer, found that while more than 80 per cent of small technology firms are looking to hire more staff this year, and 39 per cent are looking for investment, the climate is far less encouraging than it is for startups across the pond.
Bindi Karia, vice president at the bank, said that 90 per cent of entrepreneurs found the fundraising environment in the UK “extremely or somewhat challenging” and that 69 per cent found qualified engineers hard to find. “Information Technology is different [to the US] in Europe,” she told City A.M.. “The risk averse culture, that’s what separates us from the valley,” she said.
The report, which will come as a blow to David Cameron’s bid to turn London into a global hub for technology firms, found that firms do not struggle to raise capital in their early stages, when they need a few thousand pounds to open an office and hire their first round of staff. However, the bank said there was a funding gap for firms that want to get to the next level.