Is UK not helping new ideas?

[TomTechITSupport]

I was doing my morning reading, and I noticed that every morning (seems it) there's another company in the US or a start-up or some idea receiving huge amounts of funding. Why is it that it's not happening as much in the UK...maybe that's why we're behind in lots of things, there's no support or people seeking new talent or new idea.

[carolinem]

I was at a Girl Geeks dinner back in October talking to some venture capitalists and I was asking if they thought there was more talent/greater innovation or a different type of entrepreneur in the UK. Basically they said there are MORE entrepreneurs in the UK - think of all those corner shops, independents etc. But that there's more risk involved in growth because of our punative employment laws, cultural attitudes towards debt and the fact that we don't have a whole industry built around finding "the next big thing".

When you look at Silicon Valley, here you have a top class university with the very brightest of the bright working on new ideas (no proportional representation or positive discrimination here). They are supported by venture capitalists, lawyers, accountants, etc who are all prepared to work for free in return for company stock. They can hire and fire at will, so they are leaner faster companies (instead of having to grapple 8 miles of red tape and dreading someone getting pregnant or having to make someone redundant at vast cost). Even if 7/10 of those companies fold, and 2 in 10 break even, the one company which makes it big will make it really big and pay for all the other mistakes. Can't see the tax man in the UK looking favourably on people working for free or for favours in kind - they class this as tax evasion. And let's not forget, it's usually the tax man who bankrupts companies.

I do think the UK should have less benefits, and specifically less employee rights. After all, if someone is a good worker and pulls their weight, why wouldn't you want them working for you? Or why wouldn't someone else who is nicer to their employees want to poach them? So it's in companies interests to be good to their good employees. The bad employees... meh, they will probably have to mend their ways! But of course no government is ever going to actually come out and say that!!!

[TomTechITSupport]

I hear you @crolinem.

It's just a shame really in my opinion because, if i were to be facebook i bet you an American investor would still invest in my rather than a UK investor.

Maybe Government would rather people working 9 to 5 than becoming their own boss thus becoming powerful, maybe they'd rather UK citizens been under control in terms of how rich they want people to be or how powerful. US on the other hand would like all their citizens to do well and go forward.

Surely though, I would think having more businesses in the UK would mean more money for our economy or maybe better more money for this government we call ours.

[carolinem]

It's probably more advantageous to the government to have people employed steadily paying their tax coz it's harder to chase down the self-employed and the income fluctuates - so they'd not be able to plan spending... Or so the theory goes.

But then we all pay council tax and national insurance, so really all our income tax pays for is, what? Government fat cats? The queen? Jailing criminals? Boris' bicycle? (Actually I don't mind Boris' bicycle coz he makes me smile!).

[lordlancaster]

Check out the excellent article on this topic that appeared in Wired magazine in October called Watch out, Silicon Valley: Europe's next billion dollar start-ups

One advantage of being part of the close-knit southern Bay Area tech community is the speed at which an idea can become a business. “You find the Valley will invest in a company, then six months later, Europe will make a clone,” says Kanji. He cites Group on, in which his prior firm Accel invested $30 million late last year, its second main round of funding. Soon after, in January 2010, European VCs put €4 million into Citydeal.de, a German Groupon clone, which was promptly acquired by Groupon just four months later. The implication? “You’re probably not going to become the global champion. The best you can do is become the regional company,” says Kanji.

...For some in Europe, though, second place appears to be just fine. This has led to accusations of “clone factories”, which copy emerging US businesses with the aim of controlling a local market, before being sold off as quickly as possible. StudiVZ is one striking example: a Facebook clone launched in Berlin in 2005, it grew rapidly in Germany, Austria and Switzerland, before being sold on to a German publishing firm in 2007. “It’s a local champion. It is beneficial to the ecosystem, but it’s not how the West was won,” argues Atlas Venture’s Fred Destin. “Copycats are not the model,” adds Hoberman. “What is the economic value added to Europe? They end up owned by American companies, and taxes go back to America, so it’s not very productive for Europe.”

See http://www.wired.co.uk/magazine/archive/2010/10/features/watch-out-silicon-valley

[TomTechITSupport]

Americans just see what's good, take it fast and run.....however they get massive support.

[lordlancaster]

It helps that they've got such a close-knit community of tech start ups and established businesses side by side. The full article talks about how people can't go for a coffee at the local Starbuck's without bumping into potential collaborators or investors.

They're not afraid to take risks and see failure as nothing to be ashamed of. It's all part of the learning curve. Look at someone like Donald Trump as the perfect example of someone who has made a mint, lost it all, and then made it back again many times over.

[LukeLang]

Hi Tom,

Great point and well made. Current methods of raising seed funding for UK entrepreneurs seems to be very archaic and haven't changed much in the last 100 years. The task of securing business investment is notoriously difficult at the best of times; and in today’s economic climate this has become even more challenging. Banks are nervous of lending, while ‘Business Angels’ and VC funding can be out of the reach of many small businesses.

A new option is emerging that uses the web-based notion of crowdfunding to help entrepreneurs looking to raise business capital to start a business venture. Here in the UK we have been working very hard to introduce the World's first equity-based crowdfunding website where people can invest small (or large) amounts of money in a business in exchange for equity in the business. It really is a revolutionary concept that would be perfect for young, well networked entrepreneurs looking for seed funding.

If you are interested please visit the Crowdcube website - www.crowdcube.com.

If you have any questions then drop me a message.

Thanks,

Luke.

[TomTechITSupport]

Originally Posted by LukeLang

Hi Tom,

Great point and well made. Current methods of raising seed funding for UK entrepreneurs seems to be very archaic and haven't changed much in the last 100 years. The task of securing business investment is notoriously difficult at the best of times; and in today’s economic climate this has become even more challenging. Banks are nervous of lending, while ‘Business Angels’ and VC funding can be out of the reach of many small businesses.

A new option is emerging that uses the web-based notion of crowdfunding to help entrepreneurs looking to raise business capital to start a business venture. Here in the UK we have been working very hard to introduce the World's first equity-based crowdfunding website where people can invest small (or large) amounts of money in a business in exchange for equity in the business. It really is a revolutionary concept that would be perfect for young, well networked entrepreneurs looking for seed funding.

If you are interested please visit the Crowdcube website - www.crowdcube.com.

If you have any questions then drop me a message.

Thanks,

Luke.

I'm going to look into this on the weekend...good idea, I remember a post on here when you introduced it, maybe the website review section not sure.