‘Far less’ private money goes into UK high-tech start-ups compared to the US, a research project has found.
Dr Andrew McCalister from the University of Cambridge said 2009 figures showed that private funding for early stage software companies in the US was £3.9 billion, compared to £151 million in the UK.
Speaking at the Royal Academy of Engineering’s annual research forum, Dr McCalister said he went to Silicon Valley in the US to examine how the UK could get more high-tech start-ups up and running.
Dr McCalister said there were public agencies in the UK that helped start-ups; however they were focussed on the technological aspects rather than both the technological and commercial aspects. When companies entered the next stage of trying to get private funding they were assessed on the commercial aspects, but many often failed because they had not been assessed on this before, he said. The commercial aspects needed to be looked at earlier, he said.
There were five key areas that start-ups should be focussed on, he said. These included – market, technical personnel, management, technical enablers, and at the growth stage, the business model.
Dr McCalister also found a number of cultural differences between the US and the UK, which included ideas around failure, community, cash and the scale of a project. For example, failure did not matter in Silicon Valley, it was almost like a badge of honour, but failure had negative connotations in the UK, he said.
The UK should be more open to failure, and Dr McCalister said it would be great if the community became more open as well – with more introductions and high-level feedback. The UK should also think world-wide when thinking of the scale of a project, instead of just at a national level.