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Subject: Re: UKNM: Wimps?
From: Sajid Mohammed
Date: Mon, 26 Oct 1998 14:45:35 GMT

---Richard Houston <rhoustonatbrann [dot] co [dot] uk> wrote:
> [Commentary about parlous state of UK web industry & incipient US colonisation schnipped!]
> Friday afternoon it may be, but I find this a bit depressing. Are we going
> to just lie down and take it? Do we suffer from a fundamental lack of
> ambition this side of the water? Maybe David Bentey, Jim Sterne or someone
> else with lots of air miles could give us the benefit of their
> trans-atlantic wisdom.

I haven't got loads of Air Miles, but I have literally grown up with
the Web so I feel qualified to pontificate. Okay, let's go...

It's very little to do with ambition. There are plenty of ambitious
people in the industry. It's much to do with VENTURE CAPITAL or lack
thereof. Stateside companies can invest money in VC funds and offset
the expenditure against tax. IBM, Netscape, Oracle are just some of
the well known companies who have invested in funds managed by the
likes of Kleiner Perkins. As far as I am aware, no such tax breaks
exist in the UK.

In the UK, the City has been notoriously conservative about this kind
of investment. Why do you think the British film industry was up shit
creek for years? We had world beating facilities and craftspeople, but
a cautious City who were afraid of getting their fingers burnt. It
ultimately took the likes of Miramax (Disney) & Fox Searchlight to
fund successful films like The Full Monty - not forgetting the
sterling work that Channel Four has done. The City

So, this lack of tax breaks combined with ingrained conservatism means
that we don't have a raft of successful start-ups like they have in
Silicon Valley. Apple, Netscape, Excite & Yahoo are just four
companies I can think of off the top of my head who benefited from VC.

Can you think of any companies of this magnitude in the UK who have
benefited from VC? Because I can't.

Excite started out in a garage and are now valued as a multi-billion
dollar company. They may not be very profitable, but that's hardly the
point. Many VCs look to invest money in a start-up, see rapid growth
in the market value of the venture and sell out within a short

There are funds in this country like Kennet Capital and Amadeus who
would fund ventures - I have no reason to denigrate the work they do,
but I think that the other problem is that we just don't have the
critical mass of funders and fundees(?) that they have in the Valley,
which makes for a fertile business culture.

That's my two-pence worth, what do other people think?

The Sajid Mohammed Emerging Technology Markets Fund
Get your free @yahoo.com address at http://mail.yahoo.com

  Re: UKNM: Wimps?, Nick Sweeney

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