Re: UKNM: Wimps?

[Sajid Mohammed]

---Richard Houston <

rhoustonbrann [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

timeframe.


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

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