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Funding is available for tech start-ups say PwC

A fear of failure is as discouraging for would-be technology entrepreneurs as the challenge for competition for funding and skills, according to research by PwC.

In a report looking into the Venture Capitalist Funding environment for UK technology and digital media start-ups, it was found that poor perceptions of funding availability mean that some companies are not even applying for capital in the belief that they will be unsuccessful.

Paul Mankin now believes that businesses looking for funding must change their perceptions of the funding environment.

He said: “The perception divide between entrepreneurs and VCs has only widened in recent years.

“Many VCs argue that little has changed, apart from greater competition for funding. The right combination of a compelling idea, sustainable and scalable business model and a strong management team will still win investment.

“The more savvy entrepreneurs who we spoke to, readily accept that what can look like risk aversion on the part of UK-based investors is actually just sensible risk assessment.”

Research indicated that 60% of entrepreneurs believed that US investors are more willing to embrace risk than their UK counterparts, and the UK has yet to match from the American ‘super angels’ community who are quick to invest in start-ups.

Only half of all respondents believed that being based on London was an advantage with regards to gaining investment, instead citing the importance of a being within a cluster of companies. This can be be beneficial for talent recruitment, growth and funding.

Despite frequent debate, respondents said R&D incentives in the UK are sufficient to encourage earlier stage UK technology businesses to undertake innovative development work.

Mr Mankin added:“Despite the potentially negative attitudes towards failure, most entrepreneurs took the view that technological talent within the UK is as strong as anywhere in the world, but it is the UK’s potential lack of ability to successfully commercialise its technological breakthroughs that results in the market lagging behind that in other territories such as the US.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .