Two formidable US-based venture capital funds were established in Britain last week. The Cross Atlantic Technology Fund, created by a major Pennsylvanian retirement firm, and SPARK, funded by US companies GlobalNet, Financial.com and NewMedia Investors, are already scouring the nation for Britain's brightest innovators.
This recent swell of transatlantic technology investment has been heralded by both financial experts and UK start-ups as the dawn of the real Internet boom in this country. US venture capitalists that have turned Silicon Valley into a technological land of plenty are apparently turning their attention to the cream of British technology as the next possible electronic utopia.
Lance Close, Internet analyst with Financial research company Mintel, believes a boom in Internet stocks similar to the US experience. "The UK is roughly 16 months behind the US and this was about when the Internet started to take off there. We are just reaching critical mass in this build-up."
Close also believes the UK will learn a few useful lessons from the US experience and says, "In the UK I expect things to be more business-orientated. People will not just invest in companies because they have a .com in their name, and this is a good thing. As people become more aware of how to deal with Internet stocks, business principles will determine things."
Adam Twiss, co-founder and director of UK-based technology startup Zeus technology, an Internet server software firm that has benefited from The Cross Atlantic Technology Fund, agrees that US venture capital is doing the British Internet industry a power of good. "The amount of money coming from America has gone up ten times compared to this time last year. American investors tend to be a bit more aggressive, competitive and willing to invest in technology."
Twiss points to another way in which the UK's Internet industry is learning from America. "One of the big problems in the UK in the past has been the lack of a suitable domestic stock market. It is very hard for companies to list on the [US'] Nasdaq, and this in turn has discouraged a lot of investors."