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Despite signs of improvement, is the UK tech scene still underfunded?

Rod Banner

As Silicon Valley based businesses continue to attract a seemingly endless stream of investment, how does that impact UK startups' access to capital?

“Silicon Valley is where all the money is.”

And with Q4 2014 VC investment in the heart of tech hitting close to $12 billion, there’s no doubt that the incredulous figures providing the backbone of some of the world’s largest businesses have given rise to a new American Dream.

Differing from the original ‘dream’ centered around chasing opportunity, this modern morphed version requires a blend of innovation and contacts to help unlock the doors of tech investment.

With streets seemingly paved with gold, Silicon Valley is Mecca to coders, software engineers, visionaries and entrepreneurs the world over.

All arrive with the unfettered hope that their idea will help them receive funding.

What is the chance of funding for UK tech companies?

In Silicon Valley, there’s a huge concentration of capital situated in a very specific geographical area.

Rod Banner, ‘Agent of change’ at marketing group 3LA, explains that, “80% of venture capital funds are on Sandhill Road.”

“If you walk down Sandhill Road with an idea and…you’ve got something that enables you to pitch well- you can raise 10 million dollars in an afternoon. Whereas in the UK it’s much harder to get anything even close to that.”

But why exactly is this?

“Silicon Valley is where all the engineers are.”

And how does that impact the UK?

“There are some amazing ideas that come out of the UK” and it, “produces some phenomenally interesting brains.”

The problem is, that these amazing ideas, “are never sufficiently funded. The normal route is to take it (businesses) to angel stage, and then piss off to Silicon Valley”

Whilst problematic, the likelihood of funding for UK tech companies has been given a boost by the ubiquitous connectivity that cloud computing offers.

It has allowed UK based companies to, “build organizations in the cloud” and have a “head office in North America but have your team scattered all over the world.”

To hear more of Rod Banner’s views on the state of funding for UK tech companies, watch the short video above.

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