This by no means is a go at anyone, region, demographic etc. These are just my thoughts on the current brain drain situation of entrepreneurial talent in the Technology UK scene.

Before I go any further it would be best to explain what I mean by brain drain.

Wikipedia: “A brain drain or human capital flight is an emigration of trained and talented individuals (”human capital”) to other nations or jurisdictions, due to conflicts, lack of opportunity, health hazards where they are living or other reasons.”

The Pain

Day in day out you hear about news from the valley about investment, merger and acquisitions, entrepreneurs/companies evaluated at crazy sums of money and much more. For a second as an entrepreneur you think.. hang on I have a similar ideas but I didn’t get nearly as much traction as the companies in the Valley. Another proof is check out the M&A news on Techcrunch V/S Techcrunch UK. I know Mike Butcher is working hard blogging regularly about the industry investments and acquisitions in UK/Europe, but there just isn’t enough activity.

The Pain Continues

Then you have the classic examples of people exported from UK to the valley. I don’t want to give specific examples but can’t resist mentioning Y-Combinator startup Auctomatic doing so well. I’m happy for Kul and Harj and what they have achieved in under a year of being in the valley. You start thinking damn my suspicions were right UK has some top talent, give them the opportunity and things will happen. Organisations like Y-Combinator add fuel to the fire (let me clarify its not a bad thing) by regularly exporting UK talent to Cali. Lack of high risk taking, seed funding investors in the UK means that entrepreneurs can’t resist the move.

Cure

So how can we prevent this and I think the answers are almost trivial:

1. More seed and early stage funding available to some crazy ideas. Investors need to think about the fact that 50 small crazy investments could mean a lot of work, but potentially could be more lucrative. My thoughts are that it could be as profitable as investing large sums in 10 companies (only 2 of which are cash cows - as the assumption goes)
2. Government should actively do something about it (not that they aren’t). Its almost the case now that anyone who proves their talent in the UK moves to California (a bit exaggerated) . I was once interviewed by a reporter who asked me when I’m going to Valley. I said I’m not. You should see the expression on his face - seemed like he saw a ghost ! And that was the end of the conversation
3. University’s should look at starting a venture fund like Stanford Student Enterprise Venture ( SSE Ventures).  This would have to be cash and advice, a lot of graduate know nothing about entrepreneurship although they can tell you what graduate scheme’s exist at an investment bank. You see investment bank spend a lot of money in organising campus tours.
4. Similarly we should have Startup campus tours where entrepreneurs come and speak about how budding entrepreneurs can learn
5. Last I won’t spare us, the entrepreneurs. I think we have to weigh up our social responsibility to create jobs, train budding entrepreneurs in UK/Europe to financial benefits.

I think there is a lot of work to be done here before this becomes a major worry. Although there are some signs of improvement. Recently I came across this on Intruders.tv, the London Technology Fund Competition:

“It is focused on the funding gap for new, high growth technology companies based in Greater London. It bridges the funding gap by leading and building a syndicate of investors or by completing the gap in an existing syndicate.”

Its open to all technology startup. The coolest thing in my opinion is that the decision of funding is made within 2 weeks of the application. Round one meeting takes place in literally 1 week.

Tags: UKStartups, Silicon Valley, Brain Drain