On Being An Entrepreneur In England
Desperado the mouse - I know how he feels. Being an entrepreneur difficult anywhere but just try starting something in the UK. Oy vey. In Europe in 2009 in my business 136 funds raised $74 billion, or half by number and capital then 2008. This represents about 30% of all capital raised in '09. European buyout funds raised $37 billion or about half of all funds raised in '09. Real estate accounted for 18% and - here's the rub - venture capital raised $5 billion or 7% of the total, according to industry expert preqin.
In the US, venture fundraising about twice that of Europe or $15 billion in 2009 - levels equal to 1992 levels or way down. So .. less money going to private equity and less to the VC subset, though the US still sponsors many more GPs.
This trickles down to the start-up communities who are, at best, under-valued in Europe. A bad thing given the impact of venture on the economy: According to the NVCA, in the US in 2008 venture capital-backed companies employed over 12 million people while generating $3 trillion in revenue. This is 11% of private sector employment and equal to 21% of US GDP. These datas do not include the "ripple effect," ie, hospitals and corporates better run thanks to email and IT. And so on and so forth.
So back to me: it is no good to dream of starting a company if there is no love. It does not help if exits (IPOs or m and a) far and between+high capital gains taxes which further erodes returns. In short, the Great and the Good (which is not me, dear reader) who do go out on the plank must have the potential of getting rich. Unfortunately in England I have found skepticism, jealousy and regulation - not to mention lousy weather and poor communication. Not surprising I have also found a depressed entrepreneurial spirit. At my age, some or many of my (MBA) peer group should exploit its experiences and networks - if not now, when? By failing to do so, our society loses the limited venture capital to China or India nor releases its best talents. We must choose between being Disney World or a modern world and the first step from up top.
"Let the work of change begin."
--PM Gordon Brown
