The UK business environment renders growing beyond £100m without selling up to a US giant the "irrational" choice for tech start-ups, according to technology entrepreneur Mike Lynch.
The founder of Autonomy grew his company to a worth of more than $10bn before selling up to HP in 2011. But a new technology firm replicating this success is unlikely, Lynch believes, as long as the rules and regulations concerning listing on the UK stock market serve as a barrier to ambitious start-ups.
Lynch claimed that the fact that the FTSE 100 features only one IT firm is a major concern, and stated that this country needs to do more to foster great tech companies or they will continue to sell up to US monoliths before they have a chance to truly compete with them.
"At the moment the UK markets are not functioning well for technology businesses; we still have only Sage in the FTSE 100, and that is a big problem for the UK," he said. "The VCs invest and they get the business up to £100m (valuation), but find they cannot put it on London, and they need to get it to £600m or £700m to get it on NASDAQ.
"There is an ARR (accounting rate of return) calculation [which finds that] it is better to sell - it is the rational decision. We need to make it the irrational decision. Because the important thing to remember is the technology from UK companies is great."
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