Did they have to? My impression is British companies sell out as soon as they can these days. Is this something that could be changed with policy? Does Germany incentivise running companies more? Or is this cultural, e.g. British people are more risk averse?
It's very difficult to raise late stage capital in the UK, especially for deep tech. We invent so much but our capital ecosystem is all tied up in land and our pensions providers don't want to know.
> UK is by far the best country to raise venture capital in Europe
For late stage? Continental Europe has its banks and industrial policy. America and China have their deep pockets. Scaling out of the UK is incredibly hard, doubly so post Brexit, that’s why they sell early.
I think continental Europe has nothing on the UK when it comes to banks and financial markets. The UK has the deepest pockets in Europe because it is a hub for global capital. Brexit does not seem to have made a difference:
To be clear, I think there is a tone of late-stage capital in the UK that gets invested in the U.S. I’d love to see data for total late-stage money raised by British versus EU companies.
UK has City of London that dwarfs the banks of continental Europe. we're talking big banks, Fintech, HFT, etc. When you deal with Austrian banks you realize they're 10-20 years behind the UK.
> and industrial policy
Continental Europe has a large but somewhat inefficient(compared to Asia) and heavily subsidized industrial policy, acting more a a jobs program for politicians chasing votes and state subsidies, that the UK gave up on during Thatcher(for better and worse), and stayed in the niche, low volume but highly important aerospace and defense parts that dwarfs that of continental Europe.
Ofc that also means the labor market in UK is very K-shaped. Highly paid skilled niche jobs in London and the university research centers, and then a wasteland everywhere else.
I think Germany has tax rules that make exits harder, whereas it's very easy in the UK to sell. If you have a more free market next to protective ones it makes sense that your IP is going to flow in that direction.
It’s cultural. It is not difficult to raise a lot of money in the UK. The problem is that the UK (government, investors, employees and employers) got so high on the margins of services and finance in the 90s, that it has never recovered from this all-consuming addiction. Everything else simply attracts no interest comparatively, economic diversification be damned.
