Start-up funders ‘must take a tip from the US’

Amadeus Capital Partners boss Hermann Hauser is campaigning for easier access to venture capital so that UK firms can catch up with their US rivals. The firm has £50m from contributors, which include Microsoft, Lazards and Deutsche Telekom, to provide seed capital for high-tech companies with global potential. The Cambridge-based venture capital firm, which is […]

Amadeus Capital Partners boss Hermann Hauser is campaigning for easier access to venture capital so that UK firms can catch up with their US rivals.

The firm has £50m from contributors, which include Microsoft, Lazards and Deutsche Telekom, to provide seed capital for high-tech companies with global potential.

The Cambridge-based venture capital firm, which is run on US lines, has participated in five business start-ups this year. Now it wants to attract more companies to the area.

But Amadeus chairman Hermann Hauser said: ‘The market in the UK is in its infancy. From a US perspective, most UK venture capital isn’t actually venture capital it’s private equity.’

Hauser wants to create a Silicon Fen surrounding Cambridge, to rival California’s Silicon Valley. He said the region is a booming location for high-tech companies. ‘We have reviewed more than 250 business plans since Christmas.’

Among the start-ups this year are high-speed imaging specialists Advanced Rendering Technology (ART), which received the first payout, of £500,000, from Amadeus in January. This aided the recent launch of ART’s only product, the Renderdrive, which is said to produce high-quality computer-generated images 10 times as fast as traditional methods.

Software outfit Entropic is another beneficiary, as is network solutions provider Virata.

Chancellor Gordon Brown is expected to announce a package of tax breaks for innovative smaller companies in the pre-budget announcement this autumn. Radical changes may include incentives to those wanting to leave secure jobs and start their own businesses.

The need for tax reforms featured heavily in a recent series of government productivity seminars attended by the Chancellor.

Brian Larcombe of 3i’s venture capital division also called for changes in the taxation of small companies along US lines. ‘The tax structure in the UK could be more encouraging for entrepreneurs,’ he said.