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Looks like the UK is joining other countries in trying to boost growth by wooing startups.
Prime Minister David Cameron just announced intentions to create an "entrepreneur visa", aimed at luring founders of startups with high-growth potential and "serious" financial backing to settle in the UK, according to Bloomberg Businessweek. "If you've got an idea, if you want to create jobs, and if you have the ambition to build a world beating company here in the UK, we want you," Cameron is quoted as saying. "With our new entrepreneur visa we want the whole world to know that Britain wants to become the home of enterprise and the land of opportunity." More details about the plan will be disclosed next year.
It’s a trend that many may have noticed on some level, but few have actually pointed out. Fewer and fewer start-ups are aiming for an IPO. More and more the goal is to sell out to someone larger, who can move the company to the next level or bolt it onto their existing infrastructure.
However, venture capital available to start-ups and later-stage developments is continuing to grow at a rapid pace. Some of the biggest VC deals in the second quarter this year were in the range of hundreds of millions of dollars.
Venture capital companies have doled out cash to a plethora of start-ups in the past couple of weeks, even as they raised much less in new funding this quarter. Unless investors start opening their wallets and adding to VC coffers, this bounty cannot continue for long.
Companies in the technology and pharmaceuticals industries were the recipients of big investments from the VC community over the last two weeks, with numerous start-ups receiving funding.
An often-repeated solution to the economy's woes is to boost high-growth entrepreneurship. That's one reason some politicians have been pushing a new startup-visa bill making it easier for foreign entrepreneurial wannabes to set up shop in the US.
Now, however, it looks like other countries might be trying to steal the US's thunder. Chile, for example is launching a first-of-its-kind program aimed at encouraging entrepreneurs with ideas for high-growth businesses to base their operations in that country. Called Start-Up Chile , the program will award up to $40,000 and a one-year resident visa to 25 entrepreneurs "with innovative and high-growth business plans that have the potential of bringing disruptive technology into its industry or the global market."
Google has proved itself to be a major US corporation, but that isn't always a good thing, at least among tech firms. In fact, Google in some ways has reason to regret the loss of its status as a start-up.
The company said in April its first-quarter results jumped 23 percent and the company posted good metrics, with a 7 percent increase in average cost-per-clicks, which fuels sales. But it wasn't enough for many investors. Now the Internet giant is trying to copy Facebook, which surpasses Google in many ways.
Many startups, especially ones with high-growth potential, depend on receiving at least some of their funding from angel investors. Now, a new report sheds light on what type of entrepreneurial ventures got angel money last year.
Specifically, the report from the Center for Venture Research at the University of New Hampshire found that financing for really early-stage companies declined and a larger percentage went to more-established ventures. That is, 35 percent of investments in 2009 were in seed stage companies, a decrease of 10 percent from 2008. And new, or so-called first sequence investments, were 47 percent of all angel activity, a significant decline over the last two years.