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Can Britain create the next Facebook?

Andy Yates

Twitter's founder, Jack Dorsey, recently lambasted Brits for lacking the hunger and drive of Silicon Valley's entrepreneurs. David Cameron lamented the fact that the founders of Google have said they could never have started their company in Britain.

And, despite the Government’s attempts to turn London’s East End from gritty to glittering by pumping money into their ‘Tech City’ concept, we are still sadly lacking a British equivalent of Mark Zuckerberg or Larry Page to lead the entrepreneurial charge.

So can Britain ever create the next Facebook?

It’s nothing new that Americans bash the Brits when it comes to entrepreneurial flair and ability and, I have to admit, in the cold light of day you can see why.

Yes, James Dyson is hoovering up huge sales and computer chip maker ARM is bringing in an army of clients – both recent world-beating, high profile flag bearers for British business – but we’re not blessed with a huge number of role models or success stories. Meanwhile, Silicon Valley and San Francisco remain the magnets that draw many of Britain’s best and brightest.

But, before we hold up our hands in despair and condemn our bright new talent to legal or accountancy careers – or, god forbid, banking – I think there are some rays of sunshine that point to a brighter entrepreneurial future.

Give us a break

Angel investors, private individuals who back early-stage businesses, are a vital part of any start-up scene. Research has shown that, if you take into account US and UK population size differences, there is more than three-and-a-half times as much business angel investment per capita in the US. The argument is that we are risk averse rather than angelic.

This is, however, changing rapidly. The Enterprise Investment Scheme – and its new and even more attractive younger sibling the Seed Enterprise Investment Scheme – offer angel investors risk-busting tax breaks. The result – more British money flowing to talented entrepreneurs and fewer need to cross the pond.

The bandwagon is rolling

Against the backdrop of a recession, government initiatives such as TechCity and a start-up loan scheme for young entrepreneurs, start-up incubators springing up around the country, slumbering universities finally waking up to the entrepreneurial and innovative talent pool and, yes, love them or hate them, the abundance of entrepreneurial TV shows have created an entrepreneurial spirit that is gaining momentum.

The cynical among you may point out that it seems like everyone is jumping on a start-up bandwagon, but what is the US West Coast if not an enduring bandwagon that so many entrepreneurs have hitched a ride on?

And let me be very clear. I don’t subscribe to the stuff and nonsense that there is something mystical or superior about your average US entrepreneur. I just think that, in the past, Britain has lost so much of its talent to less risky and less entrepreneurial big companies or the financial services industry.

Overall, the US does appear to have a higher acceptance and appetite for risk. But more and more talented young Britons are showing entrepreneurial hunger.

Golden age?

Nothing changes overnight. It will take time to create a sustained and demonstrable entrepreneurial track record and production line, one that prompts nervous funders to take a leap of faith.

The emergence of serial entrepreneurs, experienced mentors and valuable networks of people who have seen it, done it and can help navigate the bumpy road of business, is happening but will take time to reach critical mass.

There are also some potential roadblocks. The British venture capital industry is relatively risk averse – partly because they don’t have big enough funds to make too many mistakes. So Britain needs to mind the gap – because if funding is tricky to get, those small blossoming companies will continue to head to richer soil overseas.

But, let's not fall into that other very British habit of doing ourselves down. Rather than having to rely on the Golden Gate, this could be the golden age of the British entrepreneur.

Give it a few years and the new face of entrepreneurialism can be British.

Andy Yates is an experienced entrepreneur, business mentor, advisor and angel investor and helps a portfolio of exciting growth businesses reach their potential. Follow Andy on Twitter: @smallbizhelp

In future columns Andy will explore how to become a successful entrepreneur and the big issues affecting small businesses