Autonomy Founder Mike Lynch
Autonomy founder Mike Lynch and angel investor Sherry Coutu are among a host of entrepreneurs and technology leaders pledging their support to the increasing number of UK companies looking to overcome the barriers associated with scaling up.
Lynch, who sold his company to HP for $11 billion in October 2011, was announced as a board advisor to companies in the portfolio of the newly-formed "ScaleUp Group", while Coutu announced the launch of "Scaleup Institute" this week - a non-profit organisation that aims to provide a platform to help the UK increase the proportion of companies that scale globally over the next 10 years.
John O'Connell, founder of Staffware, acquired by Tibco for $217 million in 2004, and chair of the ScaleUp Group, said: "We believe entrepreneurs need more than capital to be successful large businesses. Consequently, ScaleUp will provide a combination of services, experience and well-established relationships in the areas of management mentoring, talent finding, financial management, international expansion and related matters, as well as capital for growth.
"We will also be pragmatic about allowing founders to have a measure of liquidity sooner. This would avoid them being tempted to cash out completely by selling their business prematurely, which happens far too often in the UK. I personally benefitted from being allowed to do this and Staffware went on to expand 11 fold in eight years as a result, becoming a global champion in its field."
The challenge of converting the UK's success in creating startups to 'scale-ups' was emphasised last year in a report to the government that was spearheaded by Coutu.
Compared to the US, there are relatively few UK companies that progress to mid-size and then grow to multibillion dollar mega corporations like Google, Apple, Facebook and Microsoft.
ScaleUp Group said it wants to follow the model of Silicon Valley where cashed out entrepreneurs invest in the next generation of up and coming businesses.
Boosting the scale-up economy by just one percent over the next three years could create 238,000 new jobs and add £38 billion of value to the British economy, according to Coutu's report, which also suggested there are approximately 9,000 scale-ups in the UK, three-quarters of which are outside London.
However, many of the UK's most promising scale-up companies, such as DeepMind and TweetDeck, sell out to larger organisations before reaching their full potential.
Coutu said: "I am delighted that John O'Connell's initiative, which I very much applaud, offers a range of support addressing all of the causes of the UK's scale-up gap. I welcome his efforts with open arms and wish he and his colleagues every success."
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