Stock market correction produces quality shift in high tech start-ups


A survey comparing business plans submitted over the last two quarters to early stage high-tech funding specialist clearly shows that the stock market correction in the sector resulting from high profile failures has resulted in a marked quality improvement in new st

art-ups seeking funding.

Covering the periods April-June and July-September FirstStage Capital notes that 8% of business plans now being submitted are of a high enough standard to be listed on their web site compared with 4% in the previous quarter. There has also been a marked change in the business categories covered by would-be technopreneurs, with a dramatic increase from 13% to 36% in companies offering multi-platform enabling technologies including a shift to wireless and broadband.

Notes FirstStage CEO Jason Purcell: 'Our figures, plus anecdotal information from colleagues in the venture capital industry, indicate that the growing pains in this sector are giving way to a more mature approach. We are now seeing more B2B propositions - from 30% to 40% in the two quarters we've looked at - and a decline in B2C propositions from 39% to 24%.'

Purcell sees a quantum shift in the state of the market over the last three months. He refers to the largest ever set of US venture capital figures for April-June, four UK high tech funding events in London this month and the continuing effects of the Chancellor's UK tax allowances for private investors.

'The UK is known for its innovative capabilities but has been slow to turn this into sustainable businesses. This is changing fast. The universities are much keener to commercialise research and are finding that there is better access to funding while technopreneurs are shedding their understatement and are learning how to market themselves better. We are in for a sustained period of activity in the high tech sector.'