The planned acquisition of British software company Autonomy by US tech giant Hewlett-Packard has stirred up a lot of comment. Shadow business secretary, John Denham, said there might be a case for looking at whether certain strategic industries should be protected from foreign takeover, and criticised financial backers of technology startups who insist on a sale of the business so they can recoup their investment. Tony Burke, Unite's assistant general secretary for manufacturing, claimed the problem with merger and acquisitions is that they do not grow the economy and rarely create jobs.
Have we really come to this? Instead of celebrating a great British success, our reaction is to wring our hands and discuss legislation to make sure such success cannot happen again. Something is very wrong with this picture.
I spent more than a decade in San Francisco and New York working both for startups and for large tech companies such as Apple and Google. Two years ago I returned to the UK, where I'm now CTO of one of London's leading tech startups, Songkick. Much has changed in the UK since I left, but apparently we still have a fair way to go if we're to emulate the success of Silicon Valley.
The UK has several concentrations of startup activity. A number have sprung up in "Silicon Fen" around Cambridge University, Autonomy among them. Another hub is in east London with more than 500 startups based around Shoreditch, in an area fondly known as Silicon Roundabout. Government support for these burgeoning communities is very helpful, but what we really need is a steady flow of money and expertise to fund exciting new companies. These companies are creating thousands of new jobs and are attracting new investment from within and outside the UK.
What success looks likeAny success like Autonomy's is a huge inspiration for those who aspire to run a company. It shows that hard work, and building great products pays off. Mike Lynch, Autonomy's founder, was a penniless graduate when he founded the company in 1991 and now stands to reap the rewards of decades of success. He has a long history of investing in British startups. He and many others now at Autonomy will be ploughing their money and their know-how back into the UK startup scene, creating yet more jobs and, hopefully, more successful entrepreneurs.
So let's look at Autonomy's acquisition a different way. This is not a threat to Britain's future, its a vital component of our future. If we want large, successful technology companies in the UK we first need lots of smaller, successful companies. Autonomy's acquisition will pump vast sums into both the UK government's coffers and into the hands of investors.
Successful startups reach an "exit". This usually comes in the form of an initial public offering
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