

London: the new Silicon Valley? - kintamanimatt
http://www.independent.co.uk/news/business/analysis-and-features/london-the-new-silicon-valley-8890601.html

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langer
This type of question is most relevant to people considering which ecosystem
in which to base their company, or part of it.

Having spent 2007-2012 doing a startup in London and the past year doing a
startup in Silicon Valley, I've experienced both sides. I also had Silicon
Valley investors in the first startup and spent time here every year since
2007.

London is catching up in some areas and you have to break the question down to
make it useful. I'd look at the following areas that make Silicon Valley what
it is:

Funding

\- Not much difference in availability of investors but you'll get roughly
double the amount of capital at double the valuation at each stage in Silicon
Valley.

\- Reason for similar availability is that there is at least an order of
magnitude more investors at seed/early stages in Silicon Valley but a similar
proportion more startups.

\- At seed/early stage, Silicon Valley investors have higher expectations for
growth and London investors have higher expectations for business model
validation.

\- Silicon Valley was much further ahead 5 years ago due to fewer investors in
London and fewer startups in Silicon Valley.

\- In London the tax incentives for seed investing and VC firms started by
successful entrepreneurs (Atomico, Notion, ProFounders etc.) are changing
this.

\- In Silicon Valley, YC and its copycats are creating more high quality
startups.

\- At later stages, investors are still almost all American but they are
comfortable investing across the pond by then.

Talent

\- Proportionally more top people in Silicon Valley than in London across all
functions.

\- You'll pay 50-70% of the salary for people of an equivalent level in
Silicon Valley and the cost of living is similar to London.

\- Hiring is an order of magnitude less competitive in London than in Silicon
Valley.

Acquirers

\- Silicon Valley is dramatically better. London has no talent acquisition
market and because all the active large acquirers are in Silicon Valley, they
prefer local deals. This feeds all the way down to early-stage valuations
which need to be so low in order to tie up with the poor exit market in
London.

Ambition and role models

\- One of the biggest differences. Mentality of being best in the world is far
more ubiquitous in Silicon Valley than London.

\- This has serious implications for you as a founder as your ambition levels
are heavily influenced by the people you surround yourself with.

Accessibility of a large market

\- Most billion dollar addressable markets you can target are mainly composed
of the US market.

\- For cultural reasons on the consumer side and relationship-building reasons
in B2B, it's much easier to win the large markets when starting in Silicon
Valley.

Overall London is catching up and one $10B+ success story will accelerate
closing of the gap, but there are some structural reasons that mean there's
always likely to be gap.

I wrote a guest post discussing the growth of London a couple of years ago,
and things have continued in the same direction since:
[http://techcrunch.com/2011/01/27/the-european-startup-
ecosys...](http://techcrunch.com/2011/01/27/the-european-startup-ecosystem-
arrived-but-paul-carr-wasnt-paying-attention/)

