London Stock Exchange chief backs British start-ups

Xavier Rolet reveals details of new scheme to help UK entrepreneurs make billions, not millions

London Stock Exchange chief backs British start-ups

It’s been a fortnight now but we’re still reeling from the deal to end all deals: Facebook’s $19bn acqui-hire of mobile messaging service WhatsApp. Whilst much of the attention since has focused on the deal itself – namely how on earth Facebook can hope to see a return on its investment – we’ve taken to wondering if a British start-up will ever ‘do a WhatsApp’. It’s a question that needs asking, that’s for sure, especially if we are to become the entrepreneurial superpower we aspire to be.

Well, there were some rather encouraging sounds on the matter last night. Speaking to an audience of students and alumni of the New Entrepreneurs Foundation at the London Stock Exchange (LSE), Xavier Rolet, the LSE Group’s esteemed CEO, made clear his belief that the UK doesn’t have long to wait. Moreover, he revealed that support is on its way from the LSE for our next generation of entrepreneurs. Launching soon – after a successful pilot scheme in Italy – a new scheme called Elite will prepare start-ups for a future listing or IPO even if they are not yet anywhere near that stage.  By connecting them with the right people – investors, banks, regulators and business schools – Rolet believes the tide could soon turn in the UK’s favour.

“The core of the issue is that most of these companies just don’t know where to go,” he said. “What Elite does is work with academic institutions, usually business schools – and the very good ones that really understand innovation – we work with regulators, we work with investors, we work with banks. We create an ecosystem that these companies can join and therefore be introduced to all of these providers.”

A net product of this, Rolet hopes, is that it will instil British entrepreneurs with a level of ambition that is holding the current crop back. “Here, you make £200-300m as an entrepreneur and think ‘wow, I never thought I would even make £10m’ – but in the US, somebody thinks ‘maybe the business I am going to build will be worth £100m’,” Rolet said. “You rarely hear that ambition and to get to that level, you actually need several generations, probably three or four, of re-investment.”

Rolet pointed to Mike Lynch, of Autonomy fame, as an example of what can be achieved on these shores. He added that, with the sufficient level of support, there will be Lynchs springing up all over the shop. “We need 20, 30, 40 or 50 like him in the tech space,” added Rolet. “I think the UK is getting there. There is truly a revolution happening. And when we get there, we’ll have some of the UK Googles and Microsofts actually buying companies elsewhere. But we lose a lot of these companies to M&A. We lose a lot of companies because the level of ambition is not quite there yet.”

The audience was also treated to a glimpse into Rolet’s own entrepreneurial background. “In 2007, I founded a business with two scientist friends of mine – a biotech business,” he said.”We struggled for a year to make any money so we went to the US. Within three weeks, we had identified seed capital of $25m and signed within three months an agreement with a local university. That company is in Boston today. It is not a huge company, it’s about 150 people, but it’s going pretty fast. I am convinced today, with the same idea and the same partners, the company would be here. I am convinced we could raise the capital.” 

Adam Pescod
Adam Pescod

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