"To move a mountain, start with the smaller stones…”The success and depth of US capital markets to finance entrepreneurs and successive tech revolutions has been extraordinary – fuelling the exceptionalism of the US economy. In contrast, the UK is more risk adverse towards start-up opportunities. That’s largely cultural, a reflection of the more mature, later-stage British Economy. What will happen when the US economy is also past its top, and following the UK into maturity?It feels like a bit of a watch and wait kind of day. The streets are melting in the summer swelter – it’s simply too hot to go to London this morning. The SpaceX IPO has taken a spanking (exactly as predicted), the AI bubble and the debt financing required to make it happen looks poppy, and the market is still digesting the threat of Fed rate hikes. There are times when the best thing to do is simply stop, look and listen, and wonder about the bigger things.Thus, it was that I found myself thinking about the big film of the summer - The Odyssey – the ultimate “Journey” saga. Spoiler Alert: Wiley Odysseus, the King of sea-girt Ithaca, offends the Gods and is punished with 10-years of wandering the Mediterranean, undergoing multiple calamities, before he returns to his wife and (grown up) child, having lost his entire army and crew in the process (and fathering a couple of sons on the way, one of whom will inevitably slay his father in a case of mistaken identity years later.)Last week I was at an event hosted by Looking for Growth (“LFG”) in London, talking about how the UK could ease the funding journey for start-ups. I was there to back up the experience of two successful founders, Chloe Coleman of Vouchsafe and Ben Warner of Electric Twin, with some market context and history. They’ve both led their start-ups through successful funding rounds. (LFG is a cross-party campaign group seeking to reverse decline by promoting growth. They have the good sense to realise it’s as much a societal issue as a simple financing problem.)Today’s founders/entrepreneurs can face as terrible a journey as Odysseus to fund themselves. They have to overcome the barely coherent Cyclops of bureaucracy and regulation, the Giants of Risk Aversion, the Enchantress sweetly asking them to sell out early or a Funder who transforms your lithe startup into wallowing swine, the lotus promises of money that never materialises, the Siren song of deep pocketed US private equity, and the Scylla or Charybdis of market bubbles and crashes. Even if founders get past the first peril; the definitional seed funding – it might not get any easier on subsequent funding rounds for growth capital if the cruel and pernicious market gods decide to abandon you.You can read the Morning Porridge by subscribing on ⁠www.morningporridge.com⁠, and have it delivered fresh to your inbox every morning!

Ask this episode

“What did the council decide on item 42?” — answered with the speaker and the moment.

Transcript

Related