"We're fine" Glasshouse entrepreneurs tell VCs

British tech entrepreneurs are optimistic about the level of investment available to them, an audience discovered at an event held in London last night.

‘Show me the money’, organised by tech events company The Glasshouse, featured a panel made up of Bebo founder Michael Birch, investment banker Andreas Lazar and venture capitalist Nic Brisbourne.

Brisbourne attempted to shore up entrepreneurs’ optimism. “VC investment during the first quarter of this year was £114m,” he said. “It’s down, but it hasn’t stopped.”

In a show of hands, the audience, made up of tech entrepreneurs and VCs, indicated it has been easier to raise money during the recession than it was before the downturn started.
“That tells you something about the optimism of entrepreneurs,” said Birch.

The results of the impromptu survey go against anecdotal findings by tech journalist Paul Carr, who in a column two weeks ago called ‘time of death’ for London’s tech industry.

“Since I’ve been back in town, I’ve met no fewer than three once-successful entrepreneurs who admit they’re running out of money at a sickening rate with no prospect of raising more,” he wrote.

“I’ve seen two businesses close and one having its funding yanked suddenly because, basically, it was going nowhere fast. Everyone I speak to has the same story: investors aren’t investing, founders are being forced out – or leaving of their own accord – and no one seems to have the first idea of what to do about it.”

Silicon valley-based journalist Sarah Lacy backed up Carr in a report for technology blog TechCrunch last week: “Out of 39 firms that were active investors in British start-ups over the last five years, only 13 venture firms have £5m or more left in their coffers to invest,” she revealed.

Call us pessimistic, but Smarta thinks Lacy's figures probably hold more sway: in a room where the guy sitting next to you might become your next investor, we doubt entrepreneurs would want to appear desperate. That said, we can’t fault their logic.

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