Artificial Intelligence & Machine Learning , Geo Focus: The United Kingdom , Geo-Specific

AI Startup Execs Say It Should Be Easier to Tap UK Funding

'You Wonder, Should I Just Spend It on a Place to Stay in America for a Week'
AI Startup Execs Say It Should Be Easier to Tap UK Funding
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Revisions to U.K. government research funding guidelines and their complex application pose a challenge to early-stage tech companies, experts on Tuesday told a parliamentary committee inquiry.

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Tax breaks intended to boost innovation and help businesses overcome challenges allow businesses to claim up to 20% of research and development. Businesses can also apply for a grant of up to 2 million pounds under the Innovate UK program.

Revisions to tax relief criteria hinder growth said technology experts who testified before the Communications and Digital Committee.

"We have definitely had issues," said Peadar Coyle, founder of AudioStack. "Given the changes made to the scheme various times in the last couple of years, from a cash-flow management point, it has been difficult."

Victor Riparbelli, CEO of AI video-generation company Synthesia, acknowledged the Innovate UK grant has played a critical role in helping businesses stay afloat in the early stage until they secure larger investments.

"The role that the Innovate fund played is that we could get funds when no one else could and that is exactly what these grants need to focus on. It should be focused on companies that are starting as the capital markets won't necessarily do that," he said.

But the lengthy application process to apply for the grants poses a challenge to early-stage businesses looking for timely funding, said Simon Barratt CEO of Cooperative Innovations, a gaming company.

"In early stages, when it is really difficult, the amount of time you spend doing it, you wonder, 'Should I just spend it on a place to stay in America for a week to raise funds,'" Barratt said.

The difficulty in raising early-stage funds is largely tied to British venture capitals being more risk-averse as opposed to their American counterparts, said Riparbelli.

"If you contrast the U.K. early-stage funding ecosystem with that in Silicon Valley, there is the mentality in the U.K. of being more risk-averse. In the U.S., it is more about how big can you get," Riparbelli added.


About the Author

Akshaya Asokan

Akshaya Asokan

Senior Correspondent, ISMG

Asokan is a U.K.-based senior correspondent for Information Security Media Group's global news desk. She previously worked with IDG and other publications, reporting on developments in technology, minority rights and education.




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