Earlier exits would let business angels invest more money

BUSINESS angels and company founders need to be given earlier exits from their investments in order to pump more money into technology firms, according to a senior industry figure.

Chris van der Kuyl, chief executive of Dundee-based IT outfit Brightsolid and a survivor of the dot.com boom, will tell a conference in Edinburgh today that British venture capitalists (VCs) need to learn lessons from their American cousins.

He said VC funds investing in technology companies in Silicon Valley tended to buy out the firms’ founders and business angels who had invested in businesses, whereas UK investors want to keep them on board.

Van der Kuyl said: “If you look at Silicon Valley and what they do well, private equity investors will pass their investments on quite quickly – I’m not saying they make money overnight but there’s not the same tendency to try to tie people into a company until everybody makes money.”

He pointed to Facebook and Google, where early-staged investors were given the chance to cash in their stakes.

Van der Kuyl will discuss the “eco-system” for IT companies north of the Border at trade body ScotlandIS’s annual global forum at Edinburgh’s Prestonfield house hotel.

Other speakers include: industry analyst David Mitchell; Scott Gallacher, director of the Aston Group, a customer consultancy firm that has worked with BSkyB, Facebook and American Express; and Jim Norton, President of trade body the British Computer Society.

Polly Purvis, executive director of ScotlandIS, said: “This year’s speakers bring a wealth of knowledge to the global forum, allowing Scottish businesses a unique insight into key industry trends. Businesses can use this information to get ahead of the curve, and importantly, to compete internationally.”

The Scottish IT sector, for the first time since 2008, has more jobs advertised than people to fill them.