Mike Lynch and Sherry Coutu boost support for aspiring UK tech scale-ups
Lynch, who sold his company to HP for $11 billion in October 2011, was announced as a board advisor to companies in the portfolio of the newly-formed "ScaleUp Group", while Coutu announced the launch of "Scaleup Institute" this week - a non-profit organisation that will to aim provide a platform to help the UK increase the proportion of companies that scale globally over the next 10 years.
John O'Connell, founder of Staffware, acquired by Tibco for $217 million in 2004, and chair of the ScaleUp Group, said: "We believe entrepreneurs need more than capital to be successful large businesses. Consequently, ScaleUp will provide a combination of services, experience and well-established relationships in the areas of management mentoring, talent finding, financial management, international expansion and related matters, as well as capital for growth.
"We will also be pragmatic about allowing founders to have a measure of liquidity sooner. This would avoid them being tempted to cash out completely by selling their business prematurely, which happens far too often in the UK. I personally benefitted from being allowed to do this and Staffware went on to expand 11 fold in eight years as a result, becoming a global champion in its field."
The challenge of converting the UK's success in creating startups to 'scale-ups' was emphasised last year in a report to the government that was spearheaded by Coutu.
Compared to the US, there are relatively few UK companies that progress to mid-size and then grow to multibillion dollar mega corporations like Google, Apple, Facebook and Microsoft.
ScaleUp Group said it wants to follow the model of Silicon Valley where cashed out entrepreneurs invest in the next generation of up and coming businesses.
Boosting the scale-up economy by just one percent over the next three years could create 238,000 new jobs and add £38 billion of value to the British economy, according to Coutu's report, which also suggested there are approximately 9,000 scale-ups in the UK, three-quarters of which are outside London.
However, many of the UK's most promising scale-up companies, such as DeepMind and TweetDeck, sell out to larger organisations before reaching their full potential.
Coutu said: "I am delighted that John O'Connell's initiative, which I very much applaud, offers a range of support addressing all of the causes of the UK's scale-up gap. I welcome his efforts with open arms and wish he and his colleagues every success."
Other technology leaders and entrepreneurs to dedicate their support to the ScaleUp Group include: Dr Steve Garnett, president of Salesforce.com EMEA who previously held leadership roles in Siebel and Oracle; Michael Tobin OBE , former CEO of Telecity; Aidan Cooney, founder of Opta Sports Data; Duane Jackson, founder of Kashflow; Stuart Clark, founder of Impendium; Paul Excell, chair of British Computer Society Entrepreneurs and former global executive at BT; Neil Kipling, founder of IDBS and Rob Wirszycz, serial mentor and investor.
The ScaleUp Group said it expects to announce the first companies that will be in its portfolio this autumn.
One company that could well find itself in the portfolio is Cambridge-based cybersecurity startup, Darktrace, which has raised several millions (with the help of Lynch) and received a number of awards, including Techworld's Entreprise Startup of the Year award.
Details on how exactly the Scale-up Institute's platform will support UK technology companies are unclear at this stage but will be added to this story should Techworld receive more information.