Could the UK build a Y Combinator?

Report in the Torygraph:

....many are questioning whether or not it’s possible to successfully duplicate the Y Combinator model in Europe. The diverse and fragmented European market has often been considered a hurdle for many local entrepreneurs, who have more barriers to cross than they would in the large, more homogenous US market. Even Paul Graham isn’t certain as to how much of an impact this fragmentation could have on launching startups in Europe vis-à-vis the United States.

......

And then there's the question of how much the success of Y Combinator is tied to its founder. It’s impossible to imagine Y Combinator being as successful as it is without Paul Graham behind it. Still, replicating the model should not be synonymous with cloning him. While Graham is able to recognize the indispensable role that he plays, he feels that given the right mentors (and additional factors, including in particular a strong angel investor community) the model should be replicable.

There is no shortage of specialists, advisors, skilled people - even customers. But reporter Roxanna Vera answers the question herself. Talking about possibly the closest European example, Seedcamp, she notes:

Seedcamp’s team hosts a number of “mini Seedcamps” throughout the first half of the year in order to scout out the best potential participants from across the globe. The best companies receive up to €50,000 – usually for about 8 to 10 per cent of the company – and participate in a 3-month program in London with over 400 mentors. But even if Seedcamp covers a potentially larger territory than its American rivals and boasts hundreds of top-tier mentors, it funds far fewer companies per year than Y Combinator or TechStars, perhaps because angel investment doesn’t flow like rainwater on this side of the Atlantic.

She ends optimistically:

In the end, developing a Y Combinator-like model for Europe may not be as complicated as it seems and it definitely doesn’t require cloning Paul Graham with all the local talent we have here. Sure, companies will have to think beyond their national boundaries from the get-go and deal with a potentially less-developed angel investor community. But from my experience, good ideas always get funded one way or another.

Good ideas do get funded, but "Go West - to Y Combinator, young man" has been a path too often trodden by European entrepreneurs seeking that funding.

Sadly, her line about Seedcamp "it funds far fewer companies per year than Y Combinator or TechStars" says it all. More companies, better funded is what is missing.

Until that situation improves, the answer to "Could the UK build a Y Combinator?" is, sadly, no. The reasons why it is so, and how it could be improved, is a whole 'nother question. But looking at research going back 20 years, here are some starters for UK vs the USA:

- Higher costs of setting up a small business
- Higher costs of running a small business (red tape, fewer tax breaks etc)
- Lower benefits to founders (financial instruments, tax benefits etc)
- More conservative buyers

....and, leading the pack time after time - far harder to get much less funding.