How to Fix the UK Tech Ecosystem

Yeah. So I joined a company called Acorn, which is a computer company based in Cambridge back in 1997. It owned this thing called ARM, 40% of this company called ARM. So I helped get ARM public and then figured out what to do with Acorn, set up a chip company outside out of Acorn, which got venture funded for, raised $30,000,000 of capital, and sold that company to Broadcom for about 640,000,000 about a year and a half later, this amazing deal. Did a second deal in the chip space, which I built a company and sold that to Nvidia, and did a third deal, which was in the AI space.

So I’ve I’ve serially founded and ran and then sold companies, raised about $330,000,000 of venture capital, and sold them for about 1,300,000,000. So so that’s kind of what I’ve doing for the last, like, twenty five years is doing that. Well,

I’m I’m ready to follow-up to learn from Stan. That’s the reason I’m here. Tom, what about you, dude? So, look, yeah, I I won’t give a long bio. Just a really quick one. So I helped set up GV in Europe the year you started 20 VC in 2014. We’ve now done over 50 companies. We’ve invested in 12 countries. We just broke through $500,000,000 in The UK alone with our investment in isomorphic last week and passionate about making the European ecosystem as vibrant as possible. So keen to discuss that.

I think we got a bit of a talent problem in The UK, so I I don’t think we’re the magnet that we were or that we could be. I think it’s quite interesting, actually, if you look at where talent is being born in, like, AI across Europe and you look at where it lands in terms of where it stays, actually, The UK is minting about the same talent it’s keeping, but that is a net net, actually. So we’re losing talent to The US, and we’re actually recovering some of that from other parts of Europe.

So net net, we’re about the same, actually, but we could be 10 x better. So I think that’s the key point is that, you know, we ought to be making The UK the magnet, the place to set up a company in Europe, actually. And all that talent that is leaving The UK and leaving other parts of Europe to go to The States, we we ought to be capturing it and building companies here.

From my perspective so I completely agree. I think we’re rate limited. I think it’s the biggest rate limiter, actually, is supply of founders and supply of operators. The great thing about founders is they’ll smash through walls to build stuff. So you have Melanie at Canva built built that business in Perth, Australia. No right to build a $50,000,000,000 business in Perth, but it can be done. If you gave me the choice to have more, Nicholas Zenzstrom’s or Demis Hassabis’s or Stan’s, I would absolutely take that. I think, you know, it could only be a good thing.

The biggest challenge is for every one good founder, you need five or 10 world class operators, and I think that’s the biggest gap for us. That’s the rate limiter. To Stan’s point, if I just look at engineering talent, we’ve got three of the best 10 universities on the planet here. If you look at Oxford, Cambridge, Imperial, they’re only graduating between them about 500 computer scientists or roboticists per year. We should five x that number. There’s a huge demand. I don’t see why we aren’t increasing it.

And then to Stan’s point, we can do a better job of actually making it appealing to come into The UK for the most entrepreneurial talent and maybe retain the talent that does study here and becomes expert? Two big exporters

of talent in the world, I think. One is China. One is India. And the majority of the graduates there are decided to go and work in The States, frankly. So even if they come to university here, they’re typically not staying actually. They they come here actually with pretty much no intent of staying. And in fact, we’re not really welcoming welcoming them either, really. So, you know, so if you if you graduate in an engineering or computer science or something here, you know, you should have stapled to your graduation certificate a tier two visa and rights to stay and a right to bring your family across as well.

And just let make The UK the place that people want to come actually is what we should be doing.

I love that. Can I build on that? I I think you become what you’ll measure, and the government are measuring a lot of kind of lagging indicators. I was inspired we invested in Stripe in 2017, and one of the things that struck me is the Collison brothers were tracking a KPI. They were tracking the number of series a companies that transact online that they actually you know, that are using Stripe, and the number was phenomenal. It was, like, high eighties percent. Taking Stan’s idea, our government should be actually looking and seeing at the people that are graduating, what is the percentage that are choosing to stay.

That is the leading indicator. Like, great founders focus on leading indicators, not lagging. You mentioned that attaching

I I think the second big factor is money, actually, which we’re I’m sure we’re gonna go and talk about in a second, actually. But money is There’s no structure to this. Yeah. I think money is the great attractor of talent as well. So, yeah, part the reason that people will come to The UK, come to London or the Golden Triangle is the fact that they can get funded here. They cannot just get funded pre seed and seed, but series a, series b, series c growth phase as well, and in fact, keep the company here.

The kind of constraints that come from lack of capital, I think, is also a factor. So so the model in The UK has really been, let let’s build early stage companies. Let’s get them to a certain point, and then let’s flip them to America. And I think a lot of founders might be thinking, why don’t I just skip that first stage? And why don’t I just jump on a plane and form the company in The US, actually?

Well, I think you just need to look at the numbers. The numbers, say that I think in last year yeah. Because the model, I think, to copy is The US. I mean yeah. So the The US is is just so obviously successful in technology. $20,000,000,000,000 of value created in the last fifty years in building decacorns in in The US. The UK has created two, about a 170,000,000,000 of value in The UK. So so it’s like two orders of magnitude off for The US. So The US, I think, is a model to copy.

And the think if you look at how much venture capital was raised by US VCs last year, it was about 76,000,000,000 raised in The US. Pro rata to population, The UK should be 15,400,000,000. The UK funds raised 3,700,000,000 last year, so we’re short about 12,000,000,000 in venture capital.

situation here. So, you know, traditionally, the way to think about this is that, you know, you create this momentum of building successful companies. The idea is that capital flows to places. It gets a return. Therefore, you you create a track record of building companies here, and capital will flow to The UK, and that’s the causality. The causality actually is the other way around. And the causality is that if we put capital in place here, great companies will rise to the occasion, and supply of companies will come.

And the the reason I say that is that there’s a country you can look at where this is true, and that country is China. And so twenty years ago, China has got pretty much nothing really in technology, and and the Chinese studied The US model, put huge amounts of capital in place. And now China is clear global number two in terms of technology. You look at you look at the amount that’s invested in AI, for instance. I mean, there’s only two countries really investing in AI, The US and China, and the European investments are diddly squat.

You almost you almost can’t see them that that small. And, yeah, net result being we got a very successful Chinese tech sector. So I I I actually think that, you know, by the lack of capital crimps the ambition of companies, and therefore, the best founders go to The States and that we we end up underachieving, really.

I think that’s fair. I would just maybe make a caveat that I think the goal should be that the best capital gets concentrated in the best companies. Like, China’s an amazing example. You get concentrations of talent and then concentrations of funding taken to an extreme there. I think one of the data points that makes this so difficult is none of us, I would think, think that all companies should get funding. Mhmm. The real challenge is if you ask any founder, and by definition at seed stage, maybe the majority shouldn’t get funding.

Mhmm. When they don’t receive the funding, they think it’s a funding gap. So I don’t think what we should be doing is necessarily just sort of evenly distributing capital across the whole market. I actually think that’s damaging for talent concentration as well. Instead, we should have sophisticated people that say, these are the companies that can win. These are the companies that can actually absorb more capital because the founders are great. They’re not gonna be overcapitalized. They’ll then bring in the best people and maybe they can just be more ambitious.

Yeah. I’ve got a good example of this, actually. There’s a a company I’ve invested in called Wordware. It’s a good name check for them. But there’s two guys studied computer science in Cambridge. Could have set up a company here. Could have raised probably 5,000,000 on a 20 pre. Could have built a really interesting it’s it’s basically, a set of tools for LLM prompt engineering, but they went to San Francisco instead. They ended up raising 30 on a 220 post. This is Philip Cursor. This is Philip.

Yeah. Yeah. So those investors are expecting them to build a business worth 2 to 3,000,000,000. Yeah. So 10 x. That stratospheric raising of expectations is part of The US playbook. I

Yeah. Okay. Yeah. So even even better. But the fact is they’ve got the capital to do it really as well. So so this cranking up of expectations and the provision of capital behind founders with energy and enthusiasm, I think, does work. I mean, it’s part of The US playbook. And I completely agree, Tom, that, yeah, it’s concentration that really matters, really. And the ability to put a large amount of money at the right point behind founders that have the energy and intellect and the pivotability and the coachability, I think, is absolutely critical, really.

And it’s the bit that is sort of missing, I think, in The UK and in Europe

I think that’s certainly true. But but my solution for that would be let’s increase the amount of capital here, and the best founders will seek out the best VCs. The best VCs will generate outsized returns, and they’ll be able to raise the next round of the next capital, basically. So you will gradually, hopefully quickly, ratchet up the performance essentially of venture in Europe, actually.

The thing that has scared me historically when people have talked about, for example, government investing in startups is I think it’s an incredibly difficult thing to do. I think VCs take I don’t know if I’m any good at it still because the feedback loop is probably a decade. Exactly. It’s like the worst learning loop ever. And so the important thing is to make sure that if there is more capital in the system, it’s deployed by the experts Correct. And they can sort of really see that compound conflict.

Agree. It’s it’d be absolute disaster for government to be making direct investments in companies, I think, because there’s there’s no way they can do it, I think. Yeah. Six years

a degree. Couple of quick reactions. Firstly, I don’t think it needs to just be to players in The UK. It can be global funds. I think you have some of the best. And the second thing is the best funds have proven themselves for multiple vintages now. They’re oversubscribed, but I would hope that The UK UK PLC could get into those funds. But there’s no way if they could add value.

That’s the question.

Yeah. I I would say that there’s firstly, no large fund of funds has ever lost money. From a investment perspective, government ought to be willing to take a much bigger risk on fund of funds investments here in The UK. I think BBB puts something like $424,000,000 a year into fund of funds investments, which is a drop in the ocean compared to the 15,400,000,000 that we ought to be investing. So so, yeah, that number needs to be, like, 10 x in my view. And then secondly, I think I think there is a venture talent pool that can be energized.

I think below partner level in a lot of these firms, there are a bunch of people who are principal level, whoever, who could be interested and willing to run a new fund and would do a bloody good job at it, actually. And I also think that we’re at a time when US partners would consider coming to Europe if the capital was available. If we because here, you know, there is there is talent in Europe. Valuations are lower.

If you could put the money in place, then I think, you know, not only would we have some homegrown talent we could release from venture firms, but I think we could also imagine, you know, some of the, you know, leading partners in US firms coming to London or or UK to to basically get this economy really moving, actually.

I think just to quick You agree. Thought on no. No. I so if I look at where we sit today, some of the best deals are overpriced. I think it’s often because they’re the ones with the traction, and they’re therefore somewhat derisked. And I think there’s two things that make this a really difficult thing we to answer. We talked about lagging indicators. The first is we’re basically trading against or we’re working against sources of capital that were raised in the past. Like, these are not brand new funds often, and often they were raised in zerp.

The cost of capital has gone through the roof, like, given the current interest rate environment. I think that’s gonna get worse, if anything. The fact that a lot of these funds are giving out so many stock grants, you basically need to hit 20% IRR to break even. These numbers are really high, so that’s the first thing. I actually think there’s probably gonna be less money in the market for venture in two years than there is today. It’s kind of a question for us. And then the second thing is classic machine learning.

I think we’re overfitting to history. I don’t think we know what the biggest companies look like going forward. And so it’s very difficult for me to say that actually the sort of returns profile that funds got from investments ten years ago are they gonna be the ones they looked like before? My belief is that AI is creating a real power law far more than we’ve ever seen before. And so the job to be done is gonna be be in those handful of global champions. If you look at Israel as an interesting example for us at the moment, amazing story recently, the Wizz acquisition, 32,000,000,000, that’s like 7% of Israel’s GDP.

A lot of that is actually flowing back to Israel, and it will create this multiplier effect. That business was basically built in five years. That is nuts. It was assembled without actually a clear sort of problem identified. They just got a world class team, and they really well capitalized the business on day one. I think the businesses we wanna build look more like Wizz and so concentrate capital into the best founders. Can that be done from The UK or Europe? Hell yes. What we do often at the moment is we say be close to your customer.

We say go to The US because the market size is roughly an order of magnitude bigger than it is in The UK. We’re not saying give up The US market. Absolutely go to the market, but build a global business on day one. Yeah.

I think that’s right. Yeah. I I think it’s almost pointless building a sort of number three or number four in the marketplace today. So if if we’re gonna undercapitalized businesses and build businesses at number three or number four, it is not what we need because those businesses have got no choice but to be sold to US companies. We’re never gonna create companies here that stand up on their own two feet and generate the jobs growth and the diffusion of wealth that the country desperately needs, really.

So so I think, yeah, we’ve got to concentrate on companies that could be global number one or global number two, which does require big checks to be written into those companies

at the right point. Can I give another example of this where I think actually because we asked in a way, we’ve got a problem that we’re subscale in the way we’ve described it at the moment? I agree with that. The other place we could sort of that I think our relative size hurts us is, you know, the subscale pension funds, for example. You’ve got 90 local pension funds. Actually, a policy that I was really excited about the the chancellor, I think, mentioned last year is this idea that they should be aggregated so that they can have a world class investment office so they can do something like Yale.

Like, when I do LP calls for emerging talent Thanks, dude. You’re very welcome. Tom had to do, like, 10. Yeah. I think it was more than Literally. Yeah. I just told you about the 10. No. I did do a few. And the thing that’s stunning about The US firms and then the sec the really, I think, more sophisticated ones here, like Wellcome Trust, just phenomenal investors, is they understand the power law. They understand they gotta build relationships for the long term, and they can actually have world class analysts inside those firms.

And you can’t expect a tiny fund to do that. So this idea that we might aggregate 90 local pension funds in The UK to enable them to think more like Yale rather than just replicating the asset split, I’d be really excited about.

Well, I I think you if you think of it as a stack from, like, semiconductors and hardware up to sort of applications layer, then, I think it’s easier for Europe to think about building at the bottom of the stack or at the top of the stack, actually. I think it’s quite hard for Europe to build in the middle of the stack. So I think AI application companies that are solving a particular problem, particularly if there’s a sort of defensive moat that exists in Europe, obviously a good place to sort of start.

And and then I think at the bottom of the stack, I think something that’s attached to the metal, so semiconductors that are solving a particular problem happen to be somewhere where we have the expertise to do that, and it happens to be a b to b sale where we get paid for the value of the architecture that we put down and the utility it delivers. It’s easier to think top and bottom of the stack as places that we can build those companies, actually. So it’s not necessarily where we’re focused on, but it is kinda where we should be focused.

Whereas I think if you’re building some middleware layer or some tools layer, I think it’s a little bit easier to imagine doing that in The States, I think, than doing that here.

I think the interesting thing with Stan’s argument, I I really agree with it. I like the idea of focus and specialization. One of the things that concerns me is just this idea that we can be experts at everything. Instead, I think we have to say, actually, let’s have understand our unfair advantages. If, for example, and I agree with it, the bottom of the stack, the infrastructure layer is somewhere we can be world class, we’ve certainly got the technical talent, then I think we have to build the whole ecosystem and structure it and say, actually, in this one location, we’re gonna be effective.

We then have to do second order things. Like, we have probably the highest electricity or energy costs in the whole of the Western world in The UK. That just does not enable you to do a great job of this. It doesn’t even enable you to do a great job of training foundation models. Like if the blended cost of training a large language model is 20% energy, we’re already kind of losing. So the important thing is to say, actually, what are we gonna be world class at, and where are we gonna be?

And we have some advantages. Like, one of the things that’s interesting, we’ve done it in this conversation, it’s easier to sort of aggregate everything at the national or continental level. In truth, we should be honest that London is incredibly different, for example, from the rest of The UK. Building a startup in Europe is doing it on ultra hard mode. We’ve talked about it before. But, actually, if you do it in London, it’s slightly easier mode at the moment because of the talent, because it’s where the investors are.

So we have to start to just acknowledge that, lean into it, and actually have this pockets of specialization, I think.

Yeah. I mean, yeah, I I wasn’t so much thinking, by the way, of of building lots and lots of data centers on a on a expensive I the IP. I understand. Would be Agree. Nuts right now, obviously. But I was more thinking about the chip design layer, so not even chip fabrication, but, you know, chip design IP. Which is where 75% of the value in the semiconductor space is is what Nvidia is, what Qualcomm is, what Broadcom is, all basically semiconductor design companies that basically sell chips, that they get them fabbed by TSMC or whatever.

That’s the model that we ought to be playing in. We have something like 2% of that global market in Europe. It’s insane, honestly. So, yeah, so in the fabless space. So we must be building successful fabless companies, I think. And Europe has got the design in fact, The UK, in in Bristol, as it turns out, happens to have this full custom microprocessor design capability that stems twenty, thirty years ago from the creation of INMOS, which is kind of unique, actually.

There’s there’s only probably two places in Europe you could do that, and Bristol happens to be one of I think it’s plausible to build companies in this space that are global winners, and yet you’re right that we do need to put much larger checks into those companies. But that’s the reason why we need more venture money here, is to better write those checks.

4,000,000,000. Yeah. Firstly, I think I think the money Europe has a lot of money, actually, so I guess the first thing to say. So Europe’s got a lot of money in, obviously, in pensions. We talk a lot about pensions. So it’s got a lot of money in family, family offices that are sort of locked up all over the place, actually. So Europe actually is not capital short. It’s just not investing in this particular asset class. So the job, I think, of BBB is to create that asset class at speed and to play an enabling role in doing that, essentially.

So my suggestion would be that we get the government to increase the amount that British business bank and we may need to uprate the quality and talent in BBB to be able to do this. But, yeah, BBB puts, 4,000,000,000 a year in and would would require, like, a fifty fifty funding ratio. So the GPs have to raise matching money. Otherwise, yeah, BBB doesn’t participate, but it can be 50%. So so if I wanna create a billion dollar fund, I know I’m gonna get 500,000,000 from BBB, and I’ve gotta raise the other 500,000,000 essentially.

So raising the funding ratio to fifty fifty would be a good start. And then I think we’ve gotta be creative, which I I guess is another call to action for BBB about how we split the fees and split the carry between the different LPs in the fund. So at the moment, there’s a lot of hand wringing and anguish about the fact pension funds won’t pay a 2% fee. And I would say, fine. Let’s do it on a half percent fee then. But instead, you know, the the carrier that the partners have is higher, and quid pro quo is the BBB might pay a 3% fee, and the carrier for the partners is lower.

But net net, we’re still at two plus 20. So so let’s be creative about how we do it, and let’s flex to you know, the job is to bring the capital in and make it mesh with public money to mint these large funds that can write these big checks that allow us to play seriously in some of these sectors that are basically capital intensive and winner takes all. That’s kind of what we need do, I think, to sort of pull ourselves out of the the nosedive that the country is currently in, I think.

Where would we get that money from? The government has created its own fiscal freedom to do this, actually. So the the government, is able to treat any investment in BBB money as being not borrowing, not public spending. So it it forms part of public sector net worth, and it doesn’t count as current year spending because because the argument is, and I think this is correct, that, yeah, what we’re doing is building up a financial asset on the government’s balance sheet. So so if you did this consistently over, like, ten years, either 40,000,000,000 on the government’s balance sheet of, fund to fund investments in venture, the the worst performing fund to funds generate maybe 6% IRR.

The best performing generate mid twenties. So yeah. So, yeah, so always higher than guilt yields. And and and I would say you could go even further. You could say, like, in ten years’ time, we’ve got 40,000,000,000 on the public balance sheet. Why don’t we make an offer to the public? Why don’t we offer it to individual pension plans to invest in this stock? So, yeah, so we could we could create, a Thatcher moment, really, where you privatize that, you know, people in their twenties and thirties should be owning assets in the future of the country, actually.

They should be owning those assets, and it should be it should be recycled into making the country more successful competitively. And technology is the place to put it, obviously. So that’s kind of what we ought to be doing.

I do see it as investing. We’re talking about infrastructure projects. We look at Germany’s trillion dollars. I think it’s incredibly important. I like the idea that we have a kind of intellectual infrastructure investment that you’re describing. The big thing to design around, and it sounds like you’ve started to think that through, is the adverse selection bias. My biggest fear, because there’s such a power law of returns, what you don’t wanna do is just end up with the worst investors making the worst investments. And so placing an emphasis on those maybe first you know, supporting perhaps first time funds, solo GPs initially to get going could make sense, but it’s incredibly important for The UK taxpayer to get into the best funds.

Yep. And so I do believe there are there’s got to be incentives that UK PLC can provide so that the best funds that Harry describes actually are excited to take money from that BBB Fund of Funds.

But, Tom, do you think do you think if we put such a system in place and we made it plausible or feasible for GPs to go raise, like, 500,000,000 or a billion dollar fund here, do you think we’d get partners in US firms with a strong track record to consider coming to London to basically raise a fund here because it can be done here, and, yeah, they could build it. And and you could also imagine there’d have to be some conditions on those funds if if BBB is gonna fund them, like, half of the money or whatever is gonna be invested in The UK.

But you you could imagine somebody trying to set up a start up in, say, Stuttgart or something. The call could be, well, we’ll fund it, but you gotta move to London Yeah. And we’ll fund it. So

I think the answer is yes, but, again, it sort of speaks to a specialization. The question for me would be, in what areas would you get the best people saying it’s worth me doing that? And it’s not gonna be it wouldn’t be necessarily in digital health where The UK has one major customer, none else. It would be in places like fintech where we have a good track record because we’re in a great position sort of globally at this point. That’s why we’ve done disproportionate number of fintech investments.

Defense, I think, is an interesting area at the moment where, you know, we’re gonna have to look more to 3% of GDP spend in defense. So there’ll be areas where I think actually very smart, rational people would make that call. But there’s others where it would be a harder stretch, like consumer, where it doesn’t really make sense to, like, be outside one of the biggest markets.

So disclaimer, I’m a reservist, as you know, so this is something I’m really passionate about. And I’d say there’s three things happening at the moment that make it significantly more interesting than it has been in the past. The first is very smart people are interested in doing it because they think it’s right. There are people like our peers that are interested in doing defense companies because for the first time, they actually think there’s existential threat. Second thing is actually while you do say, you’re right. There’s maybe a single buyer.

It’s it’s more complicated that in The UK. We have multiple services. We have multiple regimens within each. Each is a potential customer, and they’re being forced to innovate at the moment for the final reason, which is to some extent, we are on the geopolitically, we are close to a war zone at the moment, and we have a point of view in that war. We occasionally have some of our armed, servicemen at risk. I think those three things together mean that, actually when you look at Andriel in The US and they had a recent round $8,000,000,000 oversubscribed, it shows you there’s an appetite of people and capital to go in there.

I think The UK has interesting talent. The UK is playing its part in Ukraine at the moment. It’s an amazing place to test new technologies, and I think it’s an opportunity to build next generation primes here. So as a category, I think defense, in Europe is an important one at the moment.

And there’s probably, what, 2 to 3,000,000,000,000 can be spent over the next five to eight years in Europe in in defense, actually, and at all layers, not just final product, but, like, components, and there’s lots of layers here, I think.

Agreed. Yeah. And then I do think it’s that will forge some dual use technologies. Now if you look out there at the sort of the biggest defense companies, you could argue that DJI is one of them at the moment. And actually, I think you’ll see the same thing in reverse. Some of the technologies, whether it be cyber or maybe it will be UAVs, drones, I think you’ll start to see they’ll have other applications outside military.

Yeah. I’ve thought about this a bit, actually. I I think it’s a supply problem again. The lack of, like, tech companies in London. There there’s only one London listed tech company worth more than 10,000,000,000, and that is Sage. And Sage is like a thirty year old ERP company. It’s a very nice company, but it it is a is an output of the 20,000,000,000 a year that we pump into tech in The UK to have one company worth $10,000,000,000 on the stock exchange is not a great outturn, really.

So whilst The US has minted 20,500,000,000,000 of value in its tech companies, we’ve minted about a 100,000,000,000 over that period of time. So firstly, let’s accept it’s not good. But I think the problem is supply, actually, is that companies grow to a certain size. They’re stunted for all sorts of reasons. You know? It could be quite early on. The cap table’s broken. They hire the wrong people with the wrong product market focus. But it could also be lack of swing over the fences, lack of money to swing over the fences, actually, and net result being companies just have to be sold to typically US buyers.

So they never get to the point where they’re into growth and they’re capable of being IPO. So there’s not a big pipeline of companies coming through that could be IPO. You know, there’s a handful in fintech maybe, but apart from that, not not very many. So so I think it’s a it’s a supply problem, actually. And I think that’s why it’s really important, I think, that we grow the amount of capital here, and it’s UK capital that is patient and will put the money in, and we can fund the companies all the way through to eventually going public.

And then I think I think it will be natural to list them where there’s a market for them, and and I think that could be London. It could be Nasdaq. It could be wherever it’s suitable for the company.

Agree. Definitely supply problem doesn’t help. If we had much many more much bigger companies, we wouldn’t see it. I give two other reasons. So the first is a sentiment problem. I have not spoken to anyone for months that is positive about LSE or listing, and it whether it be valuation or it’d be perceptions about, for example, the product itself because of the stamp duty driving down liquidity. And I’m afraid these stories are kind of like SEO for our minds. We hear the story, we remember them, and there’s just a negative sentiment about it.

So most good companies are getting more kind of open to The US, and they’re getting courted very effectively. They have the red carpet rolled out for them. That’s the first one. Sentiment problem needs to be turned around. I mean, you interviewed Julia Hoggart. Don’t know your point of view, but the sentiment isn’t great. The other one I just point out is I think it’s an easy thing to measure. That doesn’t mean it’s the best thing to measure. Actually, if I’m completely honest, given the choice between picking where a company’s HQ is or where the bulk of the employees are or where the IP is generated or where it’s listed, I’m taking the first three.

They’re way more valuable. I know that they’re kind of interlinked, but the most important thing is where is the sort of economic driver and where are the employees and that value creation. And so, you know, if we do have a period where the very best UK and European companies end up listing in The US, I think that’s okay as long as we have a great kind of platform of big value generation here.

And I think it’d be it’d be okay if the ownership of those companies when they go public is predominantly here in The UK, because because I I really think we’ve got to set a national goal here for wealth creation. I mean, the The UK, really, it’s clear. You just look around, and the country’s getting poorer, really. So and we can’t afford all the services that we want. So What do you mean a national goal for wealth? Like like, firstly, I think tech and innovation is really the engine of economic growth here.

There’s no other engine that we can rely on, so it it’s that. And if you look at The US has created this 20,000,000,000,000 of value over the last year, twenty, thirty years in new tech companies, UK, naught 100,000,000,000. Yeah. Pro rata, we should be about 4,000,000,000,000. We should have created and we’ve created 100,000,000,000. So we’re about 4,000,000,000,000 short of where we should be. So I think we could set a goal to say, look. What if in twenty years, we set a national goal of creating 4,000,000,000,000 of wealth in tech?

That’s a sort of escalating growth of value. So the yeah. So let’s say at year 10, the goal is 500,000,000,000, and and thereafter, you know, we grow from that point. So growing 500,000,000,000 is already quite a big goal for us, yeah, given that we’ve only created a 100,000,000,000 right now. But it also sets the mindset by saying, what what are we gonna have to invest to do that? What what these companies look like? How much capital are they gonna need? They’re gonna need about a 100,000,000,000 of capital to do that really realistically.

And you think, okay. Well, that 100,000,000,000, where’s it gonna come from? Well, yeah, it’s gonna be something like 10,000,000,000 a year is what we’ve gotta put in additional to what we’re currently doing, and that’s roughly the gap in our venture. So I think I think if you could find a way of putting more capital to work, we can end up growing that 500,000,000,000 in ten years and 4,000,000,000,000 over twenty

I think I think the the BBB role spoke about earlier, I think, is critical to this, actually, is if you look at where the money came from in The US, you look at the distribution of where that money came from, it’s pretty evenly spread across endowments and family offices and pension funds, insurance companies. So it’s not just pension funds, actually. There are other sources of capital that we need to energize and create. But, yeah, don’t have we don’t have the endowment fund pool, which is a That’s big gaping true.

But we do have more family offices, I think. A lot of old there’s a lot of old money here.

It’s a lot. Yeah. So I

Which is why I think we need a energized BBB, actually, which is creative about the structuring of deals to bring those people into to structure them in a way that makes it easy for them to participate in this illiquid fifteen year asset class, really, where the fee structure and the carry structure works for them and works for BBB. So you’d end up with LPs that are 50%, you know, the national balance sheet and 50% UK based pension endowment, family offices, and and insurance companies. So I think I think that is the job actually of BBB is to do that.

It is definitely a challenge, I think. So I I definitely see the the challenge, but I actually think we’ve got to make the case really for why The UK needs to change, really. I mean, yeah, the the I mean, clearly, we’re not really fulfilling our potential right now. Clearly, we got a lot more to achieve, actually. And, yeah, and it’s about raising everybody’s sights to build this country to be the best it can be, really, is is let’s build this value that is kinda missing in tech.

Yeah. Because it’s not in any way coordinated right now. You know, this $2,030,000,000,000 a year that we pump in at the front end per annum in tech, So, like, a 150,000,000,000 over a parliament in university funding for science and tech, in SEIS, in EIS, in VCTs, in r and d tax credits, in patent box, and and so on. All those things, you add them up, and what’s coming out of the pipeline is nothing, really. So, yeah, so there’s some people are making some wealth along the way, but that’s not what we want.

We’re not achieving a national goal, really. So I think I think if we say, let’s do this together as a country, let’s build this value, and let’s yeah, to energize people. It’s clear to me that active money is the way to go. Passive money is not the way to go. And active money means, yeah, when things are going well, investors double down. When things are not going well, they kill it. So yeah. And we’ve got to be courageous enough to do that, really, and that does require I mean, VCs require OpEx cover, don’t they?

So you you’ve got to basically fund them, really.

I think two two ideas that Stan’s thoughts remind me of. So the first is one of the things I admire about Sequoia is that their meeting rooms, I think, are named after their LPs. I think it’s a really interesting thing to remind everyone who they’re in the service of, and I think one of the challenges we have in The UK is we perhaps don’t celebrate entrepreneurs as much as we might. If we were able to say to those entrepreneurs, they can tell the story about the wealth they’ve given back, whether it be through BBB or another vehicle, I actually think the public would see more of the value they’re creating.

The second story I think about is the Norwegian Sovereign Wealth Fund. Extraordinary business. If you look at their sort of ownership at the moment, it’s mind blowing. But the other thing they do is they effectively have a stock ticker so that everyone can see in real time what that of national wealth is. They have a literal stock ticker. I

and he’s literally like, you know, the happiness of the country does go up and down depending on the ticker. Exactly. So this is all about just reminding society that actually some of these great entrepreneurs are building business in society’s service. I think that’s what we can say of.

Actually. We if we if we have this, like, 4,000,000,000,000 goal, it’d be a great idea to have a national ticker as we climb our way towards it, wouldn’t it?

And I think it would glue culture and society a bit more than perhaps you have at the moment where it’s perceived to be haves or have nots. You mentioned

Look. I I think this is one of those classic cases of whether you want a sort of principled approach or a pragmatic approach. I’m a pragmatist. I do say see the brain drain. I recognize it, and I do see that many of the people I know well that have chosen to leave have left. They were also incredible angel investors. They, employed a bunch of people. And so do I think everyone should pay equal tax? Yes in principle. But practically speaking, I would rather that talent was in The UK.

I mean, I am seeing some exceptions to that. I heard about a billionaire VC who, you know, I think has moved to The UK recently. You do get some movement back in the other direction, but I would take seriously, again, leading and lagging indicators. I would take seriously the leading indicator of some of the non dom’s leaving.

Yeah. And I think I it looks honestly like the you know, one of the challenges with The UK is this this tug of war between principles on the one side and practicality on the other. The principles have been you remove Non Dom status, change inheritance tax rules, change capital gain tax, put fees on private schools, and then assume that everybody’s gonna be happy to stay, really. I mean, yeah, that that I just think that’s too much, actually. And the the impulse on the system is too much and that we are shooting ourselves in the foot, really.

So, you know, so I agree with Tom that in principle, as a sort of UK taxpayer, I’d like everybody to pay the same taxis, but, but I recognize not everybody’s in the same starting point, and people do come to the country with existing wealth, really, and it it it can’t be fully right to then seek to tax that. So, therefore, there has to be some provision for that, I think, that makes it possible for people to stay here and so on. So and I think it’s also part of this thing.

Look. If we’re serious about building the country to be a country that clearly wants to win, then we

And and probably that even make economic sense for the treasury. Zero economic

There’s bountifulism trickle down economics, but but there is also this need for fairness as well. And and I think it is just a balance that we’ve gotta strike between the two. People that don’t enjoy a privileged tax status and pay full taxes, sitting in the same restaurant as people that do enjoy a privileged status, that’s also not right. So, yeah, so we gotta find a balance between the two is is how to how to sort of, yeah, make it feasible for people to stay here and not be penalized, but at the same time, try to be as fair as possible as a country as a whole because we kinda need to hold hands together on this actually as a nation.

So so we need both people that have come from outside The UK and people inside The UK to feel we’re on a shared mission together, really. And so that there’s gotta be somewhat fair at the same time. And I I just think the balance right now is probably swung too far in the opposite direction and that we’re we’re actually making it much harder to do that.

I’m a strong believer in a sort of Keynesian multiplier effect. And just in our small world of tech, the only bit only sort of part of the economy I know much about, I see it on a daily basis. Like, angel investing in GoCardless, if I look at some of the other angel investors in that business, they were Non Doms. They were actually European, some Americans. The founders of that business built an important company for London employing hundreds of people. One of the founders left and built Monzo.

Another founder has left and is a VC at another firm in London. If you look at the number of senior talent in GoCardless that has gone on to create other business Amazing alumni there. It’s an incredible multiplier effect. And so that’s what we’re saying, actually. You’ve gotta have those initial pockets of innovation and growth, and then I do think you get this real multiplier. Multiplier. And the good news is businesses are growing faster than they ever have before, so I think those cycles will happen quicker quicker.

Previous, it might be five or ten years that you start to see the best senior operators come out and build a company. Now it might be eighteen months, twenty four months. Is there any change with SEIS and EIS?

Yeah. I I think a lot of these EIS funds are not very effective, and VCT funds are not very effective. Why is that? I agree with you, but I don’t know why. Because the quality of investment managers is quite low and because they feel they’ve done a good job if they get anywhere close to just returning capital. Mhmm. So instead of saying, here’s an investment. Go swing for the fences. Is that yeah. For god’s sake, don’t lose it. Take the low risk return and and, you know, flip the company as quickly as you can and get if I get 80¢ on the dollar back, I’m happy.

And in fact, all the returns are somewhere between 80¢ and $1.20 on the dollar. I mean, it’s ridiculous. So so I think those funds are a freaking disaster, really. Would you get rid of them? I’d get rid of them. Yeah. And I think there’s a there’s a lot wrong actually with The UK tax system that is maintaining too many zombies, I think, in The UK. Like what what? Well, the most obvious is R and D tax credits, which is deeply unpopular for me to say.

as a founder and a CEO, I’d never say this, by the way. But as as somebody who’s not currently a VC and who’s not currently running a company, I’m free to say what I think is true, which is that, you know, we we’re currently investing about 7,500,000,000 a year in r and d tax credits for SMEs in 55,000 companies per annum in The UK. You know, there is no quality check, if you like, on the value that’s being created there. All you have to do is prove that you spent the money on something you can loosely classify as r and d, and you get a check from the government.

So, yeah, so this is classic helicopter money. Passive money goes to good and bad. And I think if you’re gonna be brutal, you’d say that it either goes to companies that don’t need it, or it goes to companies who shouldn’t have it. But in my view, it would be much, much, much better to take that same amount of money and put it into fund of funds and put it into active venture. And that way, you know, when things are going well, you double down. If things are not going well, you kill it, really.

And, you know, so we we do end up tying up national talent and national treasure in companies that are never gonna be successful globally that limp on from year to year living on r and d tax credits. So I’d much I’d much rather see in venture, I’d much rather see valuations go up, actually, which I I know as a VC, you’re probably not very keen on hearing. But I’d much rather see that because, you know, yeah, we end up with the same dilutive effect as we get this, like, free money from the government every year.

So, by being actively managed, we get to recycle our limited amount of talent and our limited amount of capital into companies that are really gonna make a difference, really. That is one thing we can do.

I so unsurprisingly, I think tax credits are pretty important. What I hadn’t thought about, because I have a sort of biased view of just higher growth companies at the early stage of their life where you’re investing in the future, I like in the same way as I like your point about EIS and ESCIS because I just think about angel investors when I think about

think it makes sense. Yeah.

But, like, to your point, actually, just on the r and d tax credit, what I don’t see is these kind of zombie companies that have been claiming it for a decade and actually aren’t necessarily building for the future. So maybe we should start to take into account time like they do in The US with capital gains tax and start to actually maybe taper off r and d tax credits to avoid what you’re describing?

Yeah. We’re running at roughly two x the rate of The US. So so I think if if you look at four big differences between The US and The UK, one is the attention to talent and the need to sort of keep people in the country. The second is the quality of mentoring very early stage needs to be ratcheted up a lot higher, and it can be, I think. It just needs more coordination. The third is the excess of props in The UK for companies that are not making it that limp on forever.

And the fourth is the massive shortfall, again, I don’t feel I’ve got quite an agreement expected. The massive shortfall in capital, think we just need here, actually. We need to really we need to flood The UK with venture capital is what we need to do.

I I agree with you. And one of the things we do is just whenever I think we’re making investment, we will bring in often other founders from our network, people that we’ve worked with before, and the value add from those people, partly because they’ve got experience, partly because they’re paying it forward, is unbelievable. So I totally agree.

Tom’s Tom can’t be in it. No. He’s not even I can’t be in it. It’s not stopped him asking

How many people work in Quant Funds, though? Is it is it a big number? A member of our family works at Quant Fund, actually, and who’s paid a lot of money, I think, to do something very similar. So but there can’t be that many people, so it can’t be the biggest drain on talent.

Yeah. There’s definitely competition from that for this from the smartest quants. I think one of our jobs is to make startups even more appealing, celebrate the successes, actually show the alternative. I think EIA, like, the sort of entrepreneur relief is a wonderful example of something that can maybe tip that balance because often the economics from a quant funder income tax. So I think things can be done. What would you do with entrepreneur relief to make championing entrepreneurship better? I’d I’d expand it. I would increase

It’s limited to, like, a million quid or something like

From it was taken down. Exactly. Which to me, given the amount of time and effort that people are spending, I understand that For those

Entrepreneur relief is the ability for you to get preferable tax treatment if you’ve grown a company. And I actually think the idea of making for entrepreneurs capital gains exempt, would maybe tip that balance when you’re comparing against quant funds, if that’s a competition. I

Tom was saying, universities that are global grade universities. I mean, Cambridge is not that different to Stanford. They may be a little bit smaller, bit a less funded, but the quality of research that we’re doing here is as good. So we so there is raw talent here. I do think London is a a really great city, probably the best city this side of the of The Atlantic and arguably the best city in the world actually to do this. So so so I think it’s a great place to do

Well, it could if we let it, but, yeah, I I think it’s it’s it’s possibly not as shiny and smart as it was, but I I actually still think it’s a pretty good city, actually, and there’s lots of good things to like about London. Are you concerned that Labour will let it get

I don’t think they will, but I would like to see them move more quickly on policy changes and action than they’re currently doing. That’s certainly true. But I think they will listen and change, actually. So I’m optimistic about our ability to get change.

Yeah. I think London’s a special place, and I feel lucky if I compare living here to other places. Just it’s the sort of multiculturalism, the diversity, but, actually, just it’s an interesting place to live. The fact that I can jump on a line bike, come over to do this in the afternoon. I could have a meeting at Number 10 shortly thereafter. I could go to the European headquarters of a big brand. I could do that all on a line bike. It would take five hour flights to do it between those stakeholders in The US.

So actually, that proximity effect, I think, adds a real richness to life. So does it have its challenges? Yes. But there’s an incredible pool of talent. So I think the kind of petri dish for continued growth is there. My word,

afternoon, you’re a very important

well, Bikes is Nine Bikes is actually a portfolio company, so I’m just driving up the revenue. Ah, yeah. Yeah. Just constantly cycling around on it. An effort.

Yeah. I’ve changed my mind on China a lot. So I think strategically, they’re in an amazing position for the obvious reason, which I think actually more countries are more open minded to working with them given what’s happening in the world. But I think there’s a less obvious reason, and that is partly as a result of deep sea, but more broadly, we’ve learned a lesson in the last twelve months, and that is that actually foundation models can be distilled relatively quickly. When I was on your show last time, I talked about how foundation models were sort of gonna be the fastest depreciating assets in human history, like weeks.

It’s almost days now. And so if you live in a world where the foundation model’s commoditizing really quickly, then you say, where does the value accrue? And I think the value accrues at the application layer. So we’re invested in companies like Synthesia in London or Harvey in The US at the application layer. And then I actually think it accrues to in hardware as well. And if I look at hardware, China is so much better than the rest of the world at manufacturing and hardware and value add.

And I think those devices are actually gonna be the conduit for commoditized AI. So in that world, I’ve probably gone from thinking being excited about The US dominance on foundation models extent to thinking, actually, maybe the value is gonna accrue also in the hardware layer, and that’s somewhere that I think we’re playing catch up.

Yeah. And I think I I I I completely agree with that, actually. I I think, actually, it’s it’s the hardware layer is just sitting just above the semiconductor layer. And and, actually, I think the one that we can play in is the semiconductor layer. But I I do agree with you. I think China is in a really good position, partly because it has done this, like, very significant continuous investment in start ups and in venture over the last, like, twenty years.

And as a result, if you look at a if you look at a a blob chart, if you like, of of what investment’s going into AI and you color code it for US, you color code it for China, you color code it for Europe, it’s basically US and China and these tiny little dots of Europe, actually. So, I mean, Europe is really missing. So so it it is kinda US or China sort of chasing its tail, actually. And, but I also think the sort of geopolitics of America trying to dislocate itself from the rest of the world will put China in a much better position, actually, as well geopolitically.

So I think Europeans are gonna be much more open to to working with Chinese companies and doing business in China than they were even a year ago, actually. So I do think, I do think things are changing, and it’s probably not good for The US, actually, but that’s what I think is happening. Do you think we should be

to doing business with them? I do, actually. Yeah. I mean, I I’ve sold the company to Huawei, actually. So I spent about I only spent about a month working for them, I have to say, because they didn’t give me authority to buy a box of pencils after they bought the company. So so it was was insane. But this is a

Yeah. All that’s probably true, but but also they are commercial as well. So you can do business in China. So, yeah, when I ran this chip company, Icera, actually, our biggest customers were in China. So our biggest customers were Huawei and ZTE. And, yeah, and it was easier to get them to do a deal with you to sell product to them than it was a kind of US company company or a European company because they they you you had to negotiate pretty hard on price and stuff.

But, nevertheless, they were willing to engage, and we built some really good relationships with them. At a personal level, I think people are actually pretty decent people, and, you know, I I think that you can do business with them. The Chinese state is something different, obviously, to be wary of, but but I think I think there’s a lot of scope actually for us to to do a lot more business in China than we’re currently doing.

Do agree? If I look at the talent, the areas that they have decided to focus on, they’re all important. Battery technology, BYD is a force to be reckoned with. DJI is a force to be reckoned with. If I look at DeepSeek and the emerging tech

It’s it’s certainly cornered the market in some of the rare materials and necessary for batteries and so on. And I think it’s got scale and it’s got ability to compete really. So so in that sense but I mean, the German car industry has got other challenges. So one of the other businesses I sold was to to Bosch, And so I’m I’m sort of vaguely aware of what it’s like working in a large German company, and, yeah, they they have their own challenges. They’re not Could you buy your own pencils, though?

Not really. No. I’m I’m not He’s waiting for the

Things like r and d tax credits ought to be curtailed, and we should put the money into a lot more venture is the yeah. It’s a really unpopular thought, actually, but I still think it’s right.

Mine would be I think I keep hearing people talking about the first one person billion dollar business is already created. I think that’s absolutely ridiculous. Like, on the one hand, companies are growing faster and more efficiently than ever. Like, dot new, $40,000,000 revenue run rate in three months. They’re They’re gonna grow incredibly quickly, but I think we’ve seen distillation of foundation models. We’re gonna start to see distillation of business models, businesses. And so I would expect these really successful businesses to get copied ridiculously quickly. So I think this idea that you’re gonna have a sort of moat that enables one person to deliver billion dollars of revenue a year is a myth.

My big one here is that I’ve changed my mind. I thought, OpenAI was a foundation model company. I now think it’s a consumer company. It’s at a $12,000,000,000 run rate or something. So my thought here would be it’s gonna aggregate to the application layer, and brand is really important. They signed up a million ChatGPT users in an hour last week, it was announced. Brand is incredibly important. The application layer is important. And then I think hardware, as I mentioned, is important. This is one of the things reasons we invested in Nothing.

We believe they’ve got 7,000,000 devices out there that are potentially conduits for their AI.

Yeah. I I I think that might be right, Tom, that the value is gonna be balanced up in the application layer, but I also think at the hardware and semiconductor layer below, it’s all plausible because the LLMs are not the end of the story here in AI. You know? So there are some, obviously, obviously, some some big limitations on what LLMs are gonna be able to do. So there’s more innovation to come, and that’s gonna change models. It’s gonna change the math that we got to do and so on.

But some of the things that are gonna be concept, we we’re still gonna be doing very large matrix vector multipliers at high speed in silicon. And I think, yeah, that’s the sort of thing I think we can build competitive long term advantage in here. So I think there will be value accruing even more value accrued to competitors to say Nvidia, I think, will be big. And I think at the application layer, exactly as you’re saying, I think, yeah, there’ll be value crew in there. And and how about

inference at the edge as well? I mean, that’s something you understand better than me. But they’re lighter, these models. More and more could happen on device.

Yeah. That’s true. I mean yeah. But with that is coming a lot more sort of chain of thought reasoning, a lot more test time compute. So the token generation is still going up actually. So I still think there’s gonna be a large amount of silicon required to be able to do sort of high performance inference even at the edge actually. So there’s a lot of scope, I think, in inference. I think the investment in inference has grown, like, 57 times in the last year. That that rate, you know, will probably continue for a while.

a bunch of architectural changes to GPUs to make them better and better inference. So there there is a lot of architectural change going on there. It’s obviously not a big surprise to see, if we saw Jensen starting to adopt and reinvent himself as a in memory compute company. I mean, that wouldn’t really surprise me, actually, that he he he’ll be working on that. So whether he does that organically, in internally, or or he does it through some sort of acquisition, it remains to be seen, really.

But but I think that it’s certainly it’s certainly likely that, you know, he’s got the resource, and he’s got the cash, to be able sort of move the organization or build an organization in pretty much any area he wants. And one thing about Jensen, because I spent about a year and a half working for him, is he he he he’s definitely paying attention to and listening to the market. And, he’s got very big ears and tracks what’s happening with enormous study. So I I I do think we’ve got to expect them to be tracking in the direction towards being more efficient at inference.

What’s

firstly, he’s a good human. So so that’s good, I think, that we got, you know, one of the world’s richest people is actually, I think, a good person. He is, however, a bit of a control freak. Many would be the time we’re just about to give a sort of presentation to a major customer, and Jensen wants to go through the deck and we’ll change product name, schedule, pricing, and resources, and everything on the fly, like, with, like, ten minutes to spare before the meeting. So so he’s he’s he’s he’s quite hard to work for in terms of his desire to have command of detail and to be in control of the most important variables in the company.

But in a way, as a sort of founder, I do sort of respect that, actually. It’s just so within Nvidia, we used to have a Jensen at the top. We had a layer of people whose job was to buffer everybody else in the company, actually. And so this buffer layer would deal with Jensen, which is great. Human shield. A human shield. And there’s the people below that can actually get on with stuff, actually. But, obviously, I like the guy, and he’s he’s he’s he’s an incredible communicator.

Well, I mean, it it’s a I mean, it is a sort of it’s a it’s a brutal culture, I would say. Is it? Yeah. It is. Yeah. But in a way that is not malevolent, so if it’s possible to imagine. So, yeah, so he will tear people apart in public on stuff that they’ve not got command of or he thinks they’re wrong about, and he he will, like, rip them to shreds and leave them whimpering in the corner to lick their wounds. But I I think he I think he he then sort of forgets it and hopes that the exercise will have resulted in some improvement in the way the person thinks and acts and stuff.

So so that yeah. So that there’s not it’s not for everybody, that that style of management. But, honestly, you’ve got to admit it’s worked. So he’s he has done an amazing job. Would you buy OpenAI at 300,000,000,000?

Yes. No. Why yes? Why no? I think if you look at it as a consumer business, it has extraordinary momentum, and it’s only just started integrating moats. So historically, there’s been no switch in cost, one of the most important powers of a business, but now people have started using it. I actually think the memory is helping people stick. So if I just look anecdotally at my kids at school, for them, LLMs are chat GPT, so they’re very well placed. Now do I think that And for my mother on the other end of the age spectrum, same thing.

Yeah. Their own brand. So it’s incredibly powerful. It doesn’t mean I think it’s the best Gen AI investment, but if I was sitting independently, do I think it’s a good investment now when your downside is somewhat protected and they’re at a $12,000,000,000 run rate? Let’s say it’s a 20 times forward multiple. I think it’s a reasonable place to put money.

Yeah. And I I I think a lot of the demand on these foundation models is gonna be through APIs by application software that are basically so those APIs are gonna be driven by latency and performance of the model and so on. And things like, Claude are as good, if not better, than OpenAI’s models. And that given this demand will of agents that are basically calling APIs will be driving a lot of demand here, it’s it’s not obvious to me that the consumer chat interface is the winning interface, really.

It seems to me that the API interface and the application calling, agent calling might be a bigger interface, so I’d probably put the money elsewhere.

think? I’m so concentrated in tech. I’ll avoid tech stocks and say uranium ETF. I have concerns that before. I’ve I have concerns about cost of energy for productivity. I think climate change is real. I think the best source of energy going forward is nuclear, fusion, and potentially fission, and SMRs are gonna be important. I think it’s the predictable, cleanest energy source we have. I’m not betting on one individual company. That’s difficult to do. So I think if I take an ETF in uranium, I might enjoy the upside of the market because it’ll be needed.

What’s your stat?

Yeah. I probably would avoid tech as well, actually, for the same reason. Probably Rolls Royce, actually, because I do think defense is gonna be a big kicker in terms of demand, so the air engine business. And the I mean, it’s it’s actually gone like a rocket this year anyway, that stock. I mean, it’s it’s about three x this year. But I actually think we’re at the beginning of a journey, and I think it could be much bigger because as a European air engine vendor, I think it’s gonna see high demand, actually.

Flood it with venture capital. I mean, seriously, I think that’s the, you know, the thing that will the one lever that we can pull that will make a big difference is that everything else will take time and stuff, but but I do think a lot flows from capital availability.

I love that, I would say, sentiment at the moment. I think there’s more this question is being asked so much, it becomes a drag. What’s the most underinvested but exciting area today? You know, you Tom, you do this for a living. Yes. It’s I’ll go hardware. I think if you take a hardware company out to market, the people, investors, immediate response is, oh, that’s really hard. But the paradox about venture capital is you need it to be difficult to be valuable. You need to be contrarian and right, and I think hardware is a place you can do that at the moment.

A huge amount of value will accrue there.

I’d go the level below semis. Nice. I think semiconductors that fit into the hardware that Tom’s

Yeah. So I’m gonna stick to The UK. So at the moment, I’d say none of the current government really fill me with enormous enthusiasm. Yeah. I think Patrick Valens is a useful guy who’s trying his best to sort of, you know, make an impact on The UK. So I think but he’s not really a politician. I do I do think in the in the current government, Darren Jones, I think, has got potential to be great.

Yeah. I I think we will get The UK pointed in the right direction. I think it will require some government embracing of the challenge and a lot more communication by government on what what we’re gonna do and how we’re gonna do it. I think, you know, we’re approaching a point. We’re about a year into this current government, four years to go to the next election, things have not gone well. And I think, yeah, we’re we’re approaching a point when they’ve got to recognize a change and make some changes, and I think we are gonna see some changes that will be positive.

And assuming that happens, I think in in ten years’ time, I think we will be on we will have achieved this $500,000,000,000 valuation in tech, and The UK will be seen as the magnet in Europe in which people come to kinda build these companies. So that’s what I think we’re gonna achieve.

So I’m an optimist. I think, sometimes the best companies grow from adversity partly because of the concentration of talent. They’ll just aggregate more than they have. So, I don’t know, 1999 was at Salesforce, and then you have Airbnb and Uber in 2008. I think we’ll look back, and the companies that are most impactful in the decade will have grown in The UK, and they won’t be names we know today because these companies are growing faster than ever. So they’ll be AI native, incredibly fast growing businesses, and it’s not clear to me they’ll list at all.

If you look at the trend direction there, we spent a lot of time assuming listing makes sense, but some of our best portfolio companies like Stripe aren’t listing anytime soon, and they’re finding ways to deliver liquidity. So I wonder whether we’ll even be talking about whether they did or didn’t list in The UK.

Thanks for inviting us.