Photo: Foster + Partners
The UK, as part of its “Startup Britain” initiative, is putting $40 million into local seed fund Passion Capital, along with $20 million from private LPs, VentureBeat reports.The US “Startup America” mostly feels like a press release. But then again, the US leads the world in entrepreneurship, so arguably it doesn’t need the government to teach startups how to be startups.
The British government, meanwhile, is putting its money where its mouth is. Despite really harsh austerity measures, the government is intelligently refraining from cutting back on investment in the future, such as tech startups. Its “Silicon Roundabout” initiative wants to create a huge tech cluster in London. Unlike most government initiatives of this kind, this one is being greeted favourably by the tech community.
This latest move is smart as well: instead of picking winners and losers, which government has a terrible track record at doing, they’re simply expanding early stage capital by acting as an LP and matching private sector funds. Another country has tried this with some success: Israel. In the 1990s, the Israeli government set up a government LP that co-invested with VCs and jump-started what is now known as “Startup Nation.” Today Israel has more startups and Nasdaq-listed companies per capita than any other country.
Hopefully Britain can achieve the same thing. It’s certainly making the right moves.
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