The move bolstered fears that the UK stock market is losing out to New York due to founder-led innovation companies feeling better supported in the US.

For disruptive entrepreneurs in tech, New York is often a more attractive option for scaling up and going public.

If you look at the S&P 500 (the US equivalent of the FTSE), nine of the top 10 companies are tech ones and were started by entrepreneurs. Several of them are still founder-led, for example Meta and Tesla.

Compare that to the FTSE top 10; there are no tech companies, instead there are fossil fuel and mining companies. They are slow growth incumbent businesses. None of them are disruptive, entrepreneurial or founder-led, but (like most of the FTSE100) led by career CEOs.

Unlike entrepreneurs, they are not disruptive, nor are they changing sectors or progressing their businesses as fast as their S&P equivalents.

The London markets have a problem identifying and properly valuing tech firms

Investors backing these FTSE companies are typically (if not exclusively) old white men who arguably are more familiar with mining, but not disruptive tech. In the US, investors are simply more diverse, and more welcoming of great companies and leaders regardless of their class or creed. So we have a situation for tech and other sectors where the US is progressing and leaving the UK economy behind.

This has everything to do with The City’s structural problems, and nothing to do with the behaviour of the entrepreneurs leaving the UK to raise money in the US. If it was about the behaviour of founders, we wouldn’t be losing them to successful raises and listing in New York. It's actually about a structural problem in the UK economy.

When you do get disruptive entrepreneurs listing their business, The City doesn’t support them in the way US markets do. The HUT Group’s Matt Moulding is a case in point. Entrepreneurs like him want to disrupt, push the economy forward, modernise it and do things that are not business-as-usual. The City, its analysts and the media ecosystem however just eat them for lunch. So they go to New York, where they’re understood, welcomed and well-funded.

So it has nothing to do with entrepreneur behaviours, and everything to do with long term structural problems in London. At the heart of this is diversity.

To solve London’s structural problems, we need to improve its diversity

There are diverse British entrepreneurs capable of transforming sectors with great businesses. Indeed, entrepreneurs come in all shapes and sizes - but ‘the City’ doesn’t. Many characterise it as a bunch of old white men.

We have done well to improve diversity at the angel, seed and pre-Series A and Series A venture capital stage. I personally have angel invested in UK tech companies like Super Awesome (sold to Epic Games), and co-founded an embedded VC, Fearless Adventures to support fast-growth e-commerce companies. With that platform, I’ve invested in more diverse than non-diverse founders, including women, people from lower socio-economic backgrounds, and those from the LGBTQ- community. The problem for founders (including me when it comes to my own startups) is scaleup capital.

That’s where you need to go to The City for money and as a result, your next valuation. And in London, as a disruptive entrepreneur or tech founder, you won’t be able to get the most optimal capital or valuation compared to New York.

To change that, we need more diverse people funding disruptive tech companies. And not just women (although The City doesn't do too well on that front, either) but diversity of socioeconomic backgrounds, and diversity of thought.

We need The City to be able to see the potential of disruptive entrepreneurs and allow them to succeed in the UK economy. We’re not talking about slow-growth businesses in finite fossil fuels, but fast-growth ones run by people who have strong new visions to create a future we can get excited about. 

As New York stretches ahead, we need a more diverse City that believes in our entrepreneurs and their ability to change the economy in the UK for the better. Generational change won’t be fast enough to stop the UK from being left behind, we must speed up the process by making London more diverse now.