Want to help startups? Just give them money

This feels like a One More Level of Indirection solution. [1] The problem, I think most everyone agrees, is that the government isn't the greatest at growing businesses. The obvious, delete-all-the-code approach would be to leave more money in the hands of the businesses by lowering taxes.<p>Or, as the article suggests, we could pile on another layer of indirection: encourage the government to keep taking my money, hope they're halfway decent at identifying smart startups (which I'm sure they would be, the government is awesome at everything else they do right?), and, wonder of wonders, they identify the next Facebook 9 times out of 10, we still have to lose a significant percentage of the wealth to paperwork, inefficiencies, and bureaucracy.<p>&#62; I’d be confident that I could do more for my startup, Plantedd, with whatever equivalent amount spent by government organisations to pay consultants to help us with marketing or IT or training.<p>Dude, I'd love that. Plantedd looks stellar. I think we want the same things. I also think it's far more straightforward to lobby for more tax breaks for startups and call it a day.<p>[1] <a href="http://c2.com/cgi/wiki?OneMoreLevelOfIndirection" rel="nofollow">http://c2.com/cgi/wiki?OneMoreLevelOfIndirection</a>

As someone who is running a business whose main occupation is to help the government give money to tech companies and startups, I actually disagree with this.<p>I think most startups don't need money (and they typically don't get any, because most government funding is match funding, and so you have to spend to get, and very early startups don't spend anything). Or rather, they need money, but probably not from investors, and <i>certainly</i> not from the government. They need money from customers.<p>My thoughts on why money is toxic to most entrepreneurs are pretty well summarised in this article: <a href="http://swombat.com/2011/12/8/investment-cushion-springboard" rel="nofollow">http://swombat.com/2011/12/8/investment-cushion-springboard</a><p>Growing companies that have figured out how to make their own money already <i>do</i> need money, but the reason they can make good use of it is also the reason why they don't need it as much as the cash-starved early startups.<p>To a functioning company, money is lifeblood, and more money can help make the company a bigger success than it already is (or make it more competitive against other companies in the same space).<p>To an early startup, money is a toxic sludge that will slow it down, cause weird and unpredictable mutations, and possibly kill it when it might have lived.<p>Disclaimer: I'm talking about startups operating outside of the Magical Land of Silicon Bubbles, who have to actually create a viable business rather than just build something popular that makes no money and then sell it for a billion dollars.

Good article.<p>I must say that a unique benefit about Scotland for entrepreneurs is that higher education is free. This reduces the debt burden of a new graduate significantly that helps with any new venture.<p>I do agree that the money spent on bureaucracy by government bodies that are meant to boost enterprise is wasteful, although the new gov.uk web project suggests that sometimes projects can be done well at a decent price.<p>I echo nthj's comments in saying that tax breaks are the easiest way to benefit all small enterprises, from tech start ups, to new retail shops, plumbers starting their first business etc.

I know of a few VCs who just can't help themselves...not just giving them money, but telling them how to spend it too. And for some reason, they all seem to want them to spend it on a hotshot HBS-trained former big consulting general partner that will suck up all their cash and equity and give them a failed business in return.<p>They like to claim that there is some value-add with having their experience as "part of the team"...but for 90% of the VCs out there, it is bullshit. It is just a ploy to get better deals.

In context this is a really strange article. The government bodies listed in this article do give money to startups, and the bar is extremely low. In addition, private investors (angels and angel syndicates) get matching funds "for free" where the public money matches private money. I'm not sure why this isn't exactly what's being described in the article.

How come your plantedd doesn't sell shrubberys? You are from the UK, you need to add a special search result for when the users search "shrubbery" <a href="http://www.plantedd.com/t/categories?keywords=shrubbery" rel="nofollow">http://www.plantedd.com/t/categories?keywords=shrubbery</a>

Is there no equivalent of the NW Fund in Scotland? <a href="http://www.thenorthwestfund.co.uk/" rel="nofollow">http://www.thenorthwestfund.co.uk/</a>

There's good and bad here.<p>The good: right now, the funding racket for startups (unless they can get clients, and under-35's tend not to have those kinds of relationships yet) is unfair and, due to the illegal comparing-of-notes whereby a VC can turn off interest in supposed competitors, probably extortionate. It sucks. A lot of good businesses are shut out. Here's some writing I did on how to fix that: <a href="http://michaelochurch.wordpress.com/2013/03/26/gervais-macleod-17-building-the-future-and-financing-lifestyle-businesses/" rel="nofollow">http://michaelochurch.wordpress.com/2013/03/26/gervais-macle...</a> .<p>The bad: this means that startups are funded based on their ability to attract attention and raise money (tip-jar model) when they really should be funded according to provision of value. These will probably converge over time, so you get eventual consistency.<p>On the whole, I think the good outweighs the bad. It's just that you couldn't use a tip-jar model to fund, say, a new GPU-aware C compiler. There's a lot of infrastructural technology that can't easily be funded by "dumb money" of the populace nor by the "I-think-I'm-smart money" of meddlesome VCs and executives.<p>There are a lot of hard financial problems to solve, but ideas like this are bringing us in the right direction.