Mike Lynch, chief executive of venture capital firm Invoke Capital and former founder and head of software company Autonomy before its controversial $11bn sale to technology corporation Hewlett-Packard, has criticised capital markets for “failing” society. In a video interview for the Global University Venturing 2013 Summit yesterday, Lynch said that whereas governments had spent much of his life worried about how to boost entrepreneurialism and the creation of early-stage companies now “changes are needed at the other end”. Lynch, an adviser to the UK government, added: “Why are there so few software companies in the FTSE 100, one [ARM]? Because the capital markets are failing us.” More positively, he said governments recognise this, which is why the UK government had brought in changes to the free float rule allowing smaller companies to list more easily. However, while he said the success of ARM and Autonomy showed the “path from idea to world-class is clear, it is narrow in parts”. Last month, Invoke made its first investment in Darktrace, which is pioneering a new approach to cyber defence based on Bayesian mathematics developed at the University of Cambridge. Invoke raised $1bn for its debut fund and uses a so-called management model to allow its portfolio companies to tap into Invoke’s research and development unit and network of top managers. In his interview by Tim Lafferty, managing director of Global University Venturing, Lynch said he was “excited” by other areas beyond cyber, including bringing better processing of the data thrown off by “cheap” sensors and the opportunities from the doubling in mobile phone processing power every eight months. And while he said genetic sequencing was not exciting for venture investing because vendors would compete on price the data on patients and using advanced analytics to personalise medicine would be.

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