[alephnerd]

Having a London domicile often leads to an overstating in venture capital raised for the UK ecosystem.

For example, I've funded Polish and Indian startups that chose the UK as their legal domicile because we couldn't be bothered to hire a legal team to draft a contract to Polish or Indian specifications.

Builder.ai [0] is a great example of that - it was an Indian startup that was domiciled in London to simplify raising capital from Gulf investors.

[0] - https://www.ft.com/content/926f4969-fda7-4e78-b106-4888c8704...

[fakedang]

Startups like Builder AI use London because a.) they want to raise money from filthy rich Arab investors and b.) those guys are not known for doing much due diligence. They go more by vibes and hype and who's on the existing cap table. Also c.) they are very comfortable with London because it was so much easier back in the day to launder or siphon away funds from their home countries. London is an extremely popular destination for Gulf Arabs.

You'll get a lot of shady startups of that kind in London for this reason.

[alephnerd]

Not all Arab investors are bad - for example, funds associated with the Emirate of Abu Dhabi (eg. ADIA, Mubadala) has been extremely successful in their investments explicitly because Tahnoon studied engineering in San Diego (and rolled at Gracie's gym) back in the day.

Additonally, for every failed investment like builder.ai a fund like QIA and MS Ventures has had multiple other successful investments.

The perception of "shadiness" in the London VC scene arises simply because a subset of non-American VC simply does not care about value investing and product-led growth.

Additonally, it's not like the UK doesn't have good VCs and Growth Equity investors - for example Index Ventures and Ballie Guiffold both have a solid track record.

Being overly congratulatory and being overly pessimistic about the UK scene does more harm than good.

[fakedang]

LoL, the Mubadala and ADIA funds are the most corrupt of them all. There's obviously the stuff that happens over the table, but there's a shit ton that happens under the table. This doesn't translate into VC and the startup world directly, but indirectly as they follow a fund of funds model with VC investing, and those VC funds don't tend to do their due diligence.

I have yet to see one direct startup investment from Mubadala do well. Compare that to a regional fund like BECO or Wamda (both composed of ex founders).

[atlasunshrugged]

Does this also impact US metrics for capital raised? My understanding is that the Delaware C-Corp is still the startup standard for founders from anywhere in the world to raise global capital, which I imagine skews where the capital actually ends up flowing if they are actually building a company in a foreign location and just using the Delaware entity as a holding co.

[alephnerd]

Somewhat, but not to the degree as you see in the UK, Singapore, or HK.

Until a couple years ago, it was difficult for someone without a SSN to create a Delaware C-Corp and even despite current political instability, the depth of IP, capital, and R&D available in the US is difficult to replicate outside China, Japan, and maybe India.