By Ian King

Copyright cnbc

Questions are also being asked about how the U.K. incentivizes tech investment.

A report published last week by The Purposeful Company, a consortium of FTSE businesses, investment firms, business schools and consultancies, suggested that, while tax reliefs under the Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) have encouraged plenty of angel and early stage investment, they — together with Venture Capital Trusts (a type of VC investment backed by retail investors) — may simply provide a tax shelter to British taxpayers who would otherwise not invest in tech companies. It argued this may also lead to a bias toward investing in low rather than high risk companies.

There are also concerns that even these reliefs may not be generating the results they once did.

A group of investors led by the VCT Association, the Association of Investment Companies and the British Venture Capital Association on Monday published an open letter to Finance Minister Rachel Reeves urging her to raise the current lifetime and annual investment limits for VCTs and EIS, which have been frozen for nearly a decade, during which inflation has eroded their real value.

But it is possible to overdo the pessimism. As an increasing number of startups remain in private ownership for longer, investors are focusing more on delivery than on speculative valuations.

And here, the U.K.’s startups are delivering. Another Dealroom report published during the last month highlighted the U.K.’s European leadership in both “colts” (businesses with revenues of between $25-$100 million) and “thoroughbreds” (businesses with revenues of more than $100 million), as well as unicorns.

This leadership is likely to generate more, not less, interest in U.K. startups.