02/02/05 - Fighting Bull's struggle a bad sign?
Could a small software firm's failure to find venture backing in the United States hint at a potentially big threat to U.S. tech leadership?
Fighting Bull Broadcast Technologies couldn't achieve its goal of raising $1.6 million from U.S. venture capitalists. It instead is being funded to a significant degree by organizations in Northern Ireland.
The company, which makes software to monitor broadcast networks, was turned down by American investors despite having inked a partnership with the reputable British Broadcasting Corp.
U.S. venture capitalists didn't like the fact that Fighting Bull doesn't plan to bring in revenue until next year, according to the firm's chief executive, Rick Bolin. In pitching the company, Bolin discovered the "sweet spot" for American VCs is revenue-generating companies looking "to scale."
Bolin's experience may not be representative of the U.S. venture capital climate, nor necessarily a sign of trouble. VCs are wise to focus much of their attention on companies that have a proven product--especially after so much money was thrown at dot-com pipe dreams. What's more, venture capital investment in Silicon Valley increased by 15 percent last year.
But it would be disturbing if at least some of that new cash wasn't going to riskier, early-stage firms. Otherwise, the United States is likely to miss out on some breakthrough technologies and companies.
And good jobs. Fighting Bull has scrapped plans to do some of its software development in the United States and is hiring all its programmers in Northern Ireland instead. That has something to do with lower wages in Belfast than in Boulder. But it also relates to who ponied up funds. "Investors like to be close to their money," Bolin said.
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