Rishi Sunak is right to change City rules to attract tech to London but we need a cultural shift, too

AS Londoners get used to Tier 3, the value of the technology that makes stay-at-home living bearable gets ever clearer.

So, too, does the need for our city to up its game when it comes to encouraging brilliant tech companies to grow their businesses here, rather than hop off to the US when it comes to scaling up.

The FTSE 100 is too dependent on oil, mining and banking. It lags even our European counterparts when it comes to fast-growing tech players.

Unlike in the US and Hong Kong, London Stock Exchange rules discourage company founders from holding special shares to block unwanted takeovers or outside influence. 

It’s a key reason great CEOs so often choose to list in the US rather than here.  

Happily, it looks like Rishi Sunak will relax the rules next year.

But the tech chiefs considering IPOs in 2021 say there are other issues that can’t be changed with the stroke of the Chancellor’s pen.

Primarily, they say US investors think differently to British ones. 

Having grown rich on Google, Amazon and the rest, Wall Street is happy to back long-term growth stories. 

Even if the outlook is five years of investment-heavy, lossmaking scale-up, if the vision is convincing, they will back it.

Here in the UK, the first question the founder always hears is: why aren’t you making a profit now?

The second question: what’s our exit strategy? In other words, who’s going to buy you when you get bigger?

It’s a culture that spills into a general market scepticism of young, fast-growing tech companies. 

Financial pundits (me included), are as guilty as anyone.

We were lucky to get The Hut Group to float here. It came despite the obstacles London put in its way, even putting up with the slight of being denied entry to the FTSE 100 despite being easily big enough.

Those who backed the IPO have been richly rewarded with a 35% pop in the share price.

So as we move into a tech-driven 2021, a New Year’s resolution suggests itself: dare to believe.