Dotcom doom hits cash-hungry spin-offs

A downward spiral in the technology market and inexperienced management teams are bringing university spin-off companies to a halt.

As the dotcom fallout continues and international technology firms slash jobs, universities are finding it difficult to raise venture capital to exploit their ideas.

One venture capital fund that planned to raise £100 million to enable technology spin-offs has been seriously affected and is now aiming for £60 million.

"The fund has been held up by problems in the sector," said Sir Roger Ashby, the initiator of the Venture Technologies University Partners fund. "The market is very nervous. People want to invest in universities but are being cautious with their cash."

He said that universities were having problems attracting experienced management teams. "Universities are knee-deep in technology but they need to get good management. This makes funding much easier. They are often run by inexperienced people with good ideas."

He said it was important to keep inventors in the universities where they could do what they are good at.

Imperial College, London, University College London and Bristol and Southampton universities were stakeholders in the fund.