Financial professionals turned-off by a year in which dot.com shares have plummeted and second round funding dried up, are increasingly unwilling to take control of new economy start-ups.
Some accountants privately admit firms are growing wary of advising start-ups over fears their fees will not get paid.
ACCA small business experts told Accountancy Age this week dot.coms are having increasing difficulty in finding accountants to act as business mentors.
Dot.com managers are now turning to their own networks of friends and family to source talent, according to a new PricewaterhouseCoopers poll.
Internet retailer Boo.com, which last month resumed trading, was the most high-profile dot.com failure to fail in 2000 without an FD at the helm.
Last week online auctioneers QXL.com and lastminute.com crashed out of London’s Techmark 100 top technology index, with QXL needing #30m extra to keep the company afloat.
More than three-quarters of 400 companies surveyed by PwC admit to recruiting their management teams through personal relationships rather than business experience.
The After the gold rush? The dotcom dilemma survey labels dot.com recruitment patterns ‘confused’, and highlights a financial skills and experience vacuum at the heart of the new economy.
Partner Kevin Delany said: ‘Staff are being recruited on the basis of possessing the ‘right temperament’ at the expense of job-specific skills and experience, leading to a dearth of real business acumen.’
David Harvey, ACCA’s head of small business, said that start-ups find that initially successful approaches to financial control are often inappropriate when they expand.
He said: ‘The problems come when small businesses move into a big business arena – it’s often a case of not rushing to grow up to quickly.’
British Venture Capital Association chief executive John Mackie said: ‘There’s a clear divide between those who have funding and don’t – and qualified accountants leaving secure large firms for a start-up without funds.’
A new head of solutions, Aidan Brennan, has been appointed at KPMG UK
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