This is why European entrepreneurs are looking for investment in Silicon Valley, rather than the UK, Charles Irving, co-founder of VC firm Pond Ventures, told delegates at the InnoTech Summit in London today.

"Silicon Valley investors are smarter. If you want to raise money you don't want to pitch to a stiff shirt in the City across the table who does not understand your business.

"You want to pitch to people who understand your business. Investors have to remain experienced," he said.

While Irving said the situation has improved since he first started investing in Europe in the past few years, he added: "We are a long, long way to having smarter investors in Europe."

Irving was also sceptical about the branding of London as a digital centre, with its focus on building a digital ecosystem in east London's Tech City.