One of the UK’s most prominent technology industry professionals says a lack of funding for promising technology businesses is forcing many entrepreneurs to sell up earlier than they should.

The warning came from Simon Segars, chief executive mobile computer chip maker ARM Holdings, in an interview with the FT newspaper. He said the problem is preventing smaller businesses growing to their full potential, with many being snapped up by overseas buyers.

If true, a lack of funding for bigger SMEs could be one reason the UK doesn’t produce more billion-pound technology success stories, of which ARM is one of just a handful.

With Tech City in London and ‘Silicon Fen’ in Cambridge, as well as other regional technology hotspots including Edinburgh and Bath, numbers of tech start-ups have grown quickly in recent years, with thousands sprouting in London alone.

The trend is being fed by an increasingly diverse and well-funded seed investment market, which includes independent business angels and increasingly popular crowdfunding platforms, as well as traditional funding routes.

"I live in California, where there is a very different industry and access to capital is a huge thing," said Mr Segars. "If companies are successful, that is viewed as a really good thing.

“People who do cash out from these companies, go and do it again. They back other companies. They are looking for opportunities to keep the wool turning. There isn’t quite that same culture here.