No wonder investors are backing companies that look like they are growing fast, rather than those that are making a profit.

Instead, ComVentures is backing companies that are seeking to improve existing wireless technology.

Today, by contrast, his firm backs companies "like thefacebook, which have built a deep relationship again and again with the customer."

G3's other sister company is called C5 Capital, an investment fund that backs companies in the security sector.

The government of Japan backs companies that reward citizens with "eco action points" when they take positive action toward the environment.

So venture capitalists, not wanting to wait 10 or more years for a return on their investments, are backing companies that can move products to market faster.

And Mr. Khosla says he is backing several other companies in the optical networking field.

Silverfleet reports annually on the level of buy & build activity undertaken in Europe by private equity backed companies.

Barry Michaels, a former chiropracter who specializes in backing new companies, is the chairman.

Just 10pc of the membership of angel networks actively backed companies seeking funding between 2009 and 2010, the research found.