Research from Library House shows that UK businesses received over €1.78bn (£1.19bn) from venture capitalists last year, more than double the amount received by its closest European rival, France.
VCs backed 515 deals in the UK in 2006, over a third of all of the 1434 deals in Europe overall, compared to 207 in Germany, 195 in France and 67 in Spain.
In terms of overall investment France was the closest to matching the UK with €875m, then Spain with €491m, Ireland came third with €439m and Germany was in fourth with €428m
Library House also ranked US states with European countries which showed that the UK is behind just California and Massachusetts, who received €9.1bn and €2.1bn respectively.
Doug Richard, chairman of Library House said: “With an ever-expanding base of experienced entrepreneurs and investors we will continue to see the UK flourish as a centre for hot investments.
“The fact that the UK ranks third in the world is a true indication of its strengths and, that its model is a good example for other European countries to emulate.
“The prosperity of western nations depends on small businesses. There is a subset of small businesses that drive economic growth and those companies have the prospect of fast growth.
“These companies require investment therefore, if you follow the capital you follow the companies that will effect the state of economic growth in a country.”
© Crimson Business Ltd. 2007
