James Wise, a partner at Balderton Capital, which has invested in companies including Revolut, Darktrace and Wayve, said: “We should be looking to incentivise companies to stay, not punishing them for leaving.

“We’re not the Soviet Union.”

Dom Hallas, the executive director of lobby group Startup Coalition, added: “It’s not only a dumb idea, it’s a dangerous one. 

“If our ‘much vaunted’ financial services sector wants to understand why lots of innovative businesses don’t see their future as listing in the UK, they would be better off taking a look in the mirror.”

Financial support for start-ups has increased in recent years thanks to tax credits for research and development as well as direct support through the Coronavirus Future Fund.

However, a string of UK-based companies have sought deals abroad rather than pursuing domestic growth opportunities.

The LSE was dealt a blow last year when Arm, one of Britain’s biggest tech companies, opted to list in the US. 

E-Therapeutics, a biotech company that was listed on London’s junior market for 17 years, recently announced plans to delist and pursue a US flotation, calling London “broken and closed”.

Cyber security company Darktrace and video games business Keywords Studios have also recently agreed sales to private equity that will see them delisted.

Jeremy Hunt, the Chancellor, hosted a gathering of start-ups including Starling Bank and Monzo in May as part of an attempt to encourage them to list in London.

Regulators have relaxed listing restrictions to boost activity. They reduced the free float of shares that must be available for trading and eased rules on dual-class share structures.

London has enjoyed some bright spots, with the £541.6m listing of micro-computer maker Raspberry Pi and the anticipated float of Chinese e-commerce business Shein.