Australia is losing its start-up entrepreneurs to the US, says one of Silicon Valley's most prominent tech innovators.

Start-up companies have injected trillions of dollars into the American economy since the financial crisis and are changing the way business is done.

But the CEO of the Founder Institute, Adeo Ressi, says a lack of venture capital investment in Australia is driving start-up companies away.

"Australia looks like an amazing place to live. It's developed, there's rule of law, education is good," he said.

"It does not however have a thriving venture capital market."

According to Mr Ressi, innovators have to leave Australia in search of venture capital, and also because the market is not large enough for companies to grow.

"It's really about closeness to the market. So if you are going after an English-speaking market and you're in Silicon Valley you're closer to the 300 million consumers in America."

But, he said, "that's not a bad thing for Australia in general".

Company leaders can move to Silicon Valley but leave an office behind, said Mr Resi, "breeding new entrepreneurs who create new companies, and the cycle repeats itself".

How can Australia stop the brain drain?

There is a lot of concern in Australia about the "brain drain" — the country's best and brightest leaving for other shores.

"If someone's going to leave it's hard to make them stay, but I can tell you there are two things that a government can do, and particularly Australia, to improve their lot," Mr Resi said.

He said the first thing was to invest in education and technology literacy, to "create the next generation of entrepreneurs and leaders that will fill the vacancies by people moving away".

Secondly, he said, Australia needed to foster an active venture capital community.

"Many hundreds of billions of dollars, in fact trillions of dollars of value have been created in the American economy by start-ups," Mr Resi said.

"You're starting to see companies in two, three, four and five-year spans create $20 billion or $100 billion of value from zero. And there are more and more of these companies being created in America each and every day.

"There is simply no doubt that that economic value has permeated the entire country, helping to propel us forward in the face of a lot of other economic problems."

Mr Resi also said internet access was very important.

"Look at the success of Korea in terms of the innovation that has come out of that country as a result of having very high-speed internet available for the whole population," he said.

But he sounded a note of caution, pointing out that Silicon Valley internet speeds were about a quarter those in Seoul.

"I think internet speeds are helpful but they're not the only thing that matters."