VCT Report introduced by Will Fraser-Allen, Chair of the Venture Capital Trust Association (VCTA)

I am delighted to welcome you to GBI Magazine’s comprehensive and informative Venture Capital Trust Report.

The UK is a great place to start and grow a business, and the important contribution to this of tax-advantaged investment through Venture Capital Trusts (VCT), the Seed Enterprise Investment Scheme (SEIS), and the Enterprise Investment Scheme (EIS) is indisputable.

Venture Capital Trusts play a vital role in the UK funding ecosystem, supporting businesses across the country move from early stage towards full commercialisation. The VCT scheme is working exceptionally well, with over 1,000 of the most ambitious companies in the UK currently benefitting from funding. These firms span sectors as diverse as digital technology, medicine development, specialist manufacturing and online retailing.

VCTs provide evergreen patient capital, which allows individual investors to realise their investment without the need for fund managers to sell the underlying assets, enabling the funds to remain invested in companies over the long-term.

Equity capital has been crucial in enabling fledgling businesses to scale up and create high-value jobs. The role of VCTs, alongside EIS and SEIS, will become even more important as economic conditions become more challenging.

The Venture Capital Trust Association (VCTA) represents twelve of the largest venture capital trust managers in the UK, which comprise more than 90% of the £6.6 billion VCT industry. It is also dedicated to championing early-stage businesses across the UK. During this current period of economic uncertainty, it is critical that the regulatory landscape continues to protect the funding ecosystem to unlock sufficient growth capital to accelerate the UK’s recovery and future growth.

The demand for equity finance among early-stage businesses was recently highlighted by a study conducted by the VCTA among senior decision-makers at early-stage firms. It found that 92% are likely to raise equity finance over the next two years through a VCT scheme. The most popular reasons for doing so all point to value creation: investing in Research & Development (48%), new technology (45%), and equipment and machinery (42%).

The Government’s support of these schemes, demonstrated by the commitment to extend the sunset clause in the Autumn Statement last year, is hugely welcome news for the industry and entrepreneurs who rely on equity capital to fuel the growth of their early-stage businesses as well as the end investors whose capital is used to such great effect.

To access your complimentary copy of the report, please click here

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