In this exclusive interview with GBI Magazine, the Chair of the Venture Capital Trust Association (VCTA) Chris Lewis joins us for a Q&A session to discuss the state of VCTs in 2025.
Chris assesses the ways in which VCTs are viewed following the budget changes, the reforms from the VCTA in terms of age limits and funding, how VCTs will fare in the face of economic challenges, and how VCTs support technological innovations.
The VCTA is the industry body which represents 12 of the largest venture capital trust managers in the UK. Their members account for over 90% of the VCT industry, with £6.5 billion funds under management invested.
GBI: How have the post-budget adjustments to CGT and pensions affected investor sentiment towards VCTs?
CL: “The Chancellor’s Budget has again firmly positioned Venture Capital Trusts (VCTs) as a cornerstone of tax-efficient investing in the UK. As adjustments to Capital Gains Tax and pension thresholds reshape investor priorities, VCTs stand out as a compelling and mainstream option—offering both access to some of the UK’s most innovative, high-growth businesses and substantial tax relief.
For over three decades, VCTs have driven innovation, created jobs, and fueled economic growth. This dual benefit of personal financial advantage and contribution to the broader economy resonates deeply with investors seeking stability and purpose in an evolving financial landscape.”
GBI: Are there any proposed policy reforms from the VCTA, such as limits placed on company ages and funding?
CL: “The VCTA is championing critical reforms to enhance the effectiveness of VCT funding as a driver of innovation and growth. Our proposals to extend the age limits for company eligibility from 7 to 10 years for most businesses, and from 10 to 13 years for Knowledge Intensive Companies, recognise the evolving challenges businesses face, particularly those outside London or in traditional sectors. Regional disparities and the lasting impacts of the pandemic mean that many companies require more time to scale sustainably.
Additionally, increasing annual and lifetime funding limits to £6.5 million and £16 million (£15.5 million and £27 million for Knowledge Intensive Companies) will provide VCTs with the flexibility to support businesses at every stage of their growth journey. These changes are essential for fostering innovation in sectors like technology, life sciences, advanced manufacturing, and AI—sectors that hold the key to the UK’s global competitiveness. Without these changes, VCT investment powers will soon only be half of what they were in 2016 when the limits were last set. “
GBI: How have VCTs fared recently amid an array of economic challenges in 2024?
CL: “Despite the economic turbulence of the past year, VCTs have demonstrated remarkable resilience. While venture capital activity across Europe contracted significantly, with UK deal values falling by 39%, the VCT sector continued to thrive. In 2024, UK VCT fundraising reached £882 million—the third highest on record—underscoring investors’ confidence in the sector and the enduring appeal of government-backed tax reliefs.
VCTs have proven to be a lifeline for early-stage businesses, providing patient, flexible capital precisely when it is needed most. This consistent support has enabled founders to sustain momentum, innovate, and weather economic uncertainty. Looking ahead, VCTs remain well-positioned to drive the next wave of entrepreneurial success, underpinning the UK’s economic recovery and long-term growth.”
GBI: What has been the role of VCTs in supporting technological innovations, such as AI?
CL: “VCTs play a vital role in fostering innovation across the UK. Their ability to provide patient capital is particularly beneficial for early-stage businesses in high-growth sectors such as artificial intelligence (AI), technology, life sciences and advanced manufacturing. While AI has captured headlines as a transformative force, it’s important to remember that supporting these businesses requires more than just funding.
VCTs bring expertise, industry connections, and the ability to make follow-on investments that help businesses not only survive but thrive. The UK has the opportunity to become a global leader in areas like AI, and VCT-backed companies are well-placed to contribute to this trajectory. By championing these sectors, VCTs are helping to create highly skilled jobs and ensure that the UK’s venture capital ecosystem remains competitive globally.
The role of VCTs extends far beyond financial returns—they are driving the innovation economy and shaping the future.”
This interview featured in the latest issue of GBI Magazine, which you can find here.
About Chris Lewis
Chris is the chair of the VCTA, having succeeded Will Fraser-Allen in the role as of January 2024.
Chris brings over 25 years of wider industry experience to the Chair role. He is currently Chief Financial and Operating Officer at Pembroke VCT, which manages more than £200m in VCT assets, spanning a diverse portfolio of over 40 growth-stage companies. Prior to joining Pembroke in 2019, Chris was the Chief Financial Officer at Downing LLP, which was an active investor in growing businesses through its VCT and EIS products. He has also worked in professional services, with KPMG & EY, and with a Family Office.
