The Venture Capital Trust Association (VCTA) has submitted its response to the Treasury Select Committee inquiry into the UK’s Venture Capital industry, which addresses the effectiveness of tax incentives, the ability of firms to source financing to scale up, regulatory efficiency, and how the industry can support the UK economy post-Covid.
With £6.3 billion currently invested in VCTs, the VCTA represents 90% of the VCT industry.
According to new data released by the VCTA, VCTs invested £668.6m in new and follow-on investments in UK-based small private businesses and Alternative Investment Market companies in 2021. Throughout the pandemic, £1.2 billion was invested in UK SMEs.
The VCTA’s submission highlights the extent to which VCT investments help businesses to grow fast, helping to tackle the scale up challenge. Over the past three years, unquoted VCT companies have increased sales by 62.5%. And since 2018, VCTA backed business have on average increased export sales by 275% to £1.1m in 2021.
Over the last financial year, VCTA-backed businesses delivered £12.5 billion in revenues, generating £3 billion in exports. Exits from successful VCTA backed businesses valued those businesses at £7.6 billion in 2021.
According to the VCTA, the role of VCTs in supporting successful entrepreneurs will become even more important as economic conditions become more challenging.
