Shifting sands: the changing nature of the early stage venture capital market in the UK

Pierrakis, Yannis and Mason, Colin (2008) Shifting sands: the changing nature of the early stage venture capital market in the UK. (Project Report) London, U.K. : NESTA. 28 p. ISBN 9781848750289

Abstract

The UK boasts the largest private equity market in Europe, investing £12 billion in 2007. However there are concerns about the diminishing volume of early stage venture capital investment, including seed and start-up. These concerns have prompted successive governments to respond with various initiatives to address the so-called ‘equity gap’. This report seeks to provide answers to the following questions: • Has the supply of early stage venture capital increased during the recent investment upswing? • Who are the main providers of early stage venture capital? • How significant are government interventions in increasing the supply of early stage venture capital? The report draws on two sources of statistics – the British Venture Capital Association (BVCA) annual report on investment activity and the Library House database of investments – to bring an original perspective on the changing nature of the early stage venture capital market. It does so by reworking some of the BVCA’s published statistics and by combining the BVCA’s statistics on investment activity with Library House’s database. These sources enable us to present a series of perspectives on different ‘slices’ of the market.

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