Urenio Watch Watch: Incubators

Venture Capital crisis

The venture capital industry in the UK has been in a period of decline. This has been particularly true for early-stage venture capital. The present report of NESTA provides an update on the venture capital market in 2009, examines similarities and differences between the current crisis and the one triggered by the dotcom crash and considers prospects for a recovery.

Venture capital is an important source of finance for high growth, innovative companies, one of the few sources with
an appetite for risk that matches the uncertainty that comes with pioneering, innovative ventures and the ability to provide
management support to take a company from initial proof of concept to mass market growth.

The report written by Yannis Pierrakis outlines a number of important trends:

  • Fundraising in 2009 was the lowest seen in the past decade. Both the dotcom and financial crises resulted in a significant
    reduction in the number of new venture funds established.
  • The time taken to successfully exit, through a flotation or acquisition, is getting longer.
  • ICT continued to attract the largest proportion of investments followed by Consumer and Businesses and Healthcare and Medical industries.

Read the full report: Venture capital now and after the dotcom crash