A group of venture capital and other trade bodies has called on business secretary Lord Mandelson to create a fund of funds to boost the UK’s venture capital industry.
In a letter sent this week by eight organisations including the British Private Equity and Venture Capital Association and the government-backed venture capital fund Nesta, the group reportedly asked the government to use a 750 million strategic investment fund created in last month’s budget to establish a new fund of funds.
According to the FT, the letter proposed that more money could be raised from private investors such as pension funds, which would then be invested in start-up companies through venture capital funds.
The proposal for how to use the strategic investment fund is the first to be made public, although Lord Mandelson has apparently been sent a number of suggestions from other bodies.
The letter said that money was needed for many British companies that had received an initial round of venture capital funding but had been unable to access further funding in order to survive the economic downturn.
“The US has tens of funds of over $1 billionn able to finance a company through all stages of its development, from start-up to exit,” the FT quoted from the letter, “The UK has very few investors with the firepower to do the same.”
The other signatories were IT trade body Intellect, the BioIndustry Association, the London Chamber of Commerce and Industry, British In Vitro Diagnostics Association, the Association of British Healthcare Industries and the Association of the British Pharmaceutical Industry.
D.C.