Venture Capital

Financial assistance towards small capital investment projects is offered on a national basis - such grants being available to both manufacturing and service sector industries situated in those areas of the UK now designated as Tier 1, Tier 2 and Tier 3 by the European Commission on 27th July 2000.

A grant cannot be claimed as a right - it has to be the result of an application for aid, and it must be demonstrated that without grant aid the project it will help fund, cannot go ahead.

The discretionary nature of the grant regimes and strict criteria by which eligibility is determined suggests that you should speak first with GRA or other professionals rather than to the grant authority or other government body to avoid giving information prematurely which could then prejudice your potential case when final application submissions are reviewed during the formal appraisal process. Remember: The officials' approach is one that 'Taxpayers' money is not given away lightly'. Grant aid must be additional to mainstream funding from commercial resources, amongst which the following can be considered.

Venture Funding Schemes are available for capital investment for viable business opportunities on a medium to large scale. Factors such as the why finance is needed, how much is being raised and whether you are willing to share the equity and, therefore, the profits and control of your business are the important issues to consider.

It is recommended that an accountant, or commercial law firm should be approached before talking to any specific venture capital provider. As well as any contacts whom they may introduce, the main sources of venture capital to research are professional fund managers and informal investors.

The British Venture Capital Association (BVCA) represents the professional venture capital industry in the UK and publishes a free directory of its members, containing contact details and information about their investment preferences.

It can be obtained by direct contact from:

British Venture Capital Association  
Essex House,12-13 Essex Street
London WC2R 3AA
Tel  020 7240 3846
e mail

Corporate Venturing is a new term to define a new area of finance which refers to a process in which two separate companies form a partnership in which one, usually the larger company, invests directly in the other in return for a share in that company's future. Most of interest to Medium sized firms.

The investment and the return may be in any form, depending on what is of value to each party, so, the investment may be in cash, or management or technical resources - a 'contribution in kind'. The return may be a minority shareholding, an exclusive licensing deal, the development of a new product or process or ownership or part-ownership of the intellectual property of the smaller firm.  

Business Angels (also known as informal investors), are wealthy individuals looking to make investments in growth businesses, in return for a share of the equity. Of most interest to Smaller firms, as a source of finance where banks are unwilling to be the prime lender due to the high risk factors involved in their view.

Business Angels usually have a business background and can often provide the businesses in which they invest with valuable hands-on management and other experience. They will also expect to have some say in the direction of any business in which they invest, together with a share in the profits and future value of the business.

More information from:

National Business Angels Network (NBAN)  
3rd Floor, 40-42 Cannon Street
London EC4N 6JJ
Tel  020 7329 2929