The BVCA has called on the UK Government to appoint a 'Venture Czar' to champion the venture capital industry and encourage private sector investment in the next generation of UK companies.
As part of its 2011 Budget submission, the BVCA urges the Government to underline its commitment to economic growth by ensuring the UK remains the centre of entrepreneurship in Europe.
The private equity and venture capital industry has a crucial role to play in delivering such growth - according to a recent BVCA survey, 70% of businesses owned by private equity and venture capital firms are expecting turnover to increase over the next year, and 40% are looking to create new jobs.
This year's Budget submission is a key element of the BVCA's 'Year of Venture' campaign, which seeks to place the industry at the heart of the economic recovery. In this light, the BVCA makes the following recommendations to the Government ahead of the 2011 Budget on March 23:
Appoint a Government 'Venture Czar' to attract more private sector investors into private venture capital funds as well as part publicly funded venture schemes like UKIIF, ECFs and even the Business Growth Fund.
Both the Olympic Park and the Pfizer site should be made Technology and Innovation Centres. The BVCA is already operating in Sandwich, training scientists who want to spin out companies from Pfizer's operation. But in order to get the best use out of the assets there, we believe it could be turned into a TIC, providing proper links with businesses and academia, as can the Olympic Park. London has more top 100 universities than any other city as well as burgeoning start-up communities in places like Shoreditch.
We need to reform VCTS and EIS to maintain the UK's position as Europe's venture capital hub. The Government needs to focus incentives across the venture capital spectrum, from seed funding - where there has been a 50% drop since 2005 - to later stage investing. We propose a boost in tax relief to 50% for start up investment with the same benefit extended to later stage funding rounds for those already invested. The state aid rules should be lifted to allow more flexible investment. France is on the cusp of overtaking the UK as the leading centre for venture capital in Europe, primarily because it applies these restrictions more liberally to their equivalent schemes.
Establish the UK as a centre of entrepreneurship in Europe. With the rise of the BRICs, the N11 and even Africa, Europe is sleeping. Only the UK has the depth of VC expertise to wake it up. To this end, it is imperative that a single market for cross-border venture capital is established.
Simon Walker, Chief Executive of the BVCA, said: "As Budget day approaches, the one thing we can all agree on is the need to restore strong sustainable growth to the UK economy. Private equity and venture capital can help bring this about by investing in new businesses and growing existing ones. With the right support from Government we can create the private sector jobs in diverse sectors and regions that this country needs to get back on its feet."
FOR FURTHER INFORMATION PLEASE CONTACT
Simon Horner, Public Affairs Manager, BVCA, +44 (0)20 7420 1806
Tom Allchorne, Public Relations Manager, BVCA, +44 (0)20 7420 1807
The full BVCA Submission is available to download here
