Interesting new insights in getting finance from UK Venture Capital Trusts (VCTs).

Currently (06) the have £1.3Bn in uninvested cash that needs to be invested or they will now be penalised under new rules.

Insights:

VCTs prefer to deal direct rather than via an OFEX IPO but many of those approached via OFEX traders will be VCTs and they invest this way to spread risk.
  • If they get an OFEX IPO they tend to invest alot less, say max 10% of the raise
  • Dealing direct they can go higher, say £500k to start with follow on funding
  • They much prefer AIM and like to invest in a private co before it goes to AIM
  • They prefer this because the OFEX market can move against you on valuation alot if theres not lots of good news
  • There are 90 odd VCTs but only 25 any good for IT
  • VCTs are prepared to support overseas expansion if the VCT rules can be met (by hook or by crook)
  • VCTs can invest within 3 months and are happy to co-invest with others they like