In a bid to save the UK’s next generation of technology companies that are said to be at “crisis point”, the government is planning to set-up a £1bn venture capital fund for high growth technology start-ups.
Lord Drayson, the minister for science and innovation, has backed the plans. In a further move to ease the impact of the market conditions on the technology sector, the government says it will continue to increase the science budget throughout the recession.
The National Endowment for Science, Technology and the Arts (NESTA) has called for the fund after warning that the UK’s next generation of technology companies are at crisis point, with early stage firms suffering from the retreat of private venture capital from the sector.
Lord Drayson, speaking at a NESTA event said: “NESTA’s call for a £1bn fund is now urgent. We need to do more to kick-start the UK’s venture capital market and to get UK funds and UK institutions investing at scale in promising early stage technology firms.”
Early-stage investments slumped from 11% of total equity value invested in 2000 to less than 4% in 2007.