UK venture capital lags US

The gap between the UK and the US venture capital industries is widening, a report out today warns, as the US economy start to improve. The study, from Nesta, reveals venture capital investment in the UK was $2.3bn in 2012 versus $41bn in the US, just six per cent of the US total. Louise Marston, director of innovation & economic growth for Nesta, said: “Although performance has improved in recent years in both countries, average UK VC fund performance is four points below the US average. Yet VC funding is vital to innovation.” Nesta said the figures could be explained by the fact the UK is a worse place to generate good returns on venture capital investments through initial public offerings or trade sales. The UK also produces fewer, less valuable ventures to invest in and less successful venture capital fund managers.