Letters: Let’s focus on venture capital
[Re:Post-Brexit marginal gains will be fuel for City’s future success, 12th October]
Hopes of reaching equivalence in financial regulations are dead in the water in the post-Brexit world.
There have been numerous calls from the UK Government for input from business, to help guide the UK’s financial structure in this new phase.
We’ve heard plenty around the potential changes to UK listing rules and the proposed plans to make it easier for UK-listed companies to raise secondary capital. The focus also needs to be on the early-stage startups in the UK, through each stage of their funding and on to initial public offering.
The cost of maintaining a fund in the UK that invests in alternative assets such as private tech companies can be four times that of a fund in the US.
The truth is that as things are now, only sizable venture funds can be successful in the UK. This not only deters emerging venture firms that cannot raise large amounts of capital in order to get started, but deters larger ones from launching funds that will finance early stage ventures. We need an investment ecosystem that supports technology firms and can respond to market dynamics. As competition becomes increasingly global, we need to have an eye on the UK’s competitiveness to prevent businesses and talent from being snapped up by foreign competitors.
There are lessons to be learned from America to help lower the costs of running a fund which could help the UK become a leading jurisdiction for alternative investments in a post-Brexit world.