UK investment - "venture" capital
Private equity and venture capital firms are doing a great job for the UK. </sarcasm>
The extremely important area of start-up firms has seen investment by these boys reduce by nearly 2/3rds, from £125m in 2009 to just £46m and 2010 and the equally important area of "early stage financing" fell by about 1/3rd from £303m to £224m over the same period.
This apparently means that venture capital firms are playing "a vital role in stimulating economic growth", according to these firms' collective voice - the British Private Equity and Venture Capital Association (BVCA).
I can't even begin to express how tiny and insignificant this number is. Our economy turns over about £1.4tn, that is to say start up investment is 0.0032% of the annual money flows in the UK. Small businesses (down to a single employee) are still by far the largest employers in the UK, taken together. They are the bulk of the economy - not an afterthought. Let's call them micro-businesses, rarther than small businesses. They have no finance, and no advice. Some years ago there was a company specifically designed to lend to small and micro businesses, it was called Investors in Industry, or 3I. By the time I worked in the City it had floated and turned away from small businesses, and began to think in "deal sizes" much larger than before. It no longer caters for small businesses - though I'm sure they would say they do. The BVCA numbers speak for themselves.
Instead of investing in important businesses in the UK, which promote prosperity and jobs, they are instead focusing their attention on the easy money which creates no prosperity for the economy - only for themselves - investment in management buyouts took total investment to £8.2bn in the UK, up from £4.8bn in 2009 and back in line with levels prior to the credit crisis of 2008.
They are also taking their money elsewhere - places outside the UK, and invested more overseas than they did in the UK for the fourth year in a row, investing overseas £20.4bn nearly doubling from a year earlier at £12.6bn.
A financial sector which does not focus clearly on small and micro business equity investment and advice (of the kind that venture capital was once intended to give) is not contributing to the commonweal, but instead feeding off it.
The extremely important area of start-up firms has seen investment by these boys reduce by nearly 2/3rds, from £125m in 2009 to just £46m and 2010 and the equally important area of "early stage financing" fell by about 1/3rd from £303m to £224m over the same period.
This apparently means that venture capital firms are playing "a vital role in stimulating economic growth", according to these firms' collective voice - the British Private Equity and Venture Capital Association (BVCA).
I can't even begin to express how tiny and insignificant this number is. Our economy turns over about £1.4tn, that is to say start up investment is 0.0032% of the annual money flows in the UK. Small businesses (down to a single employee) are still by far the largest employers in the UK, taken together. They are the bulk of the economy - not an afterthought. Let's call them micro-businesses, rarther than small businesses. They have no finance, and no advice. Some years ago there was a company specifically designed to lend to small and micro businesses, it was called Investors in Industry, or 3I. By the time I worked in the City it had floated and turned away from small businesses, and began to think in "deal sizes" much larger than before. It no longer caters for small businesses - though I'm sure they would say they do. The BVCA numbers speak for themselves.
Instead of investing in important businesses in the UK, which promote prosperity and jobs, they are instead focusing their attention on the easy money which creates no prosperity for the economy - only for themselves - investment in management buyouts took total investment to £8.2bn in the UK, up from £4.8bn in 2009 and back in line with levels prior to the credit crisis of 2008.
They are also taking their money elsewhere - places outside the UK, and invested more overseas than they did in the UK for the fourth year in a row, investing overseas £20.4bn nearly doubling from a year earlier at £12.6bn.
A financial sector which does not focus clearly on small and micro business equity investment and advice (of the kind that venture capital was once intended to give) is not contributing to the commonweal, but instead feeding off it.
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