INSIGHTS / News

Responding to HM Treasury’s Consultation on financing growth in innovative firms, the UK-based global number one university business incubator, SETsquared, has urged the government to match efforts to grow UK equity investment in innovative firms with a range of initiatives to increase the supply of quality deal flow and venture management.

“SETsquared agrees with the Treasury’s estimate of an annual £4bn UK patient capital market and we’re impressed and excited by the ambition to see this double,” said SETsquared Innovation Director, Simon Bond. “We should raise our game. After all, single Chinese cities are raising $bn investment funds for their own ventures – the UK should do the same. However, to turn this ambition from rhetoric into results, we need to see investment in quality deal flow and venture management alongside equity funds.”

The science, engineering and technology-based venture sector is challenging, but it is also valuable. In SETsquared’s experience, success in raising long-term equity finance is as much about market opportunity and management as it is about the availability of capital. As ventures successfully navigate each stage – from proof of concept, through start-up and on to scale-up, their valuations increase and validate the more investment.

The SETsquared Partnership of the universities of Bath, Bristol, Exeter, Southampton and Surrey has incubated and helped 1,500 high-tech, high-growth potential ventures to raise more than £1.25bn of external equity finance since it was established in 2002 – with £167m of this raised in 2016 alone, equal to about 4% of the Consultation’s own estimates of annual available patient capital in the UK.

Read SETsquared’s response to HM Treasury’s Consultation on financing growth in innovative firms