Private investors, including several well known cashed-out entrepreneurs, worth an estimated £1bn, put fund managers under the spotlight at The VCT and EIS Investor Forum on 23rd November.
The major outcomes were:
• Investors don’t just want capital returns, they want a reliable source of income on a regular basis through dividends or capital repayment
• They want a wider choice of funds with different investment strategies in the VCT and EIS fund markets
• Investors don’t just invest for the tax breaks; they want to know that their money is going to be well invested in “proper” entrepreneurial businesses which will put the capital to good use and grow quickly
• They want fund managers to be more entrepreneurial in approach and language, within the investment community.
This was the first time private investors have been given a live forum to tell the venture capital community at large, what they, as the providers of capital to the enterprise economy, want to achieve.
Lara Morgan who sold Pacific Direct in 2008 for £20m and attended the Forum said:
“I want to put part of the money I made into backing the next generation of entrepreneurs. One way for me to do this will be to find Venture Capitalists who understand what I want to be achieved with the cash I allocate to them.
“Tax breaks are nice to have, of course, but I don’t want them to be the tail that wags the dog.
“I want VCs to talk my language, (simplify reporting facts without babble). I want them to invest in companies following solid due diligence, building a specialist expertise in specific categories, but I also want good returns. Investors also need to be realistic about timescale and returns. (Whilst financial advisors need to be clearer about the challenges of selling on some VCT investments.) VCT’s will have to take some risks, but above all they need to win. After The VCT and EIS Investor Forum I can see that there are fund managers out there who understand this and who are giving acceptable returns. I am glad I have now met them.”
The firms presenting to Lara Morgan and the other investors were:
Highgate Tech Fund
Oxford Capital Partners
YFM Private Equity
For more information on the Forum, including access to the presentations and slides from the fund manager pitches and debates, please email firstname.lastname@example.org