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Government plans capital fund for small hi-tech firms
30 June 2009
The government has announced details of a venture capital fund designed to support small technology businesses.
The innovation fund forms part of the government’s new industrial strategy, Building Britain’s Future.
The government itself will put £150 million in the fund with the aim that matching investments from the private sector will see as much as £1 billion raised over the coming years.
Gordon Brown, the Prime Minister said: “This fund will help build Britain’s future by investing in key sectors. It will provide crucial support for our most promising start-ups and existing small companies just when they need it most.
“Venture capital finance is the lifeblood of innovation and crucial to ensuring the commercialisation of the discoveries coming out of our research base. The fund will boost future UK competitiveness.”
Lord Mandelson, Secretary of State for Business, added: “In our New Industry New Jobs strategy we identified access to venture capital as one of the critical factors in developing innovative new companies in Britain. The UK Innovation Investment Fund will be a shot in the arm for the British venture capital industry.
"It is also a challenge to UK venture capitalists to follow the Government’s lead in backing British entrepreneurs in building exciting new companies, investing in new technologies and creating jobs.”
The fund, which was initially outlined in the Budget, will be targeted at firms making hi-tech products. It will operate on a Fund of Funds structure. This means it will not invest directly in companies but rather invest in a small number of specialist technology funds that have the expertise and track record needed to decide which firms require support.
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