A fragmented market for VC’s but the seeds are there

Posted on: October 21, 2009

Despite Manchester and the North West having, besides London and the South East,the highest amount of venture capital activity,the average size of a deal was amongst the lowest in the country.

According to the findings of the New Economy working paper on the impact of public policy on investments talent and networks which presented its findings today,Venture Capital should be regarded as an industry in its own right that can stimulate high growth and provide benefits to the region.

The report’s authors,Adrian Nolan and Michael Corbishley in their working paper, found that in the long term public funds may not be sustainable as they can impact on private enterprise putting the latter at an unfair advantage and clashing with its objectives.

Specifically the report looked at the business angel network and found in the city that there are several private networks but that they are not that well understood and their activity is not dense enough to generate what they described as a critical mass of activity.

The report makes a number of key recommendations for local policy makers.

1.That they adopt a private sector approach to managing public funds especially that of ensuring sufficiently high ceilings of investment for high growth companies. work with relevent partners to ensure public support is structured to attract talent

3.that a detailed study be made into the demand for early stage equity finance in Manchester.

Public sector VC money is important for Manchester but the challenge for the sector is to ensure that it develops commercial viability.

The seeds of the angel market are there but there needs to be more connectivity.

The working papers draw on work originally commissioned by Manchester Knowledge Capital,Manchester Enterprise Exchange and Manchester city council


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