Sir, I am encouraged that so many correspondents (letters, Aug 28) have responded to my letter (Aug 26) concerning how we might regain our lost venture capital. We should be looking for a long-term solution to the early-stage funding gap as we are currently losing the battle to support innovation and develop new businesses.
Venture capital represents real investment in real companies and can always deliver good results for investors, if managed by commercial professionals. A state-driven investment process is not the long- term answer and was only a stopgap. State funding should not monopolise the market but accelerate and anticipate progress in strategic sectors.
We have encouraged massive funding to go into private equity and hedge funds and foolishly ignored the much smaller needs of venture capital, which creates new assets, launches tomorrow’s companies and delivers future value.
A 2010 UK venture fund network can deliver excellent results if it uses UK/European investment rules and not the US model (that accepts company failures too readily). We know how to reduce the risks of early-stage deals in the UK.
Corporations are gasping for emergent companies to acquire, so the market looks healthy and complete for venture-funded businesses. We are therefore letting down our innovators and entrepreneurs by not offering them access to venture capital.
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We can recover from this lack of early-stage funding if we accept that we can reach for the private sector solution again. All the conditions for its success are now in place.
Dr Mark Scibor-Rylski
University of Exeter in Cornwall Enterprises Ltd