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'Appalling' UK start-up funding

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In conversation with the BBC (click here to read article), funding manager, Neil Woodford, verbally tore down the UK’s start-up funding, labelling it as “appallingly bad”.  The discussion saw the comparison of moderately successful businesses which sell-out early in the UK and some of the substantially bigger success stories of American businesses. 

Mr. Woodford noted that “the limited number of success stories we’ve had here in the UK, have generally sold out too early and I think again, this comes back to the capital problem.  Typically, these businesses that have been successful and may have reached a couple of hundred or maybe a bit more…million-dollar market value, these companies have been under pressure from their shareholders to sell-out; and that’s principally because of those time-constraints on the capital that those institutions have been able to provide to us businesses.  So they have been forced to sell-out really and haven’t had the choice… to stay access more capital to become the sort of multi-billion-dollar international organisations that they had the potential to become”. 

Mr. Woodford is currently reported to have been chosen to back a capital fund, initiated by the British Business Bank, which is run by the government.  He is deliberating on investment via his Woodford Patient Capital investment trust and Woodford Equity Income fund. 

His talks with government are to spearhead an early stage tech venture capital fund, to assist with funding businesses outside of London, which also looks to ‘exploit very long-term opportunities’. 

There are many start-up businesses that are not acknowledged and promotional business London & Partners’ recent research saw that in 2015, approximately ‘75% of start-up funding for the technology was taken by London-based businesses’. 

Mr. Woodford has already assisted UK businesses by taking significant stakes in those who have had difficulties with accessing the funding required.  This new funding is estimated to aim for £250 million, backed by Mr. Woodford and several other investors, alongside the government.