Finance in UK high technology small firms: An overview

Abstract

This paper provides a broad overview of issues relating to the financing of technology-based small firms in the United Kingdom. After an explanation of the role of the Bank of England in relation to such issues, reference is made to the important contribution of such firms to competitiveness and entrepreneurship. During the past four years, a significant number of reports in the United Kingdom have focused on the needs, both financial and otherwise, of technology-based small firms. Barriers to the financing of technology-based firms at startup and early stages are considered, and comparisons are made with the United States. Recent public and private sector initiatives to encourage the provision of seed and venture capital, both formal and informal, are reviewed. Finally, the paper addresses institutional investor attitudes towards investment in classical venture capital and private equity.