Will the UK get a National Investment Fund?

HM Treasury has announced a consultation with a view to setting up a new National Investment Fund to help British start-ups.

A £4billion funding gap has been identified between American and British firms, and with Britain’s access to the European Investment Fund in questions as the UK negotiates its exit from the European Union, the Government is considering ways to ensure innovative new British enterprises have the support they need to meet their potential.

The UK currently leads Europe in the creation of Unicorns – innovative firms valued at over US$1billion – but it trails behind other international players. 54% of all Unicorns are based in the US, with 23% in China. The UK accounts for just 4%.

This is, at least in part, down to funding and support in the early stages of development. Fewer than 1 in 10 companies that receive seed funding in the UK go on to reach the fourth round of investment. This figure is 1 in 4 in America.

The Government consultation will consider the root causes affecting the availability of long-term finance in the UK, what international best practices could improve the domestic UK market, and what changes in government policy may be needed to support long-term investment.