Beauhurst, the leading source of deep data on growing companies, released its 2013 Annual Equity Investment Review at an event on 26 February 2014 held at the National Gallery in association with the Business Growth Fund.
Stephen Bence, Chairman and Co-founder of Beauhurst, shared his findings on UK equity investment to the hundreds of finance professionals in attendance. He said:
Beauhurst research shows that 2013 was a boom year for investment with over £1.5bn invested into 650 of our fastest growing companies. That’s 35% up from 2012. And our very early data from 2014 suggests that investment in the first 8 weeks of the year is up 65% from the same period in 2013.
The angel flies
Much of the growth in equity investment is down to seed-stage investing, which has risen hugely in recent times with the 2013 total exceeding the combined total from 2011 and 2012. This is the typical preserve of the “angel” investor whose interest has been kindled by generous tax breaks and a rise in crowd funding platforms such as CrowdCube that make it easier to access the seed-stage market. Investments concluded via these platforms have increased 8-fold over the past 12 months.
It is oft said that there’s no “venture” in “venture capital” and there is certainly a mismatch between the disruptive technologies that have dominated the media (bitcoins and 3D printing particularly come to mind) and the activities of the venture capital community (just a single bitcoin investment and nothing for 3D printing during 2013). This isn’t because these areas are pure media hype because there have been plenty of US investments in these areas.
The new equity gap
While early-stage (seed) investing and later-stage (growth) investing are booming, the middle- stage (venture) is losing market share. There is a real risk that this stifles the growth of the promising batch of seed stage companies that will need investment over the coming years. There is a clear need for Government to look at what it can do to stimulate this part of the market.