Blog: Venture Capital Trust (VCT) investment: spot the connection

25th March 2015

I have a confession to make.  One of my guilty secrets is that, from time to time, I get addicted to a particular TV quiz show writes Ian Sayers, chief executive, of the Association of Investment Companies AIC…

Most recently, Only Connect, where contestants have to find obscure connections between seemingly random sets of clues.

Looking at the case studies we have released on businesses backed by VCTs brought this to mind.  I mean, if I were to ask you what the connection was between holidays, pubs and human fertility, I doubt the first response that would spring to mind would be VCTs.  And yet all these featured in our video ‘Bringing VCT investment to life’.

Throw in TV production and advertising, cancer diagnosis and baby sleep products, and you would be forgiven for thinking that the only connection is that there is no connection.  But you will find these in our Guide to VCTs and on the new VCT case studies page on our website, featuring short videos which provide a fascinating insight into these companies, with interviews from key executives and the VCT managers who backed them.

You can make other connections, of course.  Yes, all of them have a great business idea, one that managers think can generate a good return for investors.  Yes, there are the themes of how these investments are boosting economic growth and generating new employment.

But, for me, what comes through time and again from the managers is that a decisive factor in terms of selecting the businesses they are prepared to back is the quality of the people running them.  People with the vision to see a new business idea and, with the funding and other support VCTs can provide, the skill and energy to deliver it.

And courage too.  By their nature, VCTs invest in small companies, and a number of the stories are of companies entering a market populated with large national, and sometimes international, players.  As one manager said to me, it’s not for the faint-hearted.

Of course, this brings risk, and for every success story, there will be others that struggle, or even fail.   But when it does work, and you see a company changing the market it operates in for the better, and building a business that will last, it is something that the VCT sector can be justly proud of.

Leave a Reply

Your email address will not be published. Required fields are marked *