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Nigel Griffiths MP

Corporate Venturing UK Launch
Nigel Griffiths MP

National Business Angels Network


Tuesday, June 18, 2002


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I am very happy to be here to officially launch this exciting new initiative. Corporate venturing has the potential to become a major influence on funding for innovative small businesses. For too long Productivity in the UK has lagged behind our major competitors and investment in British business has been lacking. We want this to change and for corporate venturing to open up new opportunities in Britain, promoting long term investment and closing the productivity gap.

Corporate venturing really can provide a win-win opportunity for us all. It gives growth firms the chance to work in partnership with investing companies to get the support - not just financial, but also in distribution and other areas of expertise - we need these to flourish and create further wealth for this country. Corporate venturing allows investee companies to identify and develop new technologies that will take them into new markets or improve existing products.

I am particularly pleased that Small Business Service support has provided the means for this National Business Angels Network-inspired initiative to go forward. As well as our pump-priming support for NBAN itself the Government, through the SBS, is providing one and a half million pounds over the next three years to develop this innovative programme. This is a practical demonstration of our commitment to improving the availability of all forms of financing for small businesses - to help them go on to develop the products and processes that will be the engine of UK productivity for the future.

By establishing a viable corporate venturing marketplace, Corporate Venturing UK will make it much easier for potential partners to find each other and for valuable partnerships to be formed. The whole process should become quicker and more efficient as well as making sure more introductions are made. The benefits should speak for themselves and encourage many new participants into this market, both large and small. We only have to look across the Atlantic to see how corporate venturing can make a difference; with companies like Intel investing over £3 billion dollars in small businesses, the majority of which were start-ups.

The Government has already provided a lead by introducing the Corporate Venturing Scheme, which provides a tax incentive to encourage companies to invest in small higher risk trading companies and to form wider corporate venturing partnerships. The tax scheme allows investor companies to:

  • Obtain corporation tax relief at 20 per cent on amounts invested in new ordinary shares held for at least 3 years;

  • Defer tax on any gain made on corporate venturing investments which are reinvested in another shareholding under the scheme; and

  • Claim relief against income for capital losses (net of corporation tax relief) on disposals of shares.

The scheme has so far led to seventeen and a half million pounds of direct investment into small firms and has generated great interest from potential investors.

I am also pleased that Corporate Venturing UK has such support from other members of the business community. I know that Digby Jones and the CBI have been good supporters of the activity, and with this sort of support I am sure we are witnessing the start of something big. I wish the NBAN team every success.
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