{"id":68139,"date":"2016-03-02T15:46:26","date_gmt":"2016-03-02T15:46:26","guid":{"rendered":"http:\/\/mostafa.openonline.co.uk\/?guid=7030235ba2843f6c084034dca4ee099f"},"modified":"2016-03-02T15:46:26","modified_gmt":"2016-03-02T15:46:26","slug":"speech-venture-capital-breathing-life-into-british-businesses","status":"publish","type":"post","link":"https:\/\/mostafa.openonline.co.uk\/?p=68139","title":{"rendered":"Speech: Venture capital: breathing life into British businesses"},"content":{"rendered":"
\n

Thank you, Tim, and good evening everyone.<\/p>\n

I see a lot of familiar faces here.<\/p>\n

It\u2019s always great to be asked to speak to organisations like the BVCA<\/abbr><\/a>. <\/p>\n

I was in finance a lot longer than I\u2019ve been in politics, so it always feels a bit like coming home!<\/p>\n

And it\u2019s kind of fitting to be here at the Savoy, halfway between the Square Mile and Westminster, between my first career and my second. <\/p>\n

Of course a lot has changed in your industry since I left Deutsche Bank in 2009.<\/p>\n

For example, last month I saw that there\u2019s a new kid on the VC<\/abbr> block. <\/p>\n

Sesame Street. <\/p>\n

Seriously!<\/p>\n

The company behind the children\u2019s TV programme is going to invest in start-ups in education and health.<\/p>\n

We\u2019ll see finance brought to you by the letters I, P and O.<\/p>\n

And, having met plenty of VC<\/abbr> people during my time in the City, I\u2019m confident that Oscar the Grouch will fit right in!<\/p>\n

Don\u2019t worry Rob, I\u2019m not talking about you!<\/p>\n

J. Paul Getty once said that the secret of success in business was to rise early, work late\u2026 and strike oil.<\/p>\n

It\u2019s sound advice, up to a point.<\/p>\n

But most businesses need a more reliable source of finance.<\/p>\n

And that\u2019s where private equity and venture capital really come into their own. <\/p>\n

Now, more than ever, you have a vital role to play in Britain\u2019s economy.<\/p>\n

And I\u2019m proud to stand here tonight and say that the private equity and venture capital sector has the full support of the Business Secretary.<\/p>\n

I know that\u2019s not always been the case in the past.<\/p>\n

It\u2019s all too easy to paint you as vultures or parasites.<\/p>\n

And let\u2019s face it, no politician ever lost votes by being too harsh on people working in finance!<\/p>\n

But such days are behind us. <\/p>\n

I know just how important your work can be.<\/p>\n

I know that, far from being the bloodsuckers of internet myth you actually breathe life into companies.<\/p>\n

You don\u2019t strip out jobs, you create them. <\/p>\n

You put your money where your mouth is, and take the kind of calculated risks that benefit us all.<\/p>\n

When I worked in emerging markets I saw, again and again, how a little faith from investors at the right time can make all the difference. <\/p>\n

You take an idea, see its potential, and give it the boost it needs to become reality.<\/p>\n

When you get it right, everyone wins.<\/p>\n

And when you get it wrong\u2026 Well, you\u2019re the biggest losers. <\/p>\n

Fortunately that doesn\u2019t happen very often!<\/p>\n

BVCA<\/abbr> members are currently investing more than \u00a35 billion in more than 700 companies in the UK.<\/p>\n

Together, those companies employ well over 100,000 people.<\/p>\n

And of course the vast majority are SMEs<\/abbr> with high growth potential, which means they\u2019re likely to go on and create many more jobs in years to come.<\/p>\n

It\u2019s clear that your confidence is coming back.<\/p>\n

[Political content removed] <\/p>\n

Equity investment in small businesses grew by more than 40% in the year to October. <\/p>\n

You\u2019re also making a real difference right across the country.<\/p>\n

Three-quarters of BVCA<\/abbr> members\u2019 investment goes outside London. <\/p>\n

You\u2019ve recently doubled the level of investment in my home region, the West Midlands.<\/p>\n

That\u2019s a real boost for the region as we work to fire up the Midlands Engine.<\/p>\n

And a real sign that you\u2019re ready, willing and able to back exciting, innovative ideas wherever they may be.<\/p>\n

That\u2019s particularly important right now.<\/p>\n

Last week I attended the annual conference of British manufacturers<\/a>, I spoke there in fact. <\/p>\n

And one message that came through loud and clear from all the speakers was that manufacturing is changing.<\/p>\n

That industry is changing.<\/p>\n

That as we enter this fourth industrial revolution the greatest demand in advanced economies is not going to be for raw materials, but for ideas.<\/p>\n

New ways of thinking<\/p>\n

New ways of working.<\/p>\n

New ways of manufacturing.<\/p>\n

In the past we\u2019ve thought of cutting-edge start-ups as something limited to Silicon Valley and Tech City.<\/p>\n

However, in 2016 those labels are becoming less important.<\/p>\n

The lines between industry and technology are becoming blurred. <\/p>\n

That change brings with it incredible potential for economic growth. <\/p>\n

But only if the right finance and funding is available.<\/p>\n

And only if the people holding the purse strings can match the vision and ambition of the innovators themselves.<\/p>\n

That means you, by the way!<\/p>\n

But I\u2019m not going to tell you to go out on a limb on your own. <\/p>\n

My department, and the government as a whole, is and will remain a committed partner in helping you support innovative companies to develop and grow.<\/p>\n

The British Business Bank<\/a> is playing an active and collaborative role. <\/p>\n

So far its VC<\/abbr> Catalyst<\/a>, Angel Co-Fund<\/a> and Enterprise Capital<\/a> funds have facilitated new finance of almost \u00a31 billion for nearly 500 businesses. <\/p>\n

On top of that, the bank will shortly be calling for innovative and ambitious investment strategies for delivering debt and equity finance through the \u00a3400 million Northern Powerhouse Investment Fund<\/a>. <\/p>\n

So get your thinking caps on!<\/p>\n

We\u2019re also committed to delivering a tax system that incentivises investment in growth and innovation.<\/p>\n

So far we\u2019re offering Venture Capital Trusts (VCTs<\/abbr>), the Enterprise Investment Scheme (EIS<\/abbr>)<\/a> and the Seed Investment Scheme<\/a>.<\/p>\n

And there\u2019s no doubt this trio of measures are working. <\/p>\n

In 2014 to 2015, VCTs<\/abbr> issued \u00a3435 million of new shares and currently have investments in over a thousand companies. <\/p>\n

And in one year alone the EIS<\/abbr> facilitated more than \u00a31.5 billion of investment in not far short of 3,000 businesses.<\/p>\n

It\u2019s pretty clear that it\u2019s playing a pivotal role in supporting a vibrant, early stage equity culture.<\/p>\n

In fact the schemes have proved so successful that we sought and secured State Aid approval for letting them provide additional support to knowledge intensive companies.<\/p>\n

Exactly the kind of companies that will be shaping the future of British industry. <\/p>\n

When those companies are ready to go public, we want it to be as easy as possible for them to do so.<\/p>\n

That\u2019s why we abolished stamp duty on Alternative Investment Market shares and made them eligible for ISA<\/abbr> investments. <\/p>\n

We have also worked with the London Stock Exchange as it has introduced such innovations as the High Growth Segment.<\/p>\n

It allows high growth potential businesses to list on the main market with an initial free float of as low as 10%.<\/p>\n

And of course we\u2019re also doing everything we can to make Britain the best place in the world to start and grow a business. <\/p>\n

So we\u2019ve extended the doubling of small business rate relief until 2017.<\/p>\n

We\u2019ve cut corporation tax to the lowest level of any major economy. <\/p>\n

We\u2019ve lifted hundreds of thousands of businesses out of employer National Insurance contributions.<\/p>\n

We\u2019ve set the highest ever permanent level for the annual investment allowance.<\/p>\n

And we\u2019ve got Research and Development tax credits<\/a>, the Patent Box<\/a> and Entrepreneurs\u2019 Relief<\/a>, all of which encourage further investment in innovation and ideas. <\/p>\n

We\u2019ve slashed \u00a310 billion of red tape for business, and are committed to cutting another \u00a310 billion by 2020.<\/p>\n

And the Enterprise Bill<\/a>, currently before Parliament, will create a new Small Business Commissioner to give SMEs<\/abbr> a stronger voice. <\/p>\n

But we can do more, and we are doing more. <\/p>\n

We need to ensure that the UK has the research base and the productivity levers in which innovative high-growth companies can start, grow and compete globally.<\/p>\n

Last summer, as you may have seen, we launched a plan called Fixing the foundations<\/a>. <\/p>\n

It\u2019s our cross-government plan for increasing productivity right across the economy. <\/p>\n

Our vision for increasing long-term investment in people, capital and ideas, as well as making markets more dynamic. <\/p>\n

That includes everything from increasing the quality and quantity of apprenticeships, to reforming the planning system, to changing the way the government supports growing companies who want to export.<\/p>\n

Alongside this, at the Spending Review, I was able to secure an investment of almost \u00a37 billion as part of the national science capital commitment. <\/p>\n

I also protected today\u2019s \u00a34.7 annual billion resource funding in real terms. <\/p>\n

Together, this underlines my commitment to keeping the UK a world leader in science and research. <\/p>\n

We\u2019ve created Catapult centres that help business and researchers turn great ideas into commercial reality. <\/p>\n

And, building on this, we\u2019ll shortly be publishing a National Innovation Plan to ensure the UK remains an international beacon for bright ideas. <\/p>\n

The plan will bring together ideas, levers and investment from across government, so we can create the right conditions for businesses to innovate and grow. <\/p>\n

These are the businesses that are the key to our country\u2019s economic future. <\/p>\n

And that\u2019s why your role in backing them through their early development and growth phase is tremendously important. <\/p>\n

But it\u2019s not just about cold, hard cash.<\/p>\n

Venture capital and private equity at its best is about more than just providing funding for companies to develop, grow or restructure.<\/p>\n

It\u2019s about nurturing talent too. <\/p>\n

About helping talented yet inexperienced entrepreneurs to devise and implement long-term growth strategies.<\/p>\n

About understanding what it takes to help a high-potential business through the development, early growth and scale-up phases.<\/p>\n

And that\u2019s where the people who been there and done that a thousand times before, people like the BVCA<\/abbr> members here tonight, can really add something special to the mix.<\/p>\n

It\u2019s your wisdom, understanding and long-term commitment that brings the greatest rewards.<\/p>\n

And that\u2019s why you can do so much more than any politician or civil servant ever could. <\/p>\n

You\u2019ve been there, you\u2019ve done that, you\u2019ve seen what works and you know what doesn\u2019t.<\/p>\n

And it\u2019s that knowledge, that experience, that will turn the next generation of great British ideas into the next generation of great British businesses.<\/p>\n

That will turn exciting innovations into real-world jobs and growth.<\/p>\n

What you do isn\u2019t easy.<\/p>\n

It isn\u2019t easily understood and all too often it\u2019s not even popular.<\/p>\n

But it is absolutely vital to the future of our economy and our country. <\/p>\n

And I\u2019m proud to say that both myself and the government support you all the way.<\/p>\n

Have a great evening.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Sajid Javid on the role of venture capital, government support for innovators, and Sesame Street\u2019s Oscar the Grouch.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"_links":{"self":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/68139"}],"collection":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=68139"}],"version-history":[{"count":0,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/68139\/revisions"}],"wp:attachment":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=68139"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=68139"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=68139"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}