The latest news from Venture Index shows a 9% rise in investments for the past quarter. Surprisingly, the size of deal is decreasing: from £125,000 to £100,000. This trend appears to be the opposite of what we are seeing at London Business Angels- where funding rounds are continuing to rise. Modwenna Rees-Mogg of Venture Index suggests:
“We are monitoring this trend closely to establish whether the equity gap is still wide open in the £250k – £1m segment and it certainly looks as if the new Enterprise Capital Funds will be fulfilling a much needed role in plugging this gap.”
From our perspective, there is a clear case for Enterprise Capital Funds. We are seeing larger funding rounds and those entrepreneurs are finding it difficult to raise £500,000. London Seed Capital can only provide £100,000,leavng a gap of £400,000 to be filled by angels. An ECF could make a significant difference in securing funding for those businesses.