Stephen Welton, who runs Business Growth Fund, the UK’s most active investment vehicle, has questioned the business model of Britain’s venture capital firm.
The total amount of VC money invested in Britain rose by 37pc to £4.4bn over the first six months of this year, according to KPMG.However, venture capitalists are shying away from investing in early stage UK start-ups in favour of placing bigger, fewer bets on scale-ups.
But Welton, who runs Britain’s most active scale-up investor, says the VC model is flawed because it relies on identifying potential unicorns – companies which will eventually be worth $1bn or more – to offset losses made by other investments.
Venture capital doesn’t work, says Business Growth Fund boss