Seed Capital is raising up to £14m to invest in Oxford technology 4 VCT, a venture capital trust focusing on early stage and start-up technology companies in and around Oxford.
This VCT will operate a similar investment strategy to the previous Oxford VCTs that were established in 1997, 2000 and 2002. These are fully invested and the directors are keen to embark on another round of fundraising to capitalise on the investment opportunities which come their way. The directors also believe the doubling of VCT income tax relief to 40 per cent will have a positive effect.
Seed Capital's managing director Lucius Cary has more than 20 years' experience of advising and managing early-stage and start-up companies. He and the rest of the board will be looking for companies that are managed by world class scientists who perhaps lack experience of running a business. These companies are likely to have developed technology that is protected by patents and may be starting to focus on the sales side.
All fields will be considered, including software, biotechnology, healthcare and engineering. Some companies may have originated from the science departments of universities and this VCT may find investment opportunities emerging from Oxford University and the Begbroke Science Park to the north of Oxford.
It is difficult for start-ups and developing technology companies to find financial backing from other avenues and this may throw up good investment opportunities in companies that have innovative ideas. For investors, there will be potentially high rewards, but the flip-side of this is higher than average risks.
This is a specialist VCT that narrows investment opportunities down to early stage companies in single sector, within a small area of England, and this may put some investors off - particularly those who had their fingers burnt by the tech boom in 2000.