Seed Capital is capitalising on the UK's answer to Silicon Valley with the Oxford technology venture capital trust (VCT) 3.
The VCT will invest in early-stage and start-up technology companies within a 60-mile radius of Oxford. It is similar to the previous two Oxford technology VCTs, which appeared in 1997 and 2000. These are now fully invested and the third VCT will follow the same investment strategy.
All types of technology companies will be considered, including those involved in software, biotechnology, healthcare and engineering. Some emerge from the science departments of universities and this VCT may find investment opportunities emerging from Oxford University and the Begbroke Science Park, which is north of Oxford.
This VCT 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 which have a chance of becoming market leaders in their field by being a cut above the competition.
Investors may also have the opportunity to make further investments in individual companies they like the look of, but this is likely to be restricted to two or three companies a year.
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. However, 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.
A recent survey conducted by Downing Corporate Finance found that 41 per cent of investors felt generalist VCTs would perform best in the current economic climate, while just 24 per cent believed specialist VCTs would do well.