A challenging marketplace for venture capital

This article looks at the contemporary situation facing the U.K. venture capital industry as it enters its second decade of activity. After 10 years of substantial growth, the industry is starting to mature. Accordingly, in an increasingly competitive marketplace, U.K. venture capital firms are having to address seriously strategic issues of product and market choice in order to meet the high investment expectations placed on them by their funders. There is evidence that the industry is already concentrating its finances into a small number of larger firms. It is likely that these better resourceed firms will have material advantages in initiating both product and market innovations. However, this concentration is unlikely to improve the supply of venture capital funds to start-up and other early stage, high risk ventures.