VCTA: Valuation and track record top reasons for funding agreement collapse

VCTA study

Kathleen Gallagher
clock • 1 min read

Business owners of early stage companies say funding agreements are most likely to fall through because of a failure to agree on company valuation and a lack of a proven track record, according to research from the Venture Capital Trust Association.

VCTA surveyed 240 "senior decision makers" in charge of businesses less than seven years old and employing up to 250 people. Around 43% said funding agreements fall through because of disagreement on company valuation, with 42% saying a lack of proven track record also being a factor and 37% saying it was down to the lack of a fully developed business model. Where will the funds flow in 2023? The research also found that despite 92% of respondents requiring equity finance over the coming two years, 44% lack information on how to access it. Will Fraser-Allen, chair of the VCTA, s...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on VCTs/EIS

Fuel Ventures VCT launches debut £50m fundraise

Fuel Ventures VCT launches debut £50m fundraise

Led by MyVoucherCodes founder

clock 25 January 2024 • 1 min read
Defaqto unveils new ratings for AIM and unlisted BR services

Defaqto unveils new ratings for AIM and unlisted BR services

Following MICAP acquisition

Sahar Nazir
clock 22 January 2024 • 2 min read
Calculus launches next EIS offering with tech and healthcare focus

Calculus launches next EIS offering with tech and healthcare focus

£2 tax free for each £1 invested

Hope Coumbe
clock 18 January 2024 • 1 min read
Trustpilot