Physical Science, Measurement and Instrumentation, Management and Education, IEE Proceedings A

The paper gives an introduction to the role of venture capital in facilitating the development of small entrepreneurial companies, providing products or services based on applied technology and electronics. Statistics on the UK venture capital industry show that UK know-how is well in advance of Europe as a whole, but ventures based on electronics have underperformed other sectors of the market, and they have become less attractive to investors. The best risks are those where an experienced and compatible management team is in place, either in a new venture, a buy out or a buy in. The most likely end point of a venture is not a stock exchange flotation, but a trade sale to a major company wishing to complement its activities in the field of new technology. A possible way forward is for such major companies to use venture capitalists to manage new-product funds on their behalf, to finance and develop entrepreneurial companies to a stage where successful acquisition can be considered.