This research from Advanced Oxford, in conjunction Oxford Investment Opportunity Network, provides valuable insight from a group of active investors, all of whom have an interest in early-stage investment, all of whom invest in knowledge-economy sectors. While there is cause for optimism that just over half expect to make the same level of investment, or more investment, when compared to the previous 12 months, just under a half expect their level of investment to reduce.
There appears to be a strong preference for focusing on investment into existing portfolio companies and an expectation that the amount of money available for investment into early-stage companies will reduce. This may mean that some younger, early-stage companies will struggle to attract investment in the short to medium term, particularly where they are raising investment for the first time. These companies are also the companies that fall outside of the eligibility for the Future Fund and as a result, other interventions may be needed to encourage and incentivise seed and early-stage investment. While investors seem to be focused on supporting companies within their investment portfolios, there is an expectation that there will be higher level of company failure than previously predicted.
Government support for the early stage businesses is very welcome but respondents indicated a strong need for additional support due to a significant reduction in investment from angels and seed/VC funding which threatens the viability of many small R&D intensive businesses.
Published: May 2020.