The consultation, ‘Financing growth in innovative firms’, looks at ways to ensure start-ups have access to the finance they need and has identified a £4 billion funding gap between American firms and British firms. The National Investment fund will help address this gap and boost British business.

 

Currently, British businesses also rely on funding from the European Investment Fund. A new UK based fund would help ensure that firms still have access to the funding they need, should the relationship with the European Investment Fund end when the UK leaves the EU.

 

The consultation also looks at how these firms might benefit from investment originating from pension funds; and how to commercialise research from UK universities and drive investment in firms across the UK.

 

“Britain is an innovation powerhouse and it’s vital that we make sure our cutting-edge firms have the funding they need to meet their potential and conquer new markets,” explained Chancellor of the Exchequer, Phillip Hammond. “Meeting this challenge will boost our productivity and enable us to create more well paid jobs across the UK.”

 

The Government highlights that currently fewer than one in ten firms that receive seed funding in the UK go on to get fourth round investment, compared to nearly a quarter in the US.

 

And while the UK leads Europe in the creation of Unicorns, it significantly lags behind the US which accounts for 54% of these $1 billion plus companies; and China which accounts for 23%. Just 4% are based in the UK.

 

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Contains public sector information licensed under the Open Government Licence v3.0.