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Drop in venture capital investment

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Private investment in new UK enterprises fell back last year.

New figures from the British Private Equity and Venture Capital Association (BVCA) revealed that monies put into UK start-ups dropped in 2010 from £125 million to £46 million.

Early stage investments were also down, from £303 million in 2009 to £224 million.

But there was a rally in the amounts invested in management buyouts. This raised the total investment by private equity and venture capital firms from £4.8 billion in 2009 to £8.2 billion in 2010.

The BVCA welcomed a joint announcement by the Prime Minister, David Cameron, and US President, Barack Obama during the recent state visit to the UK on the importance of investment in science and innovation.

Mark Florman, chief executive of the BVCA, said: “In the ‘Year of Venture’ we are delighted to see both Prime Minister Cameron and President Obama recognise the crucial role of the venture capital industry in supporting creative, groundbreaking companies.

“Venture capital invests in the sorts of businesses that will be central to Britain and America’s ability to compete and lead in the new economy which emerges from the recession.

“Fostering innovation, backing entrepreneurs, building cutting edge companies and producing world-beating technologies: this is what the venture capital industry stands for and we look forward to working with both the US and UK governments, as well as our counterparts in the America, in order to ensure venture capital continues to lead the way in nurturing those companies that will lead the way on the new technological frontier.”