The Venture Capital Trust (VCT) industry is expecting difficult months ahead as the economy is still struggling.

Proven VCT manager Stuart Veale said he is working with the companies he holds to ensure they have enough cash to cover the next 18-24 months.

Speaking at an online conference organised by the Association of Investment Companies, he said: “We’re in a difficult time now as far as the economy is concerned. We’ve got rising inflation and that means that both businesses and consumers are going to be cutting back on their spending. As a result, many of the companies in our portfolio will see a slowdown in revenue growth.

“The other related factor is that funding is much more difficult to come by compared to what it has been in the last couple of years. These early-stage companies are going to find it more difficult to go on and raise additional capital.

“We are working very hard with companies to make them focus on profitability and cash flow and really make sure that the cash that they have can last for at least 18-24 months before they need to go out and raise further funding.”

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