VCTA: Early-stage business leaders say knowledge gap is biggest barrier to accessing finance
- On February 1, 2023
- By GrowthInvest Marketing
- Entrepreneurs say company valuation disagreements and weak business track records are most likely to scupper funding deals
- 66% say access to more venture capital would make the biggest difference to starting or growing a business
LONDON, Jan. 30, 2023 /PRNewswire/ — Early-stage company entrepreneurs are hamstrung by a lack of information on how to access the external funding needed to support their growth plans, according to new research published today by the Venture Capital Trust Association (VCTA).
The VCTA surveyed 240 senior decision makers in charge of recently launched small businesses less than seven years old and employing up to 250 employees. Despite an overwhelming majority (92%) of respondents requiring equity finance over the coming two years, almost half (44%) say they lack information on how to access it, the figure rising to 47% among entrepreneurs based outside of London and the Southeast.
Business owners say funding agreements most commonly fall through with potential lenders because they fail to agree on a company valuation (43%), lack a proven track record (42%) or fully developed business model (37%).
The VCTA’s study highlights the crucial role played by equity finance in helping early-stage businesses to grow: two-thirds (66%) of respondents believe that increasing the availability of venture capital finance would make the biggest difference to supporting entrepreneurs looking to start or grow a business. This is comfortably ahead of other factors including access to local skilled staff (48%) and better local transport links and infrastructure e.g., broadband (34%).
GET IN TOUCH!
CALL US020 7071 3945
FOLLOW US ON
Throughout our site you will find links to external websites. Although we make every effort to ensure these links are accurate, up to date and relevant, we cannot take responsibility for pages maintained by external providers.