The Venture Capital Trust (VCT) scheme, introduced in 1995, has revolutionised how high-growth UK businesses access funding. As it approaches its 30th anniversary in 2025, the VCT scheme continues to drive innovation, create jobs, and power economic growth.
At Howard Kennedy, having been involved since the inception of the scheme, we are proud of our significant track record in the VCT space, providing expert FCA sponsor and legal support to those at the heart of this transformative sector.
VCTs: Fueling Growth and Driving Success
For three decades, VCTs have been an essential source of patient capital to high-growth small businesses in the UK. This support in early stage businesses, that may otherwise have struggled to access commercial investment, has allowed businesses like Zoopla, Virgin Wines, Graze, Five Guys and Everyman Cinemas to grow, enter new markets and drive employment in all parts of the UK.
This funding has helped transform businesses like Quantexa, an AI pioneer now valued at £1.8 billion, and Unbiased, the award-winning financial advice platform from start-ups to industry leaders.
VCTs offer investors attractive tax incentives to encourage them to invest in risky early-stage companies with big potential. In the last year alone, VCTs raised £882 million, and with tax reliefs extended until 2035, the scheme is set to remain a key driver of UK innovation. The VCT industry has some £6.5 billion under management, investing in approximately 1,600 startups and fast growth businesses in the UK.
Howard Kennedy’s Proven Expertise in VCTs
At Howard Kennedy we've established a strong reputation for supporting the VCT sector. Our track record reflects our extensive experience and deep knowledge of venture capital law and the regulatory framework governing VCTs.
Key Highlights of Our VCT Track Record:
- Currently advising 8 of the top 10 VCTs by total funds under management. These managers have £4.8 billion of VCT funds under management.
- Acted as legal adviser and sponsor to the last five new entrants in the VCT market.
- Supported VCT fundraisings totalling over £2 billion since 2021.
Our role goes beyond legal and regulatory advice - we provide strategic guidance that ensures compliance with complex regulations while helping to optimise outcomes for investors and businesses.
Comprehensive Support for the VCT Ecosystem
Our expertise extends across the full lifecycle of a VCT, offering services such as:
- Fundraising: Supporting successful fund launches and investor engagement.
- Regulatory compliance: Helping managers navigate the stringent rules governing listed VCTs.
- Corporate actions: Advising on mergers, manager changes and wind downs.
Through our wholly owned subsidiary, FCA regulated Howard Kennedy Corporate Services LLP, (Reference number: 523524) we are able to offer our VCT clients sponsor services, a unique dual role for an English law firm.
Looking Ahead
As the VCT scheme enters its fourth decade, its importance in fostering UK innovation and economic resilience continues to grow. Howard Kennedy remains committed to supporting the VCT ecosystem, offering our expertise to fund managers, entrepreneurs, and investors navigating this evolving landscape.
Keith Lassman, Head of Capital Markets at Howard Kennedy said:
"At Howard Kennedy we are proud to have been a key partner to the VCT industry over the last 30 years. From the beginning the sector has been exciting and vibrant and we have enjoyed playing our role in developing it into the £6.5 billion industry that it is now. The VCT scheme shows no sign of slowing down with approval of the extension of the scheme to 2035, five new entrants in the last six years and record breaking amounts of funds raised in two of the last three tax years. We look forward to continuing to service the legal and sponsor needs of VCTs for many years to come".
If you’re seeking experienced legal or regulatory guidance in VCTs contact Howard Kennedy today to find out how we can help you achieve success.
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