UK Venture Capitalists Welcome Changes To Investment Regime For Unlisted Companies

by Robin Pilgrim, LawAndTax-News.com, London

01 March 2005

Changes to the UK's Financial Promotion Order set to come into effect on March 3, which will allow unlisted firms to raise capital more easily from sophisticated investors, have been cautiously welcomed by the country's venture capital sector.

Under the terms of the new rules, high net worth and other sophisticated investors will be able to self-certify, and small or unlisted businesses will be permitted to market themselves to "anyone they 'reasonably believe' to be self-certified high net worth or sophisticated".

Speaking to the AccountingWeb news service prior to the entry into force of the secondary legislation, John Blowers of private equity firm, Angelbourse announced that:

"We very much welcome this move...VCTs normally put a proportion of their investors' money into unquoted companies so why not make it easier for the more financially aware or wealthy individuals to invest direct as well."

However, Gary Robins, the chief executive of investor network, Hotbed was more qualified in his response observing, according to AccountingWeb, that "the concept of 'reasonable' belief that someone is certified is very vague. Individuals who are not certified may well receive promotional material for opportunities to invest in unlisted companies".

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