Capacity of £1.324 billion has been made available to investors for this VCT season

Over £15 million was raised from Unicorn VCT on February 6^th. It was the last Venture Capitalist Trust (VCT) of the tax year to be launched. It now means all VCT's have been either launched or already filled out. The reached capacity for the 2022/23 tax year is £1.324 billion, from the VCT's all now being open or filled.

This year has seen there be 45 trusts involved with 25 offers launched across them. For this current tax year, 2022/23, wealthy investors have committed £661.9 million as of now. This has all come about despite the economic struggles that have derailed many and caused setbacks.

It paints a positive picture for the industry as it is set to be the second year in succession with a hefty total raised. The last tax year saw a return in the region of £783.1 million, an increase of approximately £400 million from the previous year. Also, £1.1 billion was generated by private investors through 42 trusts, where 27 offers were launched.

CEO and founder of Wealth Club, Alex Davies, spoke on the positive results of the current tax year and reflected on the positive effect of VCT's stating, "This years' VCT season has delivered a second consecutive bumper year and there are still two months left to run. He went on to admit businesses have had an 'incredibly challenging' last couple of years. The CEO further said, "VCTs have been a break in the darkness – enabling young entrepreneurial British companies to access the funds they need in order to flourish and grow".

A result of this is the ability for the UK to mark itself as the hub for enterprise and innovation. Economic growth at the grass root level amongst up-and-coming British companies can come as a result of them expanding through the access to funds from VCT's and also the creation of jobs.

Davies alluded to the benefits for VCT's in this process, adding, "VCTs remain one of the best ways that private investors can get exposure to the UK's privately owned high-growth companies, and also offer generous tax reliefs to offset the associated higher risks. This makes them a valuable alternative for wealthier investors impacted by pension restrictions and ISA allowances."

The rise of VCT's in the business and economic picture and its popularity is down to a few reasons. One of which is that they have been successful in their usage. In the decade leading up to last December, the FTSE All Share index was outperformed by the top ten generalist VCT managers, who managed to nearly double investor money on average.

Additionally, investors have come to anticipate that the stem of growth and innovation is set to come from younger entrepreneurial start-up businesses rather than corporate companies with a much larger status. Start-up businesses are in a better position to succeed than in the previous decade from access to private and public funding, as well as accelerators and incubators.

Furthermore, the relaxion for taxes as a result of utilising VCT's is pivotal as the current climate has seen a rise in taxes and traditional tax-efficient investments including pensions becoming increasingly restricted.

The top VCT's of usage right now include 40-year-old British Smaller Company, which has two VCT's running. They tend to focus on collaborating with companies that provide business services and provide investors with exposure to c.35 companies.

Octopus Titan is another popular VCT that is well resourced and have a reliable strategy regarding investment. They have a reliable track record of identifying and investing in some of the best British entrepreneurs and private technology businesses going back a lengthy period of time. The VCT's willingness to support high-growth businesses in early development and hold over £200 million yearly, make it an attractive option for those up-and-coming entrepreneurs seeking the necessary funding. They have been drawn to the small satellite industry, investing in Orbex, a private low-cost rocket company based in the UK.

Pembroke VCT launched 10 years ago and have successfully managed to achieve exits from some of their investments. These include Pasta Evangelists, Plenish and ME+EM. Doing this has enabled them to pay 12p in special dividends. As of now plenty of other growing businesses have their attention. These include Peckwater Brands, a company that supports restaurants and takeout places by providing them with food concepts to help them increase their revenue.

The increased usage amount of VCT's is a resemblance of the business and financial climate getting back on its feet after the COVID-19 pandemic. It is a more reliable opportunity for aspiring entrepreneurs to build a successful business with financial resources and guidance at their disposal from VCT's.