The report highlights the following entrepreneurs’ perceptions of venture capital:
- 72% do not believe venture capital is the best way for a business to realise its growth prospects
- 19% of entrepreneurs believe venture capital delivers sustainable growth
- Nearly a quarter of entrepreneurs (24%) believe venture capital investment increases the risk of business failure
- Less than half (37%) believe venture capital investors are interested in or understand entrepreneurs
- Only 22% of entrepreneurs believe that venture capital investors have a good reputation
In contrast to these perceptions, the research also found that among those who said they had worked with venture capital, 74% said they had a good relationship with their investors and only 13% said they regretted the decision to take the investment.
Overall, the majority of entrepreneurs remain open to the idea of working with venture capital in the future (81%) and would recommend it to other entrepreneurs (80%). Those with experience of venture capital are twice as likely to select venture capital as their preferred source of business finance compared to those with no experience.
Andrew Haigh, Executive Director, Client Propositions, comments:
“There is no doubt that entrepreneurs see venture capital as an important source of finance and associate it with increased growth in their businesses. What our research shows however, is that when it comes to considering this source of finance, negative perceptions around the nature of venture capital and how to work effectively with these investors – which don’t reflect the true experience of those who have done this – are likely to cloud the judgement of entrepreneurs and get in the way of approaching venture capital with a mindset which will deliver a successful deal. There is clearly an opportunity for more entrepreneurs to look again at this source of finance which could unlock future growth in their business.”