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Verdict on venture capital - a bad reputation and lack of understanding of entrepreneurs - May 11, 2012 The majority of UK entrepreneurs believe there is a lack of understanding among venture capital circles of entrepreneurship, according to new research from Coutts.  The results of a new survey show that UK entrepreneurs are also largely sceptical about the benefits of venture capital and its fit with the entrepreneurial mindset. While 69% of entrepreneurs believe venture capital investment will deliver faster growth to a business, the majority have doubts about the experience they would go through and the sustainability of that growth.    The report highlights the following perceptions of venture capital among entrepreneurs:   -          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, Coutts’ executive director of client propositions, said: “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, there are negative perceptions around the nature of venture capital and how to work effectively with these investors. These perceptions don’t reflect the true experience of those who have worked with venture capital, and 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.” « Go Back © Business-Money.com Ltd

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