The government plans to launch a £1bn emergency venture capital fund in a bid to throw a lifeline to technology start-up firms. The fund has won the backing of the new science and innovation minister Lord Drayson. It will form the centrepiece of a dramatic shift in industrial policy which will see more intervention from government.
The plan, conceived by the National Endowment for Science, Technology and the Arts (Nesta), was fleshed out in discussions at Downing Street last Thursday morning between Gordon Brown, Drayson and Lord Sainsbury.
Many ‘pre-revenue firms’ are facing a battle for survival as they struggle to get finance. There are fears that the doubling of government funding for scientific research at universities, which has led to an increased number of spin-outs in IT, biotech, nanotech and green technologies, will count for nothing if money is not quickly distributed to them.