Mannerisms

Venture capital and angel investment in the high technology industry in the UK and Ireland has still, it appears, not returned to the level of 2000.

Ascendant, the high-tech investment company, tracks the VC and angel tech deals done each year in the UK and Ireland, and finds that 2007, although the best year since 2001, has still not reached the £1 billion level reached in 2000.

Investments in the UK tech sector rose 27 per cent to £872 million, say Ascendant.

The year started as though it might be the year that the 2000 level of investment would be breached, but, as sub-prime, CDOs, etc emerged from under their stones, confidence softened, and investment slowed.

So, there’s only a couple of years to go before we have to acknowledge a flat decade for UK tech investment. What a bummer that would be.

One positive sign is, according to Ascendant, that some VC companies raised new funds in 2007, and another positive trend is that angels are getting more significant in the UK funding scene.

“We noticed a potentially interesting trend in the percentage of deals involving private investors – individuals not VCs”, says Stuart McKnight, Ascendant’s CEO, “historically it was rare to have a private investor involved in a deal of £0.5m or more. In 2007, 13 per cent of the deals Ascendant tracks were funded by private investors or a syndicate of private investors and a VC working together. This percentage has been moving up slowly over the last 3 years.”

That now, in 2008, the investment levels are still below those of 2000, shows what a hit the industry and its backers took in 2001, and succeeding years.

Confidence, once lost, takes a long time returning.

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