When 124 founders speak about the same funding model in similar terms, it is worth listening. The nationwide survey carried out independently by Focaldata gathers views from entrepreneurs running current and former VCT backed companies across the UK. Their responses go past abstract support for a tax scheme. They set out how Venture Capital Trust funding altered the direction of their businesses.
The numbers are direct as 91% say their company would be smaller without VCT funding. More than a quarter, 27%, believe their business would not exist at all if they had not secured VCT investment. That is not marginal support. It speaks to survival.
Growth also came up in the findings. The research finds that 68% of founders say VCT investment has been extremely important to their company’s growth. For businesses that have successfully exited from VCT backing, that goes up to nearly 80%. Those who have reached an exit are the most likely to credit VCTs with helping them get there.
One founder sets out the operational effect in detail: “VCT funding for us, apart from the financial benefit, added a step change in the operational quality of the business – in what was already a company managed by experienced and qualified professionals – and resulted in a significant improvement in strategic planning, and much faster achievement of the goals and financial success of the business.“
That comment touches on a theme running through the survey. Capital matters, and the discipline and structure that come with it can be decisive.
How Do VCTs Influence Hiring, Governance And Later Investment?
The survey moves past headline growth and looks at what actually happens inside companies after a VCT invests. The answers are practical.
79% of founders say VCT backing enabled them to hire senior talent or specialist advisers. For scaling companies, that often means moving from founder led management to experienced leadership teams. Another 77% report improved governance, financial reporting and board effectiveness. These changes affect how decisions are made and how risk is managed.
Strategic input also shows up in the data. 64% say they received mentoring that shaped decisions at important growth moments. 52% report that VCT involvement accelerated product development and research and development activity. The survey presents VCT managers as active participants in company development, not silent shareholders.
Access to later funding is another theme. Founders consistently refer to VCT capital as a bridge between early stage schemes such as EIS and SEIS and later stage venture capital or private equity finance. In Knowledge Intensive Companies, 64% say VCT involvement had a positive impact on future fundraising.
One founder explains the funding gap in stark terms: “VCT funding is a critical part of the UK’s startup funding infrastructure. World-leading angel investment schemes (EIS/SEIS) need a bridge between them and traditional VC/PE funds. Without VCT funds that are able to write significant cheques and patient capital, many businesses will fall into the valley of death for not being high-growth enough for VC funds or large/profitable enough for PE.”
That account of a funding gap is rooted in the experience of companies trying to grow from early traction to commercial scale.
What Happens To Growth Plans If VCT Support Changes?
The survey also tests how sensitive scaling plans are to policy decisions. It reports strong backing for the Government’s decision to raise VCT investment limits. In firms under five years old, 81% expect that change to have a positive impact.
At the same time, founders express concern about the reduction in VCT income tax relief from 30% to 20%, due in April 2026. Anxiety is most pronounced in smaller companies. 57% of businesses with fewer than 50 employees say they are worried about the effect on their scaling plans.
The potential consequences are direct. If less VCT funding were available, 62% say they would scale back growth plans. 45% would reduce headcount. A quarter, 25%, would consider relocating their headquarters abroad. These responses point to employment and tax base decisions, not abstract debate.
Chris Lewis, Chair of the Venture Capital Trust Association, frames the issue in economic terms. He said: “This latest research confirms that VCTs remain one of the UK’s most effective engines of innovation, backing founders who are building the companies that will shape our economy for decades to come. We will continue working alongside the wider industry and policymakers to ensure the VCT scheme remains fit for purpose and continues to empower the next generation of British entrepreneurs.”
The survey presents VCT funding as embedded in how scaling businesses hire, govern themselves and attract later capital. Founders make plain that changes to the scheme will influence how fast they grow, how many people they employ and where they base their companies.
