A new survey has revealed that less than 10% of the British public are confident that they know what venture capital (VC) is, highlighting a crucial lack of education around the multi-billion dollar industry which has made the success of brands such as Deliveroo and Stripe possible.
The survey was commissioned by Newton Venture Program, a training and development initiative which works to level up the world of venture capital, and comes as the organisation launches a free self-paced learning course, Newton Foundations, designed to help people from all walks of life understand VC and the role it plays in our economy.
Venture capital is a form of private finance designed to help start-up businesses get off the ground and scale-up. VCs provide cash to businesses they believe have high growth potential, in exchange for part ownership in the company.
The survey results found that:
- Only 9% of the British public are very familiar with the term venture capital
- 34% of respondents said they were only somewhat familiar with the term
- And a huge 56% said they were either not very familiar or completely unfamiliar with the term
Despite some people having heard of venture capital, a much smaller percentage felt confident in describing it:
- Of those who said they were very or somewhat familiar with the term, only 15% of those people would be very confident in describing venture capital
- Over one-third of respondents (34%) who are familiar with the term said they wouldn’t be confident is providing a description
The research also showcases a gender and regional dimension to the knowledge gap:
- Men were much more likely than women to say they were familiar with the term venture capital - only 5% of women said they were very familiar with the term, compared to 12% of men
- And twice as many women - 36% - said they were not familiar with the term at all, compared to just 18% of men
- People living in London are far more likely to be familiar with VC as a concept; 18% of Londoners are very familiar with the term, compared to a UK average of 9%
- The lowest familiarity was found in Wales, where only 3% of people were very familiar with the term
In an effort to redress this lack of understanding around VC, Newton is today launching a new online course, Foundations. It has been designed to demystify venture capital and help build knowledge across a wider range of people. The course covers what VC actually means, its history and geographical presence, and what working in the industry involves. The sessions will also explore the VC process; from identifying a deal through to exiting an investment.
The course takes 6 hours to complete and participants can access the modules on-demand over a 12-week period, free of charge.
Eleanor Kaye, Executive Director at Newton Venture Program, comments:
“As the numbers show, the powerful and influential world of VC is poorly understood by the UK population at large. We are constantly coming into contact with products and technology that exist thanks to VC funding, but the average person is unlikely to have a working knowledge of the industry. That’s why we’re launching this course. It’s been designed for anyone who is curious about careers in venture capital, for people in roles that intersect with the sector, such as technology and innovation, and for those who simply want to understand how startups and ideas get funded and where that money comes from. If we can boost the foundational understanding of the industry, we can hopefully attract a whole new cohort of people into roles in the space and, as a result, redress the lack of diversity in venture capital.”
Venture Capital currently struggles with a lack of diversity and inclusion. According to the IDC European Women in VC Study, out of 303 European venture funds and 122 VC respondents of funds over €25 million assets under management, 85 percent of VC General partners were men, while just 15 percent were women. And according to the British Venture Capital Association, 80% of those working in VC are white, 11% Asian and only 3% Black.
A joint venture between London Business School and venture capital firm Phoenix Court (Local Globe), with HSBC Innovation Banking joining as a founding partner, Newton Venture Program provides development and training to level the playing field for people from overlooked and underestimated backgrounds. To date, they’ve helped more than 430 people from around the world access or advance careers in venture capital.