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Venture Capital Trusts come to the masses

05/09/2023

Venture capital trusts (VCTs) have long held the reputation of being “old-school” ways to invest – and restricted purely to investors with significant sums of money to invest. 

Now, though, things are changing. But why and how are younger investors with less to invest jumping on the VCT bandwagon? 

 

Crowdcube and Octopus Investments team up

Historically, the minimum amount that can be invested into a VCT is around the £3,000 to £5,000 mark. It’s a figure that could be prohibitive to many investors – but now things have changed. 

In March 2023, Crowdcube and Octopus Investments announced the launch of a new partnership designed to lower the barriers to entry for retail investors looking to get into VCTs. Via the Crowdcube platform, individual investors can invest in Octopus Investments VCTs – including their flagship funds – from just £500.

 

How many people are investing this way – and why? 

In late July, Crowdcube released data showing that – since the scheme was introduced – 740 people had invested a total of £1.5m in VCTs via the platform. 90% of investments, they say, are now £3,000 or under.

They also highlighted that the demographics of their investors go against the historic norm, with 34% of new investors aged between 31 and 40. 

The team at This is Money spoke to these new investors to understand why they had decided to go down this route. Many of those interviewed said that they would have invested in VCTs earlier if the minimum investment amount hadn’t been so high. 

Some were attracted to the diversity of the businesses available to invest in through VCTs, while others enjoy the fact that they have access to unlisted companies. Some mention the tax benefits of investing in this way, while others talk about the good reputation of Octopus VCTs. 

Could this pave the way for other VCTs to break down barriers further still? 

 

“Stable Rise Limited is not authorised or registered by the Financial Conduct Authority. The marketing materials are not intended to provide financial advice nor promote any individual financial products.”

 

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