To be fair the industry (largely through the British Venture Capital
Association, sorry the British Private Equity and Venture Capital Association as
it has unwisely rebranded itself) has improved by employing classic new Labour
tactics last month to leak the Walker report the day before publication and
control the agenda.
But to understand its complacency you have to remind yourself that the
industry has delivered enormous financial success over a lengthy, sustained
period. And it did so out of the public eye, treading a fine line between making
many of those within the industry extremely wealthy and arguably performing a
function of government.
In the mid 1980s, Treasury officials turned a blind eye to what they
recognised as inequitable tax benefits flowing venture capitalists’ way because
it was an industry involved in activities they saw as beneficial, stimulating
new industries and backing fledgling companies.
Nowadays it’s very different. Venture capital is now private equity and more
concerned with buying into established, under-exploited businesses than trying
But the industry has to go beyond Walker to ensure it continues to thrive.
Dedicating a portion of its funds to the ‘ventures’ of old might be a start.
Only that way will self-regulation continue and will the industry survive an
inevitable credit crunch and a further reputational backlash.
If the industry thought it had weathered the PR storm wait until
restructuring funds start making enormous profits after the inevitable economic
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