UK to improve science & tech financing on the capital markets?On 14th February the Financial Conduct Authority (FCA), the UK’s financial regulator, published a discussion paper on the effectiveness of the UK capital markets. The paper (follow link here for PDF download) featured particular discussion on how effective the capital markets are for the support and growth of science and technology companies.
The principle concern today is that equity issues on the capital markets have become a way for existing investors to exit their investment and realise a profit, instead of serving as a way to raise capital for growth and development of the company. A second and related concern is that science and technology companies stay private for longer and do not raise capital because it can take longer for a company to complete its research, develop its technology, and become a profitable business.
The larger picture is that the UK government is pursuing a new industrial strategy which emphasises science and technology companies and SME financing. The FCA’s engagement on this issue here is a sign that real steps being taken to address the hindrances that science and technology companies face when they are trying to grow.
Their attention in this area is very welcome!