Britain’s small businesses, particularly in the tech sector, proved an attractive proposition in 2021, with equity investment hitting a record £18.1 billion.
The figure, an increase of 88 per cent, was almost double that of COVID-affected 2020, with a total of 2,616 deals.
The boom continued into the first quarter of 2022 with investment of £7.6 billion, which in itself is the highest recorded in a single quarter, according to the British Business Bank’s annual Small Business Equity Tracker.
Strengthening tech hub growth
Investment in UK tech companies, a driving force for the economy, doubled, rising to £8.2 billion in 2021 and up from £4.1bn the previous year.
The report added that investment in the sector is crucial for building the future economy and strengthening its position as a tech hub in Europe.
The bank itself supported around one in five (18 per cent) deals last year, with emphasis on those more likely to invest in technology and IP-based businesses.
Investment is usually a longer-term commitment of money and support with the hope of eventually reaping a profit.
If you are looking to attract investment in these areas, Investors, it might be an idea to look at the main types of investors:
Traditional banking: Banks provide businesses, companies, and individual loans that act as an investment, which receives a fixed monthly return which is increased by the interest rate charged.
Angel investors:
These are usually very wealthy individuals who invest primarily in
first-time business companies and start-ups by buying their shares in exchange
for convertible debt or ownership equity.
Peer to Peer Lenders: P2P lenders often personally fund the ventures of
small businesses and purchase their shares. The lender receives interest and
gets the money back when the loan is repaid. It’s a way for borrowers to get
funding without going to the traditional sources of finance.
Personal Investor: As the name implies, a personal investor invests in a business company, or any investment opportunity. Investment often focuses on creating a secure financial cushion for use in later years.
Venture Capitalists: This is a form of private equity financing provided by venture capital firms or funds to start-ups, early-stage, and emerging companies thought to have high growth potential or have demonstrated high growth
Thinking of investments? Call our expert team today for advice.