Glossary

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Glossary
venture capital

venture capital

Venture capital is used to fund new companies or new ideas and is designed to help a company develop a product or a service. Good examples would be funding for a biotech company developing a new drug or for a software company. The failure rate for venture capital projects can be quite high but the rewards can be high too

Venture Capital Trust

A quoted closed-end fund set up specifically to provide private equity capital to small companies. Investors in venture capital trusts can typically get tax relief for investing in these funds, the dividends are not subject to income tax and any capital gain is exempt from capital gains tax. The rules on how large these tax […]

SORP

SORP is the acronym for Statement of Recommended Practice and refers to Financial Statements of Investment Trust Companies and Venture Capital Trusts issued by the Association of Investment Trust Companies. SORP recommends that 75% of management fees and finance costs can come from capital and 25% to revenue. This can reflect the balance of the capital and […]

early stage funding

Early stage funding is for companies that have done the groundwork to get their business established but maybe haven’t progressed past proof of concept. It should be slightly less risky than venture capital

Non-mainstream pooled investment

The concept of a non-mainstream pooled investment (NMPI) was created by the FCA at the end of 2013. Funds that are classified as non mainstream pooled investment cannot market themselves to private investors. The FCA exempted investment trusts (and overseas investment companies that would qualify as investment trusts), REITs and VCTs if they were domiciled in […]

VCT

An abbreviation for venture capital trust

Investment trust definition

An investment trust is a company domiciled in the UK. (see Investment Company ) Investment trusts must: invest in shares, land or other assets with the aim of spreading investment risk, the company’s shares must be admitted to trading on a regulated market and it cannot be a Venture Capital Trust or a Real Estate Investment […]