Our first newsletter of the year takes a look ahead to early-stage investing and how its shaping up for 2024.

We highlight our thoughts, and importantly give you the opportunity to feed back to us about your views on what’s ahead, including your focus on sector and what you would like to see at our pitch events in the year ahead.

2023 was incredibly tough. A low point for investing, with only 1,300 deals versus 1,800 in 2019 in the pre-Covid era, according to Beauhurst’s 2023 Market Summary.

Our Managing Partner, Greg Tufnell, attended the UKBAA Early-Stage Investment Summit in December, where there were some key themes resonating, driven from the concerning (but not surprising) statistic that investment in new companies was down by over 50%.

Concerning because supporting and helping these early-stage founders and their businesses to succeed is the start of the growth cycle, as well as generating so many benefits to our wider economy.

Of the companies receiving the most investment in 2023, these were largely in AI, Cleantech and Fintech.

These sectors will continue to attract investor interest in 2024, but what other sectors are expected to be a focus for the year ahead?

Please click here to complete our poll – “Which is the sector that interests you the most for investment in 2024?”

To damage the growth cycle even further is the effect the current macro-economic environment is having on liquidity and subsequently having available funds to invest again.

It’s a vicious cycle, with less investor returns being re-cycled back into the investment market.

To make matters even worse, it seems Government finds no end of ways to make life even harder with another key blow to the start-up and early-stage investment market, being the UK Government’s changes to the R&D credit system, which has taken approximately £3BN out of the start-up sector.

Albeit limited, there is some good news…in that SEIS, EIS and VCT schemes have been extended to 2035.

We must also hope that the Mansion House Compact, which is aimed to encourage UK pension funds to invest in UK Venture Capital, does make some progress. However, the sense from the summit did nothing to dissuade my most sceptical feelings.

Investment Red Flags and Some Tips for 2024…

Three big take outs from the panels were;

• Invest in people and exceptional founders, capable of delivering on their big business ideas and business plans.
• Beware tech businesses that outsource their tech.
• And finally invest because it’s right, do not invest in the tax benefits.

As always, there is much to think about, and with contrasting views and opinions about the future of the early-stage investment market, it’s important to keep an open mind and be kept informed about options and opportunities.

As PACP we look forward to helping founders and investors navigate through these challenges in the coming year.

Importantly, we must also remember to celebrate the successes we do achieve against this backdrop whether through providing strategic advice and support that transforms a founder’s early-stage and growing business, or securing the funding for growth with an investor.

PACP Pitch Events in 2024

We’ll again be hosting pitch events throughout 2024, showcasing founders and their early-stage businesses presenting their investment opportunities to an investor audience.

Generally, the event is sector focussed and consists of 3 founders pitching for 10 minutes, with an opportunity after each pitch for investors to ask questions directly to the founder.

The events are hosted on zoom and last for 1 hour – we like to keep these focussed and on time, as we know and appreciate pressures on diaries and your time.

We are proud of the feedback that we regularly receive about the quality of our founders and investment opportunities presented, and strive to maintain this to ensure that we are hitting the spot with out investor community.

We very much value your comments about what you would like to see at our pitch events, or if there are any specific investment criteria that you would like to see featured.

Please click here to get in touch with feedback about what you would like to see at our pitch events in 2024.