A boost for UK startups: Hunt’s pension fund reform to mobilise UK private investment
On Monday, 10 July 2023, the chancellor, Jeremy Hunt, announced his plans to release up to £75 billion of retirement funds for fast-growing startups by 2030. This comes following his pledge in the Autumn Statement to make the UK ”the world’s next Silicon Valley.”
Nine of the largest pension providers – including Aviva, Scottish Widows, Legal & General — have agreed to commit at least 5% of the retirement funds towards private investments which could unlock £50 billion by 2030. In addition, Hunt has proposed doubling the amount of private equity investment from local government pension schemes to 10% which could potentially release another £25 billion by 2030.
The pension reforms are intended to improve the funding environment for startups and make UK capital markets more attractive. This will aim to retain fast-growing startups, following emerging trends by UK startups to seek foreign investment over the London Stock Exchange.
This move will be welcomed by UK venture capital firms, as well as the startup, technology, and innovation communities.
Fundraising is a key part of any fast-growing startup journey. It is also the first instance where a business may encounter intellectual property (IP) due diligence and consider taking a more proactive IP strategy.
The top 10 most innovative companies in the UK operating at the seed, senture or srowth stages of evolution as listed by Beauhurst in 2022 have a combined total of 130 unique published patent families between them.
When conducted properly, IP due diligence can provide investors with key insights into early-stage venture management. Comparing what founders pitch about their venture, its technology and its business model against their IP strategy and portfolio can provide clear and early warning signs when things do not align. This can be key to delivering high quality private investments.
Similarly, conducting internal IP due diligence and having a proactive IP strategy can be extremely important for founders to de-risk their business and provide an attractive offering for investors. During investment, founders may also be required to sign a number of IP warranties and indemnities, often guaranteeing to investors that the relevant IP is owned by the company. As a result, in cases where IP ownership issues subsequently arise, the founder themselves may be personally liable for the associated legal costs. It is therefore essential that founders have a clear understanding of any issues surrounding the business’ core IP.
As an IP-specialist firm, our team at Mathys & Squire has extensive experience in IP due diligence and IP strategy. Mathys & Squire is also partnered with the UK Business Angels Association (UKBAA), and offer regular ’IP health checks’ for UKBAA members.
An IP audit can be a helpful way for a business to take stock of its current IP position, particularly ahead of important investment rounds. If this may be of interest to your business, please contact a member of our Scaleup Quarter team.
An IP audit can be a helpful way for a business to take stock of its current IP position, particularly ahead of important investment rounds. If this may be of interest to your business, please contact a member of our Scaleup Quarter team at Mathys & Squire.
Written by: Jessie Harrison and Andrew White