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Simon Pilling, Corporate Partner, comments on the Chancellor's remarks around venture capital funds in relation to tech-startups. 

"An additional £400million is to be channelled through the British Business Bank into venture capital funds with the aim of unlocking £1 billion of new finance for growing firms. The Chancellor identified as the target high-tech startups that are currently being "snapped up" by large multinational corporations rather than being able to "grow to scale" themselves. This funding assumes that lack of funding is the key driver behind decisions to sell out to large companies. 

"However, in many cases, sale is a tech-founder's exit plan of choice, allowing accelerated access to a wider range of markets with the support of well-established and resourced marketing sales and business development infrastructure. For the acquiring companies, acquisition of tech startups reduces the risk of becoming limited by corporate business case and sign-off requirements for new and potentially speculative research. Such acquisitions can be an extremely valuable safeguard against corporate inertia. Nonetheless, additional venture capital could prove to be an extremely useful bargaining tool when acquisitions are under negotiation, potentially allowing startups to consider contractual joint ventures and other routes to growth rather than inevitably seeking to sell out."