Venture Capital Trust - VCT

AAA

DEFINITION of 'Venture Capital Trust - VCT'

A type of publicly listed closed-end fund found in the United Kingdom. A venture capital trust is designed as a way for individual investors to gain access to venture capital investments via the capital markets. Its mandate is to seek out potential venture capital investments in small unlisted firms to generate higher than average risk-adjusted returns for its investors.


Numerous venture capital trusts are listed on the London Stock Exchange.

INVESTOPEDIA EXPLAINS 'Venture Capital Trust - VCT'

Venture capital trusts are tax-advantaged investments in the United Kingdom, often relieving investors of many of the tax implications surrounding dividends and capital gains, or offering lower taxation rates.


Typically, they are bound by regulations to the percentage of funds that must be allocated to qualifying investments, or holdings, along with timelines for capital injection loans and investments outside of those held in said qualifying holdings. However, the majority of VCTs aim to invest a large majority of their funds with the goal of achieving higher risk-adjusted returns than other investments available in the market.

RELATED TERMS
  1. Death Valley Curve

    A slang phrase used in venture capital to refer to the period ...
  2. Angel Investor

    An investor who provides financial backing for small startups ...
  3. Venture Capital

    Money provided by investors to startup firms and small businesses ...
  4. Pre-Money Valuation

    A slang phrased that refers to the value of a company's stock ...
  5. Seed Capital

    The initial capital used to start a business. Seed capital often ...
  6. London Stock Exchange - LSE

    The primary stock exchange in the U.K. and the largest in Europe. ...
Related Articles
  1. How Venture Capitalists Make Investment ...
    Entrepreneurship

    How Venture Capitalists Make Investment ...

  2. What Is Private Equity?
    Investing Basics

    What Is Private Equity?

  3. Cashing In On The Venture Capital Cycle
    Fundamental Analysis

    Cashing In On The Venture Capital Cycle

  4. How To Invest In Private Companies
    Investing Basics

    How To Invest In Private Companies

comments powered by Disqus
Hot Definitions
  1. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  2. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  3. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  4. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  5. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  6. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
Trading Center