VCT

TL;DR

UK listed vehicle pooling retail money into qualifying small-company investments, giving subscribers 30% income-tax relief on up to £200k/yr.

A Venture Capital Trust is a UK closed-ended fund listed on the London Stock Exchange that invests in early- and growth-stage UK companies meeting EIS-style qualifying conditions. UK individuals subscribing for new VCT shares receive 30% income-tax relief on up to £200,000 per tax year, plus tax-free dividends and tax-free capital gains on disposal, in exchange for a five-year minimum holding period.

For founders, VCTs (Octopus Ventures, Molten, BGF, Mercia, Pembroke) act like a UK mid-market growth fund — typical cheques are £1–10m at Series A/B. Capital is more 'patient' than US VC because of the five-year retail holding period, but VCTs are subject to the same EIS-style qualifying conditions on the underlying company.

Worked example

Octopus Titan VCT leads a £6m Series A into a UK B2B SaaS at a £24m pre-money. Retail VCT subscribers get 30% income-tax relief on the underlying VCT subscriptions, the company gets long-duration capital, and the round structure remains EIS-compatible for the angel co-investors.

Common pitfalls

• Treating VCT money like generic growth equity — qualifying conditions still bind the company on age, size, and use of funds.
• Mis-pricing the round so the VCT can't deploy at a level that fits its portfolio model.
• Missing the company-level lifetime EIS+VCT cap of £12m (£20m for knowledge-intensive).

When this shows up in a pitch deck

Used implicitly when a UK growth-stage round is led by a VCT — surface the lead's name on the round structure slide so investors know the EIS-style framework applies.

Related terms

• EIS — UK scheme offering investors 30% income-tax relief on up to £1m/yr (£2m if knowledge-intensive) in qualifying UK growth-stage companies.
• SEIS — UK tax-advantaged scheme giving angels up to 50% income-tax relief on up to £200k/yr invested into very early-stage UK companies.
• Advance Assurance — Non-binding HMRC pre-clearance that a UK company's planned share issue likely qualifies for SEIS or EIS, used to de-risk angel investment.
• Series A — The first major priced round, typically $8M–$20M raised on the strength of early product-market fit and a repeatable go-to-market motion.
• Series B — The growth round raised to scale a proven business model, typically $20M–$50M+ on $100M–$300M post-money valuations.

Use this in your next pitch deck

Deckmetric scores your pitch across 10 VC frameworks and against 8 investor types. Upload your deck for an instant analysis, or check the startup valuation calculator to benchmark your raise.