Venture capital is a type of private financing that supports start-up companies in their early stages, aiming to help them grow and scale. VCs invest money in businesses they deem to have high growth prospects in return for equity in those companies.

The survey, initiated by the Newton Venture Program — an educational initiative aiming to democratise access to venture capital knowledge — coincides with the launch of a free, self-paced online course titled Newton Foundations. This course is intended to make the concepts of VC and its impact on the economy accessible to individuals from diverse backgrounds.

The Newton Venture Program survey results found that:

Majority of public ‘not familiar’ with Venture Capital

• Only 9% of the British public are very familiar with the term Venture Capital
• 34% of respondents said they were only somewhat familiar with the term
• And a huge 56% said they were either not very familiar or completely unfamiliar with the term

Those who have heard of the term lack confidence to describe it

• Of those who said they were very or somewhat familiar with the term, only 15% said they would be very confident in describing it
• This means just 6% of the population would feel very confident in describing what venture capital is

The research also showcases a gender and regional dimension to the knowledge gap:

• Men were much more likely than women to say they were familiar with the term venture capital - only 5% of women said they were very familiar with the term, compared to 12% of men
• And twice as many women - 36% - said they were not at all familiar with the term, compared to just 18% of men
• People living in London are far more likely to be familiar with VC as a concept; 18% of Londoners are very familiar with the term, compared to a UK average of 9%
• The lowest familiarity was found in Wales, where only 3% of people were very familiar with the term

To address the gap in educational access regarding venture capital (VC), the Newton Venture Program is launching an online course titled Foundations today. This course aims to clarify the concept of venture capital and broaden the base of knowledge among a more diverse audience. It includes modules on the definition of VC, its history, geographical spread, and insights into a career within the sector. Additionally, the course delves into the VC investment cycle, from deal identification to investment exit.

The course requires six hours to complete, with the flexibility for participants to engage with the content on-demand over a twelve-week period at no cost. The Newton team anticipates that up to 500 individuals will have completed the course by the year's end.

Eleanor Kaye, Executive Director at Newton Venture Program, comments: “As the numbers show, the powerful and influential world of VC is poorly understood by the UK population at large. We are constantly coming into contact with products and technology that exist thanks to VC funding, but the average person is unlikely to have the access to education needed to build a working knowledge of the industry. That’s why we’re launching this course. It’s been designed for anyone who is curious about careers in venture capital, for people in roles that intersect with the sector, such as technology and innovation, and for those who simply want to understand how startups and ideas get funded and where that money comes from. If we can boost the foundational understanding of the industry, we can hopefully attract a whole new cohort of people into roles in the space and, as a result, redress the lack of diversity in venture capital.”

Venture Capital currently struggles with a lack of diversity and inclusion. According to the IDC European Women in VC Study, out of 303 European venture funds and 122 VC respondents from funds over €25 million assets under management, 85 percent of VC General partners were men, while just 15 percent were women. And according to the British Venture Capital Association, 80% of those working in VC are white, 11% Asian and only 3% Black.

A joint venture between London Business School and venture capital firm Phoenix Court (home of LocalGlobe, Latitude, Solar and Basecamp funds), with HSBC Innovation Banking joining as a founding partner, Newton Venture Program provides development and training to level the playing field for people from overlooked and underestimated backgrounds. To date, they’ve helped more than 430 people from around the world access or advance careers in venture capital through their Fundamentals and Fellowship programmes.

Saul Klein, co-founder and Managing Partner of Phoenix Court, home to LocalGlobe, Latitude, Solar and Basecamp venture capital funds, comments: “Seven of the world’s top 10 biggest companies were venture backed and didn’t exist 50 years ago, including Apple, Microsoft, Google, Amazon and Nvidia. But if we are to make innovation work for everyone in our society we need to have investors that are representative of every one of us, regardless of gender, race or age. I’m delighted to see the launch of Foundations - a free course which has been created to make venture more accessible to everyone. As we build the meaningful science and technology-backed businesses of the future, this will be a vital tool to help make the next generation of investors more diverse.”

Lyubov Guk, founding partner at Blue Lake VC and Newton alumni, comments: “I believe the venture capital industry should not be limited to a small group of 'privileged' individuals as it has been historically. The industry would significantly benefit from attracting people with diverse backgrounds and perspectives. That's exactly what 'Foundations' aims to achieve – opening the doors wide to new faces and fresh ideas. It's all about levelling the playing field so that anyone with passion and drive can be part of the VC world. Looking back, a foundational course like this on VC basics would have quickly bridged the early knowledge gap I faced, just starting my journey into the industry.”

Ladi Greenstreet, co-CEO of Diversity VC and Head of Strategic Investments at NatWest Ventures, adds: “The venture ecosystem is crying out for more entry-level initiatives that can empower a wider, more representative pipeline of talent. The knowledge needed to break into a career in VC is tough to find, so the Foundations course is a massive step in redressing what's been a big gap in the market. Free, easily accessible training is the key to levelling up the industry and diversifying the entry-level talent pipeline."