A Venture Capital Trust (VCT) is a publicly traded company on the London Stock Exchange operating as a venture capital fund with the objective to invest in smaller, unlisted or AIM-listed companies. VCTs have strict criteria for qualifying investments, but they generally partner with young, entrepreneurial businesses. These businesses tend to have high growth potential, but are also higher risk.
Think of a VCT as an investment vehicle that allows investors to support the growth of emerging companies—businesses that might one day become household names but need capital to get there.
What makes VCTs particularly interesting is the suite of tax benefits they offer, designed to encourage investment in these riskier ventures.