To mark the 25th anniversary of the ProVen VCTs, we spoke to Malcolm Moss, Founding Partner of Beringea and one of the original architects of the ProVen funds. In this interview, Malcolm reflects on the early days of the VCT scheme, the journey of the ProVen VCTs since their launch in 2000 and 2001, and what excites him about the future of venture capital in the UK.

What inspired you to launch the ProVen VCTs back in 2000 and 2001?

In the 1990s, I had worked for an investment bank called Guinness Mahon, where we were involved in launching one of the earliest VCTs following the introduction of the scheme in 1995. That experience gave me an early appreciation for the potential of the VCT model to support young, ambitious companies.

A few years later, my team - who had co-managed that early fund - and I spun out of Guinness Mahon. As a natural next step, we decided to launch a VCT – and we chose to launch under the  new ProVen brand. In 2000, we introduced ProVen VCT, followed by a second fund, ProVen Media VCT, a year later, which focused on businesses in the media and enabling technology sectors. In 2005, we broadened the mandate of the second fund and renamed it ProVen Growth and Income VCT, reflecting a wider investment strategy across consumer, healthcare, and digital technology. Together, the funds have grown into two of the UK’s largest and longest standing VCTs today.

What was the venture capital landscape like when you first started the funds?

In the early 2000s, the VCT market was much smaller than it is today, and we were launching into a wave of optimism during the height of the dot-com boom. ProVen VCT launched just before the bubble burst. Over the next two years, the FTSE 100 dropped by more than 40%.

In 2000, VCTs collectively raised around £450m - a record at the time. But by 2001, that number had dropped to £155m as a result of the dot-com crash. We saw the same trend with ProVen VCT raising £20m in 2000, whilst ProVen Growth and Income VCT raised just £7.5m a year later. It was a stark reminder of how quickly market sentiment can change.

Do you remember any early successes from the ProVen VCTs? What stood out?

One of the early standout successes was Mergermarket, a provider of financial intelligence and data to banks, fund managers, and advisers. We first invested in the business in 2001, supporting the business when it was still small, helping it expand its product offering and enter the US market. In 2006, Mergermarket was acquired by the Financial Times Group, a subsidiary of Pearson plc at the time. It has since gone on to be valued at over $1bn.

What’s particularly rewarding is the ripple effect. Some of Mergermarket’s founders went on to become angel investors and supported other early-stage businesses, including Third Bridge, another intelligence provider that we came to back through the ProVen VCTs. It really shows how early capital and support can help build entrepreneurial ecosystems.

In the early days, did you imagine the funds would still be going strong 25 years later?

It was a bold move from then-Chancellor Ken Clarke to launch the VCT scheme in 1995. He wanted to foster a nation of investors and entrepreneurs, but earlier initiatives, such as the Business Expansion Scheme, had never lasted. The fact that VCTs have persisted for 30 years, and our own ProVen VCTs are now celebrating their 25th anniversary, is testament to the creativity and innovation shown by the industry

I think one of the reasons the ProVen VCTs have endured is that we’ve always taken a long-term view. We’ve consistently steered clear of short-term trends and avoided jumping on bandwagons. The dot-com crash was a clear example of how hype can quickly turn into a bubble. Our investment strategy has always focused on long-term, sustainable growth and rigorous scrutiny. That discipline has served us well.

What excites you most about the future of venture capital?

It’s the same thing that excited me when I first started in venture capital more than 35 years ago - meeting brilliant entrepreneurs with new ideas and watching those ideas come to fruition. That spark hasn’t faded.

Where do you see the ProVen VCTs in the next five to ten years?

I believe the funds will continue to play a vital role in providing capital and support to UK entrepreneurs. I also hope to see some of the more restrictive and outdated regulations around VCT investing evolve to better support innovation and sensible decision-making.

What advice would you give to the next generation of VCT investors or fund managers?

Don’t get caught up in the hype. Fads will come and go - they always have. The key is to stay focused on fundamentals, back great teams, and stick to a strategy that’s built to last.