2002 looking good for start-ups

Increased pressure on venture capitalists (VCs) to invest their funds along with a general economic upswing are likely to see the fortunes of start-ups improve over the course of this year.

That's according to accountancy firm Grant Thornton, mid-tier accountant and adviser to several dozen start-ups, which points out that last year VC company exits via flotations and trade sales fell and the main exit strategy became putting businesses into receivership. The last period when that happened was in the early 1990s.

However, the value of deals during 2001 still represented the second highest annual figure in 20 years, Grant Thornton said.

With an upswing in the wider economy expected, the company's corporate finance partner David Ascott said: "It is not in the nature of VCs to sit on the fence too long [and] there is an opportunity to purchase good quality businesses at sensible prices."