Instead, VCs are favouring later-stage companies which are a safer bet, George Whitehead, NESTA’s business development director, tells GrowthBusiness.co.uk.

‘For early-stage companies that are pre-revenue or have very small revenues, we’re finding out that not many institutional investors are willing to get involved,’ says Whitehead, whose organisation provides seed funding to selected ventures alongside private-sector investors.

‘In fact, it’s getting fewer by the day, as a couple of funds that were active in this area, Quester and Angle, have gone quiet recently,’ he adds.

Though VC investment in British companies is at an all-time high – £1.4 billion last year, according to one estimate from research institute Library House – Whitehead says that the funding is not getting to where it’s needed most.

‘The definition of “venture” is moving increasingly upwards – and people are getting increasingly risk-averse. The [Library House] research shows that there has been a 91 per cent increase in investment in the services and retail sector – which is not risky compared to the high growth potential tech businesses that we’re excited by,’ Whitehead continues.

NESTA, which stands for the National Endowment for Science, Technology and the Arts, controls funds of £300 million and invested a total of £18 million in the year to March.