The trust would have been managed by IP2IPO’s subsidiary Top Technology, acquired last summer, and was aiming to back university spin-outs making use of the agreements the parent company already has in place.

Shane Elliott of Noble & Co, which was promoting the VCT, said investors had already committed £2.5 million. He added that £1.2 million was from IP2IPO’s chief executive, founder and largest shareholder David Norwood. UniVen was looking to raise £20 million in total.

Magnus Goodlad, investment manager at Top Technology, had eight potential investments lined up and was looking to back his first venture. However, the board was not confident that the VCT would have enough money to operate successfully and wanted to allow investors time to re-invest in alternative VCTs before the end of the tax year.

This is the first setback for IP2IPO, which has seen its shares soar 160 per cent to 717p, since floating in October 2003. Three of its investments have already floated on AIM. The group is also considering buying stakes in rival technology fund managers using its £34 million cash pile.

So far four VCTs have pulled their fundraising – UniVen, ProVen 3, Cavendish AIM Fund and MTM China. 40 VCTs have been trying to raise £1 billion between them this tax year. However, investors have only subscribed £350 million, despite the 40 per cent income tax relief VCTs now offer new shareholders.