The UK Government’s introduction of the Enterprise Investment Scheme (EIS) and the Venture Capital Trust (VCT) programmes were practical policy responses to a perceived market failure in the provision of sufficient amounts of risk capital for smaller and younger companies with growth potential. Accordingly, the purpose of both of these publicly financed schemes is to encourage informal and private (i.e. non-institutional) investors to provide greater sums of seed, start-up and early growth risk capital finance by altering the nature of the risk-return ratio in favour of equity investors via a tax-based incentive.