It was reported by London & Partners earlier in the year that $3.6bn of venture capital funding was invested in the UK technology businesses in 2015 alone, a substantial increase on previous years. Will industry momentum be subdued by Brexit?

Ashfords LLP has one of the UK's most active venture capital practices, acting for a number of funds as well as a raft of emerging companies that are raising finance predominantly in tech. Almost one month after the Brexit vote, here is our take on how the market is responding to Brexit so far and thoughts on the future.

On the whole, the majority of feedback we have received from VCs is that it is business as usual and our experience is that transactions are largely proceeding as expected. This is probably unsurprising as, uncertainty aside, we still have the Article 50 process to go through with its associated timeline. Those VCs with funds already raised still need to invest them within the prescribed investment period for their fund so expect to see a good level of activity from them in the near term.

Medium term we need to consider if there will be a negative impact of the amount of funds available to UK VC funds. While sources of funds vary from fund to fund, the obvious question is what will the attitude of the European Investment Fund ("EIF") be to Brexit? It is worth noting that the EIF is a cornerstone investor in some of the UK's best known VC funds with total commitments of c€2.3bn between 2011 and 2015 having supported 144 funds as at end of 2015. The EIF issued a statement shortly after the result saying "at present…it will not change its approach to operations in the UK". Clearly any longer term change in its policy could be a significant loss for the UK's funds but at this stage it is simply too early to call. In the meantime, those fund managers currently raising will no doubt be looking hard at the investment policies in their fund documentation as to what proportion of funds that must be deployed in the EU.

One of the driving forces behind the thriving tech industries that have absorbed so much of the VC investment has been the talent pool available to UK companies. It is often said that investors back the team over anything else when looking at potential investment opportunities. Whilst this is a broader theme for consideration, moving forwards we do not know what deal will be cut on free movement of people and the affect that this will have on our ability to easily attract the best and brightest entrepreneurs.

On a related note there has been much talk about whether financial services businesses will migrate to other European cities such as Paris or Berlin over passporting fears. There is a question of what will be the knock-on effect on London's no.1 status in fintech both in terms of sector activity and its continued appeal to investors. This will be an important part of any negotiations on the UK's new deal but it will be interesting to see what strategic decisions are taken by large financial services businesses in the next 6-12 months.

It is not yet clear on how sterling will fair over the coming months, but at present rates it will likely make 'discounted' UK investments more attractive to foreign investors particularly from the US and Asia and the same is likely to be true for exits. We may well see increased activity as a result.

Again over the medium term there is a significant opportunity for a post Brexit Government to introduce a wider package of policies to support the UK's VC industry and technology sectors. For example if it does not have to comply with the EU State Aid rules that currently apply to the Enterprise Investment Scheme and Venture Capital Trusts there may be more favourable economic incentives that can be used to make the UK a better place to invest and for entrepreneurs to launch their companies.