The UK government has launched its £500 million Future Fund for applications with innovative and high-growth British businesses able to secure investment to help them through the Coronavirus outbreak. The government has made an initial £250 million available for investment through the scheme and will consider increasing this if needed.
UK-based companies can now apply for a convertible loan of between £125,000 and £5 million, to support continued growth and innovation in sectors as diverse as technology, life sciences and the creative industries. Private investors – potentially including venture capital funds, angel investors and those backed by regional funds will at least match the government investment in these companies.
The Future Fund will support firms across the UK to get through the pandemic by stimulating investment, so that they can continue to break new ground in technology and innovation. Match fund investors will be encouraged to sign the Treasury’s Investing in Women Code, which commits firms to improving female entrepreneurs’ access to tools, resources and finance. The Future Fund is a signatory of this.
Director General of the British Private Equity and Venture Capital Association (BVCA), Michael Moore said, “The Future Fund is hugely significant and very welcome. For many venture capital-backed businesses it will build the bridge from today’s severe challenges to the period of recovery, enabling them to survive then thrive.”
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CEO of TechUK, Julian David commented, “The Future Fund is a strong statement of intent from the UK Government on the value of innovative companies and their importance, not only now, but for the strategic interests of the UK’s economic future. I’m pleased to see that the government has worked to expand the scope of the scheme to make it more inclusive and accessible. It is crucial that as we rebuild our economy and look to the future, we ensure everyone is able to benefit equally. techUK will continue to work with government, our members and the tech community to ensure we build a future ready for what comes next.”
The government will also amend the rules of the Enterprise Investment Scheme, which provides tax relief to investors in high growth firms, to protect Future Fund investors from losing relief on their previous investments made prior to any investment through the Future Fund.
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In addition to the Future Fund, Ministers have allocated £40 million through the Fast Start Competition to drive forward new technological advances, and to support innovative start-ups, including a virtual-reality surgical training simulator and an online farmers’ market platform. This will give companies a vital boost, fast-tracking the development of innovations borne out of the coronavirus crisis.
The Future Fund is open to UK-based firms, that have previously raised at least £250,000 in equity investment from third parties in the last 5 years. They will also need to have investors to provide funding to be matched by the government, and have half or more of their employees based in the UK or generate at least half of their revenue through UK sales. The loans will convert to equity if not repaid.
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The Fund will be open until September and is delivered in partnership with the British Business Bank. Companies can check they meet the criteria for funding by going to the British Business Bank website. If they have secured private match funding, one of their investors can register online to start the application process.
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