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£40 million enterprise fund to help bridge the equity gap
Two new Enterprise Capital Funds (ECFs) are to be created under a multi-million pound Government scheme to boost innovation, jobs and growth for small and SME businesses trapped in the equity gap, Small Business Minister Margaret Hodge has announced. Enterprise Capital Funds invest a combination of private and public money in small high-growth businesses seeking up to £2 million of equity finance. The funds help to address the scarcity of equity capital in the £500,000 to £2m funding rounds, which makes it difficult for a number of SME businesses to raise the finance they need.
This announcement brings the total number of funds approved in the Pathfinder round of ECFs to four, further funds may be announced as the round continues. The Minister said:
"These new funds will help many small businesses that might otherwise have been unable to develop their potential because there was no equity finance available to them. These funds demonstrate how the Government is actively working with private investors to create an environment where British businesses are given the world-class support they need to succeed."
The ECFs announced are:
* The Seraphim Capital Fund - a £30m generalist coinvestment
fund that will invest alongside leading business angels and other private investors drawing on the deal flow and investment experience afforded by the funds' diverse investor base.
The fund will be managed by a coalition of 'business angel' networks and will focus on
investments in companies throughout the UK predominantly in the early stages of development.
* The Amadeus Enterprise Capital Fund - a £10m fund that will focus on seed technology
investments. The Fund will be managed by Cambridge based Amadeus Capital Partners who are one of the country's leading specialists in this sector.
David Quysner, Chairman of the Capital for Enterprise Board that advised the Government on which bids to support, said: "The two funds announced are a valuable addition to the ECF portfolio. They demonstrate that the ECF programme can attract new capital and innovative approaches to investment in the equity gap as well as encouraging some very experienced investment professionals to be more active in the sector."
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