NEW FUTURE FUND GUIDANCE
The Government has today published more details on the Future Fund and how it will operate.
The Future Fund will enable startups to access cash through a new convertible loan note program from the British Business Bank. The Government will match private investment on a 1:1 basis from a minimum of £125,000 to a maximum of £5 million.
You can find the details on the Future Fund for founders (here) and investors (here), and we have compiled answers to some of the most asked questions below.
The fund will open on Wednesday 20th May and will initially stay open until the end of September 2020.
Is your startup eligible?
To be eligible for matched funding, your startup must meet the following eligibility criteria:
You can read more on eligibility requirements here.
How do you apply?
Your Lead Investor will apply for the matched funding via a portal created by the British Business Bank. So if you’re looking to raise through the Future Fund and haven’t spoken to your investors yet, then you should do so as soon as possible. It won’t act as a ‘matchmaking’ scheme so you’ll need to have matched with an investor (or investors) before the Lead Investor submits an application.
Which investors are eligible to provide matching funding?
The Future Fund is open to a broad range of investors - including Angels, micro VCs & crowdfunders. There is a required investment of at least £12,500 for the Lead Investor, but there is no minimum investment requirement for other investors.
Are the Convertible Loans EIS/SEIS compatible?
No. We are disappointed that the Future Fund has not been made an EIS compliant structure, and this was a key issue we have been pushing on since before the fund’s creation (you can read what our key asks were here). We know the Treasury tried to get this over the line but unfortunately EU State Aid restrictions prevented them from doing so.
So what next?
We know we still need solutions for companies that fall under the £250k minimum raise threshold. Whilst we advocated for this to be £100k, and still think the Government should reconsider, we are hopeful that the Innovate UK grants and loans will provide a solution for this cohort of companies, including: R&D intensive startups and super-early stage companies.