Member Article

£40m Enterprise Capital Fund for SMEs

A new Enterprise Capital Fund (ECF) is set to invest £40m in science, technology and engineering-based SMEs.

Business Minister Michael Fallon announced Longwall Ventures ECF, that comprises £25m of Government investment and £15m from private investors.

Longwall Ventures will invest in rounds of up to £2m, managed by Capital for Enterprise Limited, the Government’s investment company.

Speaking at the Investing for Success briefing at London Stock Exchange, the Minister said: “The new £40 million Enterprise Capital Fund will address a gap in the market and help our small businesses find the finance they need to realise their potential.

“And we are also taking action to encourage more investors to bank roll small businesses. Today’s event with entrepreneurs and investors at the London Stock Exchange was an important opportunity to drive take up of the Seed Enterprise Investment scheme. The scheme reduces the risk of these types of investments, and offers significant tax benefits.”

Michael Penington, a partner of Longwall Ventures, said: “We are delighted to announce the launch of Longwall Ventures ECF, and are excited about the opportunity we have to create strong companies from the UK’s excellent science and engineering base.

“Difficult economic times present opportunities for disruptive technologies, and we are very pleased to have investors that share that vision. The ECF programme has been crucial for us in attracting private investment and raising a fund that has the scale to commercialise such disruptive technologies. We are delighted to be continuing our relationship with Capital for Enterprise.”

The Enterprise Capital Funds were established to provide equity finance for SMEs, and are a joint-private venture.

Doug Richard, investor and founder of School for Startups, also spoke at the London Stock Exchange about the benefits of SEIS.

He said: “In today’s tough climate, business owners need to look beyond the banks and traditional investment avenues when looking for funding to grow their business. The Seed Enterprise Investment Scheme is a breakthrough tax incentive which encourages investment in small businesses by reducing the risk to potential investors.

“Today’s event will showcase why SEIS is such a radical incentive for investors and will involve entrepreneurs who have successfully raised significant sums through the scheme to accelerate the growth of their businesses.”

Alexander Justham, CEO London Stock Exchange plc, added: “Effectively funding our fastest growing and most dynamic companies is crucial to nurturing the UK economy back to strong, sustained growth.

“Creating an equity financing ladder from Seed Enterprise Investment Schemes, angel investors through to IPOs on public markets will help us create a resilient, growth-orientated ecosystem in which our most ambitious small companies can thrive.”

This was posted in Bdaily's Members' News section by Tom Keighley .