The recently published White Paper for Enterprise: ‘Unlocking the UK’s talent’ confirmed the continuing existence of an equity funding gap for companies seeking risk capital of less than £2 million. Another White Paper, ‘Innovation Nation’ commented, “The challenge for policy-makers is to create a framework...where activities to support innovation are focused on cooperation between the different actors involved, are responsive to different places...and work across boundaries.”
The new Seed Fund is an equity fund open to SMEs for up to £250,000, in exchange for equity in their business. This is one stage of a new funding escalator that will include proof of concept investment, seed capital and growth finance together with integrated business support, such as advice, networking, collaboration, investment readiness and mentoring, through which business support organisations such as Business Link, the Enterprise Hub Network and Finance South East can work together to provide the right support for every business. The new £5 million fund hopes to attract further private sector funding and will be managed by Finance South East. The South East Funding Escalator provides a long-term route map for the financing of new companies, their launch into new markets and their growth needs. Nick Caiger-Smith from Finance South East explained,
“This support is all the more important for young ambitious companies that have the capability to compete on the international stage. SEEDA is committed, through its Regional Economic Strategy, to invest in excellence for global success, ensuring that the South East region maintains its position as the powerhouse of the UK economy and continues to be a leading region for innovation and entrepreneurial activity in Europe. The South East Seed Fund will be one of the key mechanisms that ensure this component of our strategy is met.”
Sally Goodsell, CEO of Finance South East, believes that entrepreneurs and businesses from across the South East region should take advantage of this new fund. She says, “We are very pleased to be able to offer a range of funding options for businesses and university spin-outs in the South East. We are looking to invest in compelling, high-growth businesses that are scalable and have a strong, committed management team.
“Companies need to show that they have a clear, sustainable advantage over competitors and commercially viable intellectual property. Ideally, they will also be able to demonstrate readiness for market and strong evidence of market demand. Any business looking to use the Fund will also need to have a well developed business plan and detailed financial projections. This should incorporate a clear and realistic exit strategy for investors.”
Contact
Nick Caiger-Smith or Julie Silvester from Finance South East on 01276 608510.
