Government launches new VC initiative

After more than 18 months of consultation the DTI has at last granted approval to its Enterprise Capital Fund (ECF) initiative - a new scheme aimed at boosting the financing options available to small and medium-sized businesses.

ECFs have been conceived to address the oft-lamented equity gap and will therefore provide a vehicle through which venture capitalists and business angels can invest in growing firms seeking up to £2 million, on a match-funding basis. Around £200 million will be made available for those operating the initial ECFs, with these ventures being run as commercial businesses themselves.

With the scheme now confirmed, prospective ECF operators have been given eight weeks to prepare and submit bids, demonstrating their suitability – in particular, how they will target their resources to supporting growing firms in need of finance. Successful bidders will then be able to use the scheme to raise private capital, with the Government providing up to twice the amount pledged to each fund in public money.

Business angel network operator Beer & Partners is believed to be among those eager for involvement in the new scheme.

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VCs and Venture Capital