Future Fund may not encourage investors to invest
by Startacus Admin
.png "Future Fund and investors")
Enterprise Investment Scheme Association welcomes new Future Fund, but questions how attractive it is to private investors to invest on current terms.
The membership organisation for many of the investment funds supporting the future high growth and technology businesses in the UK, the Enterprise Allowance Scheme Association (EISA), has welcomed the Government’s ‘Future Fund’ announcement today, but warns that it may well not have the desired result of truly backing the UKs future ‘Unicorn’ businesses.
The Future Fund has been launched in response to concern that the new CBILS loan scheme, which offers an 80% Government Guarantee, with no interest to pay for 12 
months, and requiring no security or personal guarantees whatsoever, may not be eligible for early start growth businesses as they have no profit record.
Whilst the details of the fund will not apparently be clear until May, it appears that any monies being committed by the new fund will have to be matched pound for pound by private investors.
The real issue at the moment according to Mark Brownridge, Director General of the EISA, is that private investors are simply too nervous to invest on the current terms available to them and need more advantageous tax treatment rather just than matched funding, on what would appear to be much better terms for the Government than the private investors would receive under their investment.
“Positioning the additional support as a convertible loan, carrying an 8% interest rate and a 20% discount on conversion, all in favour of the Government, will be of very little encouragement for private investors to invest alongside. We need to be focusing on encouraging new investors, and the only way to do that is through more advantageous tax treatment for them, which is what the EISA, along with other investment funds, has been lobbying for,” he claims.
“Over the coming weeks we need to be working with the Government in finalising the terms of the new Futures Fund, to ensure both that the terms are as good as the CBILS scheme, and that we do all we can to encourage the additional investment appetite from private investors, which must include more favourable tax treatment for an interim period whist the uncertainties caused by the crisis continue. In the EISA we stand ready to play our part in the discussions,” adds Mark Brownridge.
Subscribe to our newsletter
If you would like to receive our startup themed newsletter, full of the latest startup opportunities, events, news, stories, tips and advice, then sign up here.
Pension The Pennies is a Welsh startup that's on a mission to help eliminate the barrier to entry for private pensions
A list of some of the best ways to develop a unique brand and grow it so that your organisation can prosper over the coming months and years.
The lowdown on some of the key marketing strategies that businesses should consider as lockdown restrictions ease in a post-COVID-19 world
Should you be investing in video? Let’s take a look at why video is so effective to use on your corporate website.
The startup that's on a mission to create a transparent food supply chain by developing a direct link between consumers and producers
Xero and AlphaBeta analysis reveals the latest trends and insight into the impact of COVID-19 on the UK's small business economy
According to Sleep Junkie, workers who reported getting below the recommended 7 to 8 hours of sleep per night include...
Photography can be a reliable source of income. Here's some of the factors contributing to a successful photography business.
Are President Trump’s ‘American First’ policies in danger of pushing American companies over the border into Canada?
The London-based startup that's on a mission to bring clarity and help business leaders exercise their organisational intelligence
Published on: 20th April 2020
.png)
If you would like to enable commenting via your Startacus account, please enable Disqus functionality in your Account Settings.
- UK small business data in June suggests sales recovery, but jobs continue to decline 29th Jul 2020 Xero and AlphaBeta analysis reveals the latest trends and insight into the impact of COVID-19 on the UK's small business economy
- United Utilities Innovation Lab hunts for innovative businesses for third programme 22nd Jul 2020 United Utilities, has recently launched its third Innovation Lab - the successful accelerator programme which helps innovative businesses grow and develop.
- Coincover fuels growth with latest investment round 14th Jul 2020 Coincover the leading crypto security startup secures major investment as it seeks to meet the growing demand from the cryptocurrency market
- More than half of employees concerned about returning to work 2nd Jul 2020 More than half of employees concerned about returning to work and majority of employees NOT comfortable using public transport
