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.
Want to gain an edge over your business competitors? Listening to your audience is an absolute must.
The Clothes Doctor mission to fight fast fashion continues as the innovative eco clothing care brand raises £1m to support further growth.
If you plan on using social media to promote your brand, these simple rules will help, increasing both brand awareness and the number of consumers.
High-potential social impact startups from the UK sought for the 9th annual Les Tremplins by Voyage Privé programme.
The lowdown on Danish startup EvodiaBio and its innovative tech that produces sustainable aromas for the food and beverage industry.
Small Business Britain’s ‘How to Grow’ report outlines how small businesses are responding to economic challenges and how they can grow during recession.
Odd Coffee Company - the startup that's tackling coffee wastage by offering sustainably-sourced surplus coffee, rescued from British roasters.
Tech Nation shares an overview of the impact they have had on the UK's tech economy and ecosystem.
The lowdown on London-based Tutti and its digital marketplace that connects event space owners with the creatives wishing to book them.
.jpg)
UK-based and got a business idea with a link to colour or colouration? A new investment fund from The Dyers' Company is well worth a look.
Published on: 20th April 2020
If you would like to enable commenting via your Startacus account, please enable Disqus functionality in your Account Settings.
- Leading French Travel Co. Offers Mentoring to two UK startups on its prestigious two-month programme 23rd Jan 2023 High-potential social impact startups from the UK sought for the 9th annual Les Tremplins by Voyage Privé programme.
- Small businesses need new model for growth in recession 23rd Jan 2023 Small Business Britain’s ‘How to Grow’ report outlines how small businesses are responding to economic challenges and how they can grow during recession.
- Tech Nation responds to the DCMS Digital Growth Grant announcement 20th Jan 2023 Tech Nation shares an overview of the impact they have had on the UK's tech economy and ecosystem.
- Colour/dyeing industries- seed capital investment fund launches for UK entrepreneurs 19th Jan 2023 UK-based and got a business idea with a link to colour or colouration? A new investment fund from The Dyers' Company is well worth a look.
