Many of you will have seen the news this morning that details two further, significant interventions by the Treasury – more targeted towards the innovative business structures of the tech sector.
The £1.25bn package of funding includes:
- £750 million of loans and grants for innovative businesses and;
- Up to £250 million from the Government for an investment fund for high-growth companies – match-funding private sector money to take the total fund to £500m, and convertible loans into an equity stake if not repaid. So the fund will be £500m in size, 50/50 split between the private and public sectors.
The £750m of targeted support for R&D will be available through Innovate UK’s grants and loan scheme, allocated if your company passes an ‘innovation assessment’. Details are to be made available in due course.
The £500m investment scheme will launch in May (TechNation are seeking clarity on an exact date) through the British Business Bank. It will provide UK-based companies with between £125,000 and £5m of Government funding, with private investors matching (or bettering) their side, as long as the company has previously raised equity from a third party.
It is a convertible loan, so if it cannot be repaid, the money will convert into equity. The eligibility criteria have been set that a business must have raised at least £250,000 in equity investment from a third party over the past five years. The headline terms of the Future Fund are here.
Key now will be meeting the deadlines for these schemes going live, ensuring they are accessible and that a wide range of investors can take part in the co-investment fund.
The key to policy change is the strength of evidence of the need. Over the past few weeks, we know many companies and founders have provided meaningful engagement with Tech Nation over the problems you have been experiencing. The case studies you have put together, surveys you have filled in along with the data from their Data Commons, plus the time you have spent in doing so has helped to provide the evidence the Treasury needed.
TechNation will continue to work with you over the coming weeks in order that they can ensure these new proposals are working effectively for the tech community and will continue to work with the Treasury constructively on your behalf.
Join them on 5th May 2020 for Lockdown Unlocked – your opportunity to receive advice and guidance on scaling a tech business through the Coronavirus crisis.