COVID-19 Update – 19 May – Future Fund opens 20 May 2020

The Future Fund will open for applications on 20 May using an online system for applications. It is very much aimed at equity investment funded companies and is investor led.

The aim of the Future Fund programme is to retain the UK’s world-leading position in science, innovation, and technology by supporting innovative companies, who typically rely on equity investment. The programme will be delivered by the British Business Bank to help companies through this period of economic disruption and who are facing a significantly extended period of time between funding rounds.

The Future Fund will operate on a commercial basis, delivering an initial commitment of £250m of funding which will be unlocked by additional third-party investment on a match-funded basis, creating a bridge to the next equity funding round for innovative companies with good potential.

How it works

• Companies will receive between £125k – £5m of government support with a third-party investor matching at least the government commitment.
• The programme uses convertible loans, meaning there is no requirement to value the company or the price of its shares and no requirement to make regular repayments. Instead, the convertible loans are designed to convert into equity at the next funding round when an equity value can be negotiated between companies and investors.
• The programme is investor-led and there is no matching service, meaning companies seeking funding must have identified investors to contribute the matched funding amount.
• Companies will be responsible for confirming their own company information and reviewing the application before submission and as part of the scheme, companies appoint a company solicitor to facilitate the payment mechanics at the completion of the Convertible Loan Agreement.

Eligibility Criteria

• Companies must be UK-incorporated on or before 31 December 2019
• Companies must have previously raised at least £250k in equity investment from third-party investors in the last 5 years.
• Companies must be able to attract at least 50% third-party investment
• Companies cannot have any of their shares traded on a regulated market, multilateral trading facility or other listing venues.
• Companies must have at least one of the following true:
  • Half or more employees are UK based
  • Half or more revenues are from UK sales

How to apply

Information, about the Future Fund, including standard terms and eligibility criteria, is available via the Future Fund.

The Future Fund portal will open for applications on Wednesday 20 May.

Ahead of the launch, the full set of standard terms and eligibility criteria have been released. Click here for the full Convertible Loan Agreement.