Enterprise Capital Funds
Source: Small Business Service - an agency of the
20-Jan-07
On 13th November 2006 the Minister for Industry, Margaret Hodge MBE, MP announced the launch of a second round competition for Enterprise Capital Funds (ECFs). This follows a successful start to the Enterprise Capital Fund programme and the Chancellor of the Exchequer’s announcement in Budget 06 that he was making an extra £100m available.
Updated bidding process
The Capital for Enterprise Board has looked carefully at the way the bidding round for the Pathfinder round of ECFs worked and concluded that whilst it was a robust and fair system it could be streamlined. In particular, the Board has agreed that although the same level of information will be required from each bidder before any future ECF is awarded, not all of that information will be required at the start of the process. Instead, those wishing to bid for ECF status are initially invited to provide a three or four page summary bid. The summary bid will need to contain the information set out below and that information will be used to assess which bids to take forward to the next round of assessment. Additional information will then be sought.
The government expects to commit up to £50m to fund ECFs in this round. A further £50m is reserved for another competition to be launched later in 2007. Prospective bidders should be aware that competition for ECF status is likely to be high.
Bids may be submitted at any time until 28th February 2007. Bids will not be disadvantaged if they do not arrive in advance of this deadline but earlier bids will be assessed for the short list sooner.
Mandatory information required in the initial bid (No more than 5 pages, minimum font size 11 point)
- Details of the proposed ECF’s investment strategy including, target sectors and investment stages, investment structures and any co-investment arrangements, length of investment period and proportion of funding reserved for follow on investment.
- Summary CVs (as an annex) of key investment personnel involved in the fund and details of their proposed role within the ECF.
- Details of private investors willing to back the fund (evidence of commitment e.g. letters of support may be attached as an annex).
- Details of Management Fee, Start up costs and any other fees that the fund will charge including details of all fees likely to be charged to investee companies by the fund or linked organisations.
- Level of government funding sought and level of private investment. (Funds will be disqualified if they fail to close at the agreed level of investment within six months of being awarded ECF status).
- Details of the government’s fixed profit share (this must be a single figure that will apply throughout any and all distribution of profits) and how any other profits are to be distributed.
- Acknowledgement that the bidder has read and can accept the terms of the Government’s Draft ECF Limited Partnership Agreement (PDF document 400KB).
- Confirmation that the bidder has read the detailed Bidding Guidance (PDF document 294KB) and accepts the terms therein.
If your bid is taken forward following appraisal of the information you provide in your initial bid you will be asked to submit all the information set out in section 5 of the Bidding Guidance.
The Selection Process
The detailed selection criteria are set out in the Bidding Guidance (PDF document 294KB). It is envisaged that those bidders whose initial bids appear to meet this criteria best will be invited to meet the ECF selection team in the Small Business Service. That meeting will offer a chance to fine tune bids or to provide further supporting evidence. Following these meetings a short list of bidders will be invited to provide the further documentary evidence and any other information set out in section 5 of the Bidding Guidance. As before, the Capital for Enterprise Board advise the Secretary of State in the fund selection process.
Paper copies of the Bidding Guidance and the Draft ECF Limited Partnership Agreement can be obtained by sending a self-addressed envelope to:
Bidding Guidance
Investment Fund Management Directorate
Small Business Service
9-11 London Road
Sheffield
S2 4LA
Six copies of the initial bid document (which should be no more than 5 pages with a modest annex) with an electronic (Word format) copy should be sent to:
Enterprise Capital Fund Bids
Investment Fund Management Directorate
Small Business Service
9-11 London Road
Sheffield
S2 4LA
Prospective bidders only can also contact the ECF team on enterprise@sbs.gsi.gov.uk Please note that requests for business advice, investment or other support cannot be answered. Businesses looking for such advice should contact their local Business Link.
