Assessment Critieria

Open for applications

This section outlines the criteria against which the ECF Team will assess proposals. The assessment criteria are broken down under five broad headings:

Each of these areas is crucial to the application process . Successful proposals will demonstrate strength across all areas.

The detail provided below for each area is not an exhaustive list and it is important to note the ECF Team does not expect all the information to be provided at the early stages of the application process. Guidance will be provided on what information is expected at each stage by the ECF Team (for further detail see Application Process). The early stages of the process (stages 0-2) are iterative, and information will be requested and presented throughout, as Prospective Managers’ proposals evolve over time.


Prospective Managers must demonstrate that their proposed ECF management team is suitably qualified. They should collectively possess the knowledge, experience, and capability needed to successfully build, manage, and exit a portfolio of non-listed equity investments. Prospective Managers will also need to demonstrate that the team will be able to work together effectively for the life of the fund.   

Where specific skills or expertise are lacking in the management team, Prospective Managers must demonstrate how appropriate experience will be brought into the team and must show that the associated costs are fully budgeted for in the financial projections submitted as part of the application. Prospective Managers must outline the staffing requirements of their proposed ECF and demonstrate that proposed levels of staffing will be sufficient to operate the ECF effectively, including time commitments for key personnel.

Key personnel includes everyone whose experience and expertise are expected to be considered by the ECF Team when assessing a proposal. In addition to General Partners, this may include staff with responsibility for reporting, accounting, and compliance.

The ECF Team will pay close attention to whether the proposed management team demonstrates the potential to succeed in the following areas:

  • raising capital from reputable private sector investors
  • attracting a flow of quality investment propositions from businesses seeking risk capital finance
  • carrying out rigorous due diligence to assess the suitability of investment propositions put forward by businesses seeking finance
  • structuring, pricing investments, and negotiating terms with portfolio companies
  • providing management support and advice to portfolio companies, for example, by helping to develop and implement successful growth strategies
  • monitoring and reporting on the performance of the ECF’s investment portfolios
  • realising returns from investments through third party transactions, including later-round investments, trade sales, and initial public offerings 
  • the management team’s knowledge and experience of developing a successful business and, where relevant, their knowledge and experience of any specific business sectors in which the proposed ECF would concentrate its investment activities.

Information requested from Prospective Mangers will include, but is not limited to:

  • existing commitments on their time (including any other venture funds under management) that will impact on their ability to dedicate their time to an ECF
  • details of their proposed role, responsibilities, and terms of employment within the ECF, including how much of their time will be devoted to management of the ECF
  • relevant skills, expertise, and previous experience including summary curriculum vitae
  • other venture funds or other equity investment activities in which they are currently engaged, or are likely to be engaged during the lifetime of the ECF.

Track Record

The ability of a management team to work together to source, diligence, and competitively transact deals, and then add value to portfolio companies to ensure growth and profitable realisations is key to a successful fund. This must be demonstrated through the Prospective Manager’s track record of investing, and the duration of the management team’s history of working together. 

As the ECF Programme targets new and emerging fund managers and seeks to remove barriers to entry, the ECF Team will take a pragmatic view on “non-standard” track records. The ECF Team will welcome details of support that has been given on investments, including where the Prospective Manager has not been able to commit finance.

Information requested from Prospective Mangers will include, but is not limited to:

  • a completed Track Record Proforma (provided by the ECF Team), this will include:
    • details of investments made as individuals and as a team, with greater weight placed on the latter
    • details of who was involved in the Sourcing, Diligence, Transaction, Monitoring and Exits of investment
    • dates of investments, costs, equity stakes, values, multiples, co-investor details as well as exit details.
  • a list of references, within Stage 2 of the application process, Prospective Managers may be asked to provide sufficient details to verify any investment track record of individuals named in their proposal, to provide details of referees and to provide consent for the ECF Team to carry out further background checks and referencing.

Investment Strategy

Equity Gap

Prospective Managers will be required to set out their investment strategy as part of their proposals. The investment strategy must be consistent with the overarching ECF rules and target an equity gap while being commercially viable. The articulation of investment strategy, including the targeting provisions, will form part of the investment mandate that is included in the legal agreements for each ECF. It is envisaged that prospective ECFs will operate within a tightly defined investment mandate. For example, focusing on particular business sectors, stages of development, locations and/or investment tranche sizes. 

All else being equal, the ECF Team will favour approaches that demonstrate that the proposed ECF focuses on addressing a particularly acute part of the equity gap. Strong evidence showing a severe shortage of capital in their target market may compensate for other less attractive features of a proposal. The ECF Team will pay close attention to the analysis of the existing supply of equity capital available to the target portfolio companies, and the level of unserved demand for equity finance amongst those companies. Prospective Managers should also seek to demonstrate their competitive advantage over existing or potential future participants in their segment of the market.

A Prospective Manager’s investment strategy should be driven by commercial considerations. Accordingly, the ECF Team will assess applications without favouring any particular geographic location or business sector over others. Prospective Managers should note that there is no specific requirement for ECF to contribute to the Government’s wider objectives for economic development across the regions or in disadvantaged areas. While ECFs are welcome to target businesses in particular regions or localities where they can demonstrate the existence of an equity gap, these proposals will be assessed on the same basis as any other.


Prospective Managers should demonstrate their proprietary access to deals relevant to their investment strategy. They should be able to provide evidence that the dealflow is of appropriate quality and size to support the proposed fund model. This evidence should include the details of networks, inbound and outbound strategies, as well as the processes in place to manage dealflow.

Strategy & Model

Prospective Managers must demonstrate that their proposed fund has good prospects of delivering a high financial return.

Value Add

The ECF Team will consider the Prospective Manager’s capacity to make a non-financial contribution to the performance of their portfolio companies, such as providing management support, mentoring, network connections or other relevant expertise. In assessing capacity in this area, the ECF Team will consider whether the Prospective Manager’s level of ambition in this area is achievable. The assessment will take into account the resources available to the management team, as well as their track record of providing their stated value add. Additionally, the ECF Team will assess the likely costs and time commitments involved over the fund’s life.  Prospective Managers will need to demonstrate that the proposals are feasible given the resources available to the ECF.

Environmental, Social and Governance (ESG)

ESG factors will also be given appropriate consideration. Prospective Managers are encouraged to provide an overview of their approach to sustainability, responsible investment, and their existing or planned ESG policies and practices.  This includes considerations within the fund operation and their assessment of potential portfolio companies. Prospective Managers must demonstrate that the proposed ECF activities align with BBFL’s sustainability mission, particularly regarding Net Zero and Diversity, Equity & Inclusion (“DEI”).  

Information requested from Prospective Mangers will include but is not limited to:

  • overall approach (sector-specific, generalist, opportunist etc.);
  • Description of proposed value-add and examples of its execution; 
  • length of investment period and the proportion of total commitments to be retained for follow-on investments and to meet other expenses of the partnership after the end of the investment period;
  • target number and value of investments in each year of the fund’s investment period, and into the portfolio post-investment period;
  • target sector(s) for portfolio companies (if applicable);
  • target stage(s) of development of portfolio companies;
  • target location(s) for portfolio companies (if applicable);
  • target funding round sizes for the ECF’s initial investments, including the likely extent of co-investment or syndication with business angels, venture capital funds and other investor groups. Indicating if any potential co-investors or syndicate partners are in any way connected with the proposed ECF and, if so, how any conflicts of interest will be managed;
  • target proportion of total commitments to be retained for investment in follow-on funding rounds;
  • proposed deal structures, including the intended approach to minimising dilution (while remaining within the overall scheme rules);
  • a brief analysis of the market in which the ECF is proposing to operate, including an assessment of alternative current and likely future sources of equity capital for the target SMEs, and the extent of unserved demand for such capital; 
  • Sources of dealflow
  • an assessment of the specific risks associated with the proposed strategy.
  • a fund model, including the financial returns that are expected to accrue to private investors and to BBFL. This should include a sensitivity analysis that shows how returns vary on a range of different assumptions about underlying investment performance and minimum and maximum fund sizes for the model

Fund Operation

Prospective Managers will need to provide details regarding;;

  • proposed arrangements for the back-office operations of the fund manager including compliance, fund accounting, and reporting;
  • the decision-making processes, including the nature and extent of the due diligence and investment committee processes to be undertaken before each investment, including any external support;
  • arrangements in place for managing the portfolio, including follow-on investments and exits;
  • processes in place to highlight and manage conflicts of interest; and
  • succession and disaster recovery plans.

Financial Terms & Structure

The ECF Team recognises that investors typically wish to remunerate fund managers by a combination of:

  • a management fee, set at a level that is just sufficient to permit the fund manager to invest and manage the fund effectively; and
  • an appropriate carried interest provision. Any hurdle should be set at a level that is stretching but achievable, and the rate of the ‘carry’ should be no more than is sufficient to create a strong incentive for the fund manager to maximise the financial performance of the fund.

However, this structure may not be appropriate in all situations, and Prospective Managers may want to discuss alternative remuneration structures. If so, they will need to explain why the proposed structure is desirable from the perspective of the ECF Team and other investors in the fund. They must demonstrate that it provides a clear link between the performance of the fund and the remuneration of the fund manager.

Prospective Managers must also specify the level, structure and timing of any other fees or charges that would be applied, e.g., any application, arrangement, and monitoring fees to be charged to investee SMEs. They should also note the ECF Team’s very strong preference for such charges, where levied, to accrue to the fund rather than to the fund manager. Prospective Managers should demonstrate that any such fees are kept to a minimum. This ensures that as much of each investment as possible is available for the SME to develop its business, rather than to pay fees back to the ECF. Where fees relate to a specific investor in the ECF, (e.g., in the case of commission fees paid to IFAs or intermediaries who introduce investors to the fund), the ECF Team would expect these to be borne by the investor or manager concerned, and not by the fund as a whole. However, these fees should also be kept to a minimum.

As part of each proposal, the ECF Team will also wish to see projected budgets for the fund manager, to demonstrate that the level of the proposed fees will be sufficient to enable the fund to be properly managed, but not excessive.

Prospective Managers should be prepared to demonstrate why the proposed financial terms represent the least necessary level of BBFL support to attract private investment into the proposed ECF.

It is the ECF Team’s preference that each of the Manager, the General Partner and the Founder Partner proposed within an ECF structure maintain its principal place of business within the UK. They should not seek to be domiciled, qualified or registered in its own name or any other name under the laws, statutes, codes, regulations, taxation code or similar of any jurisdiction other than the UK. If any of the entities within the proposed fund structure are not to be domiciled in the UK, Prospective Managers will need to provide satisfactory explanation as to why the fund is to be structured in this way.

Where the activities of a proposed ECF would fall within the financial services regulatory regime under the FSMA, the Prospective Manager must also demonstrate that they meet the requirements of that Act (for example in relation to FCA authorisation) or have credible plans to do so.

Information requested from Prospective Mangers will include but is not limited to:

  • Fund Size, Term and Structure.
  • Commitment required from BBFL and private investors.
  • GP Commitment.
  • Management Fee, the level, structure and timing of management fees and other remuneration to the fund manager should be set out. It will be a negative feature if the proposed level of charges or fees does not appear commercially appropriate or appears to be to the detriment of either the fund or its portfolio companies.
  • Full financial projections for the fund management company. These projections should demonstrate that the fund manager will be generating income that is sufficient to cover the costs of managing the fund, but not excessive; and full financial projections for the partnership itself.
  • Carried Interest, the ECF Team will have regard to the strength of the link between the financial performance of the fund and the remuneration of those individuals responsible for taking the investment decisions and otherwise managing the fund.
  • BBFL Profit Share as a straightforward percentage, in order to maximise their chances of success, Prospective Managers should strive to offer BBFL a profit share that is competitive, but also realistic, to demonstrate that their application is viable and achievable.
  • Fund establishment costs
  • Any other fees and costs to be charged to the fund and/or investee companies. 
  • Fund structure including ownership of the management company

Sources of Private Capital

Attracting new private capital to the equity gap is an objective for ECFs. Therefore, the ECF Team will carefully assess proposals to ensure they facilitate new flows of private capital into the equity gap, rather than merely displacing capital that would otherwise have been invested in other equity gap funds.

Prospective Managers must set out their viable strategy to attract private capital, to include the intended sources of private capital for their proposal. They must specify the target level of privately sourced capital, the desired ratio of BBFL to private capital in the fund and provide evidence of investor appetite for their proposal. The ECF Team place preference on applications supported by robust evidence of investor appetite from named and verifiable sources, for examples, such as in the form of letters of intent, or conditional commitments of funding.

Prospective Managers must demonstrate that the proposed private investors are committed to investing on a fully commercial basis, prioritising financial returns and have the necessary financial capacity to meet the envisaged level of commitment.

Information requested from Prospective Mangers will include, but is not limited to:

  • Details of target Private Investors.
  • Letters of intent
  • Conditional commitments of funding

Applying for the ECF programme

After reading the above guidance and related sections, if Prospective Managers believe their proposal fits the ECF criteria and they are considering applying for an ECF they should complete the Enquiry Form and the ECF Team will be in touch to outline the next steps.

Terms & conditions

The Bank reserves the right at any time not to make a commitment and/or cancel or withdraw from the process at any stage. Any costs or expenses incurred by a Prospective Manager will not be reimbursed and the Bank will not be liable in any way to a Prospective Manager for costs, expenses or losses incurred as a result of this process. 

The Bank reserves the right to amend the timetable and/or the process until such time as binding arrangements are concluded with Prospective Managers. The Bank reserves the right to reject any, and all, Proposals at any stage, with or without cause. The Bank reserves the right to request clarification of information submitted and to request additional information regarding any Proposal, including the right to request face to face meetings. Refusal to provide such information upon request may cause the Proposal to be rejected. Where no reply to a request for information or for clarification is received within ten business days, the Bank may consider that the Proposal has been withdrawn.

No representation, express or implied, is made by the Bank as to the completeness or accuracy of any facts or opinions contained in this Request for Proposals. Recipients of this document should seek their own independent legal, financial, tax, accounting or regulatory advice before making any application under the Programme.

Please note that the Bank is acting as an investor for the purposes of this Programme and therefore this Request for Proposals does not require approval under financial promotion legislation or corresponding rules.

Prospective Managers should be aware the Bank is not authorised to carry out regulated activity. The Bank will thus be unable to consider responses where receipt or processing would require any form of regulatory authorisation or permission.

Prospective Managers should note that information received by the Bank or any other member of the British Business Bank plc group as part of this process, including personal information, may be published or disclosed in accordance with the access to information regimes. These are primarily the Freedom of Information Act 2000 (FOIA), the Data Protection Act and GDPR (Data Laws) and the Environmental Information Regulations 2004. In view of this, should Prospective Managers consider that any information should be treated as confidential and/or commercially sensitive, it would be helpful if Prospective Managers could set out why they consider this to be the case in each instance. Automatic confidentiality disclaimers generated by IT systems will not, in themselves, be regarded as binding. If the Bank or any member of the British Business Bank plc group receives a request for disclosure of information provided, full account will be taken of any explanation, but no assurance can be given that confidentiality will be maintained in all circumstances. Decisions on disclosure remain the responsibility of the Bank or the relevant member of the British Business Bank group and ultimately the Information Commissioner and courts. Personal data will be processed in accordance with the Data Laws: in the majority of circumstances this will mean that personal data will not be disclosed.

Personal data will be processed in accordance with the privacy notice on our website.


All information from Prospective Managers will be treated as commercially confidential. Except where required by law or where the consent of the Prospective Manager has been obtained, such information will not be disclosed to third parties other than those involved in assessing or advising on the applications or in other aspects of the management or evaluation of the ECF programme. The ECF Team will retain applications after the ECF application process is completed, for example to support any evaluation of the ECF application process. This may involve passing certain details to carefully selected external researchers, who would be bound by strict confidentiality provisions.

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