Business Secretary announces £25 million boost for innovative small businesses under British Business Bank scheme
Business Secretary Vince Cable announced today that a £25 million boost will be given to small but innovative UK businesses
Episode 1 is a £37.5 million fund and the 14th Enterprise Capital Fund – the government’s scheme to support fund managers who invest in small, high growth businesses.
Episode 1 will be led by Dr Simon Murdoch, an experienced investor who has successfully invested in some of the most significant UK tech companies of the last 10 years including LoveFilm, Zoopla and Shazam. The fund has attracted £12.5 million of private investment, alongside the £25 million from the government, and will invest between £250,000 and £2 million into 20 to 30 early-stage technology companies.
Business Secretary Vince Cable said:
We are determined to give entrepreneurs the financial support they need to grow. This new £37.5 million Enterprise Capital Fund will target a serious gap in the equity market for high growth small firms.
Dr Simon Murdoch, Partner, Episode 1 said:
I know from personal experience, it is hard to start and grow a business, even without the added difficulties of the current economic climate. Raising venture funding is even harder. Our aim is to establish Episode 1 as the best place to come for early stage technology entrepreneurs looking for up to £2 million of funding.
We’ve raised the money for the fund from other entrepreneurs and successful business people, and this has been supplemented by the finance matching from the UK government which enables us to invest and help more high growth UK businesses with global-market aspirations.
Later today (Tuesday 8 October 2013) the Business Secretary will give a speech at TheCityUK on how equity finance is a viable alternative source of finance for small and medium sized businesses looking for support.
Notes to editors:
1. Enterprise Capital Funds were established to address a market weakness in the provision of equity finance to innovative small and medium sized enterprises, and are a joint public-private venture. Since 2006, £197 million has been invested in over 160 companies.
2. Enterprise Capital Funds are one of a range of government-backed schemes totalling £2.9 billion that are being brought together under the Business Bank initiative. A further £1 billion of new capital will be deployed by the Business Bank in partnership with the private sector to further increase the amount of finance available and the choice of finance providers to businesses.
3. Across the 14 Enterprise Capital Funds launched since 2006, total investor commitment from the government and the private sector stands at almost £480 million.
4. The government committed an additional £200 million for investment into Enterprise Capital Funds between 2011 and 2015.
5. Enterprise Capital Funds aim to both lower the barriers to entry for entrepreneurial fund managers wanting to operate in the equity gap, and increase the supply of equity finance to innovative, early stage companies.
6. In the autumn government will launch a public campaign to celebrate GREAT British business success stories. Government wants to inspire other small businesses and point them towards the support that can help them grow. It will also launch a new strategy for how the whole of government will back them. This will set out a range of measures to continue helping budding entrepreneurs and existing businesses succeed.
7. The government’s economic policy objective is to achieve ‘strong, sustainable and balanced growth that is more evenly shared across the country and between industries’. It set 4 ambitions in the ‘Plan for Growth’, published at Budget 2011:
- to create the most competitive tax system in the G20
- to make the UK the best place in Europe to start, finance and grow a business
- to encourage investment and exports as a route to a more balanced economy
- to create a more educated workforce that is the most flexible in Europe
Work is underway across government to achieve these ambitions, including progress on more than 250 measures as part of the Growth Review. Developing an Industrial Strategy gives new impetus to this work by providing businesses, investors and the public with more clarity about the long-term direction in which the government wants the economy to travel.