Enterprise Capital Fund is a British government financial programme that provides

venture capital Venture capital (VC) is a form of private equity financing provided by firms or funds to start-up company, startup, early-stage, and emerging companies, that have been deemed to have high growth potential or that have demonstrated high growth in ...

funding to

Start-up companies A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable business model. While entrepreneurship includes all new businesses including self-employment and businesses that do not intend to ...

that is operated by the

British Business Bank British Business Bank plc (BBB) is a British state-owned economic development bank established by the UK Government. Its aim is to increase the supply of credit to small and medium-sized enterprises as well as providing business advice services. ...

. It was established in 2006 by the UK governments

Department for Business, Innovation and Skills The Department for Business, Innovation and Skills (BIS) was a ministerial department of the Government of the United Kingdom. It was created by the Gordon Brown premiership on 5 June 2009 by the merger of the Department for Innovation, Uni ...

(BIS) in the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Northwestern Europe, off the coast of European mainland, the continental mainland. It comprises England, Scotlan ...

to address a market weakness in the provision of equity finance to UKs

small and medium enterprises Small and medium-sized enterprises (SMEs) or small and medium-sized businesses (SMBs) are businesses whose personnel and revenue numbers fall below certain limits. The abbreviation "SME" is used by many national agencies and international organizat ...

(SMEs). Government funding is used alongside private sector funds to establish funds that operate within the "equity gap"; targeting investments of up to £5 million that have the potential to provide a good commercial return.

History

The first five funds supported under the scheme were launched in 2006-7 following a pathfinder competition. A further three funds were awarded ECF status in 2007. As of 1 April 2008, responsibility for the management of ECFs along with BIS's other equity funds and the Small Firms Loan Guarantee (SFLG) was transferred to a new body,

Capital for Enterprise Capital for Enterprise Limited (CfEL) was a limited company in the United Kingdom owned by the Department for Business, Innovation and Skills (BIS). CfEL was responsible for managing BIS's financial schemes, such as venture capital funds and loan ...

Limited (CfEL). This change did not change the nature of the funds or their policy objectives. CfEL was incorporated in March 2007 as a private limited company wholly owned by BIS, and commenced actively trading in April 2008. It was an asset management business specialising in designing and managing support programmes for SME finance. Its position in the SME finance markets provided it with a unique ability to inform and implement Government policy on those markets. In November 2013, Enterprise Capital Funds came in for scrutiny from the

European Commission The European Commission (EC) is the primary Executive (government), executive arm of the European Union (EU). It operates as a cabinet government, with a number of European Commissioner, members of the Commission (directorial system, informall ...

after several UK government-backed funds were found to be investing in SMEs beyond the guidelines permitted by EU law. One implication was that such businesses could have been forced to hand back millions of pounds to

HM Treasury His Majesty's Treasury (HM Treasury or HMT), and informally referred to as the Treasury, is the Government of the United Kingdom’s economic and finance ministry. The Treasury is responsible for public spending, financial services policy, Tax ...

. On 1 October 2013, CfEL became part of the

, which is now responsible for the management of all of CfEL's financial schemes, including ECFs. As of November 2019, 29 ECFs had been launched.

Approved funds

Funds were: * Accelerated Digital Ventures * Active ECF * Amadeus and Angels Seed Fund * Catapult Growth Fund * Dawn Enterprise Capital Fund * Edge ECF * Entrepreneur First Next Stage Fund * Episode 1 Ventures * Foresight Nottingham Fund * IQ Capital Fund I * Longwall Ventures ECF * MMC Enterprise Capital Fund * Notion Capital Fund 2 * Oxford Technology Management * Panoramic ECF 1 * Passion Capital ECF * Seraphim Capital Fund * Seraphim Space Fund * Sustainable Technology Partnership

References

{{reflist

External links

The Enterprise Capital Funds programme
Finance in the United Kingdom Venture capital firms of the United Kingdom Department for Business, Innovation and Skills