Enterprise Capital Funds are financial schemes established by the
Department for Business, Innovation and Skills (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 Europe, off the north-western coast of the European mainland, continental mainland. It comprises England, Scotlan ...
to address a market weakness in the provision of equity finance to UK
small and medium enterprises (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. 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 November 2019, 29 ECFs have been launched.
Fund management
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 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.
On 1 October 2013, CfEL became part of the
British Business Bank
British Business Bank plc (BBB) is a state-owned economic development bank established by the UK Government. Its aim is to increase the supply of credit to small and medium enterprises (SMEs) as well as providing business advice services. It is ...
, which is now responsible for the management of all of CfEL's financial schemes, including ECFs.
Approved funds
The current funds as of March 2017 are:
* 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
European Commission investigation
In November 2013, Enterprise Capital Funds came in for scrutiny from the
European Commission
The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body ...
after several UK government-backed funds were found to be investing in SMEs beyond the guidelines permitted by EU law. One implication is that such businesses could be forced to hand back millions of pounds to
HM Treasury
His Majesty's Treasury (HM Treasury), occasionally referred to as the Exchequer, or more informally the Treasury, is a department of His Majesty's Government responsible for developing and executing the government's public finance policy and ...
.
References
{{reflist
External links
Enterprise Capital Funds page on CfEL website
Finance in the United Kingdom
Venture capital
Department for Business, Innovation and Skills