The Chancellor has announced yesterday that the Future Fund scheme will be expanded further after already seeing a high number of start-ups receive government matched-funding to assist them during the pandemic.
The changes implemented to the scheme are:
1. Eligibility conditions have been relaxed to accommodate companies who have had to relocate outside the UK to be part of accelerator programmes.
Accelerator programmes, such as TechStars or Y-Combinator which give businesses access to finance and mentorship often require companies to set up a non-UK parent company in order to take part in the accelerator. In practice this has most often been the case for companies having to set up as a US entity to join some of the best Silicon Valley accelerators. This has previously meant that these firms did not meet the Future Fund eligibility criterion of having a UK parent company if they are part of a corporate group. The updated conditions announced yesterday waive the criterion in these situations, allowing more firms to apply to the Fund.
However, this exception will only cover accelerator alumni who can prove the reason for setting up a non-UK parent company was the participation in these competitive programmes.
Additionally, all companies will still be required to meet the ‘substantive economic presence’ tests (that half or more employees are UK-based and/or half or more revenues are from UK sales), as well as the other eligibility criteria regarding the minimum £250,000 previous equity investment that must have been received in the last 5 years.
2. The total Future Fund pot has been officially expanded.
Initially, a total of £250 million was made available by the government under the Fund, with the Treasury making clear the amount could be increased if needed. Due to the popularity of the Fund, more funding has been made available, with around £320 million having now already been invested, and the total is expected to keep growing as the scale of the scheme is kept under review.
In this context, companies have no reason to be deterred from applying due to concerns about shortage of funds.
How can you apply?
At SeedLegals, we’ve created a seamless process to help you apply for the Future Fund. You’ll be able to generate your Future Fund Term Sheet to send to your investors, obtain the application checklist so you can easily facilitate your Lead Investor applying on the government website and secure your internal company consents (Board Minutes, Shareholder Resolution, Previous Investor Consent), all on our platform.
Additionally, because the British Business Bank requires that you have an SRA-regulated company solicitor capable of holding client funds in an escrow account, we’ve partnered with Simons Muirhead & Burton LLP to provide you these exact services as part of our package.
As such, SeedLegals and our partners are providing the entire application process for a fixed fee of:
- £3000 for investments up to £300K;
- £4000 for investments of £300K to £1M;
- £5000 for investments of £1M to £5M.
All amounts exclude VAT, and the investments include both the investor and Future Fund amounts.
To apply to Future Fund, sign up on SeedLegals, create your company, then click to create a Future Fund application. The wizard will take you through each step, with the SeedLegals support team available on web chat and Zoom to help every step of the way.