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Business Link for Essex
East of England Objective 2 Venture Support Fund
Michael Veasey
Start Up & Enterprise Development Manager
Business Link for Essex
What is it?
A Fund aimed at increasing the supply of equity risk capital in the £25K to £250K range
A fund that uses EU (ERDF) funds-£3M, and EEDA funds £600K to augment private investments in SMEs in O2 areas of the East of England.
The program & fund is run by EEBL.
Business Link for Essex
What are its aims?
To provide focused support to stimulate private investors to invest in O2 based businesses, and businesses which will substantially benefit O2 areas.
Business Link for Essex
How does it work?
A company looking for £100K of equity investment.
Investor, or Business Angel must raise £50K.
Leverages in £50K on a pari parsu basis.
Business Link for Essex
Who are the likely investors?
Equity Link Network.
GEIF Business Angel Network.
NBAN.
Other Investor Networks.
Investors which bring significant management experience to businesses.
Business Link for Essex
What is the process?
The business must have a robust business plan outlining the need and scope of investment required.
Investment opportunities should be identified, developed and supported by ‘Access to Finance’ program
The business must proceed through the ‘Fit 4 Finance’ program & panels.
Businesses must go through these Finance readiness programs to access the fund.
Business Link for Essex
The Investor must carry out a fully due diligence process on the businesses.
Once the Investor & business have come to mutual agreement, a conditional Investment offer is made by Investor
The application goes to the FSA approved fund manager to agree/or not the matching funds.
Business Link for Essex
Criteria
Subject to EU Law.
Must be an SME.
Must adhere to State Funding Rules.
Arms Length investment.
O2 domiciled/trading base/workforce base/direct economic impact.
Business Link for Essex
Other Guidelines
Looking to assist aprox 75 Investments before 2007.
Average funding per Investment£70-90K.
Returns likely after fund has finished. 2007-2013.
Looking for a Return on Capital equal to the Investor to set up legacy fund into the future.
Business Link for Essex
There is intended to be a limited follow on funding proposition of up to e750K
Investments must be deemed legal, moral & ethical.
The Fund will invest by means of Equity, Preference Shares, Unsecured Loan Stock, convertible and secured loans.
