The future of a business ecosystem ultimately depends on its capacity to rejuvenate itself which, in turn, relies on the innovation capability brought in the system by startups. In other words, saving startups means building the future.
This is particularly true in a situation whereby coronavirus pandemic has come as a particular form of crisis which has hit new ventures that were in the best shape for moving things forwards.
Following the Save Our Startups campaign (of which, Oliver* has been a supporter), the British Government presented on Monday the Future Fund, a matched convertible loan scheme for startups.
A first-come, first-served programme, it is an investor-led scheme, that is, a start-up lead investor (i.e. HNWI or professionals) can apply for the matched funding using the British Business Bank portal as of Wednesday, 20 May 2020.
Companies can qualify provided they are a UK-incorporated startup with a significant economic presence in the UK (either half your sales or staff are in the UK) and have raised at least £250k in equity finance in the last five years.
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Presenting the programme, Rishi Sunak, the Chancellor of the Exchequer, told MPs on Monday that start-ups “provide the growth of tomorrow and they deserve our full support.”
Criticism has been expressed by key players in the equity crowdfunding industry, pointing out that the nature of the scheme would favour ventures backed by institutional investors.
For example, in his weekly note Thoughts from the Chairman, Seedrs’ Jeff Lynn argues that, “it is the company that has most of the necessary information to process investment-related documentation, and while an institutional lead investor will likely have systems in place that make this process easy, it may prove cumbersome—and even error-prone—for investors who are not as focused on the technical details of execution.”