Enterprise Capital Funds

Enterprise Capital Funds (ECFs) are funds modelled on a variant of the successful American Small Business Investment Companies (SBICs). In Britain, ECFs operate as private companies that back privately raised capital with Government-guaranteed leverage. They then finance investments in qualifying small businesses, and the profits are shared with the Government.

There is over £620 million of investment capacity in the 16 existing funds – eight of which are still investing, and eight fully invested.

There is no maximum fund size for an ECF, but the Government will commit no more than £25 million to a single fund.

The Government has established some overarching restrictions to constrain all ECFs to invest within the equity gap, including a £2 million upper limit on the size of the initial funding round in which an ECF may participate and a requirement that each investment should be predominantly related to, or for the benefit of, the economy of the UK.

Enterprise Capital Funds are managed by experienced investors from a variety of backgrounds – including teams from the venture capital industry as well as serial entrepreneurs with a history of success in building early stage UK companies.

There is a rolling investment programme for commitments to new Enterprise Capital Funds. The process is competitive, and we expect to invest in two to three new funds per year.