An angel fund that invests up to £1 million in growing businesses has been expanded across the UK.
Businesses across the country can now apply for the fund, which currently has a fund of £100 million from which to draw.
The Angel CoFund, which was launched in November 2011, is intended to provide a route by which “promising” businesses can be supported, and a new means by which the angel industry can be developed. The CoFund was initially established with a grant from the Regional Development Fund and, as such, was only available to businesses in specific areas of the UK. Now, though, the CoFund has been extended across the country thanks to the implementation of new funding announced in this year’s Budget.
What does the CoFund invest in?
The Angel CoFund makes equity investments of between £100,000 and £1 million to help grow businesses. Crucially, the CoFund only invests in tandem with syndicates or networks of other angel investors. It will only make investments equivalent to a maximum of 49 per cent of the total equity funding sought in that funding round, although most of the CoFund’s investments represent a smaller proportion than this of the total funding secured.
The CoFund will also only co-invest with syndicates that are making a first-time investment in the company. It will not support existing investments.
In order to be eligible for CoFund investment, businesses must meet the definition of an SME as made by the European Commission: they must have no more than 250 employees, must have turnover that does not exceed €50 million, and balance sheet assets that do not exceed €43 million.
The CoFund has made investments in firms operating in a broad range of fields. Its current portfolio includes drinks businesses, social gaming, radar, and mobile ticketing.
How can I apply?
The Angel CoFund does not accept direct applications from businesses. Instead, businesses first need to identify an existing business angel syndicate or network that is interesting in investing. The CoFund only makes investments in tandem with these syndicates or networks.
There is more information about finding a business angel syndicate available on the UK Business Angels Association website. You can read more about applying for equity finance in our small business finance guide.
What are the alternatives?
There is a wide range of alternatives to equity funding. This type of finance is not suitable for every business, and it is important that you consider all of the potential options. You may wish to read our guide to finding business finance, which is accompanied by a video introduction, for more information.