Government announces major catalyst for angel investing in seed-stage entrepreneurs

29 November 2011

CfEL announces that new £50M Angel CoFund is shortly to be Open for Business

The BBAA is delighted that the new £50m Business Angel Co Investment Fund, to be named the Angel CoFund, will shortly be open for business. The fund administered with the support of Capital for Enterprise Limited (CfEL) has been set up with a grant from the Regional Growth Fund and will be investing alongside Business Angel syndicates from across England.

The fund has been designed and established by a consortium of private and public bodies with expertise in business angel investment. It is a private sector body with clear objectives to boost the quality and quantity of business angel investing in England, and to support long-term, high quality jobs in high growth companies.

The Angel CoFund is a company limited by guarantee and private sector body with an independent board of directors. Investment decisions will be taken by an Investment Committee made up of experienced investors from the Business Angel and Venture Capital community.

The fund is able to make initial equity investments of between £100K and £1M in to SMEs alongside syndicates of business angels, subject to certain geographical restrictions and an upper limit of 49% of any investment round. Investment decisions will be made by the independent Investment Committee of the fund based on the detailed proposals put forward by business angel syndicates.

The size of the investment proposed needs to be significant enough to properly fund the business and to allow for the cost of proper due diligence and legal advice. The investment will need to be a new investment for the Syndicate, rather than supporting an existing investment, which will help to ensure that the Syndicate and the CoFund’s objectives are broadly aligned. The CoFund will, to the extent possible, follow the terms of the Syndicate including the structure and price of any investment. Once invested the CoFund will be able to make follow on investments alongside Syndicates in to companies that are already within its portfolio.

The Fund has also issued  guidelines for Syndicates seeking to put forward an Investment Proposal, including a template Investment Proposal Form and details on the investment documentation and due diligence requirements (for access to these documents see below)

The fund is not open to direct approaches from individual businesses and those seeking investment should first secure the interest of the business angel syndicate or network. Businesses seeking investment can find more information on business angels, syndicates and networks from the British Business Angels Association website

For more information on the Angel CoFund please click here.

To download an Investment Proposal Form please click here.

To download details on the Investment Paper and Due Diligence requirements please click here.