Bringing Business To Life The Coalfields Funds

Your Questions Answered

What are The Coalfields Funds?

The Coalfields Funds are commercial venture capital funds set up to support the growth of businesses and encourage entrepreneurship in England’s former coalfields. They can finance new-start companies, established businesses seeking to expand, acquisitions and mergers, and buy–outs and buy–ins.

Who manages the Funds?

The Funds are managed by Enterprise Ventures Limited on behalf of the Department of Communities and Local Government and Institutional Investors.

Enterprise Ventures provides growth and venture capital to high growth unquoted companies located throughout the UK and manages a range of funds that offer investment to new and existing SMEs.

Enterprise Ventures Limited is authorised and regulated by the Financial Conduct Authority and is a full member of the British Venture Capital Association

What is Department for Communities and Local Government’s involvement in the Funds?

The Coalfields Funds have been established as limited partnerships in line with the standard venture capital model. DCLG will play a key role in monitoring the strategy and direction of the Funds, while leaving day to day management to Enterprise Ventures as its appointed Fund Manager.

Who can the Funds help?

SMEs which require equity or equity related funding based upon the eligibility criteria.

How do the Funds invest in companies?

All investments are made on a commercial basis and Enterprise Ventures will put together individually tailored funding packages comprising equity and equity-related finance for the companies in which it invests, to allow the companies to grow and develop. Investment ranges from £500,000 up to typically £1.5 million.

What if my funding requirement is more than £1.5 million?

The Funds’ maximum investment in any one company is normally up to £1.5 million. Should your funding requirement be in excess of this amount, you should still contact Enterprise Ventures as there may be other funds under its management for which you may be eligible. The investment team at Enterprise Ventures will also help you to identify other sources of finance should this be necessary.

Do the Funds provide follow-on funding?

Follow-on funding is available, with the maximum total investment in any one company normally being £1.5 million.

How long does the application process usually take?

It is likely to take in the order of eight to ten weeks from the date of receipt of a full business plan until an approved investment is completed, although this process can be shortened in some circumstances.

How much will it cost?

The Funds require an arrangement fee, which is negotiable, but usually 3% of the total amount invested, payable on completion of the investment. The Funds also reserve the right to charge a monitoring fee linked to the value of the total investment made by the Funds.

Whilst the aim is to keep costs to a minimum, fees will also be incurred in completing the legal documentation and potentially with regard to due diligence and referencing work.

What information do you need me to provide?

For an investment to be progressed, we require a full business plan, including profit and loss, balance sheet and cash flow projections.

Will the Funds want a seat on the Board?

The Fund Manager actively seeks to add value to your business and focus on its growth and development. In most cases, the Funds reserve the right, which may or may not be exercised, to appoint a Non Executive Director to the Board, usually a member of the Enterprise Ventures investment team or an external independent director of the highest calibre who will add to and enhance your existing management team.

My company is not located in an eligible area but is considering relocating – can I apply?

Certainly – the Funds are happy to consider proposals from companies outside the eligible areas that are intending to relocate into an eligible area. However, it is not always necessary to be located within an eligible ward – companies that employ a significant proportion of their workforce from, or who bring material economic benefit to, an eligible ward, can also apply for funding.

Any companies that are based outside eligible areas should still contact the investment team at Enterprise Ventures as there may be other funds under management for which they are eligible and which may consider investing.

Can the Funds invest in businesses located in Wales and Scotland?

No, the Funds operate in the coalfield areas of England only.

Do I have to be an ex-coalminer to apply?

No, your business needs to be eligible based upon the Funds’ eligibility criteria.

How and to whom do I apply?

All enquiries and applications should be made directly to the investment team at Enterprise Ventures who will be happy to discuss your requirements with you or receive your application for funding.

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“Enterprise Ventures are flexible and approachable.”

Independent Research Nov ’13

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