The Future Fund now open for applications

On Monday (18 May) the Chancellor finally revealed more details about the Future Fund, which is now open for applications. As we were writing earlier, we hadn’t expected any surprises or significant changes; however, here are a few areas we picked up:

  • Clarification of a third party investor definition– the good news is that definition is broad and not limited only to institutional investors. As long as an investor falls within categories defined by FCA Financial Promotion rules, they are eligible to invest. This means that angel investors, high-net-worth individuals and investment professionals (any FCA authorise company) will be eligible to invest. This brings a new dimension because it will enable even crowdfunding platforms to participate as long as it satisfies the client onboarding requirement, i.e. investors do not need to meet the high-net-worth or sophisticated requirements.
  • No EIS – As in our previous article, we didn’t expect EIS to find a place in this government initiative. The Government was very clear that these two programs shouldn’t be used in conjunction. Therefore, the investment will not qualify for EIS.
  • The application must be led by an investor – this took some by surprise, but it does ensure that the investor is ready and committed. The investor will provide his or her personal details along with other investing parties, investment information and company details. It seems to be a straight forward process. However, both company and investors are advised to appoint lawyers to help with eligibility and convertible loan documentation. Therefore, we would advise making it a priority.
  • Eligibility criteria of £250,000 – there was a lot of speculation about the exact requirement for prior investment. It is now clearly stated that the company must have raised at least £250,000 in equity investment for cash consideration from third-party investors in previous funding rounds in the last five years (from 1 April 2015 to 19 April 2020 inclusive). Third-party investors mean investors other than any founder, employee, worker or consultant or their connected parties. The directors of the investee company will be required to sign a declaration that confirms this criterion.
  • Investing in Women Code – as a commitment to diversity, the Future Fund is a signatory to HM Treasury’s Investing in Women Code. Therefore, investors are asked to sign the code when making an application. It is old news about women founders struggling to raise funding. So let’s hope that this initiative will bring more transparency and justice to the funding market. How it will be monitored is not clear, but the first step complete. For those who would be interested in finding more about the code, you can read more here.

The applications will run until the end of September 2020, but with first-come-first-served bases, it is vital to have everything prepared. It is intended to be an efficient process especially after the fiasco of CBILS, therefore as long as you meet all the criteria and have an investor lined up the whole process from application to funding being awarded can take as little as 21 days. The next few weeks will show the demand for this type of funding, and in a month, we should have a better idea of how successful the delivery has been.

For those who don’t meet the criteria or choose to have another route of funding, we are here to help. If you need advice on equity funding, rights issues or financial models, please get in touch.

This article was written by our Growth Manager, Agne Pakalniskyte. If you need advice on structuring the ASA, a rights issue or assistance with equity fundraising, then please contact Agne on the form below.



We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.


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