3en Venture Capital Fund
Topic of the practice
Support to high growth SMEs by investing in early stage business and providing suppiort and contacts for the development and growth of businesses whithin the Borough of Basingstoke and Deane.
Good Practice Information
3EN's target sectors include software, IT and IT services, telecoms, new media, electronics, and other technology sectors with similar cash-flow characteristics.
Focus is on companies with Intellectual Property Rights (IPR) relevant to soft-ware development:
• companies that write software, or
• companies that act as value added reseller (customise existing software).
Focus on high growth oriented companies, with an existing/potential turnover of £300,000 to £500,000.
Company should have a complete management team and service at least 3 or 4 customers.
The area of activity is limited to the boundaries of the local authority of Basing-stoke & Deane Borough Council. The service is to fill the local equity gap in high growth companies, normally between £100,000 to £3000,000. So the fund is designed to partially plug the gap with investments of up to £75,000.
Includes the Lifeline Fund, which offers local companies a business loan for cash flow/working capital, worth a maximum of £25,000. There is a supervisory board with 2 people, and there are 6 permanent people involved in the fund.
Evidence of success
The only local authority venture capital fund in the UK, the only venture capital fund set up in a local authority through developer contribution, as far as we are aware the only local authority VC fund in Europe.
The objective of this fund is economic sustainability, to create wealth and generate employment.
Focusing investment in companies that have a sound structure, IPR shares, to make certain the business has intrinsic value. A measure of Growth in net asset value is the way to measure a financially viable initiative, it is considered profitable if this value is static or growing; it calculated in the following way:
Net Fund Value= Opening net cash - investment made - write backs and write offs-operating costs + revaluation of portfolio + additional cash in fund.
Jobs created and protected by the fund can represent approximately 70 to 80 people.
Contact details to obtain further information on the practice
Basingstoke & Deane Borough Council