Chapter 30
Capital for Enterprise U.K.: Bridging the SME early-stage finance gapa
While getting to the office one winter morning in 2009, Rory Earley, CEO of Capital for Enterprise UK, the organization set up to manage the Enterprise Capital Fund (ECF) program, thought about the report he had just started preparing on the program’s first 4 years of operations. That morning he wondered what changes, if any, could be made to the program to address current changes in the private equity (PE) industry and what changes, if any, were necessary to address the issues that his team’s research had highlighted in the current ECF program.
AN “EQUITY GAP”?
He recalled the origins of the program. In their role as advisors to the U.K. government on venture capital funding, Earley and his colleagues had promoted the ECF program based on the following diagnosis: despite having a very developed buyout industry, the U.K. entrepreneurial and investor community was still facing significant hurdles regarding investments in the £250,000 to £2mn range. There were both supply-side constraints (the lack of existing funds willing to invest in all types of early-stage businesses) and demand-side constraints (the lack of awareness of entrepreneurs of such funds and of skills to structure proposals attractive to external investors).
A number of facts in earlier studies from 2003 to 2004 to which Earley had contributed had struck key people in the sector as well as in the government.1 One chart (Exhibit 30.1 ...
