Early Stage Growth Challenge Fund

Graeme Smith


Early Stage Growth Challenge Fund

For all our information around COVID-19 visit www.frenchduncan.co.uk/covid-19.

 

Early Stage Growth Challenge Fund

 

What is it?

This new fund, managed by the Scottish Investment Bank and is aimed at providing support (£50,000 - £300,000) to early-stage, high-growth, innovative Scottish companies (Small and Micro-Enterprises only i.e. 2-49 employees) who have been negatively affected by the COVID-19 pandemic.  The funding is a combination of convertible loan and grant (which can make up a maximum of 20% of any funding awarded).  The convertible loans have a term of 36 months and attract interest at 8% (interest free for the first 12 months). You must either repay the convertible loan with accrued interest (at 8%), or convert it into equity - you’ll need the agreement of SE to do either.  Full details of the Fund are available by clicking here.

 

Who can apply?

Potential applicants should be focused on innovation, R&D and intellectual property in sectors such as fintech, life sciences, space, green tech, digital and data, and artificial intelligence.

Amongst a number of criteria, applicants must:

  • Be based in Scotland or have the majority of operations in Scotland
  • Be a private company limited by shares
  • Have been incorporated between 31 December 2009 and 31 December 2019
  • Have 2-49 full-time equivalent employees, with at least 80% based in Scotland excluding contractors or employees on zero-hours contracts.
  • Be an early stage company with a high growth potential, operating in or targeting international growth markets. You must have raised external equity finance in the last 24 calendar months, or be planning on doing so in the next 12 months. This equity can’t come from founders, family, friends or crowdfunding.
  • Be a high growth and innovative company – you must have registered at least one technology right (such as a patent, utility model, design right or protection certificate) in the last 24 calendar months, 
    • OR have received an R&D or innovation grant or prize of minimum £50,000 by an EU institution, EU body or regional/national research of innovation support scheme in the last 24 calendar months, 
    • OR have received (or are working through a formal application for) approval from a regulatory body such as Medicines and Healthcare Products Regulatory Agency (MHRA), U.S. Food and Drug Administration (FDA) or CE certification mark or equivalent,
    • OR have previously raised external equity finance (not including founders, family, friends, and crowdfunding).
    • Importantly, you'll still be eligible if you expect to have done one of these things by 7 September 2020

 

How does it operate?

This is a competitive funding call open for applications until 5pm on 31 July 2020. This means funding is not awarded on a first-come-first-served basis. Those applicants judged to have the most to contribute to Scotland’s economic recovery will be successful. Therefore, not all eligible companies will secure funding.

 

Should I apply?

This a welcome intervention for the Scottish Investment Bank at this time.  However, it is important to highlight that it is not appropriate for a large number of companies.  At French Duncan however, we would be delighted to assist you in the application process but we would encourage you to carefully read the criteria and information requirements outlined in the announcement.

You can contact the French Duncan Corporate Advisory Team for further advice below: 

 

 Click here to see Graeme's profile and contact details.

 

Other COVID-19 Information:

For all our help, support and information around COVID-19 / Coronavirus visit www.frenchduncan.co.uk/covid-19, where you can link to articles deferring HMRC payments, tax and business rates, debt assistance & restructuring and much more.

 

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