Open for applications
This guidance provides an outline of the Enterprise Capital Fund (ECF) application and investment process.
Applications are welcome from anyone looking to raise an early-stage venture capital fund. An ECF cannot invest in certain types of business so is not appropriate for funds targeting:
- Infrastructure
- Property
- Debt finance
- MBO/MBI's
- Leveraged Fund Investments
Prospective Managers interested in applying for an ECF should complete the Enquiry Form at the end of this guidance document after they have read fully the information contained, as well as the ECF Overview, Key Features, and Fund Admin & Structure sections as found on the website. Prospective Managers can also contact The ECF Team via [email protected].
Please note that we are unable to provide responses to requests for business advice, direct investments (investments into individual companies), or other forms of support. Businesses looking for such advice should, in the first instance, contact their professional financial advisors.
Introduction to the Application process
The ECF Team reserves the right to reject or decline any proposal at any stage. Any application that, in the opinion of the ECF Team based on the provided information, is unlikely to promote the objectives or satisfy the criteria of the ECF Programme may be declined and removed from the application process at any stage. Responsibility for selecting ECF Managers will rest with the ECF Team. Its decision will be informed by the findings of commercial, financial, and legal due diligence, as well as any other information or advice deemed necessary. All those involved in the process will be bound by appropriate confidentiality provisions.
Feedback will be provided to Prospective Managers throughout the stages, detailing reasons for rejection or indicating where further information is required. Prospective Managers will often exit and re-enter the early stages of the process multiple times while they take time to develop their proposal (see Stages 0-2). For example, to hone their investment strategy, to gain further traction in their investment track record, or to build out the fund management team.
It is important to note that progression throughout the stages is not guaranteed. Prospective Managers may have several interactions with the ECF Team and receive several rounds of feedback before they are deemed “investment ready” and enter the formal stages of the process (see Stage 3 ‘Due Diligence’ and onwards). For this reason, early engagement with the ECF Team is encouraged. The ECF application process is highly competitive and only the strongest proposals progress to successfully close a fund.
The application process consists of the six stages outlined below. Stages 0-2 provide Prospective Managers with the opportunity to receive feedback from the ECF Team and help them become ‘investment ready’. Once refined, and judged ready by the ECF Team, applications formally enter the ECF process at Stage 3. It is important to note that proposals reviewed by the ECF Team will each have different characteristics and so some variation from the process described below may occur.
Calls between Prospective Managers and the ECF Team are typically virtual (using Microsoft Teams) at the beginning of the process and may transition to in-person meetings as proposals progress.
Stage 0 - Initial Contact
To engage with the ECF Team, Prospective Managers are asked to complete the Enquiry Form. If the proposal is a potential fit for an ECF, a short informal Initial Call (around 20 minutes in duration) will be held with a member of the ECF Team. The purpose of the Initial Call is to gain a high-level overview of the fund proposal, discuss ECF eligibility, and highlight any red flags, issues or concerns at an early stage.
After the Initial Call the proposal may be rejected or, if the proposal is still deemed to be a potential fit, it may be followed by an in-depth Guidance Call with two members of the ECF Team (around 45 minutes in duration) to deepen the ECF Team’s understanding of the proposal and for all parties to ask further questions. The Guidance Call will be used to explore the proposal in more detail and determine if the proposal is ready to be presented to the wider ECF Team.
The Applicants may be required to complete a track record proforma and submit a pitch-deck at this stage. Following the Guidance Call, Prospective Managers may;
- be invited to an Introductory Meeting;
- have their proposal rejected;
- or, be issued with feedback with the opportunity to address this feedback and re-engage with the ECF Team.
Stage 0 objective
To gain a high-level overview of the fund proposal, discuss ECF eligibility, highlight any red flags, issues or concerns at an early stage and determine if the proposal is ready to be presented to the wider ECF Team.
Stage 0 outcome
Invitation to an Introductory meeting, proposal is rejected, feedback issued and / or further information requested
Stage 1 - Introduction Meeting
Prospective Managers are invited to present their proposal to three or more members of the ECF Team in a 90-minute formal Introductory Meeting, which will take place virtually over Microsoft Teams. Prior to this meeting, Prospective Managers should provide a Pitch Deck to the ECF Team.
The Introductory Meeting provides Prospective Managers with the opportunity to present their proposal in full and for the ECF Team to ask more detailed questions. Following the Introductory Meeting, Prospective Managers may:
- be invited to a further meeting
- have their proposal rejected
- or, be issued with feedback with the opportunity to address the feedback and re-engage with the ECF Team
Stage 1 objective
To provide Prospective Managers with the opportunity to present their proposal in full and for the ECF Team to ask more detailed questions.
Stage 1 outcome
Invitation to a further meeting, proposal is rejected, feedback issued and / or further information requested.
Stage 2 - Follow on meetings/interactions and referencing
Following completion of stage 1, Prospective Managers’ responses to feedback following their Introductory Meeting will be evaluated by the ECF Team.
- a call may be held to discuss the feedback;
- further feedback may be issued;
- another meeting may be arranged;
- or, a proposal may be rejected.
These further interactions may delve into certain aspects of a proposal as the ECF Team assess it against the Assessment Criteria and against other proposals in their pipeline. An updated pitch-deck, track record pro-forma, or more detailed documents may be requested.
Typically, there are several rounds of feedback, calls, and meetings before the ECF Team feels a proposal is ready to progress to Due Diligence. Even after multiple interactions, proposals may still be rejected. Once the ECF Team decide a proposal is ready to progress into Due Diligence, Referencing may be conducted. Referencing will be used by the ECF Team to verify details given in proposals. Referees can include but are not limited to portfolio companies, co-investors, network contacts and sector experts.
Following Referencing, a proposal may:
- be rejected;
- be progressed to Due Dilligence;
- or the Prospective Manager may be given further feedback.
Stage 2 objective
Further investigation of specific elements of the proposal by the ECF Team, assessment of the proposal against other proposals received by the ECF Team.
Stage 2 outcome
Further feedback issued, proposal is rejected, another meeting is arranged, referencing.
Stage 3 - Due Dilligence
At this stage Prospective Managers are invited to fill out the Due Diligence Questionnaire (DDQ) and complete a Data Room. The DDQ is a comprehensive document and requires a significant amount of time and resource to complete.
Following an initial review of the materials within the DDQ and Data Room the ECF Team will ask for further information or clarity where necessary. Additional information may be requested via email, call, or meeting.
Following assessment of this information and the information provided in the DDQ and Data Room by the ECF Team a proposal may be rejected, further feedback given, or a Site Visit arranged.
The Site Visit will take place at the Prospective Manager’s premises and will include interviews with the proposed team and other agenda items as agreed upon by the ECF Team. Following the Site Visit, further information may be requested, or the proposal will be rejected, or presented to our Investment Committee.
Stage 3 objective
To conduct full Due Diligence on a proposal and Prospective Manager.
Stage 3 outcome
Proposal is rejected, further feedback given, a site visit may be arranged, the ECF Team decide to progress the proposal to Investment Committee.
Stage 4 - Investment committee
Prospective Managers and the ECF Team formally present the proposal to the British Business Finance Ltd (“BBFL”) Investment Committee. If successful, BBFL will formally commit to awarding an ECF mandate to a Prospective Manager.
Stage 4 objective
To gain approval for the proposal from the British Business Finance Limited Investment Committee.
Stage 4 outcome
Proposal is rejected, proposal is approved subject to conditions and the satisfactory completion of the legal documentation.
Stage 5 - Legal execution
Once approved at Investment Committee, Prospective Managers will receive an Offer Letter from BBFL. After signing this letter, Prospective Managers will have six months to secure their full private capital commitments and finalise the necessary legal documentation to close their funds.
BBFL reserves the right to withdraw the ECF mandate should this timeline not be met. During stage 5, negotiations on non-mandatory terms and the legal documentation occur between Prospective Managers and BBFL, including their respective legal advisors.
A copy of the ECF draft Limited Partnership Agreement can be accessed at the Resources section of the website, where a Key Legal Features table will also be accessible in the near future.
Stage 5 objective
Complete all legal documentation required to close the proposed fund within the agreed deadline.
Stage 5 outcome
Fund close deadline met, fund close deadline not met.
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