theory into practice
To help increase access to funding during the recession, we have
introduced the Capital for Enterprise Fund, a scheme to help
“
finance SMEs with high levels of debt which have exhausted other
traditional means of finance.
”
“We invest alongside leading business angels
and other private investors through the Sera-
phim Capital Fund, as an Enterprise Capital
Fund manager.”
Ongoing investment shortage likely
Accepting that there probably will remain a short-
age of investment capital through the business
angel networks, the type of business which is
seeking this kind of finance is traditionally ex-
cluded from raising funds through institutional
placings which require sight of an exit through a
trade sale or one of the junior markets – Plus
Market, Sharemark and even the AIM subset of
the London Stock Exchange.
But the entry costs and regulatory process is
still too expensive for businesses whose finan- “Investors will not commit funds to a market
cial requirements would probably be not much without a reasonable expectation that they can
greater than the costs involved. be sold at some point in the future. Even at the
If invitations to subscribe for shares in a smaller height of the upswing there was insufficient
business were available only to high net-worth demand from investors to make such a market
individuals, many of the safeguards needed to viable. The priority for the government should
protect retail investors in securities could be be to fix the markets we already have before
trimmed back. creating a greater number of smaller markets.”
With multiple investors able to take up
shares on offer, the risks to an individual would
be reduced, providing an incentive for funds
BERR keen to demonstrate action
to be committed. Though that response might be disappointing
to entrepreneurs seeking to spread the risk in
Scope for more junior stock markets
their businesses to more acceptable levels
during the financial crisis, BERR is keen to
How far does BERR accept that view that there demonstrate other initiatives that it has taken.
is scope for a ‘sub-junior’ funding process Jackson continued: “We have selected two
which could use the junior markets as a plat- fund managers for the £75m fund - £50m from
form? Mr Jackson takes the view that the Jun- Government, £25m from the banks - which will
ior Markets are a complex area: “We will con- invest in smaller businesses. So far, we have
tinue to monitor the availability of, and access to received several hundred enquiries within five
appropriate finance across business needs. We weeks of announcing the fund. The fund man-
will review how the equity gap is changing and agers have already started assessing the busi-
will look to respond appropriately. ness plans submitted. The fund is still open
“There is clearly a place for effective junior for new investment opportunities, and busi-
markets in providing finance for smaller com- nesses can register their interest through the
panies. However, there is little evidence of registration helpline.”
sustained demand from investors for a market In the wake of the 3000 initiatives (albeit re-
below AIM and Plus Market for example. The packaged as 30) and the help and assistance
key issue here is liquidity and having a suffi- provided through Business Link, however, there
ciently large and active investor group that is is still a need for the small business course
prepared to trade the shares listed. that was advertised 35 years ago. §
The Informed Executive
71
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98