A new £8 million early stage equity fund, the Early
Advantage fund, was announced today to provide another source of
investment for the region's SMEs. The fund, financed by Advantage
West Midlands and the European Regional Development Fund will be
delivered by Midven Ltd, one of the West Midlands' most successful
equity fund managers.
The fund can make an initial investment of up to £125,000,
generally matched by a private sector investor or investors
providing at least the same amount, resulting in up to
£250,000 of investment into the business. The fund can invest
up to a further £125,000 in subsequent funding rounds (again
matched by the private sector), but with the ability to invest more
in certain circumstances.
The Early Advantage fund is looking for investment opportunities
in Small and Medium Enterprises (SMEs) which meet the following
criteria:
• early stage SMEs with or without revenues;
• High growth companies which have the potential to return
a multiple of the Fund's investment in 3-7 years
• SMEs interested in raising investment of up to
£500,000 (the Fund can participate in larger later
rounds)
To be eligible the SME must carry out significant operations or
trading in the West Midlands or undertake to set up operations or
trading in the West Midlands as a result of the investment.
The Early Advantage fund is open to any sector except for those
excluded by European State Aid restrictions which are shipbuilding,
coal mining, schools etc.
Mick Laverty, Chief Executive of Advantage West Midlands,
welcomed the new fund: "Advantage West Midlands is determined
to develop the necessary financial products to ensure the region's
businesses, particularly our SMEs, have access to the funds they
need to start up and grow. It builds on the experience of the
Advantage Early Growth Fund which ended its initial investment
period earlier this year, having invested a total of £8.8
million in over 60 businesses, leveraging nearly £23 million
of finance from other sources.
"I am very pleased that, with the launch of the Early Advantage
fund that there will be continuity of finance in this vital area of
the business finance landscape, helping lead the West Midlands
economy out of recession and creating a culture of innovation and
enterprise."
Dr Andrew Muir, Midven Ltd, said: "Midven Limited is a
privately owned company with a successful track record of investing
in small and medium-sized enterprises in the Midlands. I am
excited by the Early Advantage fund and delighted Midven Ltd was
chosen to deliver it.
"I'm sure this fund will prove popular with SMEs. In fact word
is out and already there have been a number of expressions of
interest in the Early Advantage fund, with the first investment
likely to be approved in the near future. I look forward to
officially launching the fund and taking it to the market properly
in the New Year. In the meantime the fund is open for business"