UK science academy The Royal Society has reached a first close on a new fund to support early-stage technology companies.
With a final target of £20m, the Enterprise Fund has so far raised £5m using a venture philanthropy model. This will allow the returns generated by the fund to be reinvested back into future deals.
Donors to the fund include Lord Sainsbury, Roger Brooke, founder of Candover and IP Group, Adrian Beecroft, co-founder of Apax Partners, and Stelio Stefanou, founder of Accord.
The fund will look at making investments in early-stage companies of between £250,000 and £2m, initially in those operating in the physical sciences and engineering.
Andrew Mackintosh, chief executive of fund, said: “Our mission is to create a bridge between today’s early scientific ideas and tomorrow’s technological and commercial winners. Early stage ventures present the highest commercial and financial risk and are therefore starved of investment. Our philanthropic structure combined with our highly commercial approach and unrivalled access to the UK science base will unlock new technologies and ideas that will bring significant and lasting economic and societal benefits to the UK.”
The Society wants the fund to help plug three key gaps it has identified in the Uk innovation market: the funding gap for companies looking for investment under £2m; what it calls a “preparedness gap”, leading many businesses to look for financing too early, and fail as a result; and a research gap with comparatively poor funding of physical sciences and engineering ventures.
The fund is backed by a panel of experts, including Adrian Beecroft, senior managing partner at Apax, Roger Brooke, founder of Candover Investments, and a founding director of IP Group, Stephen Brooke, founder and managing partner of Swarraton Partners, Anne Glover, founder and CEO of Amadeus Capital Partners, and Sir Peter Williams CBE, treasurer of the Royal Society.
Candover founder Roger Brooke said: “The Enterprise Fund is an exciting, measurable, sustainable and high impact model of philanthropy strengthening science and our future economic health. The Royal Society is uniquely placed to drive this forward. I have become involved to help ensure the UK has a strong future and the fruits of science are brought to society.”