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Tuesday 14 September 2021

Future Fund: Update

logoMany thanks to our good friend Nick Kingsbury, partner at Amadeus and also a member of ScaleUp Group, for shedding further light on the workings and impact of the Future Fund (FF) (see Future Fund: 158 down, 1,032 to go?). I reproduce his comments in full:

“I agree with your overall conclusion that it has been a very good thing.  

“During Q2 2020 when the scheme was launched there was considerable uncertainly and alarm, and the FF initiative galvanised a massive number of funding rounds. The FF contribution was matched with private capital, including from Amadeus for several of our companies; we had to make our normal commercial investment decisions on our investment.   

“This was really important at the time as it made sure the companies were well funded and the standard terms meant that all the normal (possibly wasteful) to-ing and fro-ing on terms just did not happen. Syndicates were assembled in days. Funds flowed three or four weeks later.  The future of many companies was secured and many staff retained.

“The management of the FF portfolio is entirely passive, so they do not need to get involved and make decisions; the conversion of the loan happens on the next round in a mechanistic fashion (even if the maths is a bit tricky!).

 “That said, they are having calls with investors just to find out a bit more about what they are invested in, but it’s just for the record or for interest, not to inform future investment decisions by the FF.

 “I think HMG will end up making an excellent return on the FF, and hope that it will be revived at some point, maybe focusing on certain types of tech or other target areas.”

I greatly appreciate the clarification that FF are passive investors and, while I am perhaps not as confident as Kingsbury that HMG will end making an excellent return on its investments, I certainly share that hope!

Posted by: Anthony Miller at 16:32

Tags: funding   startup   scaleup  

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