Cabinet Office
The Cabinet Office today opened a consultation on the working of a new £10 million risk capital investment fund for social enterprises.
Many social enterprises find it difficult to access risk capital, leaving a gap in their finances, particularly when they are at the critical stage of development between starting up and growing their business. The risk capital investment fund will fill this gap and help develop better access to private and independent investment in the future.
The Government has published proposals for operating the fund and wants the views of stakeholders before making the final decisions. The proposals are to establish a ‘pathfinder investment scheme’ where the Government's £10 million investment will be matched by a further £10 million investment from the private and independent sectors. The Government would appoint an independent fund manager and expect to make the same return on investments as independent investors.
Campbell Robb, Director General, Office of the Third Sector, said:
“This new fund will help many social enterprises grow their businesses and flourish. Our proposals will also make it a catalyst for market change by bringing social enterprises together with private and independent investors. This is vital if we are to build a sustainable future for risk capital financing for social enterprises that is not reliant on government subsidy.”
Responses to the consultation are requested before Friday 2 November 2007. The consultation document detailing the Government proposals is available in the consultations section of the website.
The Government committed to £10 million investment to improve access to finance for social enterprises as part of its social enterprise action plan, published in November 2006.