Mission The CoFund was established with the dual objectives of providing both direct investment to high potential SMEs, enabling them to unlock their growth potential; and supporting the development of the UK business angel market, by encouraging syndication and best practice.
Structure The CoFund is a private sector body, a company limited by guarantee, which has been designed and established by a consortium of private and public bodies with expertise in business angel investment in order to achieve the objectives as noted above.
The strategic direction and governance of the fund is provided by an independent board of directors drawn from the original consortium partners. The board is not directly involved in individual investment decisions, which are determined by the independent Investment Committee of the fund, made up of a number of highly experienced business angels and institutional investors. The investment management and administration of the fund is carried out by a small but experienced team seconded from the British Business Bank.
Backing The fund launched at the end of November 2011 and was initially capitalised with a £50M grant from the Regional Growth Fund. During the first 15 months of the fund’s operation it became apparent that there was considerable demand, from both high potential SMEs and business angels, for co-investment from the fund. Supported by additional capital from the British Business Bank the fund has been able to increase its investment capacity to £100M.
Any profits generated by the fund are recycled for further investment.
Investment The fund invests across the UK and aims to support businesses at all stages of development and across most sectors. It is able to make initial equity investments of between £100K and £1M in to SMEs alongside strong syndicates of business angels. Investment is subject to an upper limit of 49% of an investment round and 30% of the equity in a business, although investments are usually less than this.
The fund will only make investments alongside syndicates of business angels, who must be investing in a given business for the first time. Any final decision to invest will be made by the independent Investment Committee of the fund based on the detailed proposals put forward by business angel syndicates. The fund will only make commercial investments.