Angel Co Fund gets a rebrand and an extra £30m to invest - PKF Francis Clark
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Angel Co Fund gets a rebrand and an extra £30m to invest

My equity radar was piqued today when I saw the headline “Angel CoFund announces rebrand, launches new £30m fund”

Whilst I have no direct engagement with the Angel CoFund since its inception in 2011, I do see it as a potentially useful item in the arsenal of equity funding for SMEs – with equity being an increasingly important type of funding for SMEs in 2021 and beyond.

The Angel CoFund will now be known as…ACF Investors.

ACF Investors – the basics

The ACF Investors is a UK government funded investment fund. The fund:

  • makes equity investments of between £100,000 and £1 million in smaller businesses (SMEs) in the UK
  • invests alongside strong syndicates of business angels to support businesses with strong growth potential

The ACF Investors investment into a company:

  • 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
  • needs to be a new investment for the syndicate, rather than supporting an existing investment
  • will, to the extent possible, follow the terms of the syndicate including the structure and price of any investment

There is a video that gives some more background on “how it works”

The ACF Investors website gives more details including indicative legal terms.

The new fund

The £30m new money is going into a new fund – Delta Fund.  Details can be found at Delta Fund webpages as part of the ACF Investors website.

Driven “primarily by the reduced supply of capital at the earlier stages” the Delta Fund:

  • is targeted at UK based businesses raising equity or convertible loan note rounds greater than £500,000
  • only invest where there are at least three angel investors who are new to the business including at least one lead Angel investor with demonstrable sector expertise who is committing more than £70,000 to the round
  • typically provides equity investments alongside syndicates of angel investors who are new to the business but would also consider investing alongside existing Angel investors if the angels were participating via a convertible loan note or advanced subscription agreement
  • will provide up to 49% of the capital, (although by preference will be a smaller proportion), in investment rounds ranging from £500K upwards

PKF Francis Clark

It would be good to see the fund in action in the South/ South West and it may be an opportunity does arise as I anticipate there will be a growing demand for equity within the SMEs in the South/ South West and some propositions may fit the funds criteria…

FEATURING: Richard Wadman
Richard qualified as a Chartered Accountant with KPMG in 1993. Since 2006 he has worked in Corporate Finance, firstly with the predecessor firm in Truro… read more
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