Future Fund factsheet


Updated information on the UK government support package.

A few weeks ago, we hosted an event featuring panellists from Barclays, Innovate UK, ScaleUp Institute and Capital Enterprise to discuss the UK government’s support package for innovative and high-growth businesses that had just been announced, including the Future Fund. With over 1,000 registrations for the event, we were unable to answer all the questions coming in for the panel and created this factsheet with everything we knew of at the time.

Applications for the Future Fund opened on 20 May and we’ve updated our factsheet with the latest information around the application process, eligibility criteria and the key terms if you’re considering applying for support.

Application Process

  • The application process is investor-led, companies require a Lead Investor – an individual or a company – to meet a broad set of requirements, for instance if the application is submitted by an individual, this person must self-certify as a high-net-worth investor and cannot be a founder of the company submitting for funding
  • The government intends to respond to applications and process funds within three weeks of submission
  • Companies will be required to submit two years’ historical information post application to verify the information submitted during the application process
  • Companies are granted a headroom period of 90 days following completion of the investment within which other investors can participate in the funding round under the same terms. There is an option to include a ‘Headroom amount’ in the application process, however funds raised as part of the Headroom allocation are not subject to matched funding from the Future Fund
  • The application process is first-come-first-serve, subject to companies meeting the eligibility criteria of the fund


UK presence

  • The company must be an unlisted private company registered in the UK. If a company is a member of a corporate group, only the ultimate parent company (if it is UK registered), is eligible to receive funding from the Future Fund
  • One of the following must be true
    • half or more employees are UK-based, or;
    • half or more revenues are from UK sales

Third party funding

  • The business has raised at least £250,000 in aggregate between 1 April 2015 – 19 April 2020 from third party investors. However, Funds raised from previous rounds are not eligible to be matched by the Future Fund
  • The application must be submitted by a third party investor, and a total amount of at least £125,000 must be committed from private investors to the round
  • The amount of external funding is not limited, however, the maximum amount of matched funding the government will provide is £5 million
  • There is no upper limit on previous fundraises; later stage business which have raised Series A-B financing are expected to be beneficiaries of the fund
  • Advanced Subscription Agreements (ASAs) are not permitted under the Future Fund’s eligibility criteria, therefore EIS reliefs are not granted to investors by the Future Fund
  • The total number of participants in the round is limited to 149 investors including Lead Investor and Future Fund as The Prospectus Regulation includes an exemption whereby a prospectus is not required if an offer is made to fewer than 150 investors

Use of proceeds for working capital only. The following activities are not permitted

  • Refinancing
  • Dividends or bonuses
  • Advisory fees
  • Repayment of venture debt loans is allowed under the scheme

Diversity requirements

  • Investors are advised to sign the Women Code to demonstrate commitment to support the advancement of female entrepreneurship in the UK by improving female entrepreneurs’ access to tools, resources and finance from the financial services sector
  • The Future Fund are requesting a gender mix and ethnicity mix of management teams and the region in which they are based, and will publish portfolio-level statistics once a meaningful amount of data has been received.


Key Terms

Convertible loan note terms

  • Instrument: Convertible Loan Note (CLN)

  • Discount: Minimum of 20% discount to next round (principal only)

  • Interest Rate: Minimum 8% p.a. (non-compounding)

  • Interest Repayment: Company repayment right with respect to accrued interest at conversion at Qualifying Funding Round or conversion of any unpaid accrued interest into equity without the discount

  • Term: 36 months or a Qualifying Funding Round

  • Valuation Cap: Optional

  • Decision Making: Optionality to be decided by holder of a majority of the matched funding

  • Redemption Premium: A premium equal to 100% of the principal of the funding

  • Share Class: most senior class of shares in issue

Information rights

  • Quarterly reporting information related to the company’s financial performance to be provided to Future Fund

  • 2 years’ historical information to be provided to the Future Fund to support information provided during the application process

  • The Future Fund has the right to any information provided to other Investors upon request

Other investor rights

  • The company is not permitted to take on additional debt that is senior to the loan, other than any bona fide senior indebtedness or venture debt from a person or entity that is not an existing shareholder or matched investor

  • Customary warranties and covenants

  • A "Most favoured nation" clause ensures that the Future Fund will benefit from any terms given to investors on any subsequent CLNs

  • The government will be entitled to transfer the loan, or following conversion, any of its shares, to an institutional investor acquiring a portfolio of the government’s interest in at least 10 companies

Watch a replay of the panel discussion here, or sign up for future event below.

Barclays (including its employees, Directors and agents) accepts no responsibility and shall have no liability in contract, tort or otherwise to any person in connection with this content or the use of or reliance on any information or data set out in this content unless it expressly agrees otherwise in writing. It does not constitute an offer to sell or buy any security, investment, financial product or service and does not constitute investment, professional, legal or tax advice, or a recommendation with respect to any securities or financial instruments.

The information, statements and opinions contained in this content are of a general nature only and do not take into account your individual circumstances including any laws, policies, procedures or practices you, or your employer or businesses may have or be subject to. Although the statements of fact on this page have been obtained from and are based upon sources that Barclays believes to be reliable, Barclays does not guarantee their accuracy or completeness.

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