A comprehensive package of support for innovative early stage businesses whose routes to investment and growth have been impacted by coronavirus (COVID-19) has been announced by Economy Secretary Fiona Hyslop.
The £38m package, managed by Scottish Enterprise, includes three levels of support to meet the needs of the most promising businesses at different stages of early growth:
- £3m allocated as grants of up to £50k plus advisor support for start-ups identified as having the most significant potential to grow and attract future investment
- a competitive £25m Early Stage Growth Challenge Fund to provide successful applicants with a mix of grant and investment funding up to a maximum of £300k. This support will help equity-backed businesses to continue innovating through the pandemic and bridge the gap to their next investment round. The fund will open to applications on Monday 20 July
- an additional £10m for Scottish Enterprise’s existing Scottish Investment Bank co-investment funds to help stimulate private investment and support businesses that need more significant levels of funding to grow rapidly
Ms Hyslop also announced a £2.2 million fund for grassroots venues, following ongoing discussions with the Music Venue Trust. The new fund follows on from last week’s targeted £10 million to support Scotland’s performing arts venues.
Economy Secretary Fiona Hyslop said:
“Scotland’s entrepreneurs and innovators have always fuelled the nation’s economic growth so we must support them now to ensure that their energy and ideas can deliver good new jobs and help us plot a path to recovery.
“The creation and growth of businesses in exciting emerging sectors such as life sciences, digital technologies and space create high value jobs and accelerate international investment in Scotland.
“The economic impact of COVID-19 has been enormous, and the Scottish Government has so far spent more than £2.3 billion in support. Early stage businesses are not immune to this and have been impacted by a challenging investment market which restricts their ability to grow, innovate and compete internationally.
“This new package meets these challenges head-on, providing young and innovative businesses with the most comprehensive and generous package of support available anywhere in the UK.
“There are also a number of areas where immediate support is required, including grassroots venues, and I hope this additional £2.2m funding will provide much-needed stability to the music industry for the coming months.”
Steve Dunlop, CEO of Scottish Enterprise, said:
“This package is the result of insight gathered by the Scottish Government and Scotland’s economic development agencies through direct engagement with partners and companies operating in the early-stage high-growth market.
“This field is home to many promising companies whose innovative products and services are aligned with our vision of a sustainable and inclusive economy. Pertinently, a considerable amount of them are immersed in work with the capacity to drastically improve the health and wellbeing of people the world over.
“We believe this additional funding from the Scottish Government will help remove the financial obstacles created by COVID-19 that threaten their growth. With our backing, we hope our early stage companies will fulfil their potential and bolster Scotland’s economic recovery while having a positive impact on businesses and individuals internationally.”
Nick Stewart, Scottish co-ordinator for the Music Venue Trust, said:
“We are delighted to have agreed this funding with the Scottish Government, and we thank them very much for their commitment to grassroots music venues. This funding will stabilise venues in the short term and prevent permanent closures, and we can begin to plan towards reopening every venue safely.”
Background:
Further information is available on the FindBusinessSupport website.
Full details of the fund for grassroots venues will be available shortly.
The Early Stage Growth Challenge Fund will not be delivered on a first-come, first-served basis. It is competitive funding where all eligible applications will be assessed and graded with the highest-graded applicants receiving funding. Applications will be assessed by Scottish Enterprise with support from private sector investor panels.
Successful awards will receive a convertible loan (i.e. a loan that can be converted to an equity stake in the business) and a grant (subject to eligible costs) for up to 20% of the total award.
Applications open on Monday 20 July and close on Friday 31 July.
The £3m grant and advice fund is targeted at pre-seed businesses (i.e. businesses that are not yet ready to receive investment).
This fund will be managed by Scottish Enterprise on behalf of Scotland’s economic agencies and in partnership with organisations experienced in supporting the development of start-up businesses. These partners will work together to identify the highest potential pre-seed businesses which could benefit most from grant support.
The £3m grant and advice fund will be managed by Scottish Enterprise on behalf of Scotland’s economic agencies and in partnership with organisations experienced in supporting the development of start-up businesses. These partners will work together to identify the highest potential pre-seed businesses who could benefit most from grant and advisor support.
The Scottish Investment Bank will use its existing co-investment funds (the Scottish Co-investment Fund and Scottish Venture Fund) to invest the additional £10m into Scottish companies and leverage further private sector investment.
Read more about the Scottish Government’s £230m economic stimulus package.
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