The London Co-investment Fund (LCIF) is looking to select co-investment partners to build a £75m+ seed fund for early startup technology companies.
The fund has already secured an initial £25m from the Mayor of London and the London Enterprise Panel’s Growing Places Fund, and it hopes co-investors will help lift the figure to over £75m.
The LCIF hopes the fund will be one of the biggest in Europe and claims it will increase seed investments in the UK by up to 20%.
Kit Malthouse, Deputy Mayor of London for Business and Enterprise, said: “London’s tech sector is booming with forecasts estimating it will create 46,000 jobs in the next decade and generate a staggering £12bn of economic activity. Despite this boom, we know many budding science and tech startups find it difficult to raise the finance they need to grow.”
The LCIF is looking for eight Venture Capital firms and Angel Syndicates with experience investing in digital, science and technology. Firms will be selected by the LCIF on the basis of their knowledge in the three sectors, and will be based in London.
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The investors will be looking to support startups that have just left accelerators, incubators and support programmes, and will be looking to raise between £250,000 and £1m – the biggest investment gap in the market.
Maggie Rodriguez-Piza, chief executive of funding London said:“The persistence of the ‘funding gap’ at the very early stage of a business life is well documented. Yet it is these businesses that represent the future of London’s global economic potential. We look forward to enabling larger round of investment into London’s startups by co-operating with other investors in the eco-system.”
The selected co-investment partners will be allocated between £1m to £5m of LCIF’s money, but the decisions of who to invest in will remain with the partners.
LCIF will pay a small fee to contribute towards the selected partners’ cost of carrying out due diligence, and subject to eligibility checks and legal due diligence, LCIF will directly invest the agreed amount in the selected businesses seed round.
The LCIF expects to begin investing towards the end of 2014 and benefit up to 210 early stage businesses over the next three years.
Those interested in becoming a co-investor should visit the Contract Notice from the mytenders.org portal by searching for Notice ID JUL098268 and follow the instructions therein to obtain the pre-qualification documentation. Deadline for submissions is 21 August at 2pm.