What are the minimum and maximum investments?
LCIF is split into two streams, the Smaller Investments Scheme (SIS) invests between £25k and £75k and the Main Fund invests between £75k and £1M.
LCIF monies must always be invested alongside private sector co-investment (e.g. Business Angels, High Net Worth Individuals, other Funds or trade investors)
LCIF can invest up to 50% of the amount a company is seeking.
What counts as co-investment?
Co-investors (e.g. Business Angels, High Net Worth Individuals, other Funds or trade investors) will invest their money at the same time as LCIF, as part of the same funding round and on the same terms as LCIF. Typically this will take the form of equity (shares) in the business.
Can the Fund make follow-on investments?
Yes, companies that have already received LCIF investment are eligible to be considered for follow-on funding.
Do grants count as co-investment?
No, co-investment must always be another investor taking a share of the business at the same time and on the same terms as LCIF.
You can, however, apply for and bring in (unlimited) grant money alongside the LCIF investment.
How does LCIF differ from grant funding?
LCIF is a venture capital fund which provides investment to the company in return for a stake in that company. Low Carbon Innovation Fund therefore typically becomes a shareholder. In contrast, grant funders do not hold equity or another stake in the company.
What if the other investor is investing public funds?
No more than 50% of the investment round can be from public funds.
What percentage holding of the company do you take?
The equity that LCIF takes in the in the company is dependent on a number of factors, such as the value of the company the level of investment injected into the company and the level of risk. This is negotiated as part of the Investment Agreement.
Do any parties take preferential shares?
LCIF takes ordinary shares in most cases. LCIF invests pari passu (on the same terms) with the other investors and would consider preference shares if appropriate.
What is the typical level of post investment involvement from the representatives of the Fund?
LCIF are active investors and contribute to board discussions to help the company grow. The minimum involvement required by LCIF is board observer rights. The fund will request a board position (non-executive director) if deemed appropriate.
What are the monitoring requirements for the investee companies?
LCIF will keep in regular contact with investee companies to find out what has happened as a result of the investment i.e new jobs created and to help with publicity.
How long will the application process take from start to finish?
There is no standard timeline. Each case is treated individually depending on the complexity of the investment proposal. Typical timescales: Smaller Investment Scheme 6-8 weeks.
What application support is available?
The LCIF team can help with any queries you may have regarding the application process.
Can you accept in-kind as match funding?
What type of companies can apply?
Companies must conform to the European Commission’s definition of a small to medium-sized enterprise (SME).
This can include start-ups, spin outs and early stage businesses as well as companies seeking second stage investment. Applicants are required to check that their company is an eligible SME.
What do we mean by low carbon?
The fund can invest in companies that are:
- developing low carbon products or components
- selling services to support carbon reduction
- contributing to carbon reduction through a focus on resource efficiency, process efficiency and waste reduction.
How can a company become ‘low carbon?’
Every company can examine the ways it works and consider efficiency changes that will result in a reduction of waste, energy usage, fuel consumption, transport, IT systems and resource usage.
There are a number of sources of information to help companies think about their own carbon management plan, such as how to set targets or implement changes to calculate the resulting reduction in carbon emissions. During the application process we guide the company through a carbon reduction assessment process which means that the carbon reduction impacts can be measured.
Can you help advise on the Low Carbon Element?
Yes, we have in house expertise who can help advise you in this area. Please call 01603 597342 for more information.
What activities are NOT eligible for LCIF funding?
Our funding covers most sectors. The following are examples of those we cannot invest into and do not represent an exhaustive list. Suppliers to excluded sectors may still be eligible to apply to LCIF. Please contact us if you have a query.
- Further education
- Agriculture in terms of primary food production & processing only is also excluded from ERDF support due to being a land based activity and therefore covered under the EU RDPE programme and excluded from ERDF support from the Competitiveness Programme. Products manufactured or developed by those not eligible for ERDF support are likely to be eligible for LCIF funding
- Construction and renovation
- Retail, unless the customer base is not constrained by geography e.g. online provider of services and goods
- The production of synthetic fibres, textiles and clothing, motor vehicles, shipbuilding and coal and steel
- Banks and insurance companies. These should not be directly offered investment, although would be acceptable as supporting members of a consortium or as co-financers of a Venture Capital Fund or other loan fund
- Social or welfare facilities for example, hospitals, nursing homes, fire stations, stand-alone childcare schemes or facilities, sports facilities, parks and public libraries – when these are not directly linked to activities of an economic nature specifically related to the objectives of this programme
- Building and renovation of housing stock, although mixed use projects may be considered
- Coastal protection, soil conservation and infrastructures
- Major infrastructure in ports
- That proportion of public expenditure incurred in land acquisition not directly linked to productive investment or investment in infrastructure
- Exclusively retail developments
How is the East of England defined?
The East of England is defined as the counties of Norfolk, Suffolk, Cambridgeshire, Essex and Hertfordshire and the unitary areas of Bedford, Central Bedfordshire, Thurrock, Peterborough, Luton and Southend on Sea.
Businesses must be wholly or partially based in this region and the economic impact of the investment must be felt in the East of England.