MEETING THE FUNDING GAP:A REGIONAL RESPONSEResearch Report 2010

Foreword 3

Executive Summary 4

Recommendations 5

1. Introduction 6

2. Methodology 7

3. Participant Characteristics 8

4. Findings 9

5. Conclusion 16

Contents

Foreword

In 2009 Finance South East (FSE) surveyed its clients to measure the impact of its funding on the businesses in which it invests, and evaluate this within the context of the wider economic landscape.

In the current political setting and challenging economic climate, it is essential that FSE can rely on more than anecdotal evidence to support the case for continued investment in the funding gap, the value that growing businesses place on this investment and the resulting impact on the economy of the South East.

The purpose of this report is to:

highlight the economic impact of the investments made by FSE and examine the level of growth experienced by client companies in terms of both employment and turnover

explore the extent to which FSE is responding to a ‘funding gap’

measure customer satisfaction and gain information about the overall customer experience

Finance South East would like to thank the businesses who participated in the survey, without whom it would not have been possible to produce this document.

Furthermore we would like to thank SEEDA and all our partners across the public and private sectors for their continued support in helping us to deliver this unique funding solution to the region’s ambitious businesses.

Sally Goodsell Chief Executive

January 2010

Meeting the Funding Gap:A Regional Response

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Executive Summary

Since its first investment in 2004 Finance South East (FSE) has provided over £18m of investment to South East companies. In the second half of 2009 FSE surveyed its clients to measure the impact of its funding on those businesses. A 60% response rate (100 customers) was achieved, resulting in a picture that is largely representative of the FSE client base.

On the basis of our results, we can estimate that investments made by FSE have resulted in the creation and safeguarding of over 1,2001 jobs.

89% of companies told us that without FSE investment their project could not have gone ahead at that time. Some added that without access to FSE investment they would have moved to another area to obtain funding, or even gone into administration.

4 out of 5 respondents said they could not have got the funding elsewhere in the market. For many this is because other finance providers are unwilling to lend: banks due to the higher level of risk perceived, venture capitalists because the levels of investment, and thus return, are too low.

FSE makes relatively small investments2 with over 87% of companies needing £100,000 or less, and around half of these applying for sums up to £50,000. Our survey demonstrates that despite these comparatively modest amounts, by securing investment at the right time FSE companies have grown at a rate that far exceeds national and regional averages.

Our survey shows that the turnover of FSE backed companies has increased by on average 34% per annum, compared with 7.8% for the South East3. UK wide surveys show that many SMEs have experienced a recent decrease in turnover and employee numbers, while two-thirds of FSE companies continue to report growth in one or both of these areas.

84% of our customers stated they were satisfied overall with FSE, and nearly 90% would recommend FSE to another business. Satisfaction levels of over 80% with professionalism and efficiency highlight how FSE defies the typical perception of public sector support as bureaucratic, instead offering an efficient process that compares favourably with the commercial sector.

For investments in this area of the funding gap to succeed, it takes more than just money. FSE takes additional steps to de-risk what would be considered in the wider funding marketplace to be high risk investments. Our survey shows how crucial the additional support they received from FSE is in ensuring the success of the investment and the business.

FSE is streamlined, efficient and cost neutral to HM Treasury: the jobs created and safeguarded with FSE funding will have resulted in around £7.5m per annum in income tax and NI contributions, and over £3.8m in VAT. FSE has received a total of £1.75m of operational funding from SEEDA since its inception in 2002.

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¹ Survey participants reported FSE investments directly contributed to the creation of 144 new jobs and the safeguarding of 169 existing jobs. If we extrapolate these figures for the survey population together with jobs safeguarded through the Transition Loan Fund, we can estimate around 1,230 jobs exist as an immediate result of FSE funding² Compared with venture capitalists - the alternative investor for high growth/high risk businesses – who tend not to make investments of less than £1m³ Office of National Statistics Annual Business Inquiry 2006/07 (published July 2009)

Recommendations

Establish a forum for early stage fund managers and banks to engage in the identification and sharing of best practice approaches to risk management.

Explore how non-financial support measures can be maximized and integrated into the risk management process to ensure the greatest chance of success for both the business and the investment.

Consider how establishing and supporting regional funding organisations with scale could enable delivery of equity gap finance in aggregate on behalf of local and regional stakeholders, complementing national initiatives at the higher end of the funding spectrum. Regional funding escalators delivered under one roof.

Investigate ways to most effectively support companies through their funding journey i.e. ensuring they move through the appropriate stages of the funding escalator to realise their growth plans.

Adopt more innovative funding structures. Using equity and non equity based instruments to create funding packages that reflect risk and reward at various stages in the funding journey will engender a funding landscape that nurtures the talent and ambition within high growth SMEs across the regions of the UK.

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The support we received from the Accelerator Fund was critical not just to our growth, but also our survival as a business. Small gaps in funding can be fatal for growing businesses and ours nearly was. What I like about the fund, not just as a recipient but also as a taxpayer, is that it fills a space in the market between purely commercial finance and blind grants, at a stage where the risk is easier to quantify than the return.

Charles Cohen, Probability Games

Ranked No. 4 in The Deloitte Technology Fast 50, fastest growing technology companies over the last five years

When a triathlete spotted a gap in the market for a miniature speed and distance computer for use in the pool, she needed funding to design and develop the Pool-Mate, a watch that automatically counts a swimmer’s laps and strokes and gives them information about their speed, distance, calories and efficiency. Once the product was ready for manufacture, further funding was needed to make the first batch of watches and get the product to market. Swimovate progressed through the funding escalator, receiving finance from SEEDA and FSE to support each stage of development. The product has proved popular and within two weeks of receiving the first batch of watches Swimovate had sold over half of them.

Swimovate

1. Introduction

Finance South East (FSE) was set up in 2002 by the South East England Development Agency (SEEDA) and the region’s Business Links. FSE is core funded by SEEDA and exists to address market failure in the availability of finance for growth companies in the South East, most notably the risk capital funding gap up to £2million that is commonly acknowledged as an area of significant market failure.

The primary vehicle to deliver this is the South East Funding Escalator, a series of funds managed by FSE and financed by SEEDA and other public and private sector partners.

The escalator aims to unleash the promise of companies with significant growth potential but whose funding requirements fall within this well recognised equity/risk capital gap, and who with an injection of funding at the right time, should be in a position to access other private sector funding streams at a later stage in their development.

Current FSE managed funds are4:

ACCELERATOR FUND - £10m mezzanine loan fund jointly financed by the Department for Business Innovation & Skills (BIS) and Clydesdale Bank, providing SMEs with an innovative source of finance of up to £200,000, for a range of expansion activities

SOUTH EAST SEED FUND - £5m equity fund jointly financed by SEEDA, a consortium of the region’s higher education institutions (HEIs) and a private sector partner, investing up to £250,000 on a matched-funding basis to SMEs, including university spin-ins/spin-outs

COMMERCIALISATION FUND - £3m fund financed by SEEDA, providing repayable finance of up to £60,000 for proof-of-concept and commercialisation activities

TRANSITION LOAN FUND5 - £3m loan fund financed by SEEDA, providing up to £150,000 to established SMEs experiencing cash flow difficulties

GRANT FOR RESEARCH & DEVELOPMENT (G4R&D) AND GRANT FOR BUSINESS INVESTMENT (GBI) - national products funded in the South East by SEEDA

SOUTH EAST CAPITAL ALLIANCE (SECA) BUSINESS ANGEL NETWORK - a forum through which ‘investment ready’ companies are introduced to potential ‘angel’ investors

COLLABORATION FUND - £2m national grant fund financed by the Engineering and Physical Sciences Research Council (EPSRC), to facilitate the transition of research into a commercial application

Finance South East operates as a lean and streamlined organisation, delivering this range of funding solutions across the South East region6 with 28 employees and current annual operational funding7 of £750,000.

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4 Not all part of the South East Funding Escalator: the Collaboration Fund is a national pilot fund and the Transition Loan Fund supports companies experiencing difficulties through current adverse credit conditions as opposed to supporting growth 5 The Transition Loan Fund closed to new applications in December 20096 As defined by the SEEDA region7 This does not include fund management costs which are allocated from within each fund. These costs are covered by repayments back into the funds, allowing the funds to operate on a cost neutral basis in the medium to long-term

2. Methodology

FSE carried out an online survey of its clients during Q3 2009. The survey was sent to 168 companies that had received FSE funding, of which 60% (100 companies) responded.

This research focuses on businesses that have received funding from the Accelerator Fund, the Commercialisation Fund8 and to a lesser extent the Transition Loan Fund, South East Seed Fund and SECA9.

The purpose of this report is to:

highlight the economic impact of investments made by FSE and examine the level of growth experienced by client companies in terms of employment and turnover10

explore the extent to which FSE is responding to a ‘funding gap’

measure satisfaction and gain information about the customer experience

This survey is the first of this type done by FSE. This data will be collected from future clients on an ongoing basis.

The survey does not capture information about businesses that are no longer operating, however it also does not include some companies that have experienced a successful buy-out or flotation e.g. one company who did not complete the survey, Probability Games, providers of technologies and services for mobile phone users, is now a publicly quoted company with an annual turnover of around £5m. At the point of receiving FSE support in 2004, Probability was turning over just £1000 per month. Its 7785% growth rate over the last 5 years has resulted in them being placed no. 4 in the Deloitte Technology Fast 50, a technology awards programme ranking the country’s 50 fastest-growing technology companies. Probability did not complete the online survey and so their growth is not included in the figures provded in the report.

Comparisons are drawn against the latest available figures from the following sources: Office of National Statistics Annual Business Inquiry 2006/07 (published July 2009) BIS SME Business Barometer June 2009 (figs for period Apr 08-Apr 09) Forum of Private Business Economic Downturn Panel May 2009 (figs for prior 6 months)

Finance South East figures cover the period since the point of investment and are, where appropriate, calculated to give an average per annum.

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8 For the purposes of this report data from companies who received funding via the PoCKeT (Proof of Concept for Knowledge Transfer) and Catalyst Funds, both predecessors to the Commercialisation Fund, have been amalgamated with Commercialisation Fund company data 9 G4R&D and GBI were excluded from the survey as they have only been operating under FSE’s management since April 2009. The Collaboration Fund is a newly launched fund which had not made any investments at the time of the survey. The South East Seed Fund, Transition Fund and SECA have fewer clients so they represent a small number of respondents.10 Turnover and employment are the measures used to ascertain growth in the BIS 2009 SME Business Barometer (a follow up survey to the BERR Annual Small Business Survey 2007/08)

33.7%

30.6%

15.3%

16.3%

4.1%

3. Participant Characteristics

3.1 Finance South East backed companies operate across a broad range of sectors, demonstrating that high growth is not restricted to the high tech sector. Inevitably high tech businesses do account for a significant proportion of growth companies and the IT & Telecoms and Biotech & Medical sectors represent over 40% of survey respondents (see fig. 1).

3.2 The majority of survey respondents, almost 65%, received FSE funding in 2008/2009 (see Fig. 2). This could be due to a combination of two main factors: firstly that FSE has done more deals overall in these more recent years and secondly that FSE is more prominent in the consciousness of business owners where the deals were completed more recently.

11%

2%

5%

8%

3%

32%

16%

6%5%

12%

Biotech & Medical

Constructio

n & Property Services

Consumer P

roducts, Retail &

Wholesale

Creative, M

edia & Marketin

g

Environmental

Informatio

n Technology & Telecoms

Manufacturing & Engineerin

g

Professional &

Business

Services

Recreation, C

ulture & Touris

m

Other Sector

0%

5%

10%

15%

20%

25%

30%

35%

Survey Respondents by Sector

Fig. 1 Respondents by sector - Source: FSE Survey Q3 2009 Base: 100 companies receiving FSE funding

Year FSE funding received

Fig. 2 Year FSE funding received - Source: FSE Survey Q3 2009 Base: 100 companies receiving FSE funding

8

2009

2008

2007

2006

2005

4. Findings

4.1 Innovation

Respondents were asked why they had sought investment from Finance South East (see Fig. 3). 75% stated one motivation as bringing a new technology or innovative product to market. Of these, nearly 4 out of 5 stated the funding from FSE was not available to them elsewhere in the market.

This demonstrates FSE’s vital role in supporting innovative companies at a crucial stage in their development.

4.2 Growth

4.2.1 Looking at growth in terms of turnover, our survey shows an average increase of 34% per annum. The ONS Annual Business Inquiry shows averages of 7% for the UK and 7.8% for the South East Region (see fig. 4).

0%

10%

20%

30%

40%

50%

60%

70%

80%

29.0%

7.0%

75.0%

9.0%5.0%

34.0%

Obtain funding support to enter new markets and customers

Acquire new assets Enhance performance or productivity

Bring a new technology or innovative product to market

To support overall company growth

Deal with liquidity issues

19%

-6.30%

34%

7%

% increase in t/o % increase in number of employees

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

FSE Companies

UK Average

Reason for seeking finance from FSE

Fig. 3 Reason for seeking finance from FSE - Source: FSE Survey Q3 2009 Base: 100 companies receiving FSE funding

FSE Company Growth vs UK Average Growth

Fig. 4 Growth of FSE companies vs. UK average - Source: FSE Survey Q3 2009 Base: 100 companies receiving FSE fundingT/O figure taken from Office of National Statistics Annual Business Inquiry 2006/07.

Employee figure taken from Forum of Private Business Economic Downturn Panel May 2009

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In terms of the number of companies reporting a change (both positive and negative) in turnover, 55% of FSE companies reported an increase since the point of investment. Of those receiving funding in 2009, 45% saw an increase and of those receiving funding in 2008, 57% saw an increase. In the BIS Business Barometer, 24% of companies saw an increase. Only 5% of FSE companies saw a decrease in turnover since the point of investment (6% for 2009 investments and 6% for 2008 investments). 46% of the BIS survey respondents saw a decrease (see fig. 5).

It is worth noting that, of the 40% of FSE companies reporting no change in turnover, over 70% are pre-revenue companies, many of which will still be at the proof-of-concept stage, where we would expect a significant delay in the generation of revenue.

4.2.2 Looking at growth in terms of employment our survey shows an average increase of 19% per annum. The Forum of Private Business Economic Downturn Panel shows a decrease of 6.3% for the UK over the first 6 months of 2009 (see fig. 4).

Looking at the number of companies reporting a change (both positive and negative) in numbers of employees, 47% of FSE companies reported an increase since the point of investment. Of those receiving funding in 2009, 45% saw an increase and of those receiving funding in 2008, 53% saw an increase. In the BIS Business Barometer, 13% of companies saw an increase. Only 9% of FSE companies saw a decrease in number of employees since the point of investment (3% for 2009 investments and 10% for 2008 investments). 31% of the BIS survey respondents reported a decrease (see fig. 6).

40%

33%

55%

24%

Increase No Change

FSE Companies

BIS SME Business Barometer June 2009

0%

10%

20%

30%

40%

50%

60%

43%

5%

Decrease

44%

6%

47%

13%

Increase No Change

FSE Companies

BIS SME Business Barometer June 2009

31%

9%

Decrease

0%

10%

20%

30%

40%

50%

Percentage of companies reporting a change in turnover

Fig. 5 % companies reporting change in T/O - Source: FSE Survey Q3 2009 Base: 100 companies receiving FSE funding

Percentage of companies reporting a change in number of employees

Fig. 6 % companies reporting change in number of employees - Source: FSE Survey Q3 2009 Base: 100 companies receiving FSE funding

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4.2.3 The greatest average increase has been experienced by Commercialisation Fund companies. Per annum growth is 110% turnover and 55% number of employees. Looking at the total increase since the point of funding these companies have seen a 76% turnover increase and a 71% employee increase (see fig. 7). Due to the early stage of these businesses they tend to be small companies, so small increases in amount of turnover and number of employees will have a bigger impact on the percentage increase.

Accelerator Fund clients report strong growth compared to the 7.8% regional average at 48% per annum increased turnover. The number of employees has increased by 27% per annum. Looking at the total increase since the point of funding these companies have seen a 42% turnover increase and a 26% employee increase (see fig. 7).

Transition Loan Fund clients, who would have been experiencing ‘credit crunch’ induced difficulties (as this is the core purpose of the fund and dictates eligibility), are reporting an average increase in turnover of 5% and only 1% job losses (see fig. 7), compared to the UK average -6.3% reported in the Forum of Private Business Economic Downturn Panel.

4.2.4 The growth statistics for FSE companies quoted above have been calculated based on the figures respondents gave regarding their current turnover and number of employees compared to those from when they applied for FSE funding. As such, the increases show the levels of growth experienced by FSE funded companies, but we cannot state that these increases were a direct result of the funding provided by FSE.

To gauge some measure of the direct impact, the survey also asked whether funding from FSE had specifically allowed them to create any jobs or, in light of current economic conditions and the establishment of the Transition Loan Fund, whether it had specifically allowed them to save any jobs.

72% of companies reported that the funding received allowed them to either save or create jobs. Fig. 8 shows that 313 jobs were reported as created or saved.

76% 71%

42%

26%

Accelerator Commercialisation

% increase in t/o by fund

% increase in number of employees by fund

-1%

5%

Transition -10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Fig. 7 % increase in turnover and number of employees since the point of investment by fundSource: FSE Survey Q3 2009 Base: 100 companies receiving FSE funding

FSE companies growth by fund

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Supplying comprehensive communications to the hotel industry, Solution Builders needed funding in 2006 to help them reach a wider market place and supply bigger hospitality corporations. Funding received from FSE enabled the company to carry out expansion activities and double the number of employees within the company, which has driven the company forward and increased turnover by more than 500%, to around £2m.

Solution Builders

3557

85 85

No. jobs saved

No. jobs created

49

0

50

100

15

200

2

169144

Accelerator Commercialisation Transition Total

By extrapolating these figures for the remaining 40% of the customer group, and adding them with the jobs safeguarded through the Transition Loan Fund11, we can estimate that around 1,230 jobs now exist as an immediate result of FSE funding.

This growth data allows us to draw conclusions regarding FSE’s contribution to HM Treasury as follows;

assuming a UK average salary of circa £25,000, the 1230 jobs created and/or saved as a result of FSE funding account for income tax and NI contributions of around £7.5m per annum12

FSE companies reported an actual turnover increase of £18,380,600, an increase which would account for over £2.75m of VAT even at the current 15% rate. By extrapolating this for the remaining 40% of the survey population we can estimate VAT contributions will have been in excess of £3.8m

4.3 Funding Amounts

Over 87% of respondents obtained £100,000 or less of FSE funding, with around half of these needing £50,000 or less (see Fig. 9). Most companies who received over £100,000 received between £150,000 and £250,000. The largest amount received by one company was £350,000.

Up to £25,000

From £25,000 to £50,000

From £50,000 to £100,000

Over £100,000

Number of jobs saved and number of jobs created by Fund

Fig. 8 No. of jobs created and saved by fund - Source: FSE Survey Q3 2009 Base: 100 companies receiving FSE funding

Amount of funding received from FSE

Fig. 9 Amount of funding received from FSE - Source: FSE Survey Q3 2009 Base: 100 companies receiving FSE funding

12

11 FSE Board report November 2009 851 jobs safeguarded through Transition Loan Fund investment (49 reported by survey respondents)12 Income tax calculated at current rate of 20%. NI calculated at current rate of 11%

43.8%

40.6%

3.1%

12.5%

This shows how a relatively small investment13 can have a big impact on growth when made at the right point in the development of the business. This is key to FSE’s core purpose of providing funding gap finance and it is this intervention, often in the embryonic stages of a business with high growth potential, that allows the exponential growth that we have highlighted in section 4.2 above.

4.4 Availability of funding

Almost 80% of companies told us that the funding received from FSE was not available to them elsewhere at that point (see fig.10). This availability of growth finance is especially important to businesses in the current economic climate: 65% of businesses surveyed by the Forum of Private Business14 reported that access to finance for growth has worsened during 2009.

Fig . 11 shows that almost 90%15 of companies stated that without FSE funding there would have been a negative impact on the development of their project, either by being delayed, abandoned, moving outside of the area or even sending the business into administration.

78.8%

21.2%

Yes

No

In your opinion was the level of funding that you received from FSE available to you elsewhere at that particular point in your development?

Fig. 10 Availability of funding elsewhere in the market - Source: FSE Survey Q3 2009 Base: 100 companies receiving FSE funding

58.8%

9.3%

Been delayed

Been abandoned

Gone ahead with other support

Moved to a different area outside the South East

Other (please specify)

3.1%

10.3%

18.6%Without the assistance of Finance South East the development/project would have...

Fig. 11 Impact on progression of project - Source: FSE Survey Q3 2009 Base: 100 companies receiving FSE funding

13

13 Compared with venture capitalists - the alternative investor for high growth/high risk businesses – who tend not to make investments of less than £1m14 Forum of Private Business Referendum September 200915 This figure includes almost 10% in the ‘other’ category, where all but one company provided answers such as the project/company would have downscaled, struggled or gone out of business

Availability of funding elsewhere

Impact on progression of project

FSE’s efficiency in managing the

relationship

Usefulness of products

FSE’s professionalism

Overall satisfaction

Likelihood of recommendation to

another business

1

2

3

4

5

N/A

0 20 40 60 80 100

2%

3%

3% 19% 45% 28%

2% 1% 5% 11% 30% 51%

4%

4%

2% 2%

7% 42.5% 42.5%

2%

1% 3% 5% 21% 68%

3%

1% 4% 8% 33% 51%

1%

3% 2% 6% 23% 65%

3%

4.5 Satisfaction

Businesses were asked to score FSE using a 1-5 scale, with one being the lowest and 5 the highest, on the following;

ease of access to FSE’s funds

FSE’s efficiency in managing the relationship

usefulness of products

FSE’s professionalism

overall satisfaction

likelihood of recommendation to another business

In all but one category16 more than 4 out of 5 companies gave a 4 or 5 rating. Top scoring areas were professionalism at 89% and likelihood to recommend at 88%. Overall satisfaction was rated 4 or 5 by 84% of respondents (see Fig. 12).

On a scale of 1-5 with 1 being the lowest (most negative) and 5 the highest(most positive), how would you rate the following :

Fig. 12 % of companies satifisfied using a score of 1-5 Source: FSE Survey Q3 2009 Base: 100 companies receiving FSE funding

14

16 For ‘ease of access’ 72% of companies scored a 4 or 5 rating. Although still a very high level of satisfaction, some companies may have experienced more difficulty in accessing FSE funding due to insufficient business plans and a general lack of investment readiness. In such cases, where the business or idea shows the potential for growth, FSE will work with the business and partner organisations to get the business to the point where it is ready for FSE funding

“Not only did the funds come at an important time in my business, it came at a time when all other sources had dried up”

“The experience has only been positive and helpful, and the funding received has permitted the stabilisation and subsequent growth of the company”

“Our Accelerator Fund manager was exceptional both in terms of his thoroughness in dealing with all financial matters but equally in relation to understanding and offering real support to the business and our development initiatives”

“[It had] significant impact because I doubt we would have survived as a business without the funding (and the subsequent support)”

“The input in planning to get finance was critical, as was the funding, without which our business wouldn’t be here today”

“The application process was tough but fair and throughout the whole experience Finance South East offered support and guidance”

“The service received from Finance South East has been excellent and they are a great organisation to deal with. They understand their market and their clients” 5. Conclusion

4.6.2 Comments from FSE clients:

4.6 Added Value

4.6.1 Additional comments provided by respondents highlighted the value placed on the ongoing support provided by FSE, with over one third making reference to this.

Finance South East’s core purpose is to help ambitious companies to grow. By taking additional steps to work closely with its clients FSE is able to de-risk what would be considered in the wider funding marketplace to be high risk investments. The comments made demonstrate the value that clients place on this additional support and their belief that this is an integral part of the success of their business.

Some comments were critical of certain elements e.g. for some the interest rates were higher than they would have liked, FSE accepts this, however it should be acknowledged that interest rates are set on a case by case basis to reflect the level of risk and that limited personal security is generally taken.

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5. Conclusions

Alternative funding was not generally available from any other source confirming the continuing funding gap in this area. Banks will not provide finance because of the perceived risk and VCs because of the scale and suitability of the investment opportunity. Public sector intervention at the earliest stages of the funding escalator remains a requirement if the UK is to benefit from its investment in the innovation agenda.

Whilst the individual investment amounts were modest, in many cases, this had a significant impact on the company’s performance and growth potential. Innovative funding structures such as mezzanine loans can be used to address the funding gap alongside more the traditional equity based instruments – flexibility being the key to success.

A frequent criticism of regional funds is their cost versus scale of operation. By aggregating small individual funds in a “funding escalator” under the control of one fund manager, scale and value for money can be achieved. This is with the added benefit of “on the ground” regional presence and delivery.

Risk can be mitigated through a generalist approach to investment management although the lack of specialisation may result in follow on funding being more difficult to secure. However, national funding schemes (with public sector investment) at the higher end of the funding escalator can provide this, therefore preserving a return overall for the public purse and recognising the value of the earlier intervention. While it is too early to calculate financial returns on the FSE funds from an investor perspective, the wider economic benefits can already be seen.

The non-financial support provided by FSE i.e. hands on mentoring and support from experienced fund managers, is valued by investee companies, encourages an open and communicative relationship and tangibly de-risks the investment opportunity.

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Finance South East LtdRiverside House4 Meadows Business ParkStation ApproachBlackwater, CamberleySurrey, GU17 9AB

T +44 (0) 1276 608510 F +44 (0) 1276 608539

www.financesoutheast.com

Finance South East is a regional funding organisation, backed by SEEDA and privately governed. With access to a breadth of public and private resources, FSE specialises in the identification, funding and development of ambitious businesses with high growth potential. FSE is authorized by the Financial Services Authority.