Funding between £20,000 and £250,000
The Scottish Seed Fund (SSF) improves the availability of investment finance for early stage Scottish companies with growth or export potential, usually at the end phase of product development or commercialisation.
Priority will be given to businesses demonstrating high-growth potential by launching new products, entering new or export markets and increasing employment.
The SSF can invest between £20,000 and £250,000 on an equity basis in businesses that meet the eligibility criteria. It won't provide more than half of the total equity funding requirement at each investment round. So, eligible companies must secure at least 50 percent prior to applying. Unlike our other investment funds this doesn't have to be through an approved SIB partner.
Private investors can also apply to the fund by approaching us directly with their investee company. Scottish Co-investment Fund partners can apply through their co-investment syndicate.
Is your company eligible?
The SSF will only invest in commercially viable companies that:
- Demonstrate other funding sources have been explored
- Have, or be in the processes of developing, a significant operational presence within Scotland which is proportionate to the levels of investment being sought
- Match the EU definition of a Small to Medium Enterprise (SME) and ideally be a Limited Company
You must be looking for equity investment (shares), as the SSF is primarily an equity based fund. For commercial reasons an 'arm's length' sophisticated angel investor or a co-investment syndicate partner may plan to make part of their investment by way of commercial debt. In these circumstances, the SSF reserves the right to part invest by way of a debt instrument on pari passu terms with the private commercial investor.
Private sector funding
At least 50 percent of the proposed total equity funding must be secured through private sector sources. Ideally, this should include at least one external equity investor.
Examples of what we would and wouldn't consider private sector funding are detailed in the table below.
|Private sector funding sources
||Funding sources not considered private
- Business angels
- Angel syndicates
- Venture capitalists
- Corporate investors
- Further investment by the existing owners of the company
- New investors
- SMART: SCOTLAND
- Regional Selective Assistance (RSA)
- Capitalisation of existing stakeholder loans
We may be unable to invest in your company if it performs or operates in one of the following activities:
- Motor vehicles
- Real estate/property development
- Social and personal services
- Pubs, clubs and restaurants
- Local services
- Banking and insurance
- Nuclear decommissioning
- Professional services
This list may be subject to change, in line with European Regional Development Fund requirements.
What happens next?
As a minimum you'll need to provide a detailed business plan including key financial information, and details of the private sector funding secured.
When deciding whether and how much to invest, we'll carry out detailed due diligence, taking into consideration:
- The age and stage of the business
- Nature of trade, any technology or intellectual assets
- Financial information, including valuation
- Management skills
- Potential for innovation and growth
- The availability and amount of the private sector funding secured
- The terms of the private sector investors
- How the funding will be used
Our decision will also take into account the economic benefit to Scotland, so we may request further information as appropriate on a case by case basis.
If you have any questions regarding the process or would like to apply, contact us