Nigel Griffiths Announces New £2 Million Boost
For High Growth Businesses

E-Synergy Early Growth Fund launched April 2003

A new £2 million-plus fund to help young companies get the growth finance they need was launched today by Small Business Minister Nigel Griffiths.

The Early Growth Fund, run by E-Synergy, will stimulate small amounts of capital for start-up businesses that the banks or traditional venture capitalists tend to ignore. The fund is supported by a £2m investment by the DTI's Small Business Service and will be enhanced by private sector and business angel capital.

The UK is a creative source of new science and technology but technology entrepreneurs often lack business skills, contacts and finance to exploit their ideas successfully. There is a market gap in the provision of seed finance and management support and E-Synergy provides both to companies with new technology. This new fund is available to invest alongside E-Synergy business angel investor group. It is part of a pilot project of the SBS to address the market gap in early funding of new technology companies.

There are special risks for investors associated with early stage technology companies that can stop business angels from getting involved. The fund will reduce the risk for business angel investors by making matching government funds available on a commercial basis.

Nigel Griffiths, Minister for Small Business said:
"Small businesses can often find it difficult to access smaller amounts of risk capital appropriate to their needs.
"This fund, supported by a £2m DTI investment, will help more firms bridge the equity gap.
"The Government is committed to helping more small businesses get the risk capital they need, which is why the Chancellor announced a consultation on Small Business Investment Companies in last week's Budget.
"This builds on over £80m of Government investment in programmes we have already set up, such as the Regional Venture Capital Funds and the Community Development Venture Fund."

Dr Andrew Stevenson, Chairman of E-Synergy said
"E-Synergy is delighted to have the opportunity to manage this project for the SBS. Our focus is on new technology companies where this will make a real difference. We have our own group of technology business angel investors but investment capacity and risk are particular problems in completing finance transactions in this sector. It will enable the early growth financing of promising technology companies to be put on a sounder basis and will improve their chances of success. It should also make a real difference in improving business angel confidence in what are very difficult market conditions. The launch event is sponsored by HSBC bank, bankers to E-Synergy Early Growth Fund Ltd. HSBC provide banking services for technology companies through a network of technology banking managers."

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