One NorthEast has approved £2.4m worth of funding, to extend the region’s Proof of Concept Fund (PoC) until the end of 2009. The PoC provides investment in the earliest stages of business creation and aims to stimulate the growth of young companies, who may need equity capital to finance the development of new technologies.
The investment builds upon a £750,000 pilot by the RDA in 2004, which contributed to a main fund of £10m. The latest investment in the PoC adds to an existing regional fund of £100m.
Fund management company NorthStar Equity Investors (NSEI) delivers the PoC, which has so far made 140 investments and provided over 100 start ups, creating more than 200 jobs. The PoC portfolio has attracted over £20m worth of follow-on investment already.
Eight businesses have progressed from the PoC to the £23m North East Co-Investment Fund (COIF), which is also managed by NorthStar Equity Investors (NSEI). COIF provides venture capital partnerships with public or private sector investors and has been designed to encourage co-investments with a consortium of investors.
One NorthEast assistant chief executive Malcolm Page said: ‘Funds like the PoC are creating a sustainable system of support for innovative firms. Returns made from the fund’s investment are then reinvested into the region and can potentially be used to support businesses in the future.’