Could Your Esports Business Benefit From The Government's New Future Fund?

• Published date: 03 August 2020
• Subject Matter: Corporate/Commercial Law, Media, Telecoms, IT, Entertainment, Venture Capital, Corporate and Company Law, Corporate Governance, Sport, Gaming
• Law Firm: Charles Russell Speechlys LLP
• Author: Tertius Alberts and Rebecca Burford

Esports is fast becoming an increasingly competitive industry not just in the UK but on a global scale thanks largely to the interconnected modern world.

With investment being a key component to scaling up a business, securing the appropriate funding has become a high priority for organisations in the industry seeking growth, from teams to tech providers. With no live sport on TV during the Covid-19 crisis in recent months we have seen a spike in interest in esports. It is now seen by many as a mainstream alternative to live sports, and it has been fascinating to see a rise in participation by professionals from traditional sports personalities as well as pure gamers.

The UK's creative industry is expected to be worth in the region of '128.4billion to the UK economy by 2025 and recently published reviews and reports, including the Bazalgette Review, have encouraged the Government to fund esports tournaments, national teams and media coverage to help raise the status of esports. However, to date, no specific Government funding for traditional esports organisation has been provided, with the traditional routes to investment (ie private equity, crowd funding, friends & family) remaining the most viable options. Whilst not specifically aimed at the esports community, the Government announced its proposed launch at the end May 2020 of the Future Fund, its flagship support scheme for start-ups and scale-ups hit by the coronavirus, which may be a funding opportunity that could benefit the esports community.

The Future Fund is a '250million fund to support high growth companies who may not be eligible for funding under other Government schemes, which will be delivered in partnership with the British Business Bank and will be open for applications in May 2020. Investments from this fund will vary between '125,000 and '5,000,000. The scheme will initially be open until 30 September 2020, but will be kept under review and may be extended.
The headline terms have been published by the Government which are discussed in more detail below, however a number of key questions as to the practical application of the scheme still remain.

Will your esports organisation be eligible?

The main qualifying conditions require your esports business:

• to be an unlisted UK registered company with a substantive economic presence in the UK
• to have raised at least '250,000 in equity investment from private third party investors in the last 5 years, and
• to be able to attract match funding...