VC firms are about to start pitching the UK government for the £400 million it is giving away to stop British startups being snapped up by foreign companies

POOL New/Reuters

Chancellor Philip Hammond.

Venture capital firms with a taste for British startups can now apply for share of £400 million being made available by the UK government.

Chancellor Philip Hammond announced last November that the extra cash would be made available to VC funds, with an eye to stopping fast-growth tech firms being bought up by big overseas companies. (The day after his announcement, flight comparison service Skyscanner was acquired by China's Ctrip).

The funds are available through the investment arm of the state-owned British Business Bank. VC firms can now take a read of the bank's request for proposals for the criteria. Here's what it says:

• The cash is intended for later stage funding
• VCs can expect to receive up to 33% of their total fund at a maximum of £50 million
• Funds need to be £50 million or bigger at first close
• The fund can't have any "subsidised public sector support"

Interested investment managers will be expected to hold a pitch meeting with the British Business Bank to check whether their funds are eligible.

The funds will be distributed through British Business Bank's VC Catalyst programme, which along with other investors has already committed some £919 million to early and growth stage companies.

Catherine Lewis La Torre, chief executive of British Business Bank, said: "We are looking forward to engaging with funds with a verifiable track record in supporting high-growth businesses and an ability to leverage in private sector investment to support the UK's venture capital ecosystem."