‘A naive and stupid idea’: how Rishi Sunak’s Future Fund spent millions on failed firms

theguardian.com:

I n the small hours of a warm August night in 2022, staff at London-based festival tickets business Pollen received a lengthy email confirming their worst fears. Just three months after a $150m fundraising round that valued the company at $800m, Pollen had gone bankrupt.

It was a dramatic implosion. Some of the biggest names in venture capital had poured cash into the company, believing it could become a giant of the money-spinning live events industry. Their dream evaporated when the events Pollen sold tickets for had to be cancelled during the Covid-19 pandemic. Within weeks, another side to the story began to emerge.

Former staff told of its founders – young entrepreneur brothers Callum and Liam Negus-Fancey – spending hundreds of thousands of pounds on parties where drugs were a common feature. One former employee said they remembered colleagues knocking back shots in the office on a weekday morning.

A spokesperson for Pollen countered that these tales were “grossly exaggerated”, and stressed that the pandemic, rather than the parties, were what capsized Pollen.

But this company collapse attracted particular scrutiny because it had been funded not just by venture capital, but also by the taxpayer, courtesy of a £5m loan from Rishi Sunak’s Future Fund.

Launched in April 2020 when the prime minister was chancellor, the fund was designed to help promising startup businesses ride out the pandemic. It was administered by the British Business Bank (BBB), the UK state development vehicle designed to increase the flow of lending to growing companies.

Under the scheme, the BBB would lend firms between £125,000 and £5m, matching parallel investments from private investors, with the loans converting into shares when the company next