“It is a welcome measure from the Government and acknowledges that the startup community is key part of the UK’s business eco-system, said Nimesh Shah, a partner at the firm, but there are immediate limitations and possible frustrations to getting the cash into these startup businesses.”

He added: "For a business to qualify, it would have had to have raised £250,000 from third party investors over the last 5 years. This will immediately exclude some pure startups and fledgling businesses who haven’t had such investment.”

Where the business is eligible, the Future Fund will match any investment made by private investors.  It therefore needs private investors to commit before the Future Fund pays out.

He added: “Raising investment is one of the biggest issues for startup businesses, even during normal times, and it is going to be naturally more challenging to convince private investors given the present situation.

Shah said that today’s announcements do not go into the specific details of the scheme and whether there are any incentives for private investors to participate, say in the form of tax relief for making an investment or downside protection.

He added: “I question whether the matched funding design was the right move by the Government. A more attractive route for investors could have been a temporary extension to the Enterprise Investment Scheme (‘EIS’) to provide an enhanced 50% tax relief for a period of 1 year.”