New UK Programme Joins The Accelerator Vogue, Offers Evergreen Funding

There’s no denying that startup accelerators are now officially in vogue. Whether that is a sign of a bubble (or even a Blubble) or not I will leave to you.

However, today the movement is joined by the Oxygen Accelerator a UK-based investment programme designed to intensively mentor super-early stage startups. The 13-week programme will take applications from around the world, so long as the startup sets up a UK limited company.

The programme is unusual in that it’s offering an “evergreen” loan of £20,000 to start with, in return for a 6% equity stake. In effect this covers the startup’s costs and ‘ramen noodle’ living expenses during the programme (they are working with local athorities to also provide subsidised or free accommodation for teams).

And teams won’t need to ‘pay back’ the loan until its raised more investment or the business can afford to repay it. After which that £20k is designed to re-circulate back into the programme. It’s also unusual in that the £200,000 fund covering 10 teams is coming from one individual businessman with no previous history in the tech industry.

Update 2012: These terms have now be revised to normal equity terms offered by most accelerators.