How the government may end up with a stake in a sex-party company

IN THE BALLROOM of a Georgian house in central London, five mattresses have been pushed together, and a pile of people are having sex on them. The orgy has been organised by Killing Kittens, a company that claims to throw “the world’s most exclusive, decadent and hedonistic parties”, and which has been offered a £170,000 ($213,000) loan from the government’s new Future Fund scheme. Unless paid off, the loan will convert into equity, giving the government a 1.47% stake. Emma Sayle, Killing Kittens’ chief executive, is careful to point out that taxpayers’ money will be spent not on orgies but on an app and a social network.

The prospect of the government owning a slice of an organiser of upmarket sex parties is one of the more surprising side-effects of the covid-19 pandemic. Rishi Sunak, the chancellor of the exchequer, launched the Future Fund in April to tackle a gap in previous offerings of financial help to firms. Since March around £45bn of government-backed loans—2% of GDP—have been extended to the private sector but the initial package was ill-suited to firms that are, in the jargon of venture capital, “pre-profit” or even “pre-revenue”. The Future Fund offers up to £5m in convertible loans for firms that meet its criteria if they raise the same amount of third-party cash. The need for matching funding ensures that decisions are still, ultimately, being made by investors rather than by civil servants. So far 429 companies have received a total of £420m.