Investment Criteria
The South East Seed Fund is a commercially operated fund with the primary aim of maximising returns for its investors. It therefore seeks to invest only in opportunities which it believes have the highest potential for success.
The Fund may invest sums from £100,000 up to £250,000, normally in the form of equity (share capital). It operates on a “matched-funding” basis (see Key funding terms and conditions)
KEY INVESTMENT CRITERIA:
Geography:
- Company headquarters must be in the SEEDA geographical region: OR
- A material part of the business must be conducted in that region; OR
- The business must be based on research, knowledge or skills from a higher education institution in that region. (our regional map)
Status:
- The Fund is open to applications from small and medium enterprises (i.e.“SMEs” under European definitions - see footnote*) including University spin-outs/spin-ins. An applicant company must be a limited company and not a subsidiary; it should be incorporated in the UK and its shares should not be quoted on any exchange.
Stage: The applicant company may be at any stage but should have reached or passed the point where:
- Any critical technology has been demonstrated;
- A coherent business plan has been produced that includes identification of a specific market that has been assessed for feasibility; and
- the route to full commercialisation is clearly defined.
Prospects:
- There should be significant potential for growth (in sales, profits and shareholder value) based on a clear strategy and a scaleable business model.
There should be a clear and realistic exit strategy for investors within 3 to 5 years. Ventures with long development periods or which require time consuming regulatory approvals are for this reason unlikely to be suitable for investment by the fund.
Management:
- Any gaps in the capabilities of the management team should have been identified and satisfactory strategies proposed to address them.
- The team should ideally have a successful track record within the relevant industry and/or in bringing new products to market.
- Key managers will be expected to demonstrate commitment to the business going forward.
Purpose of funding:
- Funds invested may be used for a range of purposes, typically including: initial management salaries; marketing; establishing/building a sales force and sales activity; production working capital; setting up a corporate centre where none yet exists; installing IT/systems.
Exclusions: The Fund will not invest in the following:
- Sectors considered likely to bring the Fund into disrepute e.g. companies involved in tobacco, pornography or armaments. Defence business not involving armaments may be acceptable.
- Certain restricted sectors including: Shipbuilding; Steel; Coal; and a range of Agricultural, Fisheries and related activities. (full list)
For further information or to apply to the Fund, please contact the Junior Fund Executive, Bradley Jones on 01276 608516 or the Fund Managers, Alexis Weber on 01276 608526 or alternatively, Julie Silvester on 01276 608521.
* An SME (small or medium-sized enterprise) is defined by the South East Seed Fund as a business or company:
• that has fewer than 250 employees; and
• has either (a) annual turnover not exceeding €50 million (approximately £37 million) or (b) an annual balance-sheet total not exceeding €27 million (approximately £20 million); and
• of whose capital or voting rights, 25 per cent or more is not owned by one enterprise, or jointly by several enterprises that fall outside this definition of SME. This threshold may be exceeded in the following two cases: (a) if the enterprise is held by public investment corporations, venture capital companies or institutional investors provided no control is exercised either individually or jointly, or (b) if the capital is spread in such a way that it is not possible to determine by whom it is held and if the enterprise declares that it can legitimately presume that it is not owned as to 25% or more by one enterprise, or jointly by several enterprises, falling outside the definitions of an SME.
