Key Terms and Conditions
Form of investment
- The Fund will make principally equity or quasi-equity investments and on typical venture capital terms. The Fund will normally invest in ordinary share capital. It will expect to have a minority shareholding (less than 50 per cent.)
- The Fund may invest up to £250,000 in any single company in one or more tranches. The investment may be made in stages contingent on achievement of specified milestones, but tranches of less than £50,000 should be avoided. In exceptional cases the Fund may invest more than £250,000.
- Matched Funding is applied for each of the investments made. This means that each investment made by the Fund must be matched, at the same time, by funding from private sources. These may be individual, institutional or corporate provided that they are acceptable to the Fund Manager. The Fund may be able to help identify potential sources.
- The Fund will seek to obtain returns equating to a significant multiple of its original investment within 3 to 5 years. (Many viable businesses will not be suited to such investment objectives.)
Fund involvement
- The Fund aims to be an active investor and to add significant value through financial expertise, access to specialist sector knowledge and promotion of good corporate governance.
- Where there is no existing link to a Higher Education Institution (HEI), applicants may be introduced to relevant HEIs to identify opportunities where an HEI could add value.
- Where relevant, successful applicants may also be eligible to join the support programme of CommercialiSE (a consortium of South East universities) or to be introduced to the relevant SEEDA Enterprise Hubs in the region.
Charges
- The Fund will charge an up-front arrangement fee for each investment reflecting the expected complexity of the transaction.
- The Investee Company will be responsible for the costs of legal documentation. However the Fund will use simple, largely standardised legal documentation to minimise cost.
- The Fund will have observer rights at investee Board meetings, the cost of which will be covered by a periodic monitoring fee, and will reserve the right to appoint a non-executive director.
