The fund’s investment strategy is to invest in EIS Qualifying companies involved in the development, commercialisation and sale of innovative technologies or using them to gain a competitive advantage.

Why Invest

Positives

Strategy: Exposure to a small portfolio of technology companies co-investing with Business Angels.

Issues

Track record: Only a small number of exits to date, mostly predating the EIS fund, but the results so far look promising.

The Investment Manager

Positives

Team: Diverse range of experience in team, with clear strategy and good support from its Angel network.

Issues

Company size: The team is small, and this may act as a slight constraint, although it has recently expanded and has plans to recruit further.

 

Nuts & Bolts

  • Duration: The fund is evergreen, with closings around financial year-end or when sufficient investments are made.
  • Diversification: The manager expects to provide at least six equal investments for each closing.
  • Valuation: Usually changes at next financing or on write-down.

 

Specific Issues

  • Fees: Combination of direct fees and company charges. Four years of annual fees are deducted upfront.
  • Performance fee: Charged at 20% on aggregate returns over 120% of subscription, but threshold increased by 40% if exit within three years.

 

Risks

  • Target returns: The benchmark average IRR of 15% (roughly doubling the gross investment in five years) suggests a medium- to high-risk investment strategy.
  • Companies: Supplying risk capital to early-stage technology companies at the start of commercialisation. There will be a spread of company returns as the successful ones will do very well, but those who fail may do so completely.