Investment Objective

The British Design Fund 3 (the "Fund") invests in and provides support for UK product design and manufacturing companies. The UK has the second-largest design sector in the world and is home to one of the largest design industries in Europe .

Funding for UK product design and manufacturing companies often comes from a combination of innovation grants and awards, friends and family, bank facilities and product crowd funding platforms. As a result, the Fund has identified a funding gap and will provide capital for companies which seek to deliver outstanding product design innovation and manufacturing.

The focus of the Fund is to invest in UK based early-stage companies that seek to lead the market in provision of innovative product design and manufacturing. The Fund seeks to invest at least £100,000 in each Investee Company in return for circa 15% to 30% equity, across at least five companies.

Due to lack of investment options available to companies in the innovative product design and manufacturing sector, the Fund will seek to select the most attractive opportunities and pre-money valuations. Investors will gain access to unique deal flow and the Fund will seek to de-risk investments through pre-money demand validation.

The Investment Manager (with the research assistance of the Company Mentor) will seek to identify potential Investee Companies, which it believes will have the following key criteria:

• A defined pragmatic business plan with sales, profit and loss, and cash flow forecasts;
• A well-designed product that solves a clearly defined problem;
• A working prototype and indication of interest from key target client(s);
• Defensible intellectual property;
• Revenue flow or a qualified sales pipeline;
• Winning chemistry within the founding team; and
• Deep understanding of the relevant marketplace and a clear competitive difference.

Exit Strategy

The Fund will be managed by the Investment Manager. Each investment will be mentored by the Company Mentor to ensure optimum cross-fertilisation across all the Investee Companies.

The duration of each investment will be managed by focusing on companies where the Company Mentor can affect the rate of business development and the resulting cash flow growth. This aims to ensure best use of capital to enable growth and prepare each Investee Company for acquisition or a potential listing.

The expected holding period of most investments will be between the minimum three years for tax conditions and a targeted maximum of six years. However, it is noted that Investee Companies may be held for longer or shorter periods.

Fund Manager

The Sapphire Capital Partners LLP team have extensive experience within the alternative investment sphere and act as Investment Manager to several EIS Funds. They have also won several awards within the industry including: Winner, Best Individual - rising star in EIS and SEIS (Boyd Carson, 2016 & Vasiliki Carson, 2017), Highly Commended, Best EIS/SEIS Tax Adviser (Sapphire Capital Partners LLP, 2017) and Winner, Best Company - innovation, newcomer or rising star in EIS and SEIS (Sapphire Capital Partners LLP, 2017).

Fund Provider

Twenty20 Mentoring Limited

The British Design Fund is supported by a team with strong retail, product and investment experience which gives it access to valuable sector specific expertise in order to research, identify, invest in and help to accelerate early stage UK based companies in the product design and manufacturing sector.

The team consists of:

Damon Bonser: Damon is a serial entrepreneur with over 14 years’ experience of building and running product design and manufacturing businesses.

John Mathers: Former CEO of the Design Council with forty years’ experience in the brand and design industry, across retail, FMCG, and consultancy.

David Kremer: David has over 25 years ‘experience running Seven Towns, a multimillion toy and game business, and is the co-founder of Rubik’s Brand Limited.

David Motum: Over 30 years David has built up two businesses within the financial publishing and media sector, namely; MSM International Ltd, and MSM Media.

For more information visit britishdesignfund.co.uk

Fees

Initial Charge (charged to Investee Company)

5% of the amounts invested into each investee company

Annual Management Fee (charged to the Investee Company)

Between 2-4% of the amounts invested in each investee company

Performance Fees (charged to the Investor, paid from investment proceeds)

On any increase in value on an individual investment in an Investee Company up to £5 above a hurdle rate of £1.05 (for every £1 invested) a performance fee will be charged of 20% (it is noted that the 20% will be split 5% to the Investment Manager and 15% to the Company Mentor) on the amount of the increase over and above £1.05 up to £5, and; On any increase in value on an individual investment in an Investee Company over £5 (for every £1 invested) a performance fee will be charged of 25% (it is noted that the 25% will be split 6.25% to the Investment Manager and 18.75% to the Company Mentor) on the amount of the increase over and above £5.

It is noted that no performance fee will be charged on any amounts below the hurdle rate of 5% (being £1.05 for every £1 invested).

To the extent that the performance fee is not paid by the Investee Companies, Investors shall be liable for their share of such fee and the Custodian may be instructed by the Investment Manager to transfer cash in an Investor’s portfolio to the Investment Manager and Company Mentor to satisfy any outstanding performance fee.

Other Costs (charged to Investee Company)

Any reasonable arm’s length expenses and/or transaction fees incurred by the Investment Manager in managing the Fund and/or by the Company Mentor in assisting the Investment Manager or Investee Companies shall be reimbursed by Investee Companies.

VAT

The fees and charges described above are exclusive of VAT which will be added where applicable To the extent that the performance fee is not paid by the Investee Companies, Investors shall be liable for their share of such fee and the Custodian may be instructed by the Investment Manager to transfer cash in an Investor’s portfolio to the Investment Manager and Company Mentor to satisfy any outstanding performance fee.

The fees and charges described above are exclusive of VAT which will be added where applicable

• Kuber Specific Arrangements
• Kuber receives a fundraising fee of 1% from the manager.
• Kuber will return this fee to Investors by applying it to their Subscription amount thereby increasing their investment.