The Investment Consultant believes that the UK Consumer Technology Market currently offers attractive EIS investment opportunities and it will source opportunities to allow the Funds to invest in companies that, in the Investment Consultant’s opinion, meet the following criteria:
The focus on the fund is technology, high capital appreciation potential and job creation as per the sentiment of the recent EIS Nov 2017 Budget announcement.
To mitigate risk the Fund has the following strategy:
Investor alignment – Velocity have also invested over £1.5m of their own capital to align with investors
Active management approach – all investee companies are actively managed to ensure that key milestones are monitored and achieved
Focus on revenue generation – even though Velocity operates within the technology sector, traditional business values of strong management, revenue generation, profit margins and target audience resonance are applied.
First and foremost, the Investment Consultant will address the issue of target audience demand, given that the number one reason for a start-up failing is a lack of market demand for its product.
Potential Investee Companies will be appraised by the Management Team and the Technology Panel by reference to these qualities and characteristics before due diligence is undertaken and a report prepared for the Investment Manager.
Each investment will be monitored by Velocity to ensure optimum cross-fertilisation across all the Investee Companies.
Velocity actively works with each founding team to evaluate and orchestrate a variety of appropriate exit strategies on behalf of the Fund including trade sales, listing on a stock exchange, or by selling its share of the Investee Company or a portfolio of its investments to a larger private equity firm or industrial interest.
The Fund will take a long-term view on the Investments and aims to only look at the possibility of exiting an investment after it has been held for at least three years, thereby ensuring that the Investment has met the key qualifying conditions necessary for Investors to obtain the tax reliefs. However, there may be occasions where an earlier sale is a commercially sensible decision. It is anticipated that most exits from Investments will take place after they have been held for between four years to seven years though some could take significantly longer depending on market conditions and the nature of the Investee Companies.
Company Name | Date of exit | Exit multiple |
---|---|---|
BMB | 2008 | 33x |
Freuds | 2005 | 10x |
PriceRunner | 2002 | 2.5x |
Purplebricks | 2015 | 57x |
Snatch | 2017 | 6.5x |
Thompson Online Benefits | 2016 | 2000x |
Tiffin Bites | 2009 | 15x |
UWE | 2019 | 16x |
Sapphire Capital Partners is a multi-award-winning investment management firm authorised and regulated by the Financial Conduct Authority. Sapphire is a specialist investment management firm established to provide investment management services and bespoke SEIS and EIS solutions. Sapphire is headed by Boyd Carson, a former Director of PwC’s Mergers and Acquisitions group in New York.
Further details on Sapphire can be found on its website: sapphirecapitalpartners.co.uk/
Velocity Capital Advisors Limited was established to facilitate participation in exciting, young companies, which have technology at their core. We work with companies that are innovative, can scale quickly and provide a product or service that is genuinely useful to their customers.
Velocity seeks to make investments that offer investors capital appreciation opportunities. We are not re-inventing ourselves post the November 2017 budget capital preservation changes; investing in companies with growth potential is what we have always done.
The Velocity founders, come from entrepreneurial backgrounds, which we believe is a real asset.
Velocity has always sought to align its interests with investors and, to date, the founders have invested over £1,500,000 in investee companies of the previous Velocity funds.
Fee type | Fees charged to Investor (including VAT) | Fees charged to Investee Companies (including VAT) |
---|---|---|
Initial Fee | n/a | 5.00% |
Annual Management Fee | n/a | 2.00% |
Performance Fee | 25%* of all amounts returned over net subscription | n/a |
Other Fee Information | n/a | n/a |
Kuber receives a fundraising fee of 0.50% from the manager. Kuber will return this fee to Investors by applying it to their Subscription amount thereby increasing their investmen
Discretionary Managed Fund
£2.50 for every £1 invested
Growth SEIS
Technology
3 to 8 investee companies
Custodian: Woodside Corporate Services Limited
Nominee: WCS Nominees Limited
An investor qualifies as an High Net Worth investor if they have
(a) An annual income to the value of £100,000 or more;
(b) Net assets to the value of £250,000 or more. Net assets for these purposes do not include:
(i) the property which is their primary residence or any loan secured on that residence;
(ii) any rights under a qualifying contract of insurance within the meaning of the Financial
Services and Markets Act 2000 (Regulated Activities) Order 2001; or
(iii) any benefits (in the form of pensions or otherwise) which are payable on the termination of their service or death or retirement and to which they are or (or their dependants are), or may be, entitled.
An investor qualifies as ar Self-Certified Sophisticated Investor if at least one of the following applies:
a) they are a member of a network or syndicate of business angels and have been so for at least the last six months prior to the date below
b) they have made more than one investment in an unlisted company in the two years prior to the date below
c) they are working, or have worked in the two years prior to the date below, in a professional capacity in the private equity sector, or in the provision of finance for small and medium sized enterprises
d) they are currently, or have been in the two years prior to the date, below a director of a company with an annual turnover of at least £1 million