For a client, no decision to invest is ever taken lightly. This is especially true of investing in early stage firms, where more risk is assumed. Clients are always going to want to know how investments will be managed. With the Government’s legislative updates to Enterprise Investment Schemes (EIS) now in force, this is also topical. It’s likely that clients will have a few more questions for advisers before investing in new EIS vehicles.
Optimising EIS Funding
The Government has placed the focus on EIS funding for so-called ‘knowledge intensive’ companies. These will be new to many clients as such firms don’t normally have tangible assets. Instead they are all about innovation and intellectual capital, which the Government recognises are crucial for the future UK economy.
The Blackfinch Ventures EIS Portfolios are focused on these kinds of companies. And we believe that EIS funding, combined with strong active business support, is what will make the difference to each company’s fortunes. It can enable early stage companies to scale up and succeed, and to deliver for those who have supported them from the outset.
So what do we mean by active business support? It refers to how we take an end-to-end approach to investee companies, from investment to development to exit. As entrepreneurs and early stage investors, we know that this is needed. The experience and networks that Blackfinch Ventures brings means we can add value from deal stage right through to post-investment support and access.
Privileged Deal Flow
We target firms with digital and technological potential, offering products that address real world needs. This means they will have the capability to make an impact in very large markets and deliver for investors. Through a network of relationships developed by Blackfinch over many years, we’re able to find investment opportunities outside those circulated in the market. This privileged deal flow is a major differentiator for Blackfinch.
Once we have a company in our sights, we undertake a rigorous due diligence and investment process. This involves initial quantitative analysis, followed by ongoing work with the company’s management team. We also analyse the competitive landscape, and the company’s financial and operating model. Our aim is to reduce investment risk by ensuring close involvement with each company. In almost every deal, we will require board representation and input on corporate governance.
Active Business Support
Following investment in a company, we place great emphasis on working closely and in partnership with management teams. We agree on working principles upfront and run regular strategy sessions, as well as supporting on corporate governance and key hires. We support on all aspects of business development to help scale teams and companies. Leveraging the experience, knowledge and networks of Blackfinch we build companies for the long term.
Strong Exits for Investors
We work with each company’s management to ensure exits for investors at the best times. Here Blackfinch can add value through our network of contacts, alongside ensuring that investee businesses are fit for sale. We work to update potential acquirers on the progress of investments. Each exit is the culmination of years of support and strategic activity. We aim to deliver significant returns over timeframes targeted at four to seven years.
Alignment of Interests
Of course, an essential part of early stage investing is knowing that some companies will flourish while others may falter or fail. So we will also make the necessary tough decisions at the appropriate times, in order to keep our focus on companies with the potential to succeed. And by spreading investments across a multi-sector portfolio of ten or more companies, we can mitigate the effect of companies that underperform or fail. We believe in what we’re doing, and our interests are aligned with clients, as Blackfinch invests its own capital into the portfolio companies. We then work to help companies succeed. Through this process, investors can see significant return potential from investments into companies that are supported every step of the way.
If you would like more information on our Blackfinch Ventures EIS Portfolios please contact us:
Call: 01684 571 255
Email: [email protected]
IMPORTANT INFORMATION: CAPITAL AT RISK. THIS INFORMATION IS ISSUED BY BLACKFINCH INVESTMENTS LIMITED (BLACKFINCH), WHICH IS AUTHORISED AND REGULATED BY THE FINANCIAL CONDUCT AUTHORITY (FCA NUMBER 153860). REGISTERED ADDRESS: 1350-1360 MONTPELLIER COURT, GLOUCESTER BUSINESS PARK, GLOUCESTER, GL3 4AH. REGISTERED IN ENGLAND AND WALES COMPANY NUMBER 02705948. THIS ARTICLE IS FOR INTERMEDIARY INFORMATION ONLY AND DOES NOT FORM ANY OFFER OR INVITATION TO INVEST. ALL INFORMATION CORRECT AT JUNE 2018.