Benefits of Syndication
By investing alongside others you are spreading the risk of your investment, rather than "going it alone". In addition to spreading your monetary risk, by investing alongside others in a syndicate you will be bringing together different individual business experiences and varying levels of knowledge that are valuable for an early stage business to succeed. As a result, syndication is a beneficial and proven model of Angel Investing. For more information on Syndication CLICK HERE
Investment Terms
Syndicates should be looking for the Angel Co-Fund to provide equity or quasi-equity investment of between £100K and £1M into eligible SMEs. The fund will provide up to 49% (although by preference will be a smaller proportion) of the capital in investment rounds ranging from £200K upwards. The size of the investment proposed needs to be significant enough to properly fund the business and to allow for the cost of proper due diligence and legal advice. The investment needs to be a new investment for the syndicate, rather than supporting an existing investment.
The fund will, to the extent possible, follow the investment terms proposed by the syndicate, including the structure and price of any investment and will invest in equity (or equity-like instruments) alongside other syndicate partners. It is anticipated that many investments will be compliant with the Enterprise Investment Scheme (EIS) but this is not a criteria for funding.
What type of business will the Cofund invest in?
The Angel CoFund is funded via a grant from the Regional Growth Fund, which was established to stimulate employment in less affluent areas of the country. As such the Angel CoFund is not appropriate for investments in some of the country’s least deprived localities, based on a number of measures. CLICK HERE to enable you to establish if your investee business is located in a qualifying area.
Investee companies must not have more than 250 employees and turnover not exceeding £50M and balance sheet assets not exceeding £43M. They can be from within any industrial sector at any stage of their lifecycle are eligible providing they have the required level of investment from the angel syndicate.
How to Access the Angel CoFund
Applications to the Angel CoFund can only be made by business angel syndicates and initial applications to the Angel CoFund should be made using the Investment Proposal Form which can be downloaded by following the link below. Further to a basic eligibility check, a detailed investment paper, with supporting due diligence, will then be requested. The Investment Proposal Form and outline of the content of the investment paper and a description of the type of due diligence required can be found on the Angel CoFund website.
The investment proposal is considered by the Angel CoFund’s Investment Committee which is composed of experienced investors who will consider all propositions on a fully commercial basis, “from the perspective of an angel investor”. The syndicate will be expected to take the lead in managing the deal through to completion. For a complete overview and how to apply CLICK HERE to visit the Angel Co-Fund web-site.
