Each investment is a monthly winner of the Start-Up Series. This is a competition run by us and promoted by startups.co.uk, not surprisingly the ‘go-to’ place for start-up businesses looking for advice. With over 400,000 monthly users, the competition attracts an average of over 85 entries per month. This is the deal flow that we assess and distil down to one winner.
The Start-Up Series distillation process is conducted principally by the two co-founders of Worth Capital, experienced entrepreneurs with expertise in brand, marketing, retail and innovation. The process takes six weeks and gets progressively more intense for the entrepreneurs. It includes half a day with each of the finalists, digging deep into the business proposition, strategy, plans, financial projections and the strength of the team. A winner is recommended to Amersham Investment Management, who then conduct additional technical due diligence before their decision to invest.
Before getting to the final stage of the competition, we agree a fair valuation with each finalist in the event an investment is made. It’s important that this fairly balances the attraction for investors and the progress made by the founding team. We benchmark using tools such as Beauhurst and from having our ears to the ground on many private fundraises. As part of the final half day together the entrepreneurs get to understand the value of having us involved, which helps them to maintain perspective on valuations we suggest. Having access to a deep well of deal flow and quality businesses, we don’t find ourselves backed into a corner when agreeing a valuation just to get a deal done.
Investing in start-ups is inherently high risk, so no investor should invest in just one or two businesses. The Fund is invested in tranches, with each tranche designed to make three to six investments. So each investor immediately has a ‘mini-portfolio’ to diversify risk, and if invested across a whole year, they could end up with a portfolio of 12 plus investments. The competition series is open to entrepreneurs with compelling new consumer and B2B products & services – i.e. young businesses that have the potential to build significant brand awareness and new consumption behaviours. ‘Tech’ is not being targeted specifically, although technology based disruptions are to be expected and encouraged when rooted in strong consumer insight.
Team briefings and training on EIS & SEIS, be it face to face or via webinars and conference calls.
Extensive materials explaining The Start-Up Series Fund; suitability letters and wording.
Client seminars on EIS & SEIS investing and the different routes in, covering other options besides our products.
Independent review of our Fund carried out by industry experts Hardman & Co.
We have been delighted to be involved with the Start-Up Series Fund as a product that takes a responsible yet innovative approach to seed investing. It’s not often you come across funds with such a thorough distillation model.
Paul & Matthew bring a refreshing approach through 'competition investing' to early-stage venture capital. They’re entrepreneurs who have used their investing, operating & consulting experience to design an exciting new start-up process that we are pleased to support.
The directors of Worth Capital bring a lot of entrepreneurial and angel investing experience. Although there is a limited track record, the investment process that has been put in place compares well with those from more established managers.