Growth Capital Ventures is bringing new and exciting investment opportunities to a wider range of investors.
Fintech firm Growth Capital Ventures (GCV) has been leading its own quiet revolution in the North East of England, identifying and structuring investment opportunities that have the potential to deliver market-beating returns to investors alongside wider positive social and environmental benefits.
GCV has recently launched the G Ventures Investor Club, which is an exclusive group of high net worth individuals who will meet monthly and be briefed on new investment opportunities in which they can invest anything from £10,000 to £250,000, five or six times a year.
G Ventures is tight-knit group of like-minded individuals who are entrepreneurs in their own right and it will have regional bases. The first, which already has 12 members, was recently launched for the Tees Valley and the concept will be rolled out with similar groups for the wider North East, the North West, Yorkshire, Scotland and London.
“Our members are keen to back the next generation of entrepreneurs and are people who have made a success of their own businesses and have capital to invest. They are typically looking for high growth business opportunities in which they can maximise the upside and mitigate risk,’’ explains GCV co-founder Craig Peterson.
“Some are also looking for investments that capture their imaginations, and are keen to diversify and get involved in property related deals that target a minimum 1.5 times return on capital. This is alongside making investments into early stage and later stage businesses where they are looking for three to 10 times money return. The common theme is that the investment opportunities can demonstrate the potential to deliver better risk-adjusted returns than typical mainstream investment products; investments that can be seen will have a wider social impact.”
Financial Conduct Authority (FCA) registered GCV is a heavily technology-focused financial services firm that has developed platforms to widen the pool of investors for high-growth small and medium-sized enterprises (SMEs) and property-related projects. Enabling different groups and types of investors to come together to back these businesses, the opportunity arose to form an offline exclusive group of investors who are keen to invest in to deals.
Last year GCV received more than £1m in investment from Maven Capital Partners, in order to strengthen its team, develop new technology and to make growth-focused investing more accessible and rewarding.
“We are delighted with the backing we’ve received from Maven; they are one of the UK’s leading private equity firms and alternative asset managers. There’s a strong strategic fit and we are exploring opportunities where our investors can co-invest alongside Maven and other institutional investors into high growth businesses and property related projects,” explains Peterson.
Maven’s investment has allowed the GCV team to focus on identifying and structuring investment opportunities for its growing investor base and develop the co-investor model further whilst expanding its geographical reach.
Peterson adds: “Our investor network is expanding both online and offline through the launch of G Ventures. We have introduced some interesting investment opportunities to our members over the past year. We identify opportunities that have the potential to deliver significant investment growth, precisely because they are helping to solve pressing long-term challenges. We then look to co-invest into these deals alongside institutional investors and other professional investors, including venture capital funds, private equity firms, angel networks, family offices and high net worth individuals through our G Ventures Investor Club.”
Earlier this year GCV worked with Atom Bank, one of the UK’s leading digital challenger banks, to close an investment round to support continued growth and expansion. This was the catalyst for launching G Ventures Investor Club. Peterson points to Atom’s business model as one of the reasons for the positive interest from its investor network. “Our investors are drawn to disruptive businesses; those that can really make a positive difference. Atom is a perfect example of a business using technology to create and maintain a competitive advantage, challenging and changing the way things are done in the banking sector.”
This was an investment opportunity that demonstrated there were high net worth individuals who wanted a personal relationship with GCV. It is to serve these investors that GCV has formed the G Ventures Investor Club. The G Ventures network will introduce a panel of experts – such as lawyers, accountants and tax experts – from a range of disciplines to advise and support G Ventures members.
The key to the GCV’s investment model is that all the elements – G Ventures members, GCV’s own experts, GrowthFunders and Maven – can work together, complementing each other, providing a range of funding sources. This widens the fundraising base for the businesses and projects seeking capital by giving smaller investors the comfort of knowing they are investing alongside experienced entrepreneurs, professional investors and institutions, creating that true co-investment model.
A prime example was the recent seed investment round for Intelligence Fusion (IF). An early stage technology business, IF was setup in 2014 to provide a platform to manage risk and security issues by collecting, analysing and disseminating intelligence information.
GCV has supported the company for the past 18 months, structuring and completing an initial proof of concept round, all the way through to the current EIS-eligible seed round. IF demonstrates how GCV incubates and nurtures companies with high growth potential. The seed round exceeded its initial target of £400,000, overfunded by more than £85,000. The company has already gained traction with early sales to key customers and has been well received by GCV’s co-investor network and G Ventures members.
Peterson says: “We are delighted IF overfunded. With funds from a combination of institutional, professional and online investors, the investment was anchored by members of the GCV investor network, which unlocked commitment from an institutional investor. We then partnered with one of the UK’s leading crowdfunding platforms – Crowdcube – to open this opportunity up their network.”
Michael McCabe, founder and chief executive of IF, says: “The support received from the team at GCV has been invaluable. The team have been involved across many areas, helping to prepare the investment documents and arranging introductions to their investor network. The team have coordinated the online and offline campaigns and have been instrumental in helping this investment round exceed the initial target.
“I’m delighted we have raised capital from a diverse investor base. Having a combination of institutional money and investment from professional business angels together with online investors is a very powerful solution for us. I’m looking forward to continue working with the GCV team as we enter our next phase of growth”.
Co-investment is a core part of GCV’s investment and funding strategy moving forward, and the G Ventures Investor Club will play an important part of that model.
Financial returns are a key driver for G Ventures members when looking to invest in to a business or property project investment opportunity. Many of GCV’s business investment opportunities make use of tax efficient structures, such as the enterprise investment scheme (EIS). EIS offers a number of benefits to investors, including income tax relief at 30% on the investment, no capital gains on profits and qualification for both business property relief and inheritance tax relief.
All the businesses and projects backed by GCV must have the potential for high growth. However, while growth and an appealing financial return is a priority, it is not the only consideration – GCV also looks for investments that make a positive social impact.
Peterson says: “A lot of our G Venture members are business people in their own right. They’re high net-worth individuals that would like to invest into something a little bit more interesting. They would also like to invest in something that they can touch and feel, which links to the property side, particularly when it’s in an area they can relate to. If they can invest in deals that are local then that really appeals to them; they can see the impact it is having and they can see the returns it produces.”
With all of GCV’s projects, the investments are carefully handpicked and vetted to ensure their viability and that they meet the requirements of high growth potential and positive social impact.
Peterson says: “That’s a point of differentiation for us. We don’t work with lots of businesses. We hand pick them, as it’s about quality not quantity. At one end you have a bank which has raised almost £250m in equity and on the end of the scale you have Intelligence Fusion which is at the early stage of its journey, but has huge growth potential.”
G Ventures brings together investors looking to invest their capital and ambitious businesses and property related projects that need investment for growth. At the same time it is bringing exciting investment opportunities to a wider public who can take advantage of these with greater confidence thanks to co-investment.
Jordan Dargue, head of investor relations, explains: “Our investor base is quite diverse. We have our online investor members investing between £1,000 and £10,000 into single deals, with our offline G Ventures investors investing between £10,000 and £250,000. Either way, they’re high net-worth individuals that would like to invest into something a little bit more interesting, but be offered a personalised service, tailored to suit our investors is extremely important. Whether our investors are online or offline we want to make sure our members enjoy the experience of co-investing into exciting businesses and property development projects, opportunities which are high growth, whereby tax efficient investment models can be used or projects that deliver both strong returns and societal impact.
“Like Atom Bank, we’re based in the North East of England and, at the moment, the North East doesn’t have a strong and structured group of angel networks. Our North East-based members are keen to change that, so we’ve recently launched G Ventures, the first of our regionally focused offline investor networks.
Peterson adds “We’re working with institutional investors and angel networks who already have a strong presence in the UK, but there’s more we can do. We have a growing investor network and our members like the co-investment approach. It a catalyst to increase the number of deals we do and will help to support more innovative businesses and property entrepreneurs. We are keen to build relationships with investors across the UK”.
Co-invest in deals with real purpose. To find out more about investing into high growth businesses and projects, or to find out more about raising capital visit www.growthfunders.com or call 0330 102 5525.