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- £20,000Min. Investment
- EvergreenClosing Date
- 31st March 2022Next Tranche Close
The individuals that make up the Investment Committee of the Vala EIS Portfolio have worked together for over 20 years, and have returned £171m to investors from £55m invested across 40 separate exits. This does not include any tax relief, and is the total aggregate performance including any failures.
Vala charges no initial or annual fees to investors, and only takes a performance fee upon delivering a return to the EIS shareholders.
Vala Capital was established in 2018 and so there is little track record of Vala EIS to consider, though across all investments made the value is up 30%, with earlier funds up as much as 60%. There is also an established and proven track record that sits behind each of Vala's Investment Committee members.
Jasper Smith, Arthur Hughes, Paddy Willis and John Swingewood have founded, developed and sold companies for high exit multiples. As is the case for entrepreneurs, these individuals have experienced failures as well as the successes - this allows for an invaluable mentoring role which they provide to the EIS investee companies, often taking a Board seat. Collectively the team has invested in 77 companies that would meet the 'Risk to Capital' rules, exiting from 40 of those to date. This has delivered a total return of £171m from £55m invested (3.1x) inclusive of failures.
The wider track record of the investment committee members includes the following:
- Jasper Smith: has founded multiple companies, particularly within the media & entertainment space; eg, PlayJam Ltd (sold for >£45 million) and the Optimistic Network, which was listed on AIM with an IPO of £35 million.
- Arthur Hughes: was part of the management buy-out of Babcock Fulton Prebon (the brokerage subsidiary of Babcock Prebon plc), which was later sold in a deal worth £125 million when it was acquired by Collins Stewart Tullett.
- John Swingewood: held senior roles at BT and BSkyB, where he developed their internet strategies through organic development and joint ventures. John was Chairman of CENTRALNIC which successfully floated on AIM, and Chairman at DITG and Executive Chairman of Emizon, both of which were sold through significant trade sales.
- Paddy Willis: co-founded Plum Baby in 2004 which went on to be sold to Darwin PE in a deal worth £10 million.
- All capital deployed by Vala is contingent on the commitment of the investee companies to becoming more sustainable.
- Cost effective - lower than industry average (according to MICAP)
- Transparency - Diversified portfolio with visibility over your likely portfolio at time of commitment
- Quick deployment - This is an evergreen fund with regular tranche closes. The next close is Dec 2020, followed 31st March 2021. Both will allow full investment in the current tax year.
- Management Team - Entrepreneur-led, experienced Investment Committee with independent members
- Speed of certificates - Rapid EIS3 certificate turnaround
- Reviews available- Hardman & MICAP Independent Reviews
- Growth - Target return of 2.5x
Each of the Investment Committee members has their own extensive networks which enable them to bring proprietary deal flow to the fund. Altogether this translates roughly to somewhere in the region of 200 business plans that are looked at each year at a superficial level. This falls to 20-30 new companies that we undertake enhanced due diligence on. We aim to invest in 6 – 10 companies per allotment, but please note that the majority of these will be follow on investments. As a rough guide we would expect there to be up to 3 new companies included in each allotment but that is by no means a guarantee.
The Investment Team uses a staged approach to deal processing, which incorporates a combination of binary screening filters, relative ranking across various metrics, and deep dive due diligence with the goal of arriving to a 'No' as quickly as possible to focus resources on high potential opportunities.
• Stage 1 (>200 opportunities) - Screening via binary filters and quick scan of pitch materials
• Stage 2 - (c.100) Initial call w/ team and score card / ranking
• Stage 3 - (c. 25) Further information / diligence (i.e. review of financials, onsite visit, team interviews, customer reference calls)
• Stage 4 - (c. 15) Taken to IC
• Stage 5 - (c. 12) Issued term sheets Stage 6 - (6 - 10) Formal DD, Transaction
The Vala EIS Portfolio will build a portfolio of shares in small companies with big plans for growth, chosen by an experienced group of entrepreneurial investors. The Better Ventures EIS is a generalist fund, however there is a tendency to focus on investment into areas that the Investment Committee truly understand in order to lend their expertise or leverage their networks to give a greater chance of success and to which the UK has a traditional advantage. These include technology; engineering; fintech; media & entertainment; lifestyle brands; and food & beverage.
In addition Vala requires all prospective investee companies to undertake an analysis of its current level of sustainability and will measure and report to investors its progress towards ESG metrics.
A typical portfolio will be between 8-12 companies, which will be a blend of pre-revenue and post-revenue, and investors will typically get allocated into a mixture of new companies and follow-on investments. Every business (new or follow-on) will still have to go through a full due diligence process prior to any allocation being given.
Paddy was co-founder of Plum Baby, a range of premium organic baby foods. Plum Baby became one of the UK’s fastest-growing food start-ups and in 2010 the company was sold to Darwin Private Equity in a deal which valued the company at £10m. Paddy went on to co-found Grocery Accelerator, now rebranded as 'Mission Ventrues', which offers support and investment for ambitious food and beverage startups. To date, Mission Ventures has helped 19 companies raise more than £3m.
Arthur Hughes is a successful European financier with a career spanning 35 years. He spent ten years with the UK division of investment and advisory firm Babcock & Brown, overseeing numerous debt and equity transactions. In 1991, he took over Prebon Yamane, a broking business, which was sold to Collins Stewart Tullett for £125m in 2004. Arthur has extensive experience starting & developing complex businesses, generating significant shareholder returns.
John is a member of Vala Capital's investment committee, and brings valuable experience of starting, growing and exiting companies in the technology and media sectors. He was previously Chairman of CentralNic, a domain name registry service that floated on the Alternative Investment Market. He was also founder of DITG and chief executive of Emizon, both of which achieved exits through successful trade sales. Earlier in his career, John held senior roles at BT and BSkyB, where he helped to develop the companies' early internet business strategies.
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The content above has been provided by Vala Capital Limited, an Appointed Representative of Sapphire Capital Partners LLP who are authorised and regulated by the Financial Conduct Authority under firm registration number 565716.