Station12 Sports, Entertainment and Knowledge Service

Station12 Sports, Entertainment and Knowledge Service

PROVIDED BY
STRUCTUREFund
MIN. INVESTMENT£10,000
SECTORSports, Entertainment & Education
TRANCHE CLOSE30 November 2020
CLOSING DATEEvergreen
Risk score
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Synthetic Risk and Reward Indicator (SRRI) is calculated by the fund manager following guidelines set out by the European Securities and Markets Authority (ESMA)

The content below has been provided by Station12 who are authorised and regulated by the Financial Conduct Authority under firm registration number 779914.
Station12

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Summary

Station12, founded in 2014 by Patrick Bradley, is a specialist private equity and venture capital investor. The Sports, Entertainment and Knowledge SEIS/EIS Service was launched in 2019 and is seeking to make qualifying investments into early and growth stage companies within these three key sectors. The UK is a proven market leader in these sectors but there is still plenty of scope to capture underinvested opportunities. Station12 firmly believe that Sports, Entertainment and Knowledge impact individuals’ day-to-day lives and the changing market dynamics offer significant opportunities for businesses to grow. 

The Service offers individuals who pay tax in the UK the opportunity to invest in SEIS and EIS qualifying companies. Station12, the Manager, believes the Service’s investment strategy should provide an attractive risk/return profile by blending SEIS and EIS tax reliefs with equity returns from high growth companies that have strong management and an investable business model. The Sports, Entertainment and Knowledge Service will invest in venture capital and qualified venture building opportunities, targeting returns of £2.50 (before Performance Fees) for every £1 invested gross of tax reliefs within 4-6 years.


Application Process Update

In light of events happening around the world, managers have been revising their application acceptance procedures in close co-ordination with Custodians to ensure applications and funds are processed efficiently. Once you have submitted your application to CoInvestor a member of staff will contact you directly with further instructions for the relevant fund manager.

Highlights

  • Sports, Entertainment, Education and Immersive Technology sectors
  • Ability to do single company investment or diversification across 4-6 Investee Companies, all with Advance Assurance
  • Target return of 2.5x per £1 invested
  • 4-6 year investment horizon
  • Third party reviews available

Investment strategy

The objective of the Service is to maximise returns for investors by investing in a diverse portfolio of Investee Companies within the Sports, Entertainment and Knowledge sectors; sectors where the Manager has significant operating and investing experience. The Service will seek Investee Companies with clear strategies, significant potential to grow and deliver capital returns through selling its products or services.

Investors may elect to invest in one or more Investee Companies.

The focus will be on businesses that have a demonstrated proof of concept and are already generating revenues, or there is a clear pathway to revenues, breakeven and long- term profitability and capable of significant scale when supported by investment. Investments are likely to be predominantly, but not exclusively, in the UK. 

The Service will make investments into a combination of SEIS/EIS qualifying companies. Where investments are made into SEIS qualifying opportunities, it would be the Manager’s intention to ensure they are suitable for EIS follow on from the Service (subject to approval by HMRC). The Service also expects to be able to make EIS investments independently, without having previously provided SEIS investment. Investors are given the choice to allocate into SEIS, EIS or a combination of both. It is important to note that the Service will only make investments into companies that have received SEIS/EIS advance assurance from HMRC. The target portfolio size is a minimum of 4-6 companies. The Manager intends to source deal flow from a number of different channels, however, it will mainly rely on its network and opportunities created internally through its venture building activities. The Service will invest through two core methods; Venture Capital and Venture Building. 

Venture Capital

These are companies within the Service which were not founded by Station12. In these cases, the founders will have developed their businesses to a certain stage and then require external capital to further develop the business. These opportunities may range from concept/pre-seed stage and so requiring SEIS funding to growth stage so requiring EIS funding. Typically, the Service will look to ensure it can secure a board seat and the ability to influence decision making for these investments. 

Venture Building

In these instances, the company will have been founded by Station12 to capitalise on an identified opportunity within the market. Station12 will build out the business plan, establish the company and source the management team. Station12 will actively develop the company until the point where its management team can take the company to its next stage of development. The Service will make investments into these off-market/proprietary opportunities, initially at SEIS level. 

Exit strategy

Station12 will seek to exit through a trade sale, buy-out or secondary Private Equity funding when Investee Companies are strong enough to do so. Exits will not be made to accommodate an artifical exit timetable.

Risks

Prior to making a decision to invest, individuals should consider the information set out in ‘Part 6: Risk Factors’ on page 20 of the Service’s Information Memorandum.

The value of an investment may go down as well as up and an investor may not get back the full amount invested. SEIS and EIS investment are high risk, medium to long term investments. It may be difficult to realise shares or obtain reliable information as to their value as there may not be a ready market for them. As such, there may be little or no liquidity. An investment should only be made using funds that are not going to be needed for another purpose in the foreseeable future. 

Returns will be dependent on each investor’s preferred split between SEIS an EIS qualifying companies as indicated at the time of application.

Tax reliefs are dependent on personal circumstance. 

Market approach

As mentioned, the Service will look to invest in companies within the sports, entertainment and knowledge sectors. Examples of the types of companies that have received investment from the Service so far are as below. 


Parade Media – Content Production and Distribution (www.insport.education)

Parade Media is a producer and distributor of premium lifestyle and factual entertainment to a global audience. 


Founded by Matt Ashcroft, formerly of Shine, Parade works with leading producers and broadcasters around the world, leveraging off the continual demand for new content. 

The company represents over 35 production companies with approximately 1,700 hours of real-life entertainment content and continues to invest for growth.  It is currently expanding its operations into production of content, thereby, allowing it to capture a larger part of the value creation.  

COVID-19 has been extremely disruptive to programme production; however, Parade’s customers – the broadcasters and streamers – are still hungry for content and they now have an urgent need for acquired content to replace planned commissioned programming.  This provides Parade with a wider market for its newest shows and a great opportunity to re-license some older shows in the catalogue.  Parade is profit generating. 


InSport – Sports & Education (www.insport.education)

InSport Education is an international sports business school. 


InSport Education delivers practitioner-lead, immersive, short-form learning experiences targeted at ambitious students and executives in sport and business.  Programmes are designed to complement the existing plethora of long-form Masters, post-grad and under-grad courses in sport and business.  There is a gap, and appetite, for short, sharp executive education that provides practical, real-world, contextual learning and a growing need for ‘employability’ in education, i.e. a direct correlation between learning practical skills and resultant enhancement of career opportunity and progression.

Although current market conditions are challenging, the company has evolved quickly with a pivot to on-line delivery.  The growth of on-line education during the pandemic has been significant and the company anticipates that the sector will continue to grow as on-line learning becomes the ‘norm’, underpinned by an increased demand for professional learning.  Furthermore, universities and HEIs are facing huge challenges in the delivery of student education over the next 6-12 months and will be forced to outsource a considerable volume of specialist content to third parties.  

InSport Education has recently appointed Lord Moynihan to the board and is building a strong position to take advantage of this sector growth.


The company is revenue generating. 


WhyBuy (Download the app at https://applk.io/whybuy)

WhyBuy is an app that allows people to access and rent items on demand for the lengths of time they want, without any of the complications of long term contracts or hassle surrounding deliveries.

You can rent from 100’s of items for short periods and they will deliver and collect in specified time slots.  


Categories include: Baby, Car, Cleaning, Games, Garden, Home, Kids, Kitchen, Moving, Office, Outdoors, Party, Sports, Tech and Tools


Why buy when you can rent BETTER for LESS?

• WhyBuy will allow consumers to have items delivered for short periods at a time of their choosing

• Why buy a high quality drill for £150 that will sit in a cupboard for 364 days a year when you can access one for £25 for 48 hours?

• Rent a tent from £8, a fondue set from £18

• Buying the cheap alternative results in devices being thrown out after limited use

• Consumers want to be able to access items for brief periods

• High quality, top-of-the-range brands can be provided at a fraction of ownership cost


Eliminates issues with owning items:

• Storage and clutter

• Maintenance

• Cost

• Quality


The company launched in June serving the area within the M25 and is now looking for further seed funding to scale up before Series A later this year.

Key team

Patrick Bradley - Managing Director

Patrick has over 30 years of Media and Entertainment experience in music, film, TV and investment. He is a lawyer by background and has spent the majority of his career working operationally in the sector, then subsequently as an advisor and investor. He has managed investments across the sector, including in music publishing, TV production and distribution, live events, computer games and marketing services.

Debbie Manners - Investment Director

Debbie has over 25 years of experience at a senior level in both large broadcasting organisations as well as smaller companies in the independent sector.

Debbie’s previous roles include Director of Rights and Business Affairs at the BBC, Director of Rights for Flextech TV, Chair of PACT, Commercial Director at RDF, COO of Hattrick, CEO of Keo Films and Senior Investment Director at an EIS provider charged with developing a new venture fund.


Debbie also has experience of setting up and running two restaurants.


Fabio La Franca - Investment Director

Fabio La Franca has 14 years’ experience in corporate finance and investment management. He is also an Expert and Rapporteur at the European Commission for the Horizon2020 £80 billion programme and a member of the European Innovation Council. He was the Investment Manager at Creative England before joining Station 12. Fabio was previously the CFO in Residence at Telefonica’s accelerator, Wayra, is a mentor at various tech accelerators in London, an accredited Growth Coach and a Tech London Advocate. Fabio previously worked in corporate development at Viacom, EMI Music Publishing and Channel 4. Fabio is an FCA at the ICAEW having qualified with PWC and holds an MBA from the University of Exeter.

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