Investment Approach
Kapital Venture Equity LLP has a down to earth approach. After receiving your business plan we review the fundamentals. If there are aspects which we feel have not been properly examined we can assist in ensuring that the business becomes "investor ready". We can offer support at this crucial stage by assisting in securing grant funding for the costs of developing the business to a satisfactory stage in preparation for due diligence.
Once the fundamentals are in place, decisions on investing are taken on a frequent basis and in principle can often be reached within seven days. Thereafter there are a number of processes to go through. We will issue our Standard Terms sheet (copy available on request) early in this process to ensure that all key matters are considered early on. These terms include the allocation of deal costs (to cover the due diligence expenses etc) to the investee companies as part of the funding package.
Investment Strategy
We like to have a portfolio of investments at any one time covering a number of sectors. For us to consider investing the company must be able to demonstrate that it can make us compounded rates of return that are commensurate with the risk. It is unlikely that we will consider a company that cannot achieve a 40% rate of return per annum.
After Completion of the Deal
We work proactively with our investee companies providing continuing advice on corporate finance, marketing, branding, reporting procedures, etc allowing the company to grow and prosper.
It is very much a partnership approach to ensure that both parties benefit to the maximum extent from the relationship. A representative of Kapital Ventures may be appointed to the investee company’s Board.
Achieving the Exit
We are flexible with regard to the timing for exits and are happy to consider long term investments where there is a sustainable business model. More generally however exits will expect to be achieved in a 3-5 year timetable.
We look for a number of ways to deliver this:
- Achieve a stock market listing (IPO)
- Trade sale of the business
- Selling our stake in the business to another (typically larger) investor
- Selling our stake to the existing management (management buy out) or new management (management buy in)
- Purchase by the company of its own shares