- Private investors submit the application to be included in the list of private investors.
- Investment Committee approves private investors.
- Private investors submit a request for investment.
- Koinvesticinis fondas analyses the application and, if necessary, performs due diligence.
- The Investment Committee makes a decision to invest or reject an investment request.
- Contract negotiations – Koinvesticinis fondas provides a shareholder agreement between Koinvesticinis fondas and private investors. Private investors prepare an investment agreement between Koinvesticinis fondas, private investors, existing shareholders of the target company and the target company.
- Agreements are signed and investment is made.
- – Koinvesticinis fondas co-invests together with private investors.
- – Koinvesticinis fondas acts as a „silent investor” – the Fund transfers its non-material rights to private investors who represent the interests of the fund.
- – The Fund has the right to receive all information about the company free of charge. The company commits to provide quarterly and audited annual financial statements.
- – The Fund exits (sale or other disposal of investment) from the company not later than private investors with whom it has invested.
- – The Fund invests in target company`s equity through new equity issue or in convertible bonds.
- – The Fund expects to exit the investment after 5-7 years.
- – If the target company meets state aid requiraments, the Fund’s annual return is limited to 4% or 6% of annually compounded interest. The remaining unallocated income goes to private investors.
- – More information can be found in the investment strategy description of a particular sub-fund.
The Fund’s return on investment is limited to 4% or 6% of annual compound interest if the target company meets the following criteria:
- The company is a micro or small enterprise as defined by the SME Law;
- The company is not listed on a stock exchange;
- The company is younger than 5 years old (the company has been incorporated and registered with the relevant registers less than 5 years ago);
- The company has never allocated its profits to its shareholders or members;
- The company was not established as a result of a merger;
- The company has not taken over the activities of another company.
4. Can a private investor, who is not included in the list of private investors, submit an investment request?
The Fund is only considering requests for investment from private investors, who are approved by the Fund, so if you plan to submit an investment application in the future, it is recommended that you apply for the inclusion in the list of private investors promptly. A private investor who is not yet approved by the Fund can make a request for an investment, but at the same time he must submit an application for the inclusion in the list of private investors. Investment request will only be considered when a private investor is included in the list of private investors.
The Fund only considers requests for investment submitted by private investors who are included in the list of private investors. The Fund can only assist company seeking investors by forwarding its request to private investors included in the list of private investors. If any of them become interested in the company’s offer, they will contact the company directly.
The maximum Fund‘s share in the investment round may be up to 70 – 90 %. The Fund‘s share in the investment round is decided on a case-by-case basis and may be less than the maximum amount. Important factors considered by the Fund in deciding on the share of an investment are the experience of a private investor, private investor`s analysis and justification of an investment, a business plan, company management, and others.
In case Koinvest II Sub-Fund invests in the target company operating in the field of smart specialization, the Fund`s share in the investment round can be increased by 10%. Government of the Republic of Lithuania in 2014 April 30 (Resolution No. 411) approved the Program of the Priority Research and Experimental (Social, Cultural) Development and Innovation Development (Smart Specialization) directions and their priorities, which approved the following six priority research and experimental development (MTEP) directions:
- – energy and sustainable environment;
- – health technologies and biotechnology;
- – agro-innovation and food technologies;
- – new production processes, materials and technologies;
- – transport, logistics, information and communication technologies;
- – inclusive and creative society,
More information about program and its priorities can be found at sumani2020.lt.
The number of individual investor`s requests for an investment is not limited and does not affect the decisions of the Fund.
1. Who can be a private investor with whom Koinvesticinis fondas would co-invest in the target companies
Private investors may be venture capital funds, their management companies and business angel groups (at least 2 or 3 business angels depending on the sub-fund).
Private investors must be independent from the target company:
- – Private investors must not be the current shareholders of the target company.
- – Private investors, through related legal or natural persons, must not own 5% or more of the votes or shares of the target company.
- – In case Koinvesticinis fondas and private investors are co-founders of a new company, all private investors are considered independent.
2. What are the criteria business angels have to meet in order to be included in the list of private investors?
A business angel must be financially stable person, must have business and investment experience and intend to participate in the management of the target company and be able to provide it added value (specific experience, business contacts, etc.). Business angels must be of impeccable repute, have no criminal record, and meet other eligibility requirements https://www.koinvest.lt/en/investuotojai/tinkamumo-reikalavimai/. A business angel may be both legal and natural persons.
3. What information should a venture capital fund or business angel include in the application for inclusion in the list of private investors?
Venture Capital Fund (or its management company) or business angel should submit to Kofinansavimas UAB, which is the general partner of Koinvesticinis fondas, an application form (including appendices), which is published on the Fund’s website at https://www.koinvest.lt/en/investuotojai/paraiskos-pateikimas/itraukti-i-privaciu-investuotoju-sarasa/. The application form also specifies the additional information and documents to be submitted with the application.
Applications can be sent by e-mail email@example.com, sent by letter or delivered personally to the following address: Konstitucijos pr. 7, Vilnius LT-09308 (16th floor).
4. Until when can private investors submit applications to be included in the Fund’s list of private investors?
Applications to be included in the Fund’s list of private investors are accepted and considered by the Investment Committee until the end of the Fund’s investment period, which is currently scheduled for December 31 of 2020. The list of private investors may include an unlimited number of private investors and is continuously supplemented. The list is constantly reviewed upon receipt of new information on already approved private investors. By decision of the Investment Committee, private investors may be excluded from this list if, according to new information, these investors no longer meet the requirements for private investors.
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