Investment process

 

 

 

Selection of Private Investors

Only private investors approved by the Fund can submit applications for co-investment with the Fund. Read more about the selection of private investors here.

 

Assessment of Request for Investment

Investments are initiated by private, unrelated to target company, investors. Private investors may be venture capital funds or business angel groups consisting of at least three business angels approved by the Fund.

When submitting request for investment, investors have to justify why in their opinion the investment is viable and potentially profitable. Investors must also submit the main terms of investment agreed with the company (term sheet). The Fund analyses the submitted application and, if necessary, conducts an additional due diligence.

The Fund’s Investment Committee evaluates three main aspects of the proposal:

  1. Company`s team
  2. Business idea and model
  3. Team of private investors, its independence and pro-activity

 

Negotiations and investing

After the Investment Committee of the Fund makes a decision to invest in the company, the investment conditions and contracts are started to be negotiated.

Fund provides a draft of shareholder agreement between the Fund and private investors.

Private investors, in agreement with the company and its existing shareholders, provide a draft investment agreement between the Fund, private investors, existing shareholders of the target company and the target company.

A new shares subscription agreement may also be prepared between a company and every investor.

Investment is made after agreement of the final terms of investment and signing of contracts.

 

The main investment conditions of the Fund

  • The Fund acts as a „silent investor” – the Fund transfers majority of its non-material rights to private investors who represent the interests of the fund.
  • The Fund invests in target company`s equity through new equity issue or in convertible bonds up to 70-90% of joint investment.
  • 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 within the specified deadlines.
  • The Fund expects to exit the investment after 5-7 years.
  • The Fund exits (sale or other disposal of investment) from the company not later than private investors with whom it has co-invested.
  • When the Fund exits the investment simultaneously with private investors, the terms of investment disposal must be at least as favourable as those offered to private investors.
  • In the case of disposal of investments, the Fund cannot undertake any investment impairment risks or commitments with respect to the company’s relevant operating results or return on investments towards new investors.
  • If the target company meets state aid requirements, the Fund’s annual return is limited to 4 or 6% of annually compounded interest. The remaining return from the Fund`s investment is distributed to private investors who co-invested with the Fund.

More information can be found in the investment strategy description of a particular sub-fund.

 

State aid requirements

Request for ivestment