Investment Strategy

“KOINVEST I”

(hereinafter referred to as the Fund)

Request for investment

Investment geography

Investments are made in companies registered in the Republic of Lithuania at the time of disbursement of the initial investment and subsequently in any country of the European Economic Area or the Confederation of Switzerland which will generate benefits for the Republic of Lithuania for one year after the transfer of the first tranche of the initial investment.

Benefits for the Republic of Lithuania are generated when more than 50% of jobs are created (retained) or more than 50% of annual income is generated or more than 50% of taxes are paid in the Republic of Lithuania.

 

Criteria for the companies targeted for investment

The Fund can invest in micro/small enterprises, which meet all of the state aid requirements at the time of investment.

State aid requirements can be found here. The status of the company is determined according to the small and medium-sized enterprise (SME) status declaration.

Follow-on investments can be made not sooner than one year after the transfer of the first tranche of the initial investment of venture capital.

 

Maximum Fund’s contribution to investment per company

  • If an investment is made in a company registered in Vilnius, Kaunas or Klaipėda, the Fund’s contribution in the investment cannot exceed 70%.
  • If a company is registered in a town other than Vilnius, Kaunas or Klaipėda, the contribution can be increased by a further 10% (i.e. to 80%).

 

Fund’s investment per company

The Fund’s investments per company may not exceed

  • EUR 0.8 million,
  • and investments in innovative enterprises within the meaning of Article 2(80) of the Commission Regulation (EU) No 651/2014 – EUR 1.1 million,

 

Ineligible investments

  1. Cases specified in Article 1(2-5) of the Commission Regulation (EU) No 651/2014;
  2. Investments in companies engaged in the manufacture of and trade in tobacco, distilled spirits and related products;
  3. Investments in companies engaged in the manufacture of and trade in any type of weapons and ammunition;
  4. Investments in companies engaged in the organisation of gambling;
  5. Investments in companies operating in the IT sector and engaged in the research, development or technical adaptation of electronic data programmes or solutions which are specifically intended to support any activity related to manufacture of and trade in tobacco, distilled spirits and related products; manufacture of and trade in any type of weapons and ammunition, online gambling and online casinos; pornography; and to facilitate the illegal use of electronic data transmission systems and downloading of electronic data.
  6. Investments in companies operating in the natural sciences sector, whose activities are related to human cloning.

 

Investment income sharing

Income from the company is allocated between the Fund and the private investor as follows:

  1. Firstly, all the amounts invested in the company are refunded to the Fund and the private investor;
  2. Secondly, income from the investment in the company is allocated to the Fund and the private investor in the following way:

Scenario one of the first case: If the company is not a participant in the alternative First North market

  • If, prior to the investment by the Fund, the company has not raised additional funds through the alternative First North market (through distribution of shares to investors), the income is allocated between the Fund and the private investor until both of them receive 6% of annual compound interest pro rata to their investments in the company;
  • The amount of income allocated to the Fund up to 6% of annual compound interest is the cap on the Fund’s return  (the “cap on return excluding funding from First North”);

Scenario two of the first case: If the company is a participant in the alternative First North market

  • If, prior to the investment by the Fund, the company has raised additional funds on the alternative First North market (through distribution of shares to investors), the income is allocated between the Fund and the private investor until both of them receive 4% of annual compound interest pro rata to their investments in the company;
  • The amount of income allocated to the Fund up to 4% of annual compound interest is the cap on the Fund’s return (the “cap on return including funding from First North”).
  1. Thirdly, all the remaining unallocated income is attributed to the private investor only.
    Request for investment