FAQs

Venture Capital (VC) investment usually involves the investor taking some ownership (equity) in your company and having some control over its direction. Generally speaking, investors want to help a company grow as quickly as possible in order to make a profit by selling to another company or listing on a stock market. The period from investment to exit is often 5-7 years. Grants on the other hand are usually aimed at specific projects, are free (or paid back over a long period on zero or low interest) and don’t involve equity. While the grant giver may have some control over the project, they don’t usually have any control over the company.

You can apply to the East Midlands Early Growth Fund at any time by sending an executive summary. The executive summary should be no more than 2 pages, and should include what your business idea is, why there is a need for it, evidence of market size and prices that people will pay, who you are (past experience) and why you are best placed to deliver on this opportunity. Finally, don’t forget to include how much investment you are looking for, and why.

It normally takes us 1-2 weeks to get back to companies who have submitted an executive summary. If we are interested in an idea, an investment executive will carry out a telephone review. If this goes well, we may invite the company to attend a FIS (Fund Introductory Seminar) to learn more about the Fund, E-Synergy and spend time one-one-one with an investment executive. After this, we issue an Offer Letter outlining in brief how much we are prepared to invest, the valuation we are giving the company and other terms and conditions. This Offer Letter must be signed and retuned before we will proceed.

No two businesses are the same - even if they are doing the same thing, they are run by different people. Generally speaking however, we tend to value companies at between £200,000 (good patents but no sales) and £1m (significant growth) at the time that we invest (post-money).

The East Midlands Early Growth Fund is happy to invest alongside qualified business angels, other venture capital firms and corporate investors. In particular, we regularly invest alongside Catapult Venture Managers and East Midlands Business Angels.

If East Midlands Early Growth Fund is leading the investment, we often do straight-forward ‘cash-for-equity’ deals, rather than convertible loans or geared debt. We prefer to do this because it keeps the deals simple and it’s often easier to raise follow-on funding. However, if we are investing in a deal lead by another venture capital firm, we sign-up to their terms, which may include loans.

If you are interested in investing alongside the Fund please contact ANGELNET or GINEM