EIS guide

67 66 PROVIDERS IN FOCUS PROVIDERS IN FOCUS About the provider Seneca Partners is a specialist investment and corporate advisory business based in the North of the UK. Seneca provides equity and debt funding to UK SMEs, helping business owners to both finance their growth and realise value on exit either via trade sale, flotation or restructuring. With over £750 million of AUM across the various Seneca businesses, Seneca is a long-standing EIS and private equity investor with a strong track record of value realisation for investors. Seneca’s strong regional presence provides access to high quality and unique investment opportunities. Our EIS offer Seneca’s EIS Portfolio Service invests growth capital in established businesses. To date, c. £60 million has been deployed in over 80 investments. The service targets a return of £1.60 to £1.80p per £1 invested excluding any tax reliefs over a five-year period. Each subscription will be invested in four to six companies and ordinarily will have a mix of unquoted and AIM- quoted holdings, building a diverse portfolio across a number of sectors. The service has so far exited nine investments with an average return of 2.5x (before fees). Case Study Seneca invested £1m of EIS growth capital into Rockar in August 2014, to facilitate a retail rollout and further development and enhancement of its market leading ecommerce software platform. The business, the first of its kind in the auto industry, allows customers to research, test-drive, purchase and service a new car without sales team involvement. The expansion plans have subsequently been supported through a £5 million funding round in July 2016, at significantly enhanced valuation to Seneca’s entry point, with two established VCT managers investing via a process led by the Seneca Corporate Finance team. This has enabled the business to partner with additional car manufacturers who are now using Rockar’s market leading software solution to launch their own online car retail solution and the management team remain very optimistic about Rockar’s future prospects. Seneca has played an active advisory role since initial investment, supporting management with key strategic and commercial decisions. www.senecapartners.co.uk GROWTH CAPITAL FUNDS RAISED AND DEPLOYED Raised (Gross) Deployed (Net) £10m £0m £20m £30m £40m £50m £60m APR-13 APR-14 APR-15 APR-16 APR-17 APR-18 APR-19 About the provider Vala Capital was founded on the principle that experienced and successful entrepreneurs are ideally placed to find, invest in, and mentor fast- growing companies. Founder Jasper Smith and other members of Vala’s Investment Committee have a long track record of starting, incubating, growing and selling businesses. They have collectively invested around £23 million of their personal capital into EIS-type companies, generating 3x returns to date. Vala believes in nurturing investments, building close relationships with inspiring entrepreneurs and committing wholeheartedly to helping them achieve their goals and profitable returns for investors. Our EIS offer Vala EIS sees investors allocated shares in a diverse portfolio of 6-10 companies which are typically pre-revenue and revenue-generating, and a blend of new investments alongside follow-on rounds. Vala co-invests and hand- picks investments where its expertise is deepest, in sectors including technology, media, engineering and food & beverage. Companies are usually already trading, and investments take place in tranches, so subscriptions are deployed quickly and EIS3s returned rapidly. Fees are simple and fair; no initial or annual fees are charged to investors. A 20% performance fee applies to profitable exits. Case Study Great British Biscotti Co. is a bakery business, making biscotti biscuits in flavours ranging from traditional Almond, to Coffee & Walnut and Chorizo & Parmesan. The company started out selling its biscuits at farmers’ markets and artisan food stores in the New Forest area. CEO Paul Rostand saw the potential to build a much bigger brand; he joined the business in 2015 and quickly increased sales to the food service sector, and the company has twice had to move to larger premises to keep pace with demand. With the support of Vala’s Investment Committee member Paddy Willis (co-founder of Plum Baby and the Grocery Accelerator) Vala invested in 2018 and again in April 2019. Growth has been strong, and the company recently secured its first contract with a major supermarket chain. Vala EIS funding has upgraded equipment, increased manufacturing capacity, and helped develop a sub-brand for the retail sector. The biscuit industry is worth £2.5 billion in the UK alone, and Vala believes a trade sale to a major manufacturer is a likely exit route for the business. www.valacap.com