What information should I first send to a "matched" investor?
We advocate that an initial approach to a 'matched' investor should be limited to the "highlights" about your company. We can supply a template of which "highlights" to include by emailing us at email@example.com.
How long does it take to secure investment?
The quality and appetite for your proposition is going to determine whether or not you are able to secure funding. Whilst some companies will proceed from original enquiry to receipt of funds in less than 6 weeks, for others the process may take up to a year! Hence it’s good to start to get on the radar of investors early!
What sort of information do I have to provide when I go looking for investors – How do I become "investor ready"?
Following on from the initial contact, and once you formally commence a dialogue with an interested party, you should have ready a full documented business plan, but additional documentation as part of the plan or as appendices will be useful as well, including:
- an explanation of who you are (including your age, qualifications, background, etc)
- an explanation of what your business does and where you plan to take it
- sales and profits figures as far back as you can go (suggest a minimum of 2 years but not more than 5)
- a balance sheet showing assets and liabilities
- a detailed 3 year sales and profits projection incorporating detailed cash flow projection over the same 3 year period.
- an idea of what you expect to do in the following 2 years
- full use of proceeds explanation
Business plans, particularly those designed for VCs, are becoming increasingly sophisticated documents. Be prepared to spend time and trouble on yours. This is your selling document, and you will only get one chance at presenting it. Venture capitalists are swamped with applications for money, most of them pretty spurious, and it is very unlikely that they will be willing to look at yours a second time.
Who is behind Match Capital?
The team who built Match Capital are a seasoned mixture of City veterans and West End marketing gurus intent on improving visibility, distribution and liquidity for capital raising small UK companies.
How does this platform/matching engine work?
We have designed algorithms which ingest all of your profile information, and deliver back to you all of the investors on our database, scored in terms of their relevance to your investment opportunity.
What is new and different about Match Capital?
Most of the existing platforms for connecting entrepreneurs and investors are missing one key ingredient. How does an entrepreneur or business owner discern what is the maximum investor audience for his opportunity, and having done so, sort the results in order of relevance, and then get themselves in front of these relevant investors with the absolute minimum of 'interference'. These two factors are what Match Capital has fundamentally addressed more than any other platform.
How do I register/set up an account?
Clicking 'find your matches' or 'profile yourself' or 'sign-up' on our homepage takes you to the sign-up form, where you can start the process of registering.
Can I change my profile once I register on the platform?
Yes you can. Once you signed up for the service, and profiled yourself, there is a section called My Account, where you will be able to edit and amend some, if not all, of the information you have provided.
How much does it cost?
The basic cost of a subscription is £29.99 per month (excl. VAT). There is no minimum monthly contract and subscribers may cancel their account at any time.
What do I get for my subscription?
Access to all of the investor data Match Capital has built, over two years of research and development, about the professional investment community, with a unique relevancy score for each investment group against your company profile.
As social media advocates, additionally we follow you on Twitter, LinkedIn, Facebook and other social networks. This affords you visibility to our followers, (including investors) whom you may ultimately meet.
Are there any success fees as well as subscription fees?
You only pay a success fee if you have formally engaged Match Capital 'offline' to contact investors on your behalf.
Who are the investors?
The investors profiled to date include crowd funding platforms, angel networks, private equity firms, traditional VCs, corporate investors and family offices.
How many investors are profiled in the system?
To date, we have profiled over 900 investor groups, networks and platforms.
How many companies have found their investors by using your platform?
Match Capital has been successful matching companies with investors from very shortly after platform inception. As the service is rolled out commercially these pleasing outcomes continue. Look out for news of some of these success stories in the Match Capital Blog.
Is your payment gateway secure?
Our merchant services are transacted via Stripe. See Stripe’s advice on security here.
Does this platform only work for UK companies?
Our core focus is the UK, but we have many subscribers from other parts of Europe, including Ireland, Finland, Portugal and Germany.
How can I contact you?
You can email us at firstname.lastname@example.org or alternatively, phone us on +44(0)20 3475 4292.
What happens if my credit card is declined?
We're sorry about that, but currently, paying your subscription by credit or debit card is the only way one can pay, and get access to the data.
Can I pay by cheque or cash?
Sorry, it is only possible currently to pay by debit or credit card.
Do you store my credit card or share my credit card information?
Match Capital do not store any of your payment details, these are securely held via a third party, Stripe. Stripe adheres to the most stringent security guidelines in the industry. You can find further information here.
How long will it take to become active?
You will see detailed match results immediately after your credit card is processed.
What if I want to cancel my subscription?
Subscription is on a 1 month rolling contract. If you wish to cancel your subscription before the end of any month, simply email email@example.com at any time and we will unsubscribe you right away. If you have any thoughts about how we might improve our service, we are always grateful for helpful suggestions.
Do you have any tips on producing a pitch video?
We are not video producers, but we have lots of contacts to whom we can introduce you to help you build your own video content. Please email us at firstname.lastname@example.org.
Is Match Capital on Twitter, Facebook and LinkedIn?
Yes, we are on Twitter, our handle is @MatchCapital, and we are also on Facebook and LinkedIn.
Do you have a Match Capital blog?
You will see links to the Match Capital blog on the website.
Can I get any discounts?
Periodically, we will be running various promotional campaigns, so watch out for these on our social media feeds.
Is Match Capital for entrepreneurs or investors?
At the moment the site is set up for companies looking to raise capital, helping them to identify the maximum investor audience for their investment opportunity. Later iterations will allow investors to search the system, for the best matched investment opportunities.
Will my information be sold? Will you spam me?
Match Capital does NOT sell or rent any data from within our system, nor do we send out any unsolicited third-party emails. We also promise not to spam you. However, we may send an occasional e-mail about your account or our services. All subscribers are required to double opt-in to use our service and verify that their e-mail address is accurate.
Does Match Capital receive stock in my company?
No. We only receive fees from paid subscriptions and our related product and service offerings.
Are you a broker/dealer?
No. Match Capital is not a broker/dealer and does not act in any capacity as one.
How do I find potential investors for my business?
You could spend a very long time going nowhere if you try to tackle this one on your own. One option is to tap into an existing network of venture capital providers, by way of a lawyer or accountant who specialises in providing services to SMEs (small to medium-sized enterprises). There are also brokers who claim to offer introductions to venture capital sources. Their services are variable in quality and can prove expensive.
Alternatively Match Capital provides a comprehensive data base allowing you to accurately match and relevance score each investor against your opportunity.
How much does it normally cost to raise capital?
Of course, any intermediaries do not come cheap, (some charge as much as 7.5% with an additional equity carry in some cases) so if you choose this route you need to set a budget for the costs of raising capital.
- Lawyers and accountants will normally work on a fee per hour worked.
- Brokers will normally look to receive a percentage of the sum raised. Some may also expect a bonus payment for success in raising capital for you. Bear in mind that payment may be due whether or not you actually succeed in raising money. At a very rough estimate, a good rule of thumb is for every £250,000 required plan for between £10,000 and £25,000 in fees.
What is the minimum VC, Family offices or High Net Worths will invest?
It can take almost as much time and effort to size up a business looking for £50,000 as it does to size up one looking for £10 million. Most venture capitalists are unwilling even to look at any business wanting less than £500,000. However Family Offices, multi family offices and High Net Worths with a professional investment company will invest from £100,000.
At Match Capital we typically help companies raise between £250,000 and £2.5 million.
What is the maximum they are likely to invest?
In practice, assume a maximum of £50 million, unless the circumstances are really exceptional - for example, where part of a large, established business is being sold off to its management, but this is stepping more into the world of private equity!
What is the difference between a venture capitalist, a family office and a High Net Worth?
All of the above provide equity capital for investment in new (Start Up) or expanding (Growth Capital) companies. But generally speaking, a venture capitalist is an investing institution - for example, an insurance company, a pension fund or another fund management organization has placed money with them specifically for investing in this sector of the market. Because they are investing money on behalf of other people, they are likely to have strict criteria or 'Mandates' - for example, on the type of business in which they are prepared to invest, (Sector or super-Sector) the rate of return they expect, and so on.
Family offices and multi-family offices can often look very similar to VC funds; however they often have smaller investment committees (in some cases just one individual) that make the final decision on any capital injection. They also tend to have more flexible mandates. Both can be passive investors, but both are far more likely to be active investors with a board seat.
High Net Worths are private individuals who are looking to invest a lump sum on their own behalf, very often in a business to which they can make a non-monetary contribution too (Often in sectors where they have domain expertise) - for example, in helping with marketing or other management skills. Their financial resources will be more limited than those of the venture capitalists, but their approach will most likely be more flexible.
Would a VC fund, Family office or High Net Worths be looking for an all-share deal, or would they be willing to put up debt capital as well?
Some venture capitalists are certainly willing to think in terms of putting up both equity and debt capital, though they would be unlikely to consider a deal simply for debt alone. Often VC funds will take a view of the opportunity and will take an equity stake but may initially put money to work in your business via a debt structure ( higher up the capital structure) which on specific mile stones converts into equity.
What sort of a stake would they want to take?
This is up for negotiation. In broad terms, few venture capitalists would want more than a 50% stake. Many will be restricted by the terms on which they are allowed to invest, to holding no more than 30% of the shares in any one business. The question then becomes, whether a % stake in your business is worth the money you would like them to provide. This often leads to a discussion around valuation which is more likely the most contentious part of any negotiations. We suggest that if you are offering between a 15-45% stake in the company as part of your capital raise, we then suggest you start by saying you are looking for a significant minority stakeholder.
Family offices and High Net Worths may be willing to take a higher stake, specifically if the growth prospects are sufficiently enticing. But you would have to be very certain you could work with them, before you gave them a stake of more than 30%.
How much say would investors want in the management of the business?
As a general rule you can assume that venture capitalists will want to know what is going on and have regular updates, but will not usually want to be involved day-to-day or on an executive basis - provided of course they are getting plenty of information. To this end, they will though typically seek board representation. High Net Worths on the other hand may want to get more involved in day-to-day management. There is no rule of thumb as every deal is different.
Would I have to give investors a seat on the board?
Yes – in the main. Some venture capital firms will take the view that managing the business is your affair, and will simply judge you by the end results, but this is rare. Most would prefer to know which way you are thinking, so that if they see you doing something they know has proved disastrous elsewhere; they can at least suggest a rethink. Family offices, High Net Worths and VCs will at the very least want the right to appoint 'their' director to the board.
How long would investors want to hold the investment?
Venture capitalists will often expect to sell their shares - via an 'exit route' of selling the company or arranging a flotation (a listing on a market such as the Stock Exchange) - after as little as three years, and usually no longer than seven years.
Family offices and High Net Worths by contrast will probably be thinking between 3 & 7 years but will be more flexible. If things are going badly they may try and bail out sooner; if things are going well, they will probably be content to hold their investment for somewhat longer – common sense really?
What happens if things go wrong - for example, if investors invest, but I subsequently find I cannot comply with the agreed terms?
In accepting funding from any institution or party, it is vital you understand the terms under which the capital is being provided. With VC's typically the original offer will be defined by a 'Term Sheet'. Seek legal advice for agreements you enter into. Hopefully if you share information on a regular basis you will be already talking at the first sign of trouble, if not then start talking as soon as possible. All professional investors, whether VC, Family offices or High Net Worths know that some of their investments will give them problems and some will fail. What they really do not like is being kept in the dark. So tell them what is happening, and what you propose to do about it. In the end a problem shared is a problem halved…….!
Will I be able to go back to the same investors for more money in the future?
That depends on why and when. A fair number of deals are structured with the understanding that further capital will be required down the track. On the other hand, if you need more money in the short term, because you miscalculated how much you would need, or the returns are coming in more slowly than you anticipated, or something else has gone wrong, the answer is probably no, again this goes back to regular communication with investors. The above often happens, and many investors will 'follow their money' in additional rounds, but ONLY if they feel that they have been fully alerted to the reasons why additional capital is required. That said, understand that investors are by nature fairly hard-headed, and you are most unlikely to be able to tempt them into throwing good money after bad.
Will I be able to go back to different people for more money in the future?
It is vital that existing investors are kept appraised of all and any additional capital raising activities, and are given first refusal. They will most probably have pre-emptive rights in any new capital raise anyway. Subject to the above, you should have the ability to seek capital from different people.
Will investors be looking for all their gains on exit, or will they want income in the meantime?
It will depend on the firm. All will expect most of their gain on exit, but some may well want dividends in the meantime as well. Make sure you know what they are looking for before you sign up to anything.