Venture capital (VC) is a form of private equity financing that is provided by firms or funds to startup, early-stage, and emerging companies that have been deemed to have high growth potential or which have demonstrated high growth. Venture capital firms or funds invest in these early-stage companies in exchange for equity, or an ownership stake. Venture capitalists take on the risk of financing risky start-ups in the hopes that some of the companies they support will become successful. Because startups face high uncertainty, VC investments have high rates of failure. The start-ups are usually based on an innovative technology or business model and they are usually from high technology industries, such as information technology (IT), clean technology or biotechnology.
Seed money, also known as seed funding or seed capital, is a form of securities offering in which an investor puts capital in a startup company in exchange for an equity stake or convertible note stake in the company. The term seed suggests that this is a very early investment, meant to support the business until it can generate cash of its own, or until it is ready for further investments. Seed money options include friends and family funding, seed venture capital funds, angel funding, and crowdfunding.
The Enterprise Investment Scheme (EIS) is a series of UK tax reliefs launched in 1994 in succession to the Business Expansion Scheme. It is designed to encourage investments in small unquoted companies carrying on a qualifying trade in the United Kingdom.
Social venture capital is a form of investment funding that is usually funded by a group of social venture capitalists or an impact investor to provide seed-funding investment, usually in a for-profit social enterprise, in return to achieve an outsized gain in financial return while delivering social impact to the world. There are various organizations, such as Venture Philanthropy (VP) companies and nonprofit organizations, that deploy a simple venture capital strategy model to fund nonprofit events, social enterprises, or activities that deliver a high social impact or a strong social causes for their existence. There are also regionally focused organizations that target a specific region of the world, to help build and support the local community in a social cause.
A series A round is the name typically given to a company's first significant round of venture capital financing. The name refers to the class of preferred stock sold to investors in exchange for their investment. It is usually the first series of stock after the common stock and common stock options issued to company founders, employees, friends and family and angel investors.
An angel investor is an individual who provides capital to a business or businesses, including startups, usually in exchange for convertible debt or ownership equity. Angel investors often provide support to startups at a very early stage, once or in a consecutive manner, and when most investors are not prepared to back them. In a survey of 150 founders conducted by Wilbur Labs, about 70% of entrepreneurs will face potential business failure, and nearly 66% will face this potential failure within 25 months of launching their company. A small but increasing number of angel investors invest online through equity crowdfunding or organize themselves into angel groups or angel networks to share investment capital and provide advice to their portfolio companies. The number of angel investors has greatly increased since the mid-20th century.
Enterprise Capital Funds are financial schemes established by the Department for Business, Innovation and Skills (BIS) in the United Kingdom to address a market weakness in the provision of equity finance to UK small and medium enterprises (SMEs). Government funding is used alongside private sector funds to establish funds that operate within the "equity gap"; targeting investments of up to £5 million that have the potential to provide a good commercial return. The first five funds supported under the scheme were launched in 2006-7 following a pathfinder competition. A further three funds were awarded ECF status in 2007. As of November 2019, 29 ECFs have been launched.
Impact investing refers to investments "made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return". At its core, impact investing is about an alignment of an investor's beliefs and values with the allocation of capital to address social and/or environmental issues.
Babak "Bobby" Yazdani is an Iranian-American entrepreneur and investor specializing in early-stage, private U.S.-based modern enterprise technology companies.
The Seed Enterprise Investment Scheme (SEIS) was launched by the United Kingdom government on 6 April 2012 in order to encourage investors to finance startups by providing tax breaks for backing projects they may otherwise view as too risky. SEIS acts as a powerful incentive to encourage investors to invest as the tax relief can allow individual investors to reduce their effective income tax liability, for the year in which they make the investment, to zero.
Crowdcube is a British investment crowdfunding platform, established by Darren Westlake and Luke Lang in 2011.
Gousto, a trading name of SCA Investments Limited, is a British meal kit retailer, headquartered in Shepherd's Bush, London, founded by Timo Boldt and James Carter. Gousto supplies subscribers with recipe kit boxes which include ready-measured, fresh ingredients and easily followed recipes.
Technology Tax Relief is the generic name for the programme of tax incentives implemented in the UK to incentivise companies to invest in high-value-add R&D and IP commercialisation.
Mercia Fund Management, which is now known as Mercia Fund Managers or Mercia is part of Mercia Technologies PLC. It is a UK-based venture capital fund manager. The company provides venture capital to businesses focused on innovative technologies. Mercia offers investment under the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS), both investment-based tax-reliefs, operating one of the largest such combined funds in the United Kingdom. Startups in which Mercia has invested have gone on to earn awards for their innovations. Allinea Software was a 2011 Red Herring Global 100 winner and Molecular Solar earned the 2011 Lord Stafford Innovation in Development award. In April 2021, Mercia co-authored a report on UK-India Energy Opportunities with think tank Bridge India and law firm Howard Kennedy.
SyndicateRoom is a UK venture capital fund, headquartered in Cambridge, founded by Gonçalo de Vasconcelos and Tom Britton in September 2013. The company is authorised and regulated by the Financial Conduct Authority.
Equity crowdfunding is the online offering of private company securities to a group of people for investment and therefore it is a part of the capital markets. Because equity crowdfunding involves investment into a commercial enterprise, it is often subject to securities and financial regulation. Equity crowdfunding is also referred to as crowdinvesting, investment crowdfunding, or crowd equity.
Eureeca is an equity crowdfunding platform with presence in Europe, the Middle East and South East Asia that allows early-stage businesses and small and medium-sized enterprises (SMEs) to raise capital from a group of investors, who range from casual and angel investors to institutional firms, in exchange for equity. Eureeca serves as an alternative financing option to more traditional financing sources such as banks and venture capital firms.
A simple agreement for future equity (SAFE) is an agreement between an investor and a company that provides rights to the investor for future equity in the company similar to a warrant, except without determining a specific price per share at the time of the initial investment. The SAFE investor receives the future shares when a priced round of investment or liquidity event occurs. SAFEs are intended to provide a simpler mechanism for startups to seek initial funding other than convertible notes.
SFC Capital is an investment fund manager and network of business angels founded in 2012 by Stephen Page, the CEO of the company. It manages the SFC Angel Fund which invests in small companies qualifying for the SEIS and EIS investment schemes in the UK.
