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Esdt Esdt Presentation Transcript

  • Early  Stage  Digital  Technology  Fund   A  discre7onary  EIS  Fund  
  • Important  No+ce    C&P  Capital  LLP  and  Prosper  Cap7al  LLP  are  communica7ng  this  presenta7on  on  a  confiden7al  basis  only  to  a  limited  number  of  firms  authorised  by  the  Financial  Services  Authority  of  the  United  Kingdom  (the  "FSA")  for  the  sole  purpose  of  providing  informa7on  about  the  Early  Stage  Digital  Technology  Fund  (“The  Fund”).  Promo7on  of  an  investment  in  the  Partnership  is  regulated  under  the  Financial  Services  and  Markets  Act  2000  ("FSMA")  and,  in  par7cular,  under  the  FSMA  (Financial  Promo7on)  Order  2005  (“FPO").  Accordingly,  this  presenta7on  is  being  communicated  to  persons  having  professional  experience  in  maSers  rela7ng  to  investments  who  are  "investment  professionals"  within  the  meaning  given  in  ar7cle  19  of  the  FPO  and  specifically  firms  authorised  by  the  FSA.  The  distribu7on  of  this  presenta7on  to  persons  who  are  not  investment  professionals  or  are  not  firms  authorised  by  the  FSA  is  unauthorised  and  contravenes  FSMA,  and  such  persons  should  not  act  or  rely  on  this  presenta7on  or  any  of  its  contents  for  any  purpose.    This  presenta7on  is  intended  to  be  a  brief  summary  overview  of  an  investment  in  the  Fund.  Any  recipient  of  this  presenta7on  must  read  this  presenta7on  in  conjunc7on  with  the  informa7on  memorandum  of  the  Partnership,  once  available,  which  sets  out  the  detailed  terms  and  risks  involved  in  inves7ng  in  a  business  of  this  nature  prior  to  any  decision  to  invest  being  made.    Any  projec7ons,  forecasts  and  es7mates  contained  in  this  presenta7on  are  forward-­‐looking  statements  and  are  based  upon  certain  assump7ons  considered  by  the  Fund  to  be  reasonable.  Projec7ons  are  necessarily  specula7ve  in  nature  and  it  can  be  expected  that  some  or  all  of  the  assump7ons  underlying  the  projec7ons  will  not  materialise  or  will  vary  significantly  from  actual  results.  Accordingly,  the  projec7ons  are  only  an  es7mate.  Actual  results  may  vary  from  the  projec7ons  and  the  varia7ons  may  be  material.  Some  important  factors  that  could  cause  actual  results  to  differ  materially  from  those  in  any  forward-­‐looking  statements  include  changes  in  interest  rates  and  market,  financial  or  legal  uncertain7es,  among  others.  Consequently,  the  inclusion  of  projec7ons  herein  should  not  be  regarded  as  a  representa7on  by  the  Fund  or  any  other  person  or  en7ty  of  the  results  that  will  actually  be  achieved  by  the  Fund.    This  presenta7on  should  not  be  construed  as  a  recommenda7on  or  as  legal,  tax  or  financial  advice  in  rela7on  to  the  subscrip7on,  purchase,  holding  or  disposi7on  of  shares  in  the  Fund.  Prospec7ve  investors  should  accordingly  consult  their  own  professional  advisers  
  •   Overview    What    Why    How    Who    Fees    Funnel  extract    
  • overview    Target  fundraise:  £15m    Minimum  fundraise:  £10m    Minimum  investment:  £25,000    Maximum  investment:  £1,000,000    Target  return:  30%  IRR    Investment  term:  5  years  (with  the  op7on  of  a  further  two,  one  year  increments).    Closing  Date:  April  2013    Fund  Structure:  Discre7onary  EIS  porbolio    Investor  Repor7ng:  Investors  will  receive  a  quarterly  leSer  and  full  annual  report.  
  • what    A  discre7onary  EIS  fund  inves7ng  in  early  stage  internet   companies,  ran  &  advised  by  successful  internet   entrepreneurs  and  experienced  investment  professionals.    A  fund  seeking  to  invest  in  the  value  created  by  disrup7ve   internet  technologies.    A  fund  that  is  using  historical  data  to  guide  an  investment   strategy  to  manage  downsize  risk,  while  leaving  an   opportunity  for  substan7al  returns.    In  fact,  a  target  IRR  of  30  over  5  years.      
  • what    A  fund  that  draws  analogue  to  successful  US  ‘micro-­‐VC’  models    “[This  kind  of  fund]  want  to  reinvigorate  venture  capital  by  taking   it  back  to  its  roots,  when  firms  were  smaller,  more  nimble,  and   more  likely  to  help  startups  get  off  the  ground.”  –  Business  Week    “The  fact  that  start-­‐ups  today  can  do  a  lot  with  so  much  less   capital  will  conCnue  to  put  pressure  on  VCs  to  look  at  smaller   investment  opportuniCes.”  –  Greg  Foster    “This  ‘boom’  in  seed  and  Micro-­‐VC  acCvity  is  not  so  much  a  boom   as  it  is  a  seismic  shiI  in  how  technology  companies  will  be   founded  and  funded  for  the  forseeable  future  “–  Jonathan  Tower,   MD,  Citron  Capital  
  • Source:  Mark  Suster,  GRP  Partners  “ The  State  of  The  Venture  Capital  Markets”   why  We  believe  that  certain  structural  changes  caused  by  internet-­‐based  technologies  have  presented  unprecedented  opportunity  for  growth  from  a  rela7vely  small  capital  base.  
  • ZocDoc   Company   LivingSocial   Zulily   Tumblr   AirBnB   Evernote   Dropbox   0   100   200   300   400   500   xMul+ple  Mul+ple  of  seed  value  for  select  tech  companies  <4  years  old  (source:  C&P  Research)   why   And  this  has  led,  for  some,  to  stellar  seed  returns.  
  • why  
  • why  And  this  gap  hasn’t  yet  been  filled  in  UK/Euro  VC  
  • Sample  Euro  Startups  by  value  ($)  (Source:Business  Insider)   shazam   miniclip   Mind  Candy   Habbo   Ozon.ru   spo7fy   Rovio   Vente-­‐privee  0   500,000,000   1,000,000,000   1,500,000,000   2,000,000,000   2,500,000,000   3,000,000,000   3,500,000,000   why   Yet  UK/Europe  are  fully  capable  of  crea7ng  blockbuster  start-­‐ups  
  • why  Because  angel-­‐level  investments  –  by  investment  groups  –  are  solid  performers    
  • 40   25   N  =  10,  y  =  gross  fund  mul7ple  35   N  =  10,  y  =  gross  fund  mul7ple   20   N  =  40,  y  =  gross  fund  mul7ple  30  25   15  20   ~40%  chance  of  >6x  return  15   10  10   <10%  risk  of  <2x  return   5   40%  risk  of  <2x  return   5   <20%  risk  of  <3x  return   0   0   0%   20%   40%   60%   80%   100%   120%   0%   20%   40%   60%   80%   100%   120%  CDF  results  of  Monte-­‐Carlo  simula7ons  on  fund  porbolios  of  n-­‐companies  using  a  probability  distribu7on  imputed  from  The  Kauffman  Founda7on  Angel  Returns  Study  (Wiltbank  2007),  the  biggest  survey  of  Angel  returns  to-­‐date.  Source:  Irving  Ebert  (Owner,  PurpleAngels)  &  C&P  Capital  Research   why   Because  angel  investments  exhibit  non-­‐normal  distribu7on  curves,  risk  can  be  hedged   with  upside  poten7al  retained.  
  • IRRs  for  VC-­‐Backed  Companies  in  Selected   Industries,  2008-­‐11   Sovware/Services   Internet  ecommerce   Internet  e-­‐business   0.00   20.00   40.00   60.00   80.00  Source:  Cambridge  Associates  LLC  US  Venture  Capital  Index  and  Selected  Benchmark  Sta+s+cs     why   And  VC  should  see  solid  results  going  forward.  
  • how  Tapping  into  our  mature  and  expansive  networks  to  generate  dealflow.  We  already  have  a  strong  funnel.  Using  published  term  sheets  &  standardised  legal  documents  By  being  ‘public’:  blogging,  twee7ng  and  aSending  the  myriad  of  conferences  and  meetups.  We  too  will  seek  to  be  nimble,  hard   Paul  Singh,  500Ventures:  working  &  disrup7ve,  just  like  our    “Moneyball:  A  Quan7ta7ve  Approach  to  Angel  Inves7ng”  startups.  
  • how  By  leading  ~15-­‐20  of  the  best  investments.  By  giving  that  ~15-­‐20  direct  opera7onal  and  board  level  support.  And  ‘following’  or  ‘silent  partner’  inves7ng  for  the  rest.  
  • who    Fund  manager:  Prosper  Capital  LLP          Technology  Adviser:  C&P  Capital  LLP        Custodian:  Woodside  Securi7es        Audit  and  accounts:  Nyman  Libson  Paul        Solicitors  to  offer:  Davenport  Lyons      
  • who   David  Hickson  –  Chief   Dylan  Collins  –  Chairman   Investment  Officer   Investment  CommiSee  David  Hickson  is  a  seasoned  digital  media/Internet   Dylan  Collins  is  one  of  the  most  experienced  online  veteran  and  entrepreneur.   gaming  entrepreneurs  in  Europe,  building  three   companies  with  three  successful  exits  over  the  last   decade.    He  was  commercial  &  legal  director  at  lastminute.com  PLC,  where  he  was  a  key  part  of  its    He  is  Execu7ve  Chairman  of  Fight  My  Monster  the  leading  £577m  exit  to  Travelocity  Europe  Limited.   online  game  for  boys  in  the  UK.      Head  of  Corporate  Development  at  mydeco.com   Dylan  is  also  an  angel  investor  in  several  Internet  and  where  he  raised  over  £12.5m  of  venture  capital,.   technology  companies  in  the  UK  and  Ireland.      Co-­‐founder  and  Chief  Strategy  Officer  at   He  serves  as  Ambassador  to  the  Irish  Government’s  Tribesports.com  that  has  recently  announced  over   Interna7onal  Startup  Fund.  £2m  worth  of  venture  capital  and  has  seen  1200%  user  growth  since  January  ‘12.   Accolades:    He  is  a  partner  at  C&P  Capital  LLP    Finalist  in  last  year’s  Ernst  &  Young  Entrepreneur  of   the  Year  He  sat  on  the  Jury  Panel  at  the  Tech  Entrepreneurs    Winner  Irish  Internet  Associa7on  ‘Internet  Hero’  Week  with  Jimmy  Wales,  founder  of  Wikipedia.   award  
  • who   Paul  Thompson  –  Fund   James  Cox  –  Investment   Manager   Director  In  2006  Paul  founded  Prosper  Capital  to  provide  regulated  status   James  is  a  Founding  Partner  of  C&P  Capital.    James  and  authorisa7on  to  companies  in  the  media  and  technology   started  his  career  working  for  an  ins7tu7onal  sector,  also  aiding  in  capital  raising  under  EIS  regula7on.     equity  trading  company  and  was  then  headhunted  Prior  to  this  he  worked  at  Dover  Street  Capital,  which   to  set  up  an  equity  deriva7ves  desk  at  Cornhill  specialised  in  tax  based  products.   Capital.    Having  successfully  set  up  the  equity   desk,  James  then  set  up  their  Managed  FX  trading    In1993  Paul  founded  the  Capital  Exchange,  a  web  based   desk.  James  was  then  in  turn  solely  responsible  for  business  portal  for  entrepreneurs  and  investors,  which  exited  to   raising  capital  for  both  the  Equity  and  FX  Desks;  Evolu7on  Capital  in  1999.   during  James’  7me  at  Cornhill  Capital  he  raised  in   excess  of  £30m.    From  1987  to  1992  Paul  was  a  partner  at  Cygnus  Venture  Partners,  a  venture  capital  firm  which  invested  in  biotech  and   James  then  co-­‐founded  Xenfin  FX,  part  of  the  technology  start-­‐ups  including  Axis  Shield,  Bio  Compa7bles  and  Deltex.   Xenfin  Group,  a  Foreign  Exchange  brokerage  that   currently  trades  in  excess  of  $25bn  of  Foreign  Paul  received  his  MBA  from  Bradford  University  in  1980  having   Exchange  per  month.    Xenfin  FX  was  an  FX  already  qualified  as  a  member  of  the  Ins7tute  of  Chartered   advisory  business  covering  a  range  of  clients  Accountants.   including  Asset  Managers,  Family  Offices  and   Hedge  Funds.  
  • who   David  CoSerell  –  Investment   Peter  Rose  –  Investment   CommiSee   CommiSee  David  CoSerell  has  successfully   Partner  at  C-­‐View,  C-­‐View  currently  built  up  a  number  of  IT  sovware   manages  in  excess  of  $250m.  and  services  businesses  from  early   Ex-­‐CIO  of  a  quoted  hedge  fund  (In  stages  through  to  mature  and   managing  approximately  $2.5bn.    successful  business  models.   Ex-­‐Director  of  Research  at  Ivy  Asset  ACT  Financial  Systems  (became  a   Management,controlled  $15bn  of  subsidiary  of  Misys)  ,  DST   investments.    InternaConal,  Advent,  Cresta,  and   Trading  experience  -­‐  mul7  strategy  SQS  .   hedge  fund  (MBS  Ltd.)  and  long/ short  for  Close  Bros   Risk  management  experience  –Bear   Stearns  
  • who   David  Kelly  –  Special  Advisor  COO/VP  Opera7ons  at  ebay  COO  of  lasminute.com    Director  at  Amazon,    Founder/CEO  of  mydeco.com  SVP/Managing  Director  of  Rackspace  –  the  US  hos7ng  and  cloud  plaborm  –  during  a  7me  it  put  on  $5  billion  of  market  cap.  
  • fees  Establishment  costs    5%  of  aggregate  Subscrip7ons  to  the  Fund,  from  which  will  be  seSled  all   establishment  costs  (including  professional  fees  and  prin7ng  costs)  and   commissions  due  to  independent  third  party  intermediaries),  including  a   fee  to  the  Manager  and  Technology  Adviser.  Annual  costs      2.5%  of  aggregate  Subscrip7ons  to  the  Fund,  from  which  will  be  paid  a   fee  of  0.25%  of  aggregate  Subscrip7ons  to  the  Manager,  a  fee  of  0.2%  of   aggregate  Subscrip7ons  to  the  Custodian,  with  the  balance  to  the   Technology  Adviser.  The  transac7on  costs  in  rela7on  to  each  investment   will  be  met  out  of  the  annual  fee,  although  in  some  cases  may  be  met  by   the  Investee  Companies.    
  • fees  Performance  fee      A  performance  fee  shall  be  payable  to  the  Technology  Adviser  on  realisa7on   of  the  assets  of  the  Fund.  The  performance  fee  shall  be  calculated  as   percentage  of  the  surplus  available    for  distribu7on  to  Investors  aver   realisa7on  of  Fund  assets,  calculated  aver  the  return  to  the  Investors  of   their  aggregate  Subscrip7ons,  (“Surplus”)  as  follows:  
  • funnel  extract  
  • contact    James@candpcapital.com    David@candpcapital.com  Or  call:  0203  6518181