Strategy: Exposure to a portfolio of technology companies that have achieved product-market fit and are starting to scale up.
Issues
Track record: As a new fund from a new team within Blackfinch, there is no track record.
The Investment Manager
Positives
Team: There is a diverse range of experience in the team, with a clear strategy and well-designed processes.
Issues
Team size: The investment team is small, although the angel network is very active and, overall, is adequate for current activity levels.
Nuts & Bolts
Duration: The Fund is evergreen, with investors participating in transactions on an ongoing basis after investment.
Diversification: The manager expects to provide at least 10 investments to each investor.
Valuation: Usually changes at next financing or on writedown.
Specific Issues
Fees: Combination of direct fees and company charges.
Performance fee: Charged at 20% on aggregate returns over 130% of amount invested in companies on a per company basis.
Risks
Target returns: The target IRR of 3x capital suggests a high-risk investment strategy.
Companies: Supplying risk capital to early-stage technology companies at the start of commercialisation. There will be a spread of company returns, as the successful ones will do very well, but those who fail may do so completely.
