The Empirical Ventures S/EIS Fund will invest in deeptech companies at the pre-seed and seed stage. Empirical launched in 2023, developing from an existing angel syndicate. The fund is usually the lead science investor in companies, using the team's scientific background to evaluate technologies while still keeping a focus on founding teams. It has established a strong sourcing pipeline and sound investment process. It is too early for portfolio performance to be informative, although investments in the prior angel syndicate are showing progress.

Why invest

Positives

• Strategy:  Exposure to a good-sized portfolio of early-stage deeptech companies.

Issues

• Track record: The fund has a limited track record with no exits yet, although the earlier angel investments are showing progress.

The investment manager

Positives

• Team: The team has a wide range of skills, with extensive scientific knowledge and commercial experience.

Issues

• Team size: While the team is adequate for current operations, it is small and may need future expansion.

Nuts & bolts

• Duration: The fund is evergreen with annual tranches; closings take place each March, with funds invested by the end of the subsequent tax year.
• Diversification: The manager aims to provide 13-15 investments for each investor.
• Valuation: Updated six-monthly, based on IPEV guidelines, but usually based on latest transaction price.

Fees

• Fees: A combination of direct fees and up-front company charges.
• Performance fee:  Charged at 20% on aggregate returns over subscription.

Risks

• Target returns: The modelled return is 3.1x invested capital, or 17% IRR, after fees, which suggests a high-risk investment strategy.
• Companies: Supplying risk capital to early-stage deeptech companies. There will be a spread of company returns, as the successful ones will do very well, but those that fail may do so completely.