The VGC EIS Evergreen fund invests in a range of consumer-focused technology companies. Although the fund is new, it replaces previous annual EIS offerings and complements VGC’s longer-standing institutional growth funds. As well as its focus on the consumer area, VGC distinguishes itself with a thesis-driven investment process and its use of corporate partners to help provide additional support to investments. The fund is evergreen, with two closes a year.

The report goes into details of how the investment process works, sourcing and decision-making, exit strategies, post-investment governance and monitoring, fees and more. It also includes Hardman & Co’s unique fee calculation table, allowing advisors and investors to properly investigate their effect.

Why invest

Positives

• Strategy: Investing in a range of consumer-focused technology companies, supported by corporate partners.

Issues

• Newer fund: While VGC has managed institutional and SEIS funds in this area, EIS is still relatively small.

 

The investment manager

Positives

• Team: An experienced and growing team that has been managing venture capital investments for more than a decade.

Issues

• Track record: Both the (S)EIS and institutional fund track records are promising, but there are few exits to date.

 

Nuts & bolts

• Duration: The fund is evergreen, with two closes a year on or around 31 October and 28 February. The late-2023 close is likely to be around 24 November.
• Diversification: The manager aims to provide 4-7 investments for each investor.
• Valuation: A mixture of last transaction and writedown, if appropriate.

 

Fees

• Fees: Some direct fees, with most charged to investee companies.
• Performance fee: Charged at 15% on aggregate returns over £1.20 for each £1 invested.

 

Risks

• Target returns: The target return of 3x capital, after fees, suggests a high-risk investment strategy.
• Companies: Supplying risk capital to early-stage technology companies. There will be a spread of company returns, as the successful ones will do very well, but those who fail may do so completely.

 

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