For Startups Whilst many early stage businesses have interesting ideas and technology, they still require substantial intervention to prepare them for seed finance. The provision of ‘smart money’ that includes mentoring, business and product development support and introductions alongside pre-seed capital has greater value to these businesses than cash alone. This approach has been successfully developed in the US by Y Combinator and TechStars and is known as a ‘pre-seed accelerator programme’.
C4DI runs a pre-seed fund, and has access to other funds. To apply for this, please contact John Connolly firstname.lastname@example.org
C4DI startups are very investor-friendly.
In addition to the shareholding, there are a number of advantages of our approach to investment:
Tax efficiency: Investors select the startups that will participate in the programme and their money is invested directly in the companies, attracting (S)EIS relief.
Portfolio diversification: Angel syndication provides investors portfolio diversification and spread of risk across ten teams per programme.
ROI across portfolio: Siding with Angels (NESTA, 2009) is the most authoritative analysis to date, reflecting experiences from running these programmes in both the US and UK: “The most likely outcome in any one angel investment is failure, but ‘winning’ investments are very attractive. Fifty-six per cent of the exits failed to return capital, while 9 per cent generate more than ten times the capital invested. Because the 44 per cent of investments that generate positive exits win at a larger multiple than the costs of the negative exits, the overall return to business angel investing in the UK is 2.2 times the invested capital [in a] holding period of just under four years.”
Reduced cost of discovery: Leveraging the international pre-seed startup ecosystem creates a ready route to provide investors with a stronger and wider dealbase, by both geography and sector. The accelerator programme is actively promoted to identify and attract the best startup teams locally and worldwide, bringing entrepreneurial talent and global business connections back to the region for business development.
Enhanced business opportunity: The accelerator programme brings dozens of like-minded investors and entrepreneurs together, increasing the opportunity to extend networks and successfully do business together.
Increased investment confidence: Investors are encouraged to mentor in the programme and take advantage of seeing the momentum in the startups. As relationships develop on both sides, there is an increased opportunity to extend a commercial or advisory relationship. Investors participating in the programme are in a prime position to be involved in next round decisions as the startup steps up.
Next round readiness: The programme increases the prospects of a startup quickly developing a scalable business model for a product that is generating revenue by the end of the programme, and that can therefore attract further funding. On average 50% of the teams on the affiliate programmes run by Springboard go on to successfully attract between £100k - £2m, with an average of £300k second round investment.