Secure up to £250,000 through the Co-investment fund
The stages of the investment process
Despite inevitable variance between deals, the East of England Co-investment Fund (COIN) investment process will typically include the following stages:
Stage 1
An SME Company seeking external investment secures at least 40% of required funding from arms length private investors, or contacts their local Business Link Adviser or East of England Business Links Limited (EEBL) who may be able to assist with finding the necessary private investor.
Stage 2
The Company applies for a co-investment from COIN, via its local Business Link or EEBL. The application includes information about private committed capital and a business plan, with detailed financial forecasts clearly indicating cash flows and sources of future external funding, if they are necessary.
Terms to be agreed with the private investors prior to contacting COIN must include:
• Amount and investment instrument.
• Valuation (at least indicative).
• The extent of the investor’s intended management involvement.
Stage 3
EEBL reviews the proposal to check whether the application is complete, and whether the prospective Investee is a beneficiary to the economy of an East of England Objective 2 area.
Stage 4
IQ Capital Partners LLP (the Fund Manager) reviews the proposal to check whether the prospective Investee complies with the investment criteria, and collects further information about the business of the Company, which in the majority of cases will involve a meeting with the Company and some background research.
The Fund Manager is also likely to contact prospective investors to discuss their intentions, as well as preferences for terms of investment.
Stage 5
The Fund Manager, applying the investment criteria and their discretion, makes a primary decision whether COIN would be likely to join the investment round, subject to agreement on terms and satisfactory due diligence.
Stage 6
A set of detailed investment terms (a“Term Sheet”) is issued by the syndicate of investors and COIN, primarily based on the terms initially agreed between the private investors and the future Investee.
Stage 7
Due Diligence. The Fund Manager will co-ordinate its own due diligence with the other investors (utilising existing due diligence by private investors when possible). Lawyers are instructed to draw up the legal documentation, as per the agreed Term Sheet. This process to completion usually takes between two weeks and two months.
Stage 8
The Fund Manager will then present the results of satisfactory due diligence and final terms to the Fund Administrator, who checks that the process is fully completed and releases the funds to an escrow account.
Stage 9
Funds are invested simultaneously with other investors at a completion meeting held at the solicitor's offices. In exceptional circumstance when not possible otherwise for practical reasons, COIN may invest up to two months after the private investors.
NB. At any stage of the process you are welcome to discuss any queries you may have with a Business Link Adviser who will be happy to help you obtain appropriate funding.
The Fund is managed by IQ Capital Partners LLP, which is authorised and regulated by the Financial Services Authority.
Subjects covered in this guide
- Introduction
- Companies looking for finance
- Looking to invest?
- Intermediaries
- Fund criteria and investment Policy
- The stages of the investment process
