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IQ CAPITAL FAQs 1. What is IQ Capital? IQ Capital Fund 1 LP is a £25m fund focused on seed and early stage companies in high technology sectors, and on fast growing companies in more traditional sectors. One third of the fund is raised from private investors, and Gordon Brown announced £16.7m of Government backing for the fund under the Enterprise Capital Fund programme in his 2006 Budget, in order to address the 'equity gap' facing early stage, high growth companies. The investment philosophy of the fund is based on the principle that active and experienced angel investors provide a highly significant contribution to early stage companies and entrepreneurs. The fund will therefore only invest when at least one such angel is also investing in the same round. The Fund Manager and Partner Business Angel Networks can assist with finding such an investor for prospective investees who have not yet secured one. 2. Who are the partners in IQ Capital? The Fund is managed by NW Brown (Cambridge: www.nwbrown.co.uk), and the three partner business angel networks (BANs) are OION (Oxford: www.oion.co.uk), GEIF (Cambridge: www.geif.co.uk) and SWAIN (Bristol: www.swain.org.uk) 3. When will IQ Capital be ready to invest? We are currently finalising the Fund's structures and processes, and drawing down funds from Government and private investors. IQ Capital is expected to be 'ready to invest' by July 2006. 4. What sort of companies will IQ Capital invest in, and is there an investment strategy? IQ Capital will focus on investing in early stage high-tech companies with at least near-term prospects for generating revenue, although up to 30% of the Fund may be invested in non-tech or development capital opportunities. The Fund will expect to lead or co-lead on all its investment transactions, but will avoid highly capital intensive investments (which cause undesirable dilution). 5. What size of investments will IQ Capital make? IQ Capital expects initial investments to be in £250k-600k range (£1.5m maximum in exceptional cases), and expects to make some 25 investments of this size. The balance of the Fund will be reserved for follow-on investments of up to £2.5m per company. 6. How big a Fund will IQ Capital be? IQ Capital will close with £25m of investment from private investors and Government. 7. Can I submit business plans directly to the IQ Capital team? Yes, but is expected that many of the investment proposals to IQ Capital investments will be introduced by the partner Business Angel Networks. Any potential investment must first be committed to by a co-investing 'IQ Angel'. 8. How does my company qualify for consideration by IQ Capital? IQ Capital is an expert angel co-investment fund, and will only invest when at least one angel with the proven expertise in the investee's sector - who we dubbed 'IQ Angels' - is co-investing more than £25,000 and is prepared to take an active involvement in the investee company post investment. Most of IQ Angels are high profile and successful entrepreneurs themselves, with successful business and investment track-record, and many are members of the Fund's partner Networks. The existence of an IQ Angel prepared to invest unlocks access to the Fund but does not automatically cause the Fund to invest. If you do not yet have a lead angel supporting your investment proposal you should nevertheless submit an outline of your opportunity to the IQ Capital Fund Manager or to one of the partner Business Angel Networks and, where appropriate and possible, we may be able to assist in identifying an IQ Angel. 9. When will the IQ Capital website be launched? We are aiming to launch www.iqcapital.co.uk in June. 10. Which partner Business Angel Network should I apply to? Each Partner Network's website gives full details of how to submit business plans and work towards securing an introduction to the Network's business angel members, typically by presenting at an Investment meeting. IQ Capital's deal flow will be drawn from our networks and other angel-backed sources, so there is no advantage in applying to any one particular partner Network. It makes no difference which of the three BANs is approached initially because we work closely together and all are equal channels towards IQ Capital. There are no geographical restrictions on where companies can be based for IQ Capital to invest. For further information: For more information on IQ Capital Fund, please contact Max Bautin on 01223 720 227, 07740 647 776 or Hugh Parnell on 01223 720 238 Enterprise Capital Funds Programme A competitive bidding round for fund managers or angel groups to run ECFs was launched by the DTI's SBS in July 2005. 45 bids were received. In selecting which bids to support the government has been advised by the Capital for Enterprise Board, an advisory group of industry experts, chaired by David Quysner of Abingworth Capital Management. See www.sbs.gov.uk for a full press release on the programme. NW Brown Group Ltd www.nwbrown.co.uk The NW Brown Group, founded in Cambridge in 1974, offers a comprehensive range of bespoke financial services to private and corporate clients throughout the UK. In the unquoted sector, the NW Brown Group is fund manager of GEIF Ventures Early Growth Fund (£5m), the £4m Iceni Seedcorn Fund LLP and the £3.6m Eastern Co-Investment Fund ("COIN"). GEIFV and COIN are both angel co-investment funds, which have, between them, made more than 20 investments to date. NW Brown & Company Ltd is authorised and regulated by the Financial Services Authority. Oxfordshire Investment Opportunity Network (OION) www.oion.co.uk Launched in 1995, OION is one of Europe's most successful technology business angel networks that links investors with entrepreneurs seeking business development funds from £150,000 to £2m. OION helped 13 companies raise £2.5m in the year to March 2005, and during the last five years, has helped over 90 companies raise £22m. OION has strong links with universities with a reputation for spinning out quality technology companies such as Warwick, Oxford, Bristol, UCL and Imperial College. The South West Angel and Investor Network (SWAIN) www.swain.org.uk SWAIN, launched in 2004 and based in Bristol, specialises in helping small and medium sized companies to find equity finance, and assists private investors in searching for investment opportunities in businesses with growth potential. SWAIN operates throughout the South West region and is supported by SWRDA and the South West Business Links.
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