SidebySide EIS Venture Fund

The SidebySide EIS Venture fund seeks to invest in high-growth EIS-qualifying technology companies that already have a developed customer base and revenues of £1–£10 million.

The fund is managed by The SidebySide Partnership, which was founded by successful entrepreneur John Bailye. He’s best known for founding Dendrite International – a software provider to the pharmaceutical industry. Started in 1986, Dendrite was public for almost 15 years before being acquired in 2007 for $751 million. 

The fund will look to use John Bailye’s previous experience to help support its investee companies. As a result, SidebySide has decided to limit the number of investee companies to just 10 across different iterations of the fund, helping ensure each company receives enough attention.

SidebySide Partnership has invested £3 million into six companies since launching its first EIS fund in 2019.

Important: The information on this website is for experienced investors. It is not a personal recommendation to invest. If you’re unsure, please seek advice. Investments are for the long term. They are high risk and illiquid and can fall as well as rise in value: you could lose all the money you invest.

Read important documents and then apply

Highlights

  • Managed by an experienced entrepreneur with a $751 million exit
  • Focused on mentoring only a small number of companies at any one time (currently six)
  • Target return 3x (net of fees and excluding tax relief – returns not guaranteed)
  • Expected exit timeline of eight years (not guaranteed)
  • Charging structure aligned with investors' interests: no initial or annual management fees and performance fee set against a high hurdle
  • Minimum investment £10,000 — you can apply online

The manager

The SidebySide Partnership was founded by John Bailye in 2016, originally as a family office to manage his personal investments. In 2019, it launched its first EIS fund. 

John is an experienced entrepreneur, investor and mentor. He first found success as the founder and CEO of Dendrite International Inc. The business, founded in Australia in 1986, developed software applications for pharmaceutical sales force management. After John relocated to New Jersey, it listed on Nasdaq before being acquired in 2007 in a deal worth $751 million. At the time of the acquisition, Dendrite had grown to 3,000 employees and had clients in more than 52 countries.

John also helped turn around EKR Therapeutics, a specialist pharmaceutical business supplying hospitals with critical care products, into a business generating $125 million in sales. Having taken a stake in Systech International, John acted as a mentor to the management team, revenues subsequently rose from $14 million to $50 million and the business was sold for $165 million. Please note: past successes are not a guide to the future. 

John is supported by two full-time investment professionals. Additional support comes from portfolio company mentor Sheli Gupta, a successful software entrepreneur in the US.

Sapphire Capital Partners LLP is the Investment Fund Manager for the SidebySide EIS Venture Fund. 

Watch our latest video interview with John Bailye of SidebySide, recorded October 2020:

Investment strategy

The fund seeks to invest in high-growth and relatively established young technology companies with revenues of £1–£10 million. Each investee company should be driven by an ambitious and motivated management team. 

SidebySide sources deal flow from John Bailye’s professional network and personal contacts, as well as a number of regional funds, regional angel networks and corporate finance houses. SidebySide bills itself as a hands-on and supportive investor. It believes this, alongside John Bailye’s experience, should prove appealing to entrepreneurs raising capital.

In addition to the revenue target, SidebySide looks for several attributes, including:

  • At least three years of meaningful revenue growth
  • Strong customer endorsement
  • Founders with a significant personal investment in the company paying themselves modest salaries

Once invested, SidebySide looks to be actively and regularly involved with the day-to-day operations and strategy of every company it invests in to add value, although it does not wish to run them. 

Currently, the SidebySide Partnership has six investee companies within its portfolio and aims to spend at least two days a month with each. 

Target return

The SidebySide EIS Venture Fund targets a return of three times the amount invested after eight years, excluding any EIS tax reliefs, not guaranteed.

Exit strategy

SidebySide’s preference is for exits to be planned well in advance, ideally via a trade sale. The expected holding period for investments will be between three years and eight years, not guaranteed. Exits could happen sooner or take significantly longer than planned. 

Portfolio

The SidebySide EIS Venture Fund aims to invest in three to five investee companies per deployment.

The companies outlined below are investments made by the fund in its previous iterations and give a flavour of the types of companies a new investor might expect. EIS funds tend to be managed on a discretionary basis, so each individual portfolio is likely to be different.

Laundryheap – SideBySide EIS Venture FundLaundryheap

Laundryheap provides an on-demand laundry and dry-cleaning service, offering collection and delivery in just 24 hours. Laundryheap serves both individuals and businesses (e.g. hotels). It also provides a linen rental service (bedding, towels and toiletry packages) to the short-let and Airbnb market. Packages are delivered to the rental property ahead of any new guests arriving and the driver will also collect the old set of linen and return this to be laundered at Laundryheap’s partner facilities.

The business is based in London, has expanded to three other UK locations and is now available in 11 countries, including in the US, the Netherlands, the UAE and Singapore.

SidebySide first invested in the business in April 2020 after being impressed with the quality of the entrepreneur and the revenue growth since launch. Sidebyside has now participated in four funding rounds, including a $3.5 million funding round in February 2021 alongside Sova VC. Since SidebySide’s initial investment LaundryHeap has doubled revenue and is pursuing B2B opportunities. 

Sherpr – SidebySide EISSherpr

Sherpr offers a door-to-door luggage delivery service, letting travellers ship their baggage and sports equipment ahead of time and meet them on arrival. Sherpr believes it can reduce the inconvenience and cost of travelling with luggage on airlines and offers a student shipping service.

The company continued to grow despite the effect of coronavirus on the travel industry. That was primarily due to increased demand from customers relocating and the international student population . SidebySide believes there is significant room for future growth as the pandemic subsides and international travel resumes, especially as airline luggage charges are expected to increase. 

SidebySide first invested in the business in April 2020, and revenues have gone up close to four-fold since then – past performance is not a guide to the future. SidebySide has since participated in two further funding rounds in April 2021 and November 2021. 

Exits

SidebySide Partnership has a limited track record and therefore has not experienced any exits or failures to date. However, as with all EIS funds, investors should be prepared for some failures in the portfolio.

Performance

The SidebySide EIS Venture Fund launched in 2019.

The chart below shows the average performance of the total subscribed into the funds each tax year, based on valuations as at 5 January 2022, expressed on a £100 invested basis. Please note, individual investor portfolios’ performance will deviate from the average.

Performance per £100 invested in each tax year

Source: SidebySide Partnership, 5 January 2022. Figures are net of all fees. Past performance is no guide to future performance. These figures do not include tax relief or any realised returns which would be available through loss relief

Risks – important

This, like all investments available through Wealth Club, is only for experienced investors happy to make their own investment decisions without advice. 

EIS investments are high-risk and should only form part of a balanced portfolio. As must be expected with early-stage investments, some or even all of the companies in the portfolio could fail: the fewer the companies included in the portfolio, the higher the risk of loss if things don’t go to plan. You should not invest money you cannot afford to lose.

There is no ready market for unlisted EIS shares: they are illiquid and hard to sell and value. There will need to be an “exit” for you to receive a realised return on your investment. Exits are likely to take considerably longer than the three-year minimum EIS holding period; equally, an exit within three years could impact tax relief.

To claim tax relief, you will need EIS3 certificates, normally issued once shares have been allotted. This can take several months: please check the deployment timescales carefully. Tax reliefs depend on the portfolio companies maintaining their EIS-qualifying status. Remember, tax rules can change and benefits depend on circumstances.

Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks. 

The Fund is dependent on the skill and expertise of John Bailye and the chosen experts appointed to provide Investee Companies with specific skills and guidance to act as the investment adviser and provide Mentoring Services to the Investee Companies. Any loss of these services may have an adverse impact upon the prospects of the Investee Companies and therefore negatively impact the Investments made by Investors.

Charges

A summary of the main charges and savings is shown below. Some of these will be payable by the investor, whilst others by the investee companies. The investment may have additional charges and expenses: please see the provider documents, including the Key Information Document, for more details. 

Investor charges
Full initial charge 0%
Wealth Club initial saving
Net initial charge through Wealth Club 0%
Annual management charge 0%
Administration charge
Performance fee 30%
Investee company charges
Initial charge 5%
Annual charges 2%
All fees and charges are stated exclusive of VAT, which may be applicable in some cases. Any fees and charges payable by the investee companies or the underlying businesses do not directly come out of your investment. However, they will effectively reduce the returns generated by investee companies and therefore impact your investment.

More detail on the charges

Timing of the offer

The SidebySide EIS Venture Fund aims to deploy capital within the financial year in which it was invested, but in no case longer than 12 months after receipt of investments, not guaranteed.

Our view

This is a relatively new EIS fund which hasn’t yet had the time to build a performance track record. However, there are several attributes that may appeal to investors. 

The opportunity to invest alongside John Bailye may be attractive. Few venture capital managers can say they have founded and built a business that floated on Nasdaq and achieved a $751 million exit. This may also attract deal flow to the fund. 

Secondly, by limiting the number of companies SidebySide can invest in, the team’s focus is concentrated. Whilst increasing diversification risk, this may enhance the value it can add to its investments. 

Finally, the charging structure is tax efficient and weighted in investors’ favour, in our view. Investors pay no initial or management fees and the performance fee is set against a high hurdle rate. 

Read important documents and then apply

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – tax-efficient investments. You should base your investment decision on the provider's documents and ensure you have read and fully understand them before investing. This review is a marketing communication. It is not advice or a personal or research recommendation to buy the investment mentioned. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.

The details

Type
Fund
Sector
Technology
Target return
3x
Funds raised / sought
-
Minimum investment
£10,000
Deadline
Discretionary
Last updated: 23 February 2022

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