How we assess single company opportunities
All the single company deals available on our website have been carefully reviewed either by Wealth Club or by reputable and established counterparties, to help you make your own decision whether to invest. Wealth Club has a team of experienced corporate finance executives: qualified accountants and corporate financiers with years of experience in highly regarded financial services firms and in-house, within private equity backed businesses. We do not verify or audit Company information but produce our reviews to help experienced investors make their own decision whether to invest.
Explainer: Private company investing
What are Wealth Club single company deals?
These private deals are often available exclusively to our members.
They are either originated by us or introduced to us from our qualified network, which includes many of the top accountancy firms and corporate finance boutiques.
We see a large volume of deals, up to 50 per month. From these, after a preliminary review, we create a shortlist of those that look potentially credible in our view. Only a handful progress into our more detailed review process. For Wealth Club-led deals, we negotiate valuation and key commercial terms. We carry out a review, covering many strands, such as management, commercial and financial and distil our findings into an easy-to-read research report to present the deal to investors. We do not verify or audit company information, but we produce our reviews to help experienced investors make their own decision whether to invest.
We reserve the right to step aside from a deal at any time if our review uncovers issues that have a material impact on our view of the management and/or the company’s growth prospects or value.
As a result, we introduce to our investors only a minority of the deals we see. The service is not personal advice and you should always make your own informed investment decision after carefully reading the company’s Information Memorandum.
Co-investment and third-party deals
We regularly introduce our investors to co-investment opportunities with a cornerstone investor, or deals where a corporate finance boutique is leading the commercial negotiations and funding round and has typically carried out extensive due diligence. Co-investment opportunities could provide an attractive way for experienced Wealth Club investors to participate in deals on the same terms as large funds and corporations.
For this kind of deal, we need to satisfy ourselves both the co-investment partner and the underlying company are credible and robust.
To date, we have co-invested in deals alongside global corporations including Bayer Pharmaceutical, Hinduja Group, Mitsubishi and Saint-Gobain as well as financial institutions such as WestBridge Fund Managers, Amadeus Capital Partners, and Gresham House along with a variety of family offices and ultra-high net worth investors. We have also worked with highly regarded corporate finance boutiques, such as West Hill Corporate Finance.
What do we look for in our deals?
We don’t focus on any particular sector. We are selective and aim to only introduce high-quality, high-potential companies to our investors, although as with all early-stage companies, these are high-risk investments. The companies for which we raise money must all have some important characteristics.
1. The management
We look for experienced and ambitious people, preferably who have previously achieved success in a relevant venture and have invested significant amounts of their money into the business. They must be fully committed, have in-depth knowledge of their sector and market and a clearly articulated business plan. Supporting the management team, we look for an accomplished professional Board demonstrating strong corporate governance and accountability.
2. The business
We look for businesses offering a credible solution to a real problem that we believe capable of significant scale and rapid growth. We prefer revenue-generating, B2B, capital-efficient companies, with a differentiated market approach and defensible market position.
3. The market
The market needs to be large enough and growing – the business must have a well-defined, proven method to access it and clear potential exit options
4. The financials
We look for businesses with high-quality earnings, potential for good margins and cash generation and a clear path to profitability and ultimately, an exit (not guaranteed).
5. Investment appeal
We look for businesses that can be built in manageable chunks, are capital efficient and don’t need to dominate the world to be successful. The valuation must be reasonable, in our view, and the target returns should reflect the level of risk to which investors are exposed.
What information do we give investors?
The findings of our review are distilled in the research reports we usually make available alongside our deal overview, the Information Memorandum (prepared by the company) and key governing documents.
Our aim is to give our experienced investors all the information they need to weigh up the risks and decide whether or not to participate. Our service is not advice or a personal recommendation to invest.
The average amount Wealth Club subscribed per round in the last 12 months
The number of people Wealth Club backed companies employ in the UK and around the world
9 out of 10
The percentage of Wealth Club backed companies that have attracted institutional capital
60% REVENUE GROWTH
The average company year-on-year revenue growth within Wealth Club backed offers
£159 MILLION, 11% UPLIFT
Current unrealised value based on investment of £149m into 84 companies:
- £139 million in EIS single companies
- £2.8 million in Management Buyouts (MBOs)
- £6.7 million in asset backed companies
- 8 companies out of the 82 companies have failed
Over £5 MILLION
Total capital returned to investors to date based on investment of £149 million, including loan notes, interest payments, capital redemptions and five equity exits
Source: Wealth Club, based on investee company information as at 30 September 2023. Past performance is not a guide to the future.
See average five-year performance of Wealth Club single company investments
Source: Wealth Club, based on investee company information. Past performance is not a guide to future performance. Data as at 30 September 2023. The graph shows both realised and unrealised returns, calculated on a weighted basis, per £100 invested equally across each Wealth Club backed deal per tax year since 2016, for deals where more than £200,000 was invested overall from Wealth Club or more than £100,000 from Wealth Club was invested in that round. Unrealised valuations are based on the share price in the latest funding round or the original share price if there has been no subsequent funding round. Realised returns include loan note interest payments, capital redemptions and equity exits, including values reduced to zero in the case of company failure. These investments are into private company shares or loan capital and there is no readily accessible market for these instruments. Figures do not take performance fees into account. Investors pay no direct fees. Figures do not include up front tax reliefs or any returns that may be available through loss relief.
Below are examples of past deals that have proven popular with investors.
Inotec AMD EIS (co-investment with Amadeus Capital Partners and other funds, Jonathan Milner)
Inotec has developed patented wound care technology offering superior healing rates for chronic wounds. Its NATROX® oxygen therapy technology heals or improves 90% of wounds previously untreatable with standard care. NATROX has been commercialised in the US since 2018 and is used by the US Department of Veterans Affairs – the largest integrated healthcare provider in the US, similar in size to the NHS.
The Company has received significant backing from sector specialists, including Amadeus Capital Partners and Abcam founder Jonathan Milner. In April 2021 Wealth Club members invested £4.7 million as part of a Series C round, extended due to investor demand.
In 2022, Wealth Club investors followed their money, investing a further £2.7 million into a Series C extension round alongside existing institutional investors.
Wealth Club was recommended to us by our cornerstone investor Amadeus Capital Partners. The deal team at Wealth Club showed great expertise in understanding our business and the investment opportunity. They were always available and on top of their process, and they worked seamlessly alongside all other parties involved in the transaction ensuring a successful fundraise. They were a fantastic partner to have onboard our Series C round and we highly recommend them.Craig Kennedy, CEO, Inotec AMD
BibliU EIS (Series B Edtech co-investment with institutional investors)
BibliU is a digital textbook and learning platform used by half of UK students and more than 100 universities and colleges around the world. BibliU’s ed-tech software helps publishers increase revenues and book sales while offering learning materials to students at a discounted price.
Since its launch in 2015, the Company has grown to over $20 million ARR, working with leading institutions like the Universities of Oxford and Cambridge and Imperial College London.
The business is well supported by a variety of institutional investors including Guiness Asset Management, Stonehage Fleming and Nesta Impact Investments.
Wealth Club members participated in the Company’s £15 million Series B round in 2022, investing a total of £1.3 million alongside institutional investors.
Working with Wealth Club has been a fantastic experience. They raised over £1 million to close off the final tranche of our series B under tricky market conditions in a very short six week timeframe. BibliU is looking forward to growing with the Wealth Club investors in future. The latest round of investment in BibiliU, from a highly valuable group of investors, will only serve to further our mission to provide high-quality, accessible and vital learning resources at an affordable cost. This funding will help facilitate this businesses continued growth be developing new technology that will further streamline processes for publishes and academic institutions and, most importantly, improve the leaning experience and outcomes for all students, regardless of their individual needs or circumstances.Dave Sherwood, Co-Founder and CEO
Fabacus’ platform, Xelacore, bridges the flow of licensed product sales reporting information and the data flow between licensor, licensee and end-user.
This unlocks new capabilities assisting with consumer engagement initiatives, as well as provides robust data capture and structuring to meet increasingly stringent ESG reporting requirements.
Its blue-chip customers include Epic Games, Ultimate Fighting Championship (UFC), Skydance Animation, Ubisoft and Activision Blizzard. Fabacus also has strategic partnerships with IMG Licensing, the world’s largest licensing agency, which manages the likes of Fiat Chrysler, Pepsi, Haribo, Volkswagen and Budweiser, Fanatics, who are leading the sports sector with clients including NBA, NFL and UEFA, and Wildbrain CPLG, agents of Peanuts and Teletubbies.
Fabacus has reached an exciting phase, having spent the last three years aligning the licensing industry on better practice and smarter collaboration, with an architecture built to enable all stakeholders to benefit from economies of scale.
The company is backed by other high-profile investors, including Tom Singh OBE (founder of 440-store chain New Look), Seneca Partners, Inovia (led by Patrick Pichette, former CFO of Google) and Mitch Foreman (former CFO of Disney EMEA Consumer Products), as well as Wealth Club.
Wealth Club led the £4.5 million investment round raising £2.35 million, or 52% of the total raise.
Wealth Club’s original allocation of £500,000 was quickly filled in just five days, and the additional £1.85 million raised was due to unprecedented client demand to invest.
Thank you to Wealth Club and all the investors who participated, we are now set for this exciting next phase. The team at Wealth Club have been amazing, consistently demonstrating incredible professionalism and efficiency. Following a seamless and thorough due diligence process, they raised over £2.35m in under 8 weeks, through two tranches, after the overperformance of the initial raise where they smashed the targets. Equally impressive was their swift understanding of the complex nature of our business. We would highly recommend WealthClub to any business seeking capital, as well as to any individual seeking investment opportunities.Andrew Xeni, CEO and Founder, Fabacus Holdings Limited
Pavegen Systems EIS (co-investment with institutional investors, including Hinduja Group)
Pavegen has created patented floor tiles that turn footsteps into clean energy and data: every time a person steps on a Pavegen kinetic tech floor tile, clean electricity is created.
To date, Pavegen has delivered projects for city developers, government bodies and blue-chip corporates in 36 countries, installing over 200 systems. These include installations in Yosemite National Park in California, Abu Dhabi airport and Chelsea Flower Show in London as well as the world’s first indoor exercise track that produces energy in Hong Kong. The aim is to make Pavegen’s patented technology a core component of smart cities infrastructure – a market worth an estimated $381 billion and forecast to grow at 40% per annum.
Wealth Club investors investors £2.7 million in Pavegen in 2021, co-investing at the same price as conglomerate Hinduja Group and alongside funds Tamar Capital and Wadi Makkah Ventures.
Wealth Club investors reinforced their support for the business, investing a further £0.3 million in 2023.
Wealth Club sits in a totally unique space: it's not small-scale crowdfunding and it's not a private equity house, which is perfect for a fast-growing technology business like Pavegen. I was really impressed with their level of diligence on the deal beforehand and also the deal cadence once we went live on their platform. We had a constant heartbeat of investors getting involved, asking questions, and eventually investing, a wide mix of investors from proven entrepreneurs who want to get involved in the business to HNWI who want to support our growth.Laurence Kemball-Cook, Founder and CEO, Pavegen Systems Ltd
Unibio EIS (co-investment with Mitsubishi Corporation, investors of West Hill Capital)
Unibio International plc is a leading alternative protein company, which has developed patented technology to convert natural gas into high quality, sustainable protein for the animal feed market on an industrial scale. The Company operates a demonstration plant in Denmark while a production plant is being established in the US. The Company has a licensee operating a full-scale commercial plant in Russia, and signed a $200 million MOU in 2019 with the Saudi Arabian General Investment Authority to develop a facility in the Middle East.
The Company has raised over $50 million and has received significant backing from strategic investors, including Mitsubishi Corporation. Wealth Club investors have invested £2.8 million across three funding rounds in 2017, 2019 and 2021, alongside members of West Hill Capital.
In March 2023 Unibio announced an investment of c.$70million from the Saudi Industrial Investment Group (SIIG). The investment follows the signing of a major licensing agreement with Gulf Biotech in Quatar to produce its product Uniprotein.
Wealth Club clients first invested in Unibio alongside lead investor and adviser West Hill Capital in 2017 at a share price of GBP £4. Those who invested in the first tranche will have seen a 2.27x unrealised return on their investment. To date Wealth Club clients have invested £2.8 million.
What returns do single companies target?
Target returns will vary depending on the company. Factors that may affect target returns are the stage the company is at, the market in which it operates and its business model.
What is Wealth Club’s role post-investment?
We try to stay close to the businesses we help raise capital for so we can keep our investors updated and provide strategic input into follow-on rounds. Wealth Club looks to take up board observer rights in companies in which there is no institutional investor represented on the board.
We usually require:
- Information rights – this allows us to request and collate the information we use to prepare our six-monthly investor updates, tracking actual performance against plan;
- Right to request appointment of a Non-Executive Director to represent the interest of minority investors, should we consider it necessary;
- Typical board and shareholder level consent rights to be in place as well as an independent remuneration committee – this means management teams need board and/or shareholder consent to do certain things outside of their business plan, such as unbudgeted capital expenditure or raising debt or issuing more equity.
Wealth Club does not take a seat on the board so cannot influence the business the same way as is often the case with institutional investors taking a full board position.
What are the risks?
The main risk, common to all single company investments, is that you are investing in young and unproven companies. They are statistically more likely to fail than their larger counterparts, so you could lose some or all your capital.
This risk is even greater when you invest in a single company rather than a portfolio or fund: there is no diversification so if the company fails you have nothing to fall back on.
A common rule of thumb for venture investing in startups is that out of a 10-company portfolio, you should expect three or four to fail completely, three or four to return capital and one or two to do well, in some cases well enough to outweigh the losses on the other investments. You should not invest money you cannot afford to lose.
Typically, the companies we offer our investors are later stage and more developed than startups. Our review process should also help mitigate some of the risks, but this remains a high-risk area of investment.
Failures can and will happen – they are part and parcel of venture investing. In addition, they tend to occur early on, whilst success takes much longer. Investors may find this uncomfortable.
EIS tax relief, where available, provides a valuable cushion when things go wrong. Conversely, when things go right, returns are magnified. Tax rules change and benefits depend on circumstances.
That said, this type of investment is only for experienced investors, as part of a large and diversified investment portfolio. Don’t forget: besides the risk of failure, these are illiquid investments and you’re locking your money away for the long term (at least three years to retain the EIS tax relief, where available, but usually longer). There are also other risks, such as loss of tax relief if the company becomes unqualifying, operational risks or key person risk – you should always appraise each company carefully. You should only invest based on the information provided in the Information Memorandum: please read all the offer documentation thoroughly.