Symvan Technology EIS Fund
The Symvan Technology EIS Fund offers investors exposure to early-stage technology businesses that are potentially disruptive in their sector. Symvan relies on its SEIS funds to act as incubators and expects around 75% of the EIS portfolio will be sourced from these funds. For companies to receive follow-on funding, Symvan has to be confident in the management team and its ability to scale the company.
- Exposure to early-stage technology companies
- Collaborative approach with technology incubators
- Investment selection emphasises competent management teams
- Target return of 2.85x (not guaranteed)
- Aims to provide exposure to seven to ten companies (minimum portfolio of five)
- Minimum investment £20,000 – you can apply online
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Symvan Capital was founded in 2013 by Kealan Doyle (CEO) and Nicholas Nicolaides (Investment Director). They met in the early 2000s and have experience in investment banking and venture capital.
The EIS fund is managed by a core investment team of four and receives support from Symvan’s advisor network. Symvan employs advisors to broaden its industry contacts and to provide sector expertise for investee companies. Recently, it hired Paul Frampton, the former CEO of Havas Media Group (UK Division), to advise on media and HR technology.
For any company to secure investment, it must receive unanimous approval from the investment committee.
Symvan looks to invest in a company across its lifecycle. The capital needs of a business are considered from first investment through to exit – so as well as providing any initial SEIS funding, Symvan will consider the requirements for later stage, follow-on funding, through the Symvan EIS fund.
The SEIS funds will act as incubators and are expected to provide the majority of the EIS deal flow. Symvan will provide follow-on funding to companies with competent management teams who have demonstrated their ability to scale the business. However, other factors such as revenue generation, market competition and valuation can affect this decision. For deals sourced outside Symvan’s existing portfolio, the investment team will monitor the company for several months before investing.
Typically, the investment team sees over 500 deals a year that are of interest. It is expected that fewer than 1% of these will receive investment across both the EIS and SEIS funds.
The fund is sector agnostic. Prospective companies should ideally already be generating revenues, however, Symvan may consider those with clear revenues in sight e.g. a commercial contract.
Currently, Symvan has around £20 million in assets under management. Of this, EIS represents £15 million with the remainder held in SEIS.
Since launching the EIS fund in 2016, Symvan has invested £7.1 million into 15 companies. Approximately 75% of these were follow-on SEIS investments. The estimated hold period is expected to be between 5-7 years, although it may be longer.The fund targets an average portfolio size of between 7-10 companies, with a minimum of five, not guaranteed
Source: Symvan Capital Partners, as at 31 December 2019.
Examples of previous portfolio companies
The companies outlined below are historic investments made by Symvan. EIS funds tend to be managed on a discretionary basis so each individual portfolio is likely to be different.
Founded by architect and entrepreneur Michael Jansen, Cityzenith’s digital platform allows designers to create virtual replicas of building projects.
By pulling together data from builders, developers and cities, the software creates hyperdetailed ‘supermaps’. This ‘virtual twin’ can then be used to simulate the effect of different conditions on existing infrastructure or understand the impact of a new building. The software can be used at any point in the building process from ‘design to demolition’ and has already been employed to design the new $6.5 billion capital city in Andhra Pradesh, India.
Symvan was first introduced to the company through ShadowFoundr, an angel group, and were encouraged by the global interest the business had already acquired. It invested £230,000 through the EIS and the company has subsequently raised a further $1 million in funding from Republic, a crowdfunding platform in the US.
Guider Global Limited
Guider is an online platform which allows companies to manage internal mentoring programmes. Its proprietary software matches the most suitable mentors and mentees and integrates goal setting, messaging and video chat for ease of use.
Programmes can be tailored to drive changes in specific areas or provide visibility on skills gaps. With each mentoring partnership, Guider will gather data to provide companies with insights into the impact and success of its programmes. The company is revenue generating and is scaling relatively quickly with clients such as M&S and Aviva already on its books.
Symvan initially invested £150,000 at SEIS before providing an additional £100,000 in EIS follow-on funding.
As is to be expected, not all investments work out. One example of a failure is WonderLuk, one of the early SEIS investments, from 2014.
WonderLuk sold 3D-printed jewellery (bracelets, rings, necklaces etc) designed by architects, product and jewellery designers from around the world. Durable high tech nylon pieces were digitally created and the sterling silver elements were crafted by lost wax casting from the 3D-printed shape.
WonderLuk opened the first pop-up store for 3D-printed jewellery in Europe and in 2015 the firm collaborated with Topshop to open a 3D-printed accessories pop-up store in the Topshop Oxford Circus branch.
However, WonderLuk was not able to scale. In 2017, the business was liquidated and a small amount was returned to SEIS shareholders.
The EIS fund did not invest even though the business was seeking further money: indeed this is one example of how Symvan’s knowledge and experience gained from working with a company at SEIS stage can have potential benefits at the EIS level.
To date, the Symvan EIS Fund has yet to make a cash exit, however, two portfolio companies have generated unrealised returns through separate mergers. The first, Buying Butler was a paper exit, the second, B.heard, was a token-for-cash equity exit. In the latter case, investors returns were denominated in Sweetcoin, a cryptocurrency.
Buying Butler (now trading as RightIndem)
A digital concierge buying service, Buying Butler helps match customers with the best products. For instance, within the second-hand car market it can filter for exact requirements such as boot space, safety features or speed. Once a feature has been specified, Buying Butler’s algorithm will select a series of products fit for purpose.
Symvan Capital first invested in 2014 through its SEIS fund, in the same year the company was also selected to be in the first cohort of the Microsoft Ventures Accelerator programme.
Buying Butler was acquired by RightIndem, an insurance claim business, in March 2019. This generated a paper exit for the fund – equivalent to a return of 1.55x, past performance is not a guide to the future. For every ordinary share in Buying Butler, subscribers to the fund received 1.21 shares in RightIndem, which is still held within the EIS portfolio.
Please note, as the fund exited Buying Butler within the 3 year holding period, the investment did not qualify for EIS tax relief.
The graph below shows the annual value of £100 invested for each tax year invested in the open EIS fund for each tax year. Please note, while the fund has achieved two paper exits (one in consideration for cryptocurrency), these returns are included in the 'unrealised gains' category. Realised gains would be cash back to investors.
Source: Symvan Capital Partners, as at December 2019. Figures are net of all fees. Past performance is no guide to future performance. These figures do not include any realised returns which would be available through loss relief. In the above examples, initial tax relief of up to 30% could also apply. So, for the tax year 2015/16, the total return including initial tax relief would be £234, remember tax rules can change and tax benefits depend on circumstances.
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 so should only form part of a balanced portfolio and you should not invest money you cannot afford to lose. They also tend to be illiquid and hard to sell and value. Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks.
Tax rules can change and benefits depend on circumstances.
This EIS fund invests in early-stage businesses which are more likely to fail than larger ones. So you should expect a number of failures in the portfolio, or even be prepared for all companies to fail.
Investors should note the fund has exited one investment for
a cryptocurrency consideration. This has fewer controls and regulations in
place to protect investors: valuations and realisations can also be difficult.
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.
|Full initial charge||0%|
|Wealth Club initial saving||—|
|Net initial charge through Wealth Club||0%||Annual management charge||0%|
|Performance fee||20%||Investee company charges|
|Initial charge||Up to 6%|
More detail on the charges
Timing of the offer
The fund anticipates taking up to 12 months to fully deploy investor capital following the closing dates. However, it may take longer.
Read important documents and 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.
- Target return
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