Velocity Technology EIS
The Velocity Technology EIS fund targets young companies that offer innovative technology solutions.
on consumer technology startups with scale up potential
- Experienced management team
Return of £2.50 per £1 invested (not guaranteed)
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The fund is a partnership between Velocity Capital Advisors, the investment consultant team, and Thompson Taraz, the investment managers. The team is headed by Rajeev Saxena and Bil Bungay.
The fund expects to hold a minimum of three companies in the portfolio typically investing between £50,000 to £1,000,000 per company. However, this is dependent on whether the fund achieves its targeted raise.
As much as possible, the portfolio will be spread across companies at different stages. It is expected that around 60% of subscriptions will be allocated to later-stage opportunities with the remaining 40% split equally between early to mid-stage companies.
Watch a video interview with fund manager Raj Saxena:
Velocity will only consider companies where technology is a significant component in the business, aside from this the fund is sector agnostic.
Deals are sourced either through the Velocity’s personal network or through independent organisations such as Pitch at the Palace or universities. In terms of selecting companies, the investment team looks for businesses that can demonstrate clear market need, scalability and the ability to expand outside of the UK market.
Velocity is also open to co-investing, however, it will only do so as the lead investor.
This is a relatively new offer which launched in 2016. Some examples of current investments held within the funds are detailed below: note individual portfolios will vary.
Example portfolio companies
The tattoo industry is notoriously fragmented – the most common form of recommendation is still word of mouth. Iynk’s solution is a mobile platform which connects tattoo artists with potential customers.
Users can find their closest artists, look through their portfolios and importantly, review their ratings. What’s more, the app is all inclusive. Users can book and pay for appointments while also providing reference images for the artist all within the app itself. In turn, this provides artists with an efficient booking system while and removes the need for a personal website.
The app is expected to launch this summer with a number of top artists already signed onto the platform.
Founded by Pedro Lourenço, an acclaimed fashion designer, Zilver is a brand focused on producing gender neutral and sustainable fashion.
Over 10% of global warming can be attributed to the fashion industry. To combat this, brands have increasingly become more ‘eco-friendly’, however, leading designers such as Stella McCartney have so far only achieved around 17% sustainability. Zilver, on the other hand, is 98% sustainable. Nearly every product is designed from recycled material, some of its jackets have been made from bottle tops and even apple cores.
The company has already released three collections and are already one of the leading brands on Farfetch, an online luxury retail platform. Velocity first invested through its SEIS fund but as also provided follow-on funding through its EIS.
Building on the success of other content streaming platforms, Next Up offers an online subscription service that provides exclusive Stand Up comedy performances. With new shows released every week, Next Up delivers an extensive collection of both breakthrough and well-established comedians to a dedicated audience.
Going forward, Next Up is looking to increase its customer base - this should be helped by its recent inclusion in the Apple TV subscription service.
Target return and exit strategy
The target return is £2.50 per £1 invested although this is not guaranteed. Exits are expected to take place between five to seven years, but this is not certain. The preferred exit strategy for subsequent companies would be to list on the AIM market, however, other exit strategies will be considered.
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.
Charges & savings
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||—|
|Wealth Club initial saving||—|
|Net initial charge through Wealth Club||—||Annual management charge||2%|
|Performance fee||20%||Investee company charges|
More detail on the charges
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
- Funds raised / sought
- £2.5 million / £10.0 million
- Minimum investment