Boundary Capital AngelPlus SEIS

The Boundary Capital AngelPlus fund, available for both EIS and SEIS investment, is an opportunity to invest in early stage, high growth technology companies alongside experienced entrepreneurs. Co-investment alongside business angels is a central theme of the offer.

Highlights

  • Early stage technology companies
  • Investors will hold 4 to 8 portfolio companies 
  • Co-invests with business angels, entrepreneurs and professional investors 
  • Expected exit in five years (not guaranteed) 
  • Pay no initial charge through Wealth Club
  • Minimum investment £20,000

The manager

Boundary Capital Partners LLP is a venture capital firm investing in early stage technology companies with a particular focus on ICT and electronics, green / clean tech, materials and chemistry, and healthcare and life sciences. Established in 2009, Boundary Capital collectively has 60 years of venture capital experience. It has a network of 300 investing directors. Managing Partner Dan Somers has founded several IT companies including videoconferencing business VC-Net and predictive analytics company Warwick Analytics. Mr Somers holds an MA in Natural Sciences from Cambridge University and a Diploma in Business studies. 

Strategy 

Boundary Capital aims to invest technology-based or knowledge-intensive companies which are growing or in need of turnaround. It believes a number of potentially high growth companies in the UK are run by individuals who do not have the business experience or acumen to commercialise the product or intellectual property (IP) they have developed. 

As well as raising capital, Boundary offers expertise in the form of ‘Venturers’ to the companies in which it invests. Boundary has access to an extensive network of entrepreneurs and executives as part of the “AngelExchange” which was itself founded by Boundary. It will only invest if an appropriate ‘Venturer’ is willing to invest and take a seat on the investee company’s board.

Investors will hold between four and eight investments and exit is planned for after the fifth year, which is not guaranteed. Potential exit routes are trade sales, IPOs, MBOs and company buy backs. 

Boundary Capital sees 500 to 600 deals every year. Of those, 100 make it to investment committee level where they are given a full review. Around 40 companies’ management teams are then interviewed and an appropriate Venturer sought. 4 to 8 companies are selected for investment.

To receive investment, a company must have:

  • Strong and committed management team (any gaps may be filled by later recruitment or a Venturer appointment)
  • Disruptive and potentially global protectable technology with a defined market need
  • Evidence of customer traction

Additionally, Boundary tends not to invest if it deems the business to be too capital intensive, if a stake of less than 5% is available or if there is no plan B (i.e. it is an ‘all or nothing’ proposition).

Example investment – Desktop Genetics 

In August 2013, Boundary Capital invested in Desktop Genetics Limited, an award-winning genome editing software company. Desktop Genetics enables scientists, particularly those involved in the CRISPR genomics revolution, to design and execute experiments and interpret the resulting data. The company was formed by three postgraduates from the University of Cambridge.

Dr Darrin Disley put himself forward as the ‘Venturer’ and became Non-Executive Chairman of the firm. Dr Disley co-invested on the same terms as other investors, with additional share options to cover his active involvement. He is a serial entrepreneur and the CEO of Horizon Discovery plc, one of the fastest-growing newly listed British life science companies. The Venturer role is the executive or entrepreneur who co-invests alongside Boundary Capital and takes an active seat on the Board. Along with Dr Disley, strategic co-investment came from other experienced angels including Dr Jonathan Milner, founder and CEO of Abcam plc.

Fees

Charges are levied on investee companies rather than directly on the investor, meaning more of the initial investment benefits from tax relief. There is an initial charge of 5.5%. There is a 2.0% annual fee paid by the companies to cover monitoring and £150 per month for administration. Directors fees may be payable by the company depending on the level of support given.

A performance fee of 20% is due on amounts returned above £1.10 for every £1 invested. Other fees may apply: more information on fees can be found in the information memorandum.

Risks

These are very early-stage technology businesses. By nature these firms will be more prone to failure than later-stage, more mature businesses. All of the portfolio companies could fail. There are also specific risks: 

  • Key man risk: Although Venturers are incentivised to focus on the investee company, this will be part of a portfolio of interests and their focus may lie elsewhere
  • Intellectual property risk: if the companies’ IP rights are not defensible their value may be completely wiped out.
Your capital is at risk and investors should not invest money they cannot afford to lose. Investors should be aware these are long-term investments and are illiquid. Tax rules can change and the value of tax benefits will depend on circumstances.

Key Information Document: Important Notice to Investors

Before you apply you should read and understand the important documents. Please note, the Key Information Document is not currently available for this investment. This is a new document we are required to provide to retail investors before they invest.

If you wish to apply now, please read the other important documents and ensure you are comfortable with the risks of investing. Then simply download, sign and return the declaration below alongside your application form and we will send you the document as soon as it is available. 

Key Information Document Declaration

Our view 

This is an interesting EIS and SEIS offer. These are early-stage, high growth potential companies carrying high investment risk. The co-investor model has benefits, and the individuals involved have strong credentials.

Wealth Club aims to highlight investments we believe have merit, but you should form your own view. You should decide based 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. 21.12.2017

The details

Type
Fund
Sector
Various
Target return
25% per annum
Funds raised / sought
-
Minimum investment
£20,000
Deadline
Discretionary

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