Most of the public companies of today have sought venture capital funding at some stage and many of them will have been back to venture capital houses a number of times. Nobody likes selling a stake in their business, but if a company is to grow and prosper it is likely that at some time outside funding of one kind or another will be needed, over and above debt finance that a bank may provide. Braveheart provide mainly equity finance although we will look at debt situations. We prefer to invest using the Enterprise Investment Scheme (EIS) wherever possible, because this is the most tax efficient vehicle available to our investors.
Once we have been approached by a company we go through a number of stages on the path towards completing a transaction: If the business appears to meet our initial investment criteria, we will have a meeting with management. If we like what we see we will then look at the risk/reward scenario very carefully, and alongside that we will consider the three main areas of people, product and market potential. Once we have agreed terms we commence a detailed due diligence exercise.
We expect the complete exercise from initial approach to deal completion to take around four to six months, although we have completed transactions in much shorter timeframes in rescue situations. It is helpful if companies can approach us sooner rather than later, even if the object is to have an exploratory meeting based around a business plan that might still need finalising.
Once an investment has been made we look for a close relationship with the investee company. We are sometimes invited to appoint a representative to the board and that person will usually play an important role in the development of the company as well as reporting back to us.
We are members of the British Venture Capital Association and where possible we work to their guidelines.