In general, the Mercia Technology Seed Fund expects to be the lead investor in any round of venture capital funding, but will actively encourage investment by management and syndication with other venture capital investors.
 

Stage of Company Pre-Investment

a) Typically less than 5 years post incorporation;
b) Will have had professional assistance in regard to business plan preparation and marketing evaluation;
c) May have had initial management and/or business angel funding and grant funding;
d) Will have developed the technology to a point of established proof of concept; and
e) Will have early commercial interest in the technology or product

Phase I: Investment Request

1. Route to Mercia Technology Seed Fund:

a) Intermediaries (accountants, lawyers, business support services);
b) University technology transfer offices;
c) Downloadable application form; or
d) Direct contact with the MTSF Investment Team

2. Following receipt of an executive summary (outlining the product, proprietary position, competition, market opportunity, management and founders, company history), the opportunity will be assigned to a member of the Investment Team with the appropriate sector experience

3. If a decision is made to proceed further, a business plan will be requested, to be followed by a presentation to at least one member of the Investment Team

PHASE II: Investment Offer

1. Following the business plan review, presentation and preliminary due diligence, an ‘indicative offer’ will be made. This will outline:

a) Valuations; and
b) Pre-conditions†

2. An internal paper will then be submitted to the MTSF's Investment Committee detailing the opportunity and the indicative offer terms;

3. The investment request will either be approved with no changes to the indicative offer, or amended, or rejected;

4. If accepted by the Investment Committee, a detailed ‘Heads of Terms’ will be issued to the prospective investee

†Note: These pre conditions will involve the MTSF's satisfaction against certain technical, commercial and financial conditions, and will include reference checking.

PHASE III: Completion

1. Following receipt of the signed 'Heads of Terms' from the prospective investee, the MTSF will complete its due diligence and will issue a set of legals. We use standard legal templates and, if these are not amended, legal costs are kept to a minimum.

2. Following agreement on legals, satisfaction in regard to the MTSF's due diligence and pre-conditions, the investment is made and cash released to the investee.

Timetable

The time taken from the MTSF's first introduction to a prospective investee through to completion of an investment can vary considerably and is dependent on a number of key factors. These include the stage of product/technology development, the quality of the business plan and market evaluation, the results of the MTSF's due diligence process, and the ability of the prospective investee to fulfil any pre-conditions set out in an Indicative Offer.