By Lisa Walls-Hester on Tuesday 27 December 2016
Growthdeck has launched a funding round to facilitate expansion. It wants to extend its deal processing capability and says its hybrid platform, combining Radius Equity and Growthdeck, represents a significant opportunity for investors to participate in the growth of UK SMEs.
The platform now hopes to scale rapidly and seeks new investment capital to expand its team, its network of affinity partners, and its regional clubs.
Growthdeck launched in January 2016 as a joint venture between Radius Equity and Lexicon Marketing, a tech-focused marketing agency specialising in financial services. In July 2016, the two companies combined under Growthdeck as the head brand.
The merger created the new hybrid business - a traditional venture capitalist operating alongside a professional equity crowdfunding platform. The business model it calls “Personal Equity” will combine the professional due diligence and investee support of traditional venture capital, with the flexibility and accessibility of equity crowdfunding.
Image Source: GrowthDeck
The GrowthDeck hybrid business model will differentiate from all other crowdfunding platforms and traditional VC firms.
Growthdeck focuses on equity fundraisers of between £500k and £5m for early stage and more established UK companies which generally qualify for SEIS/EIS tax relief. The main source of capital for these investment opportunities is:
• UK High Net Worth (HNW) investors (the traditional clients of the Radius Investor Club)
• Sophisticated or HNW investors (the higher-quality crowdfunding investors)
• Regional or affinity-focused investor clubs
• Foreign investors seeking investments to comply with UK visa requirements
The Growthdeck plan requires £1.5m of new equity and is seeking investment participation in units of £10,000. The platform has attributed a pre-money valuation of circa £6m which compares with valuations of £30-65m recently paid by private equity institutions when investing in the more established platforms, Seedrs and Crowdcube.
In addition to an equity stake in the hybrid business, investors are also offered a low-cost carried interest (a stake in the investee company, typically three-five per cent) in every company for which Growthdeck raises funds. All Growthdeck shareholders are offered these carry shares in proportion to their shareholdings and the company has forecast this could be as many as 80 carries in the next three years.
Growthdeck aims to create a transparent and professional multi-channel investment platform, and whilst it is predominantly focused on the UK, changes in legislation in both the US and Australia, and significant potential in China, present opportunities to roll-out its operating model to other territories.
The company plans to exit within the next three to five years with the prospect of a gross IRR for investors of 59.1 per cent.
For more information on the Growthdeck raise, please contact firstname.lastname@example.org or call 0800 302 9444'