New Venture Capital Trust launched to back ex-military entrepreneurs
Fund creators aim to grow companies by 70% within five years
A new Venture Capital Trust (VCT) has launched today, set to be the first fund in the UK to exclusively back commercially proven ex-military entrepreneurs.
Launched as a joint venture between venture capital firms TIME Investments and Reboot Ventures, the TIME:REBOOT VCT aims to capitalise on the growing number of ex-military personnel in the UK – estimated at around two million people, following reduction of the UK’s armed forces.
It aims to raise £20m from investors by the end of April 2014, with around 50% of this invested in established profitable companies and the remainder backing companies with strong revenue growth and realistic projections.
TIME:REBOOT’s creators said that many of the qualities looked for in successful entrepreneurs were shared amongst ex-military personnel, including discipline, teamwork and leadership skills.
The VCT will hope to find those companies emulating the past success of notable veteran-founded companies, which include Trailfinders and Go Ape in the UK and FedEx, Walmart and Enterprise Rental in the US.
TIME:REBOOT will typically invest between £500,000 and £3m per investee company, with investments usually taking the form of shares, loan stock and convertible securities.
It is expected to deliver a minimum 70% growth for its portfolio companies within five years and claims it will double investors’ returns within 10 years.
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A Venture Capital Trust (VCT) is a company that is listed on the London Stock Exchange and invests in non-quoted small and growing companies.
VCTs provide a number of tax advantages for investors, including tax-free dividend payments and capital returns.
Stuart Nicoll, founder of Reboot Ventures and a member of the British Army from 1991 to 1998, said: “Ex-military entrepreneurs have a number of qualities that make them stand out in the business world. These include resilience under pressure; determination, discipline and adaptability.
“Our team have the necessary skills to identify the opportunities and we already have a strong pipeline of potential investments.”
Nigel Ashfield, managing director of TIME Investments, said: “VCTs now have around £2.9 billion in funds under management, which is the highest amount since they were launched in 1995, and with the improving sector track record, its strong tax benefits and the current bull market in SMEs, investors are increasingly looking to increase their exposure here.
“Our proposition, which combines a relatively cautious investment philosophy with a focus on backing ex-military entrepreneurs, is unique and we believe it will appeal strongly to investors.”
Tim Hames, director general of the British Venture Capital Association, commented: “TIME:REBOOT VCT is an excellent use of Government tax relief and the kind of honest, innovative finance we need to grow our small businesses and make sure the best people are leading them.”