Unlike Private Equity Funds, Venture Capital funds invest in start up businesses either at idea/concept level or at the second stage, ‘Series A’ funding.
Venture Capital funds, like any other fund are heavily regulated in the UK and Europe – thus all Venture Capital funds must ensure they have the appropriate regulatory cover, FCA permissions and compliance frameworks in place, before launching such ventures.
As Venture Capital funds will make smaller investments in a broad range of industry sectors and companies, with the expectation that around 10-15% of the companies develop into ‘unicorns’ and cover the 85-90% of losses made by the other companies*, this requires extensive resources in time and research in which companies to make investments in. XCAP’s dedicated Venture Capital funds platform allows you to focus on deal origination, execution and creating value for your fund, whilst we look at the AIFM infrastructure and regulatory cover.
*Data gathered from our own internal findings and empirical research with Vantage Point Capital
Growth of Venture Capital Funds
Venture Capital funds have been around more for than 30 years, however their popularity has increased since 2010, following some high profile ‘unicorns’ and a number of similar success stories originating from venture capital backing. Also, governments, such as the UK and European Union have launched a number of tax-efficient incentives to private investors to participate and invest in early stage start-ups in a bid to kick start the economy post financial crisis 2008-9.
Venture Capital Trusts: VCT’s are a tax efficient structured domiciled in the UK where the income and capital gains have a different tax treatment. Naturally, the risks are higher investing in startup companies – hence the incentives such as tax relief.
For EuVECA Funds, please click here
Venture Capital Fund Hosting
Unlike other regulatory hosting platforms and European AIFM platforms, we specialise in structuring, launching and hosting Venture Capital funds under the AIFMD regime. Rather than be a generalist regulatory hosting platform, we offer bespoke services to Private Equity/Venture Capital funds, complete with integrated solutions such as risk management, fund memorandum, regulatory cover, investment due diligence, corporate finance advisory, custodians, fund administrators and legal support where required, allowing you to remain focused on deal origination, execution and value creation, instead of deploying capital and resources in non-core activities.
Being a true specialist, allows us to add genuine value to our Venture Capital fund clients, from a corporate finance / capital raising point of view, to offering assistance in managing risk and compliance.
XCAP and Vantage Point Capital (our regulated investment manager and European AIFM) are members of the British Venture Capital Association (BVCA) and UK Business Angels Association.
Venture Capital Funds - How can XCAP help?
Whether you are a seasoned professional in venture capital, or looking to launch your first fund – we offer a comprehensive platform for venture capital funds that will allow you to ‘Plug and Play’ your venture capital fund, from structuring, fund memorandum, launching, risk management, regulatory cover and capital raising.
Our service include, but not limited to;
- Fund Structuring & Set Up, including EuVECA Funds
- Fund Memorandum
- Legal Counsel/Support on Taxation, Investment Management Agreements and corporate structures for the General Partner (GP).
- Integrated Fund Administration & Auditing
- FCA Regulatory Hosting (FCA Appointed Representative)
- European AIFM/ManCo Hosting for the Fund
- European Passporting to all 29 EEA States
- Corporate Finance & Capital Raising
- Risk Management / External Risk Committee
Venture Capital Fund Launch
We have helped launch Venture Capital funds ranging from 5 million GBP, to over 60 million GBP for professional and institutional partners. As a rule of thumb, we recommend 5 million GBP/EUR/USD to be a minimum when launching a VC fund, in order to cover the operating costs of the fund and associated expenses.
If you are interested in launching your Venture Capital fund or operate in corporate finance advisory and want a quote – please visit our bespoke ‘Xchanging’ platform by clicking here