The Investment Process

EMBA identifies, screens and carries out an initial appraisal of interesting companies. We invest in well-managed businesses with committed management and the potential for strong growth. Short-listed companies are then introduced to registered investors.

Each investor is emailed a clear, concise investment proposal for each company. This includes details of the management team, a description of the business model, marketing and operational issues, financial history and forecasts. It is up to each investor to respond to these investment proposals and to register interest. EMBA then arranges meetings where the management present to interested investors.

EMBA arranges syndicates and co-ordinates more detailed commercial, financial and legal due diligence and the preparation of legal completion documents. Investors can conduct their own due diligence, but experience has shown that pooling resources is more effective.

Each investor independently makes his or her own decision as to which companies they wish to invest in. There is no minimum or maximum investment and individuals can invest in one or a number of companies to form a portfolio.

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Tax Advantages

Tax breaks are available to UK investors who invest in the ordinary shares of unquoted companies under the Enterprise Investment Scheme (EIS). Most of the situations that EMBA considers qualify for EIS tax relief. Capital gains reinvestment relief may also be available.

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Investor Syndicates

EMBA frequently co-ordinates syndicates of investors who want to spread their risk by co-investing with others and build a portfolio of investments.

Private equity investors (business angels) have found that many good opportunities are too demanding for any one investor to undertake alone. Forming syndicates round a number of investments enables investors to spread their risk and means that each investor does not have to commit a substantial proportion of their wealth to a single project. Co-investing works to each investor’s mutual benefit.

EMBA brings investors together so that resources, business experience and contacts can be combined to the benefit of investors and the company.

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Risk and Reward

Investing in private unquoted companies is at the riskier end of the investment spectrum. However as proper due diligence is undertaken, the investee company carefully selected and the investment sensibly structured, attractive indeed spectacular returns can and have been achieved.

Investing collectively in a syndicate means that more capital and resources are available to the company. This provides more ‘financial headroom’ and reduces the risk of failure.

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Confidentiality

Many of the situations that we work with are commercially sensitive and so it is important that confidentiality is preserved. Each investor upon registration signs a non-disclosure clause.

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Monitoring and Exit

Once an investment is completed, good corporate governance is vital to ensure that the business stays on track. Often one of our investors is appointed to the board of the investee company. As a minimum a monitoring role is required. Regular board meetings are held and timely management information provided. We are involved in significant strategic issues and play an important coaching role in the development of the business helping to ensure that progress is being made towards a suitable exit.

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Financial Services & Markets Act

Investment in new business carries high risks as well as the possibility of high rewards. It is highly speculative and potential investors should be aware that no established market exists for the trading of shares in private companies. Before investing in a project about which information is given, potential investors are strongly advised to take advice from a person authorised under the Financial Services & Markets Act 2000 who specialises in advising on investments of this kind.

The role of East Midlands Business Angels Ltd is to introduce investors to businesses seeking finance. East Midlands Business Angels Ltd does not and cannot advise on the merits or risks of any particular investments.

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How do I Join?

Prospective new investor members are asked to provide a CV and meet with a director. We want to ensure that investors have appropriate commercial experience and understand the risks as well as the potential rewards inherent in business angel investment.

To find out more contact:

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