Tech for Good SEIS and EIS Fund 3

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Bethnal Green Ventures (BGV) is Europe's leading early-stage tech for good VC. They invest in ambitious founders building tech startups to solve social and environmental problems at scale.

  • £20,000
    Min. Investment
  • Impact
    Sector
  • SEIS
    Fund Type
  • 31st March 2021
    Closing Date

BGV has unrivalled experience and track record investing in and scaling tech for good businesses, generating top-tier returns for investors, as well as significant and measurable impact.

The Tech for Good SEIS & EIS Fund 3 provides individual professional investors with the opportunity to invest in BGV backed companies.

Highlights

  • 100% focus on tech for good - ventures intentionally using technology to deliver positive impact at scale
  • Targeting companies with the potential for high-growth and significant investment
  • An aim to invest in 20+ companies (a minimum of 10) providing a well-diversified portfolio.
  • High quality deal flow through BGV's extensive network, strong track record and brand recognition
  • Capital intended to be fully deployed into investments in portfolio companies in the 2021/2022 tax year.
  • Portfolio companies will benefit from BGV’s intensive accelerator programme, and life-long venture support, coaching and connections with 50+ mentors
  • Tax efficient - benefit from SEIS or EIS tax reliefs
  • The Fund aims to realise a return for investors of £2.00 for every £1.00 subscribed (net of all fees; before any tax reliefs).

Market approach

BGV invests at the early stages of a company’s development from startup to seed stage. We’re well known for our accelerator programme where we select a cohort of startup companies and provide them with an intensive 12-week programme of advice and support, to rapidly develop, test and launch their businesses.


After the accelerator programme we provide ongoing tailored support to our portfolio companies, and make follow-on investments in the most promising ventures at pre-seed and seed stage alongside other investors.

Financial overview

The Fund aims to realise a return for investors of £2.00 for every £1.00 subscribed (net of all fees; before any tax reliefs).

Minimum investment: £20,000

Minimum Final Fund Size: £1,250,000

Investment strategy

The Tech For Good SEIS and EIS Fund 3 aims to deliver significant positive impact for society and the environment, benefiting millions of people and delivering strong capital growth for investors. The Fund aims to provide investors with access to a large number of high potential early stage tech for good companies. With its industry leading reputation, long track record and large community, BGV is uniquely placed in the tech for good field to access these investment opportunities, giving investors diversification and good quality opportunities as is appropriate when investing in early stage companies.


Investment thesis

BGV believes that tech for good businesses will become some of the most valuable companies within the next ten years. Our purpose as an early-stage investor is to find those ventures when they're just starting out, and help them launch and scale. There are four key insights that make up our investment thesis:


Better solutions are needed

Better solutions are needed to achieve a sustainable planet, a good society and healthy lives. We see an opportunity for ambitious ventures to tackle these challenges and radically reimagine the future for the better. Better solutions aren’t just good for humanity, they’re also a huge market opportunity too. An estimated £9 trillion can be unlocked each year by the businesses that ensure a sustainable and prosperous future for people and planet. 


The potential of technology

Technology designed with the specific intention to drive positive impact has huge potential – providing opportunities for greater scale and new approaches to addressing big social and environmental challenges. It enables rapid growth, global reach and affordability through declining unit costs. It also enables network effects where the value and positive benefits can increase exponentially with growth.


Purpose driven business

People are becoming increasingly values-aligned, expecting companies to contribute positively to society and the environment. We see this decade being defined by the demand from investors, customers and employees for business to be a force for good.


Diverse teams

Diverse teams develop more accessible products and services, deliver better returns and better impact. Our commitment to seeking out and engaging with diverse founders gives us visibility and access to brilliant opportunities other investors regularly miss out on.


Investment objectives

We will select investments that we believe have the potential to achieve each of the Fund’s objectives:

• Impact: To have a positive social or environmental impact within the themes of a sustainable planet, a better society and healthy lives.

• Scale: To achieve that impact at scale, directly benefiting millions of people 

• Capital growth: To deliver long term capital growth for investors


Portfolio strategy and diversification

The Fund will aim to invest in 20+ companies (a minimum of 10) providing a well-diversified portfolio. Investments will be made across accelerator, pre-seed and seed stages, sourced through new applications to BGV’s accelerator and also from high potential companies within BGV’s existing portfolio. At least 75% of the investment in the portfolio will aim to be eligible for SEIS relief with the remaining investments aiming to be eligible for EIS relief.


Investment Criteria

The detailed investment criteria we use is set out in Appendix 3 of the Information Memorandum. In summary, we seek investments which: 

• Have the potential to achieve our investment objectives 

• Pursue a social or environmental mission through innovative use of technology 

• Operate with a high standard of integrity and business ethic 

• Aim to generate substantial revenues and profits from their activities over time.


Over our eight years of experience investing in tech for good we have identified critical success factors that we screen investments for, including:

• Skills and commitment of the management team.

• Deep understanding of the social or environmental problem and market insight

• A user centred design approach, based on learning and iteration

• The innovation of the product or service, and its potential to add significant value to users and customers at a large scale

• Differentiation and defensibility in light of competition


We will not invest in:

• Industries or companies serving defence or armed conflict markets

• Industries or companies known to cause damage to human health

• Industries or companies known to cause environmental damage

• Industries or companies we consider to be exploitative of workers

Exit strategy

Early stage investing requires a patient outlook. We expect successful exits from our investments seven years to ten years after our first investment. Typically, our exit hypothesis will be the acquisition of the portfolio by an established incumbent in the market or established large business entering a new market. An exit to another investor in a secondary transaction may also be possible where the portfolio company continues to raise further rounds of investment. To date we have achieved two successful exits with 17x and 3x returns on investment.

Risks

The Fund will be making investments in early stage, Seed Enterprise Investment Scheme (“SEIS”) and Enterprise Investment Scheme (“EIS”) qualifying unquoted companies in the UK. Investments in unquoted shares carry higher risks than investments in quoted shares. You should be aware that no established or ready market exists for the trading of shares in unquoted companies. The value of shares can fall as well as rise and you may not recover the full amount of money originally invested. Past performance is not necessarily a guide to future performance and may not be repeated. Any investment in this product should be considered as a long-term investment.

Documents

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The content above has been provided by Bethnal Green Ventures, an Appointed Representative of Midmar Capital LLP who are authorised and regulated by the Financial Conduct Authority under firm registration number 519772.