Frequently Asked Questions

Who are 1818 Venture Capital?

1818 Venture Capital (“1818”) is an investment firm which focuses on early and growth stage digital technology companies with the aim of generating significant returns for our clients.
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1818, licensed and regulated by the Guernsey Financial Services Commission (reference 2293247), was established in Guernsey as part of RAW Capital Partners in 2012. 1818 became fully independent in 2017 and is proud of its successful track record.

Where are we based?

We are based in Guernsey in the Channel Islands. Guernsey is a politically and financially stable, self-governing British Crown Dependency situated in the English Channel about 80 miles off the coast of the United Kingdom. It is a leading international financial centre in the sterling zone.
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Our registered office is at: Carinthia House, 9-12 The Grange, St Peter Port, Guernsey, GY12QJ.

What does 1818 Venture Capital invest in?

Early stage, high growth businesses that are focused on delivering digital technology solutions to end users.
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We invest in what we know and understand. Typically, these will be FinTech and Tech-enabled start-ups.
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We prioritise under-represented founders and businesses with a social purpose.
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We invest early: Pre-Seed, Seed, Bridge and Series A investment rounds. This is where the biggest funding gap is and where the greatest investment opportunities lie for potentially outsized returns.

How do we diversify your portfolio?

Increasing portfolio size and decreasing portfolio concentration helps reduce the risk of adverse outcomes for investors. Therefore, to help mitigate the risk of losing capital and to reduce the volatility of investment returns, we build diversified portfolios of venture opportunities. We believe we source the best early-stage businesses with the most talented and visionary founders and therefore we will never sacrifice quality for quantity.
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Over approximately 12 months, your funds will be invested in typically 10-15 of our carefully selected opportunities creating your own venture portfolio. Your funds are pooled with that of other clients and management into each company we invest in. Your exposure to any single portfolio company will kept to between 5-10% of the capital you invest with us.

What is our guiding investment criteria?

For an investment to be attractive, the target business must have:
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The potential to achieve 10x return on investment
- An attractive target market
- An understandable and viable route to market
- A competitive market edge
- A commercial model with clear financial benefit to the company
- A clearly articulated proposition which can be scaled
- An appealing user-focused solution

Typically, investee companies will have an initial valuation of between £1m - £20m.

From time to time, we come across exceptional opportunities that do not fall within our core investment strategy. When we have a high level of conviction in such an opportunity, we can offer participation to our clients outside of the Venture Portfolio on a Deal-by-Deal basis. We believe this is a further value add service to our clients.

What is the 1818 Venture Portfolio?

The Venture Portfolio is a discretionary managed service, which means that our team invests your money on your behalf, directly into a diversified portfolio of new investment opportunities. Diversification is a sensible tool to spread risk in each client’s portfolio.
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Each investment is identified on the basis that it has the potential to return at least 10 times the capital invested.

Alignment with investors

Senior management of 1818 personally invest in every opportunity offered to our clients on the same terms both on entry and exit. We believe this shows total alignment with our clients.

Where does 1818 invest?

We invest in companies incorporated in the UK or the Middle East region (GCC nations - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, or the United Arab Emirates), as this is where our network is strongest.

What do we look for in a founder?

We believe that talented and visionary founders and leaders are significant value drivers of early-stage investment opportunities.
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1818’s strategy is to look for leadership teams that have:
- Intelligence, high conviction, and new ideas
- Ambition, passion, drive
- An abundant mindset
- Tenacity, resilience, and integrity
- A balance of relevant skills
- Curiosity, openness, and realism

What is your fee structure?

The management fees that 1818 charges are significantly below those of its peers. 1818 currently charge a one off 5% upfront management fee (with zero annual management fees), and a performance fee subject to a hurdle.

How does a venture portfolio differ from a venture fund?

Clients may start a discretionary managed account (Venture Portfolio) with us whenever they wish, unconstrained by the fixed dates a fund would impose.

Client capital will typically be deployed more quickly than via a fund, and therefore this potentially provides better compounding effects on investment returns.

Portfolios do not incur annual administration fees in the same way a fund would. 1818 charges a fixed one-time 5% management fee covering the life of the discretionary managed account as opposed to the typical 2% per annum over the 10 year life of a fund.

Topping up or ’over investing’ option: A client may top up their investment in the opportunities that particularly appeal to them. Where possible, this is done by adding additional funds to the discretionary managed account.

Reporting and founder webinar series

We will provide you with quarterly valuations via our Client Portal and our investment newsletter. We also invite our clients and prospective clients to attend our Founder Webinar Series (“FWS”). In the FWS, founders we have backed or are considering investing in provide a detailed insight into their business, markets, challenges, accomplishments and road map. These are typically interactive sessions with questions and answers.

When will my capital be returned to me?

As portfolio companies are exited, we will return 100% of any cash realised from the exit less any applicable fees.

Tax relief for UK residents - SEIS and EIS

We aim to invest in companies that can qualify for the UK government’s Seed Enterprise Investment Scheme (“SEIS”) and the Enterprise Investment Scheme (“EIS”) These schemes allow our UK based clients to claim certain tax reliefs to alleviate any pressure that comes with investing in riskier private enterprises.
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The majority of our investments can qualify for the UK government’s initiatives, being the Seed Enterprise Investment Scheme (“SEIS”) and the Enterprise Investment Scheme (“EIS”). Where this is applicable, clients that are UK tax resident can enjoy significant tax relief on their investments. The two schemes are similar but there are some key differences:

SEIS focuses on very early-stage companies. SEIS permits an individual to invest up to £100,000 per tax year and to receive relief of 50% of the value of their investment by way of a corresponding reduction on their income tax bill in the year of investment. A UK tax resident client may also benefit from a capital gains tax exemption on any profits that arise from a sale of shares in the applicable investee company after three years.

EIS focuses on more mature companies. It allows an individual to invest up to £1 million in any tax year and to receive relief of 30% of the value of their investment by way of a corresponding reduction on their income tax bill in the year of investment. A UK tax resident client in an EIS qualifying investment will also pay no capital gains tax on any profit arising from the sale of the shares in the applicable investee company after a three-year holding period.
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In respect of both SEIS and EIS, where shares are held in excess of two years, there is no UK inheritance tax payable. If shares are sold at a loss, the investor may offset the loss against their capital gains tax.
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Please note, we do not provide tax advice and each client wishing to avail themselves of incentives such as SEIS and EIS clients should check with their own professional advisors and should check HMRC’s website regarding the latest information and updates on such schemes.

How are your investments held?

The Venture Portfolio is offered via a discretionary managed account in the name of the underlying client. The relationship between a client and 1818 in respect of the discretionary managed account is governed by an Investment Management Agreement (“IMA”).
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Underlying securities (by which we mean the investments in investee companies comprising the Venture Portfolio) are held in the name of RAW Nominees Limited (as bare trustee), a wholly owned subsidiary of 1818. Therefore, 1818 (through RAW Nominees) holds and manages each client’s interest in the investee companies.

Is there a minimum I need to invest?

Private Equity and Venture Capital investing has traditionally only been accessible to investors able to invest very substantial amounts of capital.
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We have set our minimum investment level to be accessible for new eligible clients at £25,000 and £10,000 for existing clients.

How long will I be invested for?

Clients can expect to be invested for at least 5-7 years in each opportunity, prior to an exit opportunity arising. Typical exit opportunities would include trade sales and IPOs.

Risk profile

The Venture Portfolio will invest at an early stage (up to and including Series A), where the market is less efficient, investments are less competitively priced, and the opportunity for attractive risk-adjusted returns is greatest.
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The Venture Portfolio is only suitable for professional and sophisticated investors with a willingness to accept the lack of liquidity inherent in Venture Capital investments.

The risk associated with investments in Venture Capital is high and investors are required to familiarise themselves with the risk warnings set out in the IMA, and to seek their own professional advice in order to satisfy themselves that the investments are suitable for them before becoming clients of 1818.

frequently asked questions

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