How long is the exclusivity period?
Exclusivity is for 12-months after the investor event.
How long does it take for a Series A round to close?
Depending on your revenues and growth rate, you should allow 12-months from starting to work on your investor proposition to having cash in the bank. It could take longer if you are growing slower than planned and your net revenues are not yet at the magic £1m ARR. It typically takes 3-6 months for a series A round to close. That is for a company whose investor proposition is in good order (this is the purpose of the programme). That time includes 3-4 meetings with investors, investment committee approval, term sheet negotiation and then due diligence, which can take 6-8 weeks. Series A investment processes are far more rigorous than seed.
I already have existing investors, is commission payable if they follow on?
We can ringfence previous investors, but we will collectively agree to a reasonable amount in the contract.
I am already talking with investors, why do I need to pay commission if I know them?
Even with the best relationships in the world (often including your earlier investors), they will still need to see suitable growth and an investor proposition that is relevant for series A. This is exactly what the programme delivers to you. Without a rock-solid deck, business plan, financial model and data room, it is difficult to close a series A round.
I am really busy running my business; how much time do I need to commit?
During the programme you will need to spend 1-2 days per week (½ day for the programme sessions, some time for mentoring and the rest is needed to research and document your investor proposition). After the investor event, outreach and subsequent negotiations you should expect half of your week to be investment related. This is obviously a significant commitment so you should be prepared to delegate during this time.
Is there a list of investors participating in the programme?
We do not share our investor list, but it currently contains 800+ institutional investors. We are very good friends with ~130 of them and worked closely with many of them in the £350m+ of deals we have helped to negotiate. Recent deals have been done with Amadeus, Blackfinch, Calculus, Earthworm, Finch, Mercia, Symvan, Edge, Fuel to name a few.
Is there any commitment to how many investors will be possible to pitch during the exclusivity timeframe?
We do not guarantee how many investors attend an event, but we typically have 40-60 attend our virtual pitch events. We double that number at physical events. However, we do not stop introductions at the investor event, but continue to work with you and suitable investors until we have a successful outcome. That’s why 75%+ of our companies receive investment.
How have Series A investments been affected by COVID-19?
We have closed a number of existing deals during lockdown and are now part way through negotiations and meetings with companies from our last cohort. We expect those to close in Q420, which is not far off normal timing. So far we haven’t seen too much of a squeeze on valuations, although investors are wanting better quality propositions, which is where The ScaleUp Accelerator comes in.
Will you really help me close my VC round?
We have spent a decade doing exactly this, with £350m+ of transactions advised on, with a predominantly success related fee structure, i.e we don’t get paid unless you raise your funding. Our experience, network and processes maximise your likelihood of raising VC cash on the optimum terms, as quickly as possible. We genuinely care about our clients, and work tirelessly to achieve your funding objectives.
Is it seen as “weak” to have deal support?
A small number of VCs do say this. Our experience is that good VCs welcome well presented opportunities, the ability to have direct qualification chats with people they know (us), and confidence that we can assist in the structuring of deals that work for all sides. From a founder’s perspective it is not the best use of your time to have to learn a set of skills you are likely to need once or twice in your business career.
Does the commission fee reduce my cash runway?
With increased interest generated from our VC outreach, we often see clients achieve the best possible valuations. The increased valuations mitigate the extra cost of our contingent fee as overall the founder’s suffer less dilution, frequently achieving a net zero cost. In some instances founders add our fee on top of their funding requirement, so are no worse off from a cash position.