The assessors will score your answers for questions 3 to 6. You will receive feedback from them for each one. Questions 1 and 2 are not scored.
Do not include any website addresses (URLs) in your answers.
Question 1. Your financial standing (not scored)
The Innovate UK credit and risk team will carry out an assessment of your organisation’s financial standing before we decide whether to invite you to join the investor partnership programme.
Describe or explain:
- the financial position of relevant entities involved in your investment activities, including providing financial statements for the past 3 years
- the assets under management of relevant entities involved in your investment activities for the past 3 years, including at the time of submission of your application
- where 3 years of historic financial statements or assets under management (or equivalent funds available for investment) are not available, provide the most recent available information (including management accounts where appropriate)
- the regulatory status or authorisations of relevant entities involved in your investment activities
- any investment by public sector entities in your assets under management, for example investment by the British Business Bank through its Enterprise Capital Funds programme or by British Business Investments through its Regional Angels Programme
Your answer can be up to 400 words.
You must upload a copy of your financial statements and your assets under management (or equivalent funds available for investment) to support your answer. These can be in up to 3 PDF documents. Each document can be up to 20 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.
Question 2. Memorandum of understanding (not scored)
You must download and review the memorandum of understanding. This must be signed and uploaded before submitting your application. Please type ‘Completed MOU attached’ as your answer to this question.
The document will not be countersigned by Innovate UK and will not be binding until you are confirmed as an investor partner.
Question 3. Your credibility as an investor
This question is scored out of 25.
Please demonstrate your credibility as an investor. Provide a summary as described below.
Describe or explain your investment strategy, including:
- the sectors you prefer to invest in
- any geographic constraints
- the minimum and maximum amount of investment you typically make in each business, and the amount of investment you expect to make in each business in this investor partnership programme
- your historic and planned period of holding an investment
- your historic average deal size and anticipated average deal size in the future
- your target returns (including social, environmental, economic or impact on society) and how you plan for exits
- whether you prefer to syndicate with other investors or not
Explain how you generate returns by telling us:
- how you grow the businesses in your portfolio and increase their value or impact on society
- your track record in achieving successful exits for organisations you have invested in
- failure rates and write-off levels within your portfolio
- the investments you have completed, and full or partial exits achieved in the past 2 years
- the value that has been created in your unrealised portfolio and your plans for exit for these companies, specifically highlighting how you will optimise financial and impact outcomes at exit
Describe or explain how your investment impacts on businesses with high growth potential. Give examples of how you and your portfolio investments have historically delivered the following objectives since you invested:
- export growth and international expansion
- high value job creation
- turnover growth
- supply chain enhancement (for example where the supply chain of portfolio investments has had a positive impact on the UK economy)
- indicators relating to social, environmental, economic or societal impacts
Describe or explain how you add value to your portfolio investments beyond financial support, including:
- the expertise you can bring to actively build value in a business, including the development of business skills, recruitment, supply chain development and market access and embedding impactful practices into the organisation’s business model and processes
- how you improve the management capability of businesses in your investment portfolio during your period of investment and ensure that their impact mission will outlast any changes in ownership
- your approach to board appointments, both in relation to representing your organisation and executive management
- how portfolio investments have benefitted from your network in terms of increasing management capability
- your approach to exit planning, with examples of successful and less successful exits and lessons learned or alternative approaches to realising economic and social value from investments that you have made
Describe or explain the types and level of fees that you (and related organisations) typically charge to portfolio investments, such as:
- transaction fees (initial investment and follow on)
- portfolio management fees
- advisory or consultancy fees
- executive and non-executive director fees
- any changes planned to your current fee levels, particularly for investments in this investor partnerships programme
We will not pay fees to any of our investor partners. However, if there is a specific reason why we should provide some support to your costs then please indicate why and how those costs should be calculated.
Your answer can be up to 800 words and you can submit up to 3 appendices to support your answer. They must be PDFs and can be up to 20 A4 pages long and up to 10MB in size. The font must be legible at 100% zoom.
Question 4. Your capacity for investment
This question is scored out of 25.
Describe the preferred amount of grant funding you wish Innovate UK to make available for award to successful SME applicants introduced by you and the rationale for this.
Describe the size, investment period, percentage deployed to date and follow-on expectations of your capital available for investment. Include, as appropriate:
- allocated capital from your balance sheet
- capital in investment vehicles (for example limited partnerships with defined investment periods and fund terms) which are currently in their investment period
- capital available from active business angel network participants
- the amount of capital you expect to make available for aligned investment in investor partnerships programmes
- your sources of funding and your investor base
- the amount of funds that you expect to be deployed into new investments and into follow-on funding over the next 2 years
- your track record in supporting portfolio investments with follow-on funding
- the proportion of investments in your portfolio that you expect to receive follow-on funding
Describe or explain how you source investment opportunities, including:
- your approach to sourcing proprietary deal flow, citing appropriate examples
- your approach regarding leading investments or syndicating with other investors, with examples of deals completed alongside other funders
- how you encourage diversity (for example in terms of age, gender or ethnicity) among companies seeking investment from you
Your answer can be up to 800 words and you can submit up to 3 appendices to support your answer. They must be PDFs and can be up to 20 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.
Question 5. Your capability as an investor partner
This question is scored out of 25.
Describe or explain your approach to transacting investments, including:
- your involvement to date with businesses who have received funding from Innovate UK, or why you are interested in working with innovative, and intellectual-property rich companies, if this is a new approach for you
- your decision making and governance processes in relation to committing funding to new investments and follow-on opportunities
- your approach to diligence, for example whether this is internal or external and the type of diligence you typically undertake
- the experience of the individuals tasked with the leadership and execution of the investment strategy in your organisation, including any current responsibilities outside of your organisation and the time allocated to each - you can include short CVs as an appendix
- any ‘key individuals’ in relation to the operation of your organisation, explaining how the organisation would mitigate against a prolonged absence or inability to perform their duties
- in the last year: the volume of introductions, the conversion rate and time taken from introduction to completion
Describe or explain how you manage your portfolio, including:
- your approach to portfolio management, giving the level of engagement with portfolio investments, available resources, and the ratio of portfolio investments to investment professionals or portfolio managers
- your approach to investor reporting, including your reporting tools and processes
- the experience of the individuals who are involved in portfolio management, if different to those involved in transacting new investments - you can include short CVs in an appendix
- your approach to appointing directors (non-executive or investor) and how suitable individuals are identified
- your approach to managing potential conflicts of interest
- your approach to structuring investments to plan for responsible exits
- how you deal with under-performing companies
Your answer can be up to 800 words. You can submit up to 3 appendices to support your answer. One appendix should describe the skills of the main people vital in maintaining your portfolio of investments. They must be PDFs, up to 20 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.
Question 6. Your alignment to the investor partnerships programme
This question is scored out of 25.
Explain how your investments and your portfolio businesses align with the strategic objectives of UKRI and Innovate UK, and tell us:
- the amount of capital you expect to make available for aligned investment in new businesses to your portfolio and in follow-on investment in existing portfolio investments through investor partnerships programmes
- your experience of investing in businesses with an innovative offering
- your experience of investing in businesses that have demonstrated their ability to grow and scale and contribute to the UK economy and society, including by exporting into new markets
- your experience of investing in and supporting investee businesses through follow-on funding and/or sourcing or syndicating with new investors
- your experience of investing in organisations with mission-driven or entrepreneurial management teams or in supporting organisations to source executive and non-executive talent
- your experience of investing in organisations with a focus on delivering social, economic or societal impact
Describe or explain your interest in the investor partnerships programme and how your investment strategy might change as a result of the Transforming Foundation Industries Investor Partnership programme.
- your interest in this challenge area and why you believe it is an exciting area for investment
- details of existing investments in or closely aligned to this area
- your anticipated activity in this area, including the distribution of investments, average transaction size and timing of investments
- how you will use this programme to access new opportunities and why the programme will make a difference
- about your team members with specific experience relating to this challenge
Describe or explain the specific areas that you are potentially interested in investing in from these 4 themes and any other industries that you are currently targeting:
- energy costs and optimisation such as heat or energy recovery and reuse
- process measurement, optimisation and digitisation, such as sensor technology or digital tools
- waste recycling, utilisation and symbiosis, such as reuse of waste or industrial symbiosis
- new product and service development, such as new materials, new materials-based products and services, or new business models
Your answer can be up to 800 words and you can submit a copy of as up to 3 appendices to support your answer. One should describe your relevant investment portfolio They must be PDFs and can be up to 20 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.