Investx

What types of investment opportunities can Investx crowdfund?

We plan for there to be a number of different investment types rolled out across the platform, ranging from growth capital, through to 100% owner buy out and many varied types in between as listed below.

Numerous activities are required prior to listing an opportunity on the platform, which activities are undertaken will be determined by how much equity is planned for sale and how much control future shareholders will have.

Most of the investments that we intend to offer through the Investx platform are not available from crowdfunding platforms today, therefore these exciting opportunities are not currently available to investors other than banks, venture capital or private equity firms

The raising of external finance to accelerate growth, in exchange for a minority shareholding in the business. As the most common type of funding being crowdfunded today it covers the following uses:

Growth capital:

Expansion / costs of growth: Providing finance to support the organic growth of a company, including the cost of new employees / sales staff; moving to larger offices or additional sites; improving processes for cost efficiencies and investing in additional products, expertise or new technology.

Business acquisition – horizontal integration: For businesses looking to grow market share quickly, the purchase of a competitor potentially provides an additional established customer base, enhanced core competencies, access to diverse markets and other expansion opportunities.

Business acquisition – vertical integration: For businesses who are looking to secure their supply chain or gain a direct / alternative route to market, the purchase of a supplier or customer for strategic reasons can provide operational efficiencies and lead to improved profitability.

Working capital / cashflow: Typically, the biggest challenge to growth a business suffers is accessing sufficient working capital / cash-flow, for example, if completing a large customer order with extended payment terms, or coping with a seasonal sales cycle. Investx funding can provide the necessary cash, along with an ability to raise further funds as the business expands.

Capital expenditure (Capex): The purchase of equipment or other assets to deliver improved process efficiencies or expanded capabilities. Equipment is often financed by hire purchase or leased but in some cases, this is not possible, for example if an asset cannot be used as security.

Paying off third-party loans: Funding proceeds can be used to repay existing third-party loans, easing the cash pressures associated with ongoing loan and interest repayments, as well as allowing the removal of security over the company’s assets or personal guarantees of the business owners.

Other types of crowdunfing deals through Investx:

Management buy out (MBO): The existing experienced management team of the company purchases shares from  the current shareholder(s). The majority of funds raised by the team to achieve this   are traditionally sourced from expensive finance providers such as banks or external equity providers, who usually require a controlling equity stake themselves.

Management buy in (MBI): An outside team of management with relevant sector expertise buying into a company. Banks see these transactions as high risk, making it difficult to raise the necessary funds from traditional sources. MBI teams usually have to risk everything to investor give away a controlling interest to a third-party equity provider.

Retirement sale: The sale or part-sale of a company by an owner wishing to retire and exit the business,  or release part of their equity and partially retire. Key to making such a deal work is placing an experienced and incentivised replacement into the business to reinvigorate growth. Many retirement sales offer a potential for  enhanced  value  for  money  for new investors.

Minority shareholder buyouts / shareholder reorganisation: Businesses often have complex shareholder structures, but minimal resources with which to remove inactive shareholders or allow owners to adjust their shareholding proportions. The Investx platform will provide the infrastructure  to adjust shareholdings as well as a mechanism for calculating a fair value for the business.

Owner exit: Similar to retirement sales, this is the purchase by a third party of a majority shareholding of a company. New management usually needs to be placed in the business, and a handover period agreed.

Complex combinations of the above: Many corporate transactions involve different combinations of the above, to incentivise key management, release cash into a company and give value for shareholders.

Depending on the deal type and the level of crowdfunded ownership, appropriate levels of due diligence, oversight, voting rights, deal negotiation and reporting will apply. These levels will be communicated as part of the particular deal pitch.