Investment Agreements come in all shapes and sizes and cover the T&Cs agreed between Fund Managers, Investors and Investee companies. In the cast of Seismic’s Funds and single company raises, they describe the agreement between the Investment Fund and the Entrepreneur’s Investee Company. For transparency, Investors can see those terms and decide if they want to invest under them.
An Investment Agreement sets out both the costs and terms expected by Seismic, and the services to be provided by us. VCs usually work with a combination of early stage fee with a carry element to cover the short-term effort and the ongoing interest. The combination and quantum of fee is a reflection of the size, effort and speed of any fundraise as well as the duration and level of involvement over the next few years of development.
Despite the introduction of the recent KID (Key Information Document) under the European Commission’s PRIIPS Regulation, our industry remains resistant to full disclosure on fees and fee-like charges. Seismic believe that this is a reflection on investors shopping for “cheaply managed” funds and invites a plethora of other fees and costs that are complex to compare.
Seismic aims to be competitive on all areas of fee, but not the cheapest. We take a hands-on approach, actively engage with our Investee Companies over a 3 to 5 year period, co-invest in them and support them where we have relevant knowledge or experience.
Will charge a fee for fundraising and will often engage an intermediary if the funding strategy requires their specialist skills. We will hold a carry stake in your business as this is a simple way of aligning our best interests.