Frequently Asked Questions (FAQ)

The following frequently asked questions will be an aid to businesses and entrepreneurs to have a better understanding about what venture capital (VC) and Boost Private Equity is all about.

1. What is venture capital?
Venture Capital is capital provided by investors for the purpose of growing, developing or launching a business's products or services and is typically in the form of the investor subscribing for new shares in a business as opposed to debt financing.

2. How will Boost help my business to grow?
Boost offers not only a financial boost for early stage businesses, but also mentorship, strategic guidance and governance. Boost has worked with many early stage businesses across a range of industries and this experience proves invaluable to a business and helps the business grow, at a sustainable rate.

3. What are the criteria for funding through Boost Private Equity?

• Revenue. Boost invests in businesses that have at a minimum started commercialising their product and have generated revenue for at least 18 months.
• Location. Boost invests in businesses where the management team is based in Europe and Southern Africa or intends to expand the business into Europe and Southern Africa.
• Competitive edge or barriers to entry. Boost seeks out businesses that cannot readily be replicated.
• Growth. Boost invests in businesses that have the potential for significant growth, both in the local and international markets.
• Financing. Boost will invest between €0,5 million to €1,5 million in the form of equity-based funding.
• Industries. Boost does not invest in certain industries such as armaments, gambling and tobacco. It is open to investing in any other industry.

4. Who can I contact with regards to patenting an idea?
There are many Patent attorneys that are available. It's important to match your idea with the expertise of the patent attorney and of course your personalities too! An option is Adams & Adams. www.adamsadams.com

5. Does the full investment amount get invested upfront?
It depends on the expansion plan of the business, but usually Boost staggers its investment over two or three investment tranches based on pre-determined milestones.

6. How does Boost determine its equity stake in my company?
During the due diligence, Boost determines the fair value of the company based on various factors linked to its future potential. This value is then discussed and negotiated with the current shareholders on an arms length basis to determine the ultimate subscription price.

7. What are the steps to apply for funding through Boost?
Boost has a structured approach for funding applications that guides a potential transaction through different phases: Initial Screening, Assessment, Term Sheet, Due Diligence and Deal Execution.

8. What documents do I need to hand in to apply for funding?

• Proposal Summary - the first step is to complete Boost's Proposal Summary document in order to log the transaction in the system and provide enough information to test Boost's appetite for the proposed deal. This Proposal Summary document can be obtained by contacting Boost.
• A detailed business plan - this should include the outline of the business concept or product as well as information about the company and structure, marketplace and industry, info about the management team, your company's financial history and a five year Income Statement forecast. You should also include monthly cash flow projections to support your forecasted Income Statement.
• The pitch - this should include your motivation (why do you need funding) and proposal.
• References - can you indicate or make available customers/suppliers that the funder can contact to get a better understanding of your business and the market you operate in?

9. Who do I submit my application to?

Rob Matthews This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Direct line: +44 (0) 207 198 8442
UK Mobile: +44 (0) 796 391 1421

Chantal Duyver This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Direct line: +44 (0) 207 198 8442
UK Mobile: +44 (0) 752 128 5215

10. How long will it be before I receive a response to my initial application?
You will receive a response outlining the next steps within two weeks of providing Boost with a proposal summary.

11. What is the process after I request funding?
All proposals undergo a screening process. This process is described here.

12. What does a due diligence by Boost entail?
A due diligence basically entails background checks and research on a prospective investment. Specific areas covered in Boosts due diligence process include:

• the product concept
• marketing strategy
• customer base and sales
• purchasing and suppliers
• financials (historical and forecast)
• legal compliance
• human resources
• industry and competition

13. If my application is not accepted by Boost, what other avenues can I explore in terms of finding funding?
Depending on your fit to their mandate we can suggest alternatives to you,

14. Why would I want to give up a stake to Boost?
The benefits to you will depend on what your circumstances are. Some of the possible benefits would be:

• Equity funding has different characteristics to debt funding that could be beneficial to the capital structure of a business.
• Entrepreneurs benefit significantly from a partnership with Boost.
• Boost leverages their experience gained by their professional team in other investments to the benefit of your company (this includes different market segments and geographical areas)
• Boost acts as a partner and co-shareholder to drive business strategy.

15. What is my repayment schedule?
Venture Capital funding is generally equity based, and accordingly has no fixed repayment schedule. If the company has excess cash on the balance sheet that cannot be re-invested in the business, dividends might be declared. The parties pre-determine the exit strategy of the venture capitalist.

16. What is Boost's typical exit strategy?
Boost's exit strategy depends on the nature of each transaction. Potential exit strategies include: Initial Private Offering and listing on a stock exchange, trade sale, management buy-back and sale to another venture capital fund.

17. Does Boost co-invest or syndicate with other Venture Capital funds?
Boost prefers to be the key investment partner in your business, whether this takes the form of a majority or minority equity stake, but where the dynamics of the transaction dictates syndication it will be considered.

18. How involved is Boost in my company post-investment?
Boost invests in passionate entrepreneurs and strong management teams that can successfully manage their own business. Boost does not usually get involved operationally, but rather adds strategic value through active board participation. Monthly management accounts are required by Boost to track performance and regular interaction with management is encouraged to gain valuable insights in the business.