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What is Venture Capital ?
The formal venture capital industry in the USA, was introduced soon after World War 2. By comparison, the European venture capital industry was really formed in a period of rapid growth commencing at the beginning of the 1980's. Available capital in Europe had increased from €9.5 billion in 1988, to a staggering €32.8 billion by 1997 and is now around € 70 billion Venture capital is mainly start-up money mostly invested in leading edge or new technologies, and generally in return for equity. Venture capital organisations, fund companies through the three main stages of corporate financing ; (1) Seed Capital for start-ups, (2) Second 2nd tier financing or mezzanine capital for firms showing growth potential, (3) Third round financing which may be an Initial Public Offering ‘IPO’ for successful companies issuing common stock to the public.
How does it work ?
When the target company is identified, or prime movers of a company approach the venture capitalist to structure backing, a preliminary appraisal is conducted, and agreement reached in-principle. The process then moves to the due diligence stage, to verify the company's claims and assuming independent reporting confirms the potential as presented, the offer moves to an unconditional stage. The venture capital company then invests capital as equity (i.e.) takes a percentage of the shares in exchange for capital, or it may also invest funds as debt (i.e.) A loan, and/or it may also provide the capital as a combination of equity and debt.
Unless it is in Japan, where investors will wait a little longer for returns than their Western counterparts, typical venture capitalists look for 3-5 year exits with a profit. An Initial Public Offering or 'IPO' is often the vehicle used to achieve this, which also helps prime movers to convert income into capital.
What industry sectors interest us ?
Whilst we do not place too many restrictions on industry, we do look for companies with good products, good services, good management, good growth and with excellent earnings potential. If a company is a start-up, venture capitalists normally will be looking for initial profits within 12 - 15 months, so a P/E ratio can be established, to achieve a reasonable capitalisation.
What is the maximum amount for one company ?
Suisse Group manages our own private capital portfolio, so if a company presents exciting prospects which fit our portfolio profile and policy requirements, largely there is no limit. Where the required capital exceeds what we or our partners typically look for, we will often take the role of lead manager, accessing capital from our network banks, and/or other affiliate institutions.
Geographic Restrictions
We do have some geographical restrictions [ mostly dictated by radical governments ], or other reasons of instability, but fundamentally, good companies, sound ideas, good management, and good earnings potential, are the major criteria.
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Funding - Organisation Type & Jurisdiction Examples - 1960 - through Third Millennium
TYPE OF COMPANIES ASSISTED INDUSTRY SECTOR JURISDICTION PERIOD
* Trans West Airlines Aviation non-scheduled AUSTRALIA 1960
* Trans Swazi Airlines (Swaziland Africa) Aviation - Airlines SWAZILAND 1972
* Anti - Collision Small ship radar warning Marine Electronics NEW ZEALAND 1973
* Maritime - anti-rollover device Prototype for RN UNITED KINGDOM 1980
* Scottish Bus Lines - Management Buy-out Transport UNITED KINGDOM 1980
* Jigsaw Joinery London Furniture Manufacture UNITED KINGDOM 1980
* Automated -Beer Line Cleaning Invention Hospitality UNITED KINGDOM 1980
* British MFI Superstore Licensee - Equity Flat pack Furniture AUSTRALIA - UK 1987
* U. K. Great Portland St Fashion Designer Rag Trade UNITED KINGDOM 1988
* Aviation Centre Ft Lauderdale - Equity Aviation- Charter UNITED STATES 1996
* Jet Aircraft - Teutonic Order Missionary Corporate Aviation UNITED STATES 1998
* Equity funding major events group Promotions & Events AUSTRALIA & N.Z. 1998
* Legacy Foundation United States Charitable-Philanthropic UNITED STATES 1999
* Jet Aviation Ltd - Equity Corporate Aviation U. K. and USA 2000
* Bus and Horse Float Project in Germany Transport GERMANY 2002
* Royal Airlines ( start - up ) Aviation non-scheduled USA 2002
* Decorative Toilet Seats - Equity Plumbing Bathroom GERMANY 2003
* Corporate One - Members Airline Non-Scheduled Airline AUSTRALIA 2004
* V.P. Trade - Waste Recycle Project Alternative Waste Disposal POLAND 2005
* Construction of Hospital and ancillary Project Development CHINA 2004
* AT Group Systems- Singapore/Malaysia Corporate Staff Training SINGAPORE 2005
* Heritage Museums Australia Museum AUSTRALIA 2005
* International Philanthropic Entity Charitable Foundation SWITZERLAND 2006
* Christian College Education MISSOURI - US 2006
* Start - up Marketing Group Multi-Level United Kingdom 2008
* MSB Group - Golf Courses Resort Development AUSTRALIA 2008
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