Sustainable Accelerator 5

Idea

What is Sustainable Accelerator?

Sustainable Accelerator, led by the Sustainable Ventures management team, supports and invests in some of the UK’s best SEIS & EIS sustainability start-ups.

At Sustainable Ventures we believe in a world where climate change and resource scarcity are addressed by commercial innovation.

At a time of increasingly extreme weather patterns, rising sea levels, devastating pollution and biodiversity collapse, there has never been a more pressing time to turn the tide of climate change. While progress is being made, it is far too slow and so we believe that new technologies and businesses are required to accelerate the global economy to net zero.

While the world is waking up to this challenge, Sustainable Ventures has been launching and supporting sustainable start-ups since 2011. We have supported over 300 start-ups and built Europe’s largest sustainability cluster. To celebrate our tenth anniversary we launched our new flagship Sustainable Workspace at County Hall in the heart of London.

Over the last five years Sustainable Accelerator has also made it possible for over 2,000 investors to contribute to solving the planet's gravest challenges

We are successful entrepreneurs with a track-record of developing and investing in high growth start-ups. We leverage our industry networks, experience and seed capital to accelerate start-ups from idea to exit.

We are specialist early-stage investors in the sector having reviewed close to 1,000 investment opportunities and we have made 30 investments to date. With our deep expertise in the sustainability sector, we have created four portfolios of high-growth, early-stage companies.

By supporting our investee companies with a bespoke, long-term accelerator programme, we aim to reduce the failure rate and increase returns.

Sustainable Accelerator 5 (SA5) aims to invest £150k - £250k into around 6-8 high potential sustainability businesses. These businesses join Sustainable Accelerator’s high touch one year support programme of expert mentorship, network introductions, fundraising support, and growth services.

By investing in Sustainable Accelerator, you will gain access to a portfolio of sustainability businesses benefiting from our fourfold strategy:

(1) gain exposure to start-ups all receiving substantial 1-on-1 support from our experienced team,
(2) diversify exposure across multiple start-ups,
(3) leverage grant and tax (SEIS & EIS) advantages for the sustainability sector – making your investment go further and
(4) capture value by investing at the pre-seed stage and capturing equity stakes just prior to growth inflection points.

Track Record

Across our previous four Sustainable Accelerator programs, we have invested in 30 high growth sustainability businesses from which we have a portfolio of 29 active companies - all either SEIS or EIS tax relief eligible.

Since 2011, Sustainable Ventures has developed a successful portfolio of sustainability businesses, championing innovative solutions and attracting significant later stage funding.

We also have experience funding companies alongside the crowd, having achieved the UK’s first crowdfunded exit, when E-Car Club was bought by car rental giant Europcar within 4 years of inception.

The companies across our previous four funds have now raised >£33m in follow-on funding, including investments and grants. In particular, our portfolio company Rovco has secured £7.8m in investment and achieved a 13x valuation uplift in 35 months after our initial investment*. A second portfolio company, Airex has secured £1.9m in follow-on funding at >3x Sustainable Accelerator entry valuation from November 2017*.

*As calculated from company pre-money valuation prior to our investment to post-money valuation after the most recent round.

Our Sustainable Accelerator portfolio:

In the last four years we have sourced close to 1,000 potential investments, affirming both the quality and quantity of the UK’s growing market.

Please note that past performance is not a reliable indicator of future results.

Our Sustainable Workspaces community

In 2015, we opened Sustainable Bridges, our first co-working and workshop space in London Bridge, to accommodate our own portfolio of companies and for other like-minded early stage companies. After moving into a site on London’s Southbank in 2017, we have now settled at our flagship location at County Hall in London, opposite the Houses of Parliament. We have over 300 members located in our Sustainable Workspaces, all working for sustainability start-ups, which forms Europe’s largest sustainability cluster.

How does Sustainable Accelerator source start-ups?

Sustainable Accelerator leverages the established Sustainable Ventures network to help source start-ups. We have strong relationships with many of the industry’s best incubators, universities, research funding bodies and venture capitalists from years of working side by side.

Our first four Sustainable Accelerator funds have sourced and evaluated close to 1,000 sustainability companies across the UK. We host pitch days to short-list promising companies and then undertake detailed due diligence on the most attractive opportunities.

We have made 30 early-stage investments over three years making us one of the most active funds at this stage of investment in the UK, specifically tackling a prominent funding gap in pre-Series A venture investing.

Sustainable Accelerator 5 will be able to leverage the established networks and growing pipeline of companies already sourced by our previous scouting activities, as well as the growing number of start-ups within our Sustainable Workspace community.

What does Sustainable Accelerator look for?

We look for early stage, SEIS and EIS eligible, UK sustainability businesses to join our accelerator programme.

Though we are interested in a range of themes across sustainability, there are a few we are particularly focused on – where we believe disruption is inevitable.

When evaluating opportunities, we predominantly reference the following criteria:

For our programme, we expect high quality teams, early traction, and a disruptive technology or business model. We want companies capable of gaining momentum from equity investment, and coachable founders willing to leverage our programme to the fullest.

How our Acceleration Programme strengthens start-ups

An accelerator is a hands-on model for funding early stage companies; by providing start-ups with a package of investment and support, good accelerators provide unanticipated advantages to their portfolio companies – giving them the best shot for success.

We pair an investment of £150k - £250k (from the funds raised via this campaign) with a one year accelerator programme, which makes us more invested and more embedded than the classic accelerator model which typically lasts three months and makes a very small investment of between e.g. £10-50k.

Our belief is that by spending a full year (1) embedding the experience of our management team into our start-ups, (2) providing our expert services to help founders succeed, and (3) sharing our readymade industry network, the companies we select will routinely outperform their peers. Our hypothesis has been proved by the performance of our Sustainable Accelerator 1 companies. All of the seven portfolio companies raised next round financing with some achieving significantly higher valuation multiples. Many of our Sustainable Accelerator 2 and 3 companies have also raised second round funding with others now preparing for their next rounds of funding and will also hope to achieve significant valuation uplifts.

The one-year Sustainable Accelerator programme consists of:

• Routine 1-to-1s with successful founders and entrepreneurs.
• Dedicated business development and market research support.
• Dedicated fundraising support / preparation.
• Access to experienced industry mentors.
• Panels and feedback from successful entrepreneurs.
• Access to our readymade industry network.

Our relationship with Sustainable Ventures allows portfolio companies to gain access to their suite of proprietary growth services during their year-in-residence, including:

• Bid Writing (leveraging the significant grant funding support for the sector).
• Bookkeeping (avoiding common early stage mistakes).
• Tax Rebates (leveraging government financial support for innovation).

Our relationship with Sustainable Workspaces, Europe’s largest sustainability cluster, to our knowledge, allows us to place companies there. Residence means far more than desk space – it means better networks, more learning experiences, and a greater chance of success.

• Priority access to desk and workshop and event space.
• Work with like-minded sustainability start-ups creating peer to peer support including knowledge sharing and problem solving.
• Attend tailored professional and social events across calendar year.

Investment Thesis

Sustainable Accelerator uses a fourfold strategy to maximise the potential of cohort companies.

We offer investee companies more than just funding – we provide our experience, proprietary growth services, and ready-made networks so our chosen early stage companies have the best chance of success, ensuring portfolio companies have the runway, tools, and mentorship to succeed. This also means our investors are only exposed to companies receiving

The accelerator fund model diversifies capital, giving investors exposure across a spread of companies within the sustainability sector. We believe in investing early and broadly – a tactic responsible for unearthing internationally successful technology companies like Stripe, Dropbox, and Magic Pony Technologies.

Tax advantages and sustainability-specific grant initiatives allow us to offer investors some downside protection and make your investment go further.

Significant SEIS/EIS tax advantages exist to support investment into early-stage companies; all cohort companies will require HMRC advanced assurance for either SEIS or EIS relief. However, any tax relief is dependent on individual circumstances and is subject to change in the future.

We have calculated that early-stage start-ups in the sustainability sector qualify for more than £230m annually in (non-dilutive) public funding to support rapid growth – we help start-ups secure grant funding, increasing their runway without decreasing your equity holding

Investing early allows pre-seed investors to capture equity stakes just prior to growth inflection points. Accelerator investments can see rapid and outsized appreciation against venture capital and private equity comparables.

*Please note that any tax relief is dependent on personal circumstances and may be subject to change in the future.

Who am I investing alongside?

Whilst we have set our minimum campaign target at £600k, our goal is to raise at least £1m from investors looking for curated exposure to the broader sustainability space.

Should there be sufficient demand, Sustainable Accelerator would like to overfund to increase the capital available to invest in the portfolio. We would be open to raising up to £2m as we believe there are sufficient high-growth early stage opportunities within the booming areas of cleantech and sustainability to deploy that capital.

Our management team is investing a minimum of £50k into the Sustainable Accelerator.These funds will be deployed into the cohort companies alongside other funds raised via Seedrs on exactly the same terms, aligning our interests with anyone who joins us via Seedrs.

Team

Andrew Wordsworth, Managing Partner:

Andrew co-founded Sustainable Ventures in 2011, holds over 15 years in new venture development, and has been directly involved in securing over £250m in equity commitments into portfolio ventures.

Prior to Sustainable Ventures, Andrew held roles at Esso, Bain & Co and as Managing Director of Carbon Trust Enterprises Limited – where he invested alongside the likes of HSBC and SSE. Andrew holds a first-class MEng in Chemical Engineering from the University of Cambridge, where he was awarded the University Fox Prize.

Peter Shortt, Chief Investment Officer:

Peter is an experienced Venture Capital fund manager with a focus on environmental businesses, having spent 30 years in VC covering seed investments to IPOs.

Prior to Sustainable Ventures, he led the Corporate Finance team at the Ministry of Defence responsible for selling a number of owned businesses – including the Defence Support Group, sold to Babcock PLC for £140m. Prior, he was an Executive Director at Shareholder Executive, where he co-invested UK Government capital alongside private funds.

Peter was also Chief Investment Officer of Carbon Trust Investment Partners, where he oversaw the successful IPOs of Ceres Power and CMR.

Chris Morris, Co-Founder and Senior Partner:

Chris is a co-founder and Venture Development Director of Sustainable Ventures, and was co-founder and Managing Director of E-Car Club – which exited to car rental giant Europcar in 2015.

In 2012 Chris co-founded E-Car Club Ltd and quickly cemented it as a significant player in the sustainable transport space, raising over £1.5m in investment and grants whilst forging national partnerships with household names including British Gas, Nissan and Renault. In July 2015 the business was acquired by Europcar, delivering the world’s first crowdfunding exit.

He holds an MBA from the London Business School and is the 2016 Business Green Entrepreneur of the Year.

What are the fees?

Investors:

Sustainable Accelerator does not charge investors any management fees however, investors will be charged the Seedrs standard 1% transaction fee upon investment (up to a max. £250). The capital (net of 1% transaction fee) will be eligible for EIS or SEIS tax relief (dependent on the personal circumstances of the investors and is subject to change).

Sustainable Accelerator is also motivated by a carry fee on any profits made by an investor on a per investment basis. Sustainable Accelerator will charge a carry fee equal to 12.5% of profits investors make on each investment into an investee company. Seedrs will also charge its standard 7.5% carry fee.

Investee companies:

Each investee company will be charged a fee upon investment:

• 6.5% of total funds raised
• a payment processing fee
• £2,500 completion fee

If the above is less than £6,000 in total, then the company will be charged £6,000 as a flat fee instead.

This fee will be shared between Sustainable Accelerator and Seedrs. These fees are equivalent to Seedrs’ standard crowdfunding financing fees.

To deliver the year-long acceleration programme, Sustainable Accelerator charges investee companies £2k per month.

Investment Terms

Investor capital will be held in escrow by Seedrs until SEIS or EIS eligible start-ups are identified by Sustainable Accelerator and accepted into the programme.

Once a company has been selected for the Sustainable Accelerator programme, Seedrs as nominee, will perform legal due diligence and then invest your funds directly into the chosen business in exchange for equity. Seedrs holds these shares as your nominee (in the same way it does for start-ups that raise money on its platform).

The valuation that investments are made at will be the same for all investors in the Sustainable Accelerator, including the management team who will be responsible for negotiating the valuation terms.

Investor Benefits

We are proud of our ever-growing investor group. We have over 2,000 investors across our four previous Sustainable Accelerator funds. Our investors bring huge benefits to our portfolio companies through feedback, mentorship, and customer introductions.

Below is our proven framework for engaging with start-ups from an investor point of view, and how you will be able to get involved with Sustainable Accelerator 5 events, investment strategy and portfolio companies.

We keep all our investors up to date with news and performance of Sustainable Accelerator companies through:

- Quarterly portfolio updates
- Interim updates on headline news from the portfolio
- Invitation to our annual investor event

For larger investors we offer a tiered range of additional benefits including:
- Invitations to private investor events and networking opportunities
- Priority preview/first refusal on next round funding opportunities (EIS)
- Mentorship opportunities
- Quarterly reviews with our investment team and cohort
- Membership of our Sustainable Workspaces – access to hot desks, meeting rooms, and event space

Note: investor benefits will vary depending on size of investment. Please contact us to discuss specific investor benefits.