Worth Foundation Fund

About

Overview

The Worth Foundation Fund (the "Fund") is a new fund that is being set up by Worth Retail Ltd to invest a total of £200,000 in the 3 winning businesses of a major national entrepreneur competition launched in association with Metro newspaper.

The competition aims to discover the UK's best young retail / e-commerce businesses. Metro newspaper is featuring it heavily in their business pages, with a full launch tabled for late January 2014.

It is anticipated that thousands of businesses will enter, and a shortlist of 10 will enter a final judging event in London on 4th April 2014. We have assembled a stellar judging panel from the retail and business world including:

• Michael Acton-Smith OBE, Founder of Mind Candy
• Jeff Lynn, Co-Founder of Seedrs
• Roger Wade, Founder of Boxpark

The result of the judging will be 1 winner and 2 runners up. The winner will receive £100k and the two others £50k each for stakes to be determined at the time of the investment. Each winning business will also receive a grant and free mentoring support from Worth Retail Ltd.

We strongly believe that the fund will have a significant chance of success for the following reasons:

1. The investments will be chosen by a group of well-known entrepreneurs with huge success under their belts.

2. The search for the final investee companies will come via a national search with significant media coverage.

3. The companies will receive focused mentoring from a group of retail experts - which will turbo charge their path to success.

4. The three winning companies will receive significant coverage from Metro which will help put their businesses in front of the public and their potential customers.

What is Worth Retail?

Worth Retail Ltd is a leading UK retail consultancy focused on helping consumer brands to retail directly. Worth Retail is part of the Consumer Engagement Group, a £20m turnover marketing services group established in 1994. The Worth Foundation Fund is a new initiative created by Worth Retail Ltd as a way of unearthing the best retail businesses of tomorrow and providing investment to help them to grow much faster.

What have we achieved so far?

The phenomenal tie-up with Metro newspaper is already up-and-running, and they have already run two half-page teaser articles in their business section.

Metro has a UK national weekly readership of 7.57m adults, the third highest in the UK (National Readership Survey March 2013). It is distributed free in Bath, Birmingham, Brighton, Bristol, Cardiff, Derby, Edinburgh, Glasgow, Leeds, Leicester, Liverpool, London, Manchester, Nottingham, Newcastle and Sheffield.

The judging panel has been finalised and we are on track to be ready to launch the competition in January.

Investment Strategy

The Fund will invest the full £200k between the 3 winning businesses chosen by the judging panel, and such businesses must be SEIS eligible.

We anticipate the Fund will receive between 10% and 30% equity in each business, subject to each business's current performance and potential. So you, as an investor in the Fund will receive a direct proportion of the Fund's investment.

With a £200k raise, we will invest the proceeds as follows:

• £100k in the winning business in return for an anticipated equity stake of 20% to 30%; and
• £50k in each of the two runners up, in return for an anticipated equity stake of 10% to 30% in each business.

Please note that the actual equity stake received may differ depending on the type and maturity of the relevant business.

The Worth Foundation team will have total options of 5% in each invested business. Each business the Fund invests in will receive between 6 and 12 months of free mentoring from a Worth Retail director. Thereafter, each business can choose to extend their relationship for a small monthly fee (equivalent to a non-exec fee). This is completely optional.

Retail in the UK is huge. UK retail is set to grow by 1.8% in 2013 to £300.7bn - the highest rate of growth since the recession began.

The landscape for start-up retailers is more attractive than it's been for some time. Rents are generally cheaper and more flexible as the number of empty shops has peaked. E-commerce continues on its upward curve, and is better served than ever by retail platform providers.

There is no seed fund dedicated to UK retail sector, and we feel that our national competition with vetting by a team of expert judges, offers the perfect launchpad for the Fund.

Fund Management

The fund will be investing in more than one company, and as a result the minimum investment in this fund is £100, and multiples thereof. The Worth Foundation team will inform the Fund's manager, Seedrs Limited ("Seedrs") as to who the winning businesses are. Seedrs will be holding the funds in escrow until the team provides the relevant investment recommendation, and Seedrs will act on such recommendation subject to their strict legal due diligence process. Seedrs will make the investment into the relevant business, and will hold and manage such investment as nominee for the investors in the funds. Seedrs is an FCA-authorised firm that manages a wide range of investments in early-stage businesses.