Our most frequently asked questions.
For UK investors
+ How does the investment work in the UK?
Collider and its investors are targeting the selection of up to 12 startups over 4 cohorts in any given 12 month period (1 cohort per quarter).
A minimum of £200,000 made from all relevant investors will be made available every 3 months to be invested at least 2 companies.
• Each later stage company (EIS) will receive £100,000 investment for 10-12% of total share capital, which will result in a valuation for each company in the range of £833k - £1m
• Each early seed stage company (SEIS) will receive £50,000 investment for 10-12% of total share capital, which will result in a valuation for each company in the range of £400k - £500k
Collider will receive an allocation equal to 2 of the percentage equity points of the 10% to 12% in each of the selected companies. Each £100,000 investor will be awarded bonus shares in each startup as part of the Collider allocation. Investors who invest £100k will each share in part of this equity, which will be made available by Collider.
It is important to note that investors equity will be split across the cohort (although not necessarily evenly), depending on the investment received by each startup.
+ How much can I invest?
Collider has a minimum subscription level of £50,000. Thereafter £100,000 or £200,000 level. The amount invested will define the investment structure.
Each investment amount will be split equally across four cohorts. The date at which the investor signs the investment agreement will define which cohorts the investments are made.
+ Can I invest using EIS/SEIS?
The investments are aimed to be EIS and in some cases SEIS qualifying. In extraordinary cases where no tax incentive is available, investments will be subjective to investors consent.
Whilst the aim is to make approximately 4 SEIS investments over the year, it is expected most of investments to be made under EIS, as we are targeting later stage companies with a proven model over the course of 2018 and beyond.
+ Where will the investors' shares be held?
Each investor will appoint Collider Nominees in respect of each investor's holding.
+ What equity will I receive?
The equity will vary depending on the individual investment level.
• X = Number of shares held by Collider Nominees on behalf of the individual investor • Y = Number of shares held in each company, which represents 8-12% of the entire share capital • O = Overall commitment by each individual investor (as set out in the relevant commitment letter) • A = Total investment by all investors (aggregate)
• X = Y x (O/A)
+ Why do Collider receive 2% equity?
Although we take programme fees from each startup, this doesn’t truly reflect the lifetime of support and coaching the Collider co-founders and team provide to each and every one. The programme fees exist to support Collider the business, and equity received by Collider Nominees enables an ongoing incentive to grow each startups' equity base and prospects for scale.
+ Do I have pre emption rights?
You do! As part of the offer to Collider investors you have pre-emption rights in all of the companies we collectively choose to invest in. This means you get preferential access to further follow on rounds and can increase your stake in the companies you want to back. Depending on how each company conducts their follow-on rounds, they will notify you when they are fundraising.
+ Do you have an anti dilusion clause?
We do not. We get asked this a lot and we believe that an anti-dilution clause dissuades future angel investors and VCs from investing in our startups – thus impacting their future rounds. However, investors do have pre-emption rights. To avoid dilution there’s the option to follow on in future rounds. Following in future rounds is a trend amongst investors over the past five years.
+ Why do I/we invest in a portfolio?
By investing in a portfolio, you are doing two key things – diversifying your investment, and simultaneously de-risking it. Spreading your investment across a cohort of startups could potentially increase your chances of a good return – it’s commonly known in our market that in most portfolios, 1-2 startups normally pay for the whole fund (although at the stage we meet the companies it will be hard to gauge who of the companies this will be). Furthermore, by investing early, you are acquiring capital in these organisations at a far better rate than when they start to scale.
In addition, by investing in a portfolio you have the change to work and add value to a larger number of companies and their different technologies.
+ When do you need the money?
Collider will draw down the amount required from you 14 working days before each Selection Day.
+ Are you FCA regulated?
No we are not. We operate as an investment club, and use an authorised legal and financial process through organisations who work with us on the appropriate due diligence on all of the startups we invest in as part of the recruitment process and prior to the money being invested in each individual company.