There are certain costs involved in receiving an investment from The Capital Fund. However, no fees will be charged until we have completed our internal assessment (see investment process) and you have accepted the terms of our offer of finance. The fees then come out of the investment.
Investment costs
- Arrangement fee - this is 3% of the amount of the investment. One-third of the fee is payable on acceptance of our offer and two-thirds on completion of the investment.
- Due diligence costs
- Commercial: an assessment of your proposal by an industry expert who will also make recommendations of improvements to your business. Typical cost: around £3,000.
- Financial: an assessment of your accounts and projections by professional accountants. Typical cost: around £3,000
- Legal costs
- Our legal costs: these are usually in the region of £4-£6,000 but can vary, depending on the complexity of the deal. However, we arrange a fixed fee with our lawyers at the outset and will let you know this figure.
- Your legal fees: we strongly recommend that you work with a lawyer who has experience of small VC investments and who is prepared to work for a fixed or capped fee. To help you, we will inform you during the process of firms we know who do this. We also suggest that we try and negotiate all substantive commercial terms with your company as far as possible as early as we can in the process, to reduce legal costs later on.
Ongoing costs
- Monitoring fee - an annual fee of 2% of the investment is payable to us
- NED costs - we reserve the right to appoint a Non-Executive Director to your Board. The NED will usually be an industry expert who can add significant value to your company in terms of contacts, skills and experience. He/she will attend monthly Board meetings and will report to us on the progress of the investment. Remuneration is negotiated between the NED and the company.
The Capital Fund is managed by YFM Venture Finance Limited. YFM Venture Finance is authorised and regulated by the Financial Services Authority and is part of the YFM Group. Trading names used in the past by the London office include London Fund Managers, Yorkshire Venture Finance and Yorkshire Fund Managers.