Investment Process

Business owners will often say that raising money is too time-consuming, too costly and too onerous.

It can be, and that is why we have worked hard to dramatically reduced the time and the costs associated with securing finance.

Our quickest investment was made in less than 4 weeks from agreeing heads of terms to final completion. We can’t manage that every time – but we try hard and we often come close.

Our due diligence is proportionate, and the costs are therefore significantly lower. Remember, we only ever take a minority stake, the business owner retains control and the majority ownership.

And we are working hard, directly with business owners, and in partnership with the UK’s extensive advisory community, to promote better financial understanding and help companies prepare themselves to attract investment. One of the critical ingredients to converting demand is a good and credible business plan. In other words, what are you going to spend the money on?

Whilst we are the first to recognise that every company is unique, and every situation will have points of difference, a typical process might look something like this:

STAGE 1: Developing the relationship

  • From the first meeting with a management team we will begin to assess whether this is a company and strategic plan we can support.
  • Openess and a comprehensive exchange of information is critical at this time.
  • We will also have conversations with industry experts from our own network to inform our thinking.
  • If we see it as an opportunity we can support an internal ‘investment paper’ is written and BGF’s Investment Commitee approves the terms of our offer.
  • If the potential investment falls outside our mandate or we don’t believe that BGF growth capital is the appropriate answer we ensure that this feedback is given as quicly as possible, and where possible we look to signpost alternative avenues for the company.

 

STAGE 2: Offer → Heads of Terms

  • A detailed offer letter is presented and terms are finalised with current shareholders and management.
  • Once the Heads of Terms have been signed we will ask for a period of exclusivity.  We will also work as hard as we can to complete the investment in the most time and cost efficient manner.
  • Together we wil discuss due diligence providers, budgets and scope. And we will develop a timetable and key milestones to completion.

STAGE 3: Due Diligence → Completion (4-6 weeks)

  • Due diligence is provided by a combination of our own in-house team of investment professionals, external expertise through the BGF Talent Network and judicious use of professional advisers.
  • We focus on key risks, recognising that as potential minority partner our alignment of interests with the majority shareholder and management team is the most important factor.
  • The culmination of this period is a final paper presented to the BGF Investment Committee, followed by the release of funds.

 

STAGE 4: Post-Complete: the 100 Days Plan

  • Our investment has been made, but the work has only just begun!
  • One of the outputs of the due diligence process and earlier conversations is a jointly agreed 100 Day Plan to enact post completion.
  • This is also the point when the BGF Investor Director will join the Board, often joined by another independent non-executive introduced during the investment process from the BGF Talent Network.