WAM is a small and independent operator offering young and growing private companies a solution for capital raising and investor communications. The company has a large network of private investors and a growing track record in early stage equity fund raising for small businesses in the UK. It is well positioned to offer access to equity financing for businesses that are still too small to capture the attention of investment banks, private equity companies and most venture capitalists.
We are interested in helping companies that are in the seed or early venture phase of financing. It is preferable that the funding qualifies for tax relief under HMRC’s EIS or SEIS schemes*, but by no means essential. The seed phase is typically one that is pre-revenue and is the earliest stage of financing, while the early venture phase is one that is pre-profit i.e. operational and generating early revenue, but requiring financial support as it develops a foothold in its market and strives towards profitability. For us the early venture phase is the preferred target market of the two. For our purposes, early venture phase financing is where the company has a good product and has identified its target market, and funding is necessary for providing a runway for the management to develop and grow the business. Usually early stage businesses require a few rounds of financing before they are able to generate sufficient cash flow to become self-supporting.
It is important to us that companies for whom it raises equity capital are good communicators with their shareholders, and that the funding proceeds are merely the start of a much longer process. Post-fund raising communications with shareholders can often be poor, which we believe is self-defeating. Regular communications with shareholders is of great mutual benefit. Providing early stage equity is high risk. Shareholders have an obvious interest in tracking the development of the business while proper information flow to shareholders makes it much more likely that they will follow their money if and when further injections of capital are required, making future fundraising easier. Good communication ultimately strengthens a company’s chances of survival and success.
* Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS)