FAQs

1. What more than cash should I look for in a venture capitalist?

Equity finance comes at a price, but arguably more important than the straight pecunary cost of the capital raised is the other stuff the VCs bring. Most VCs talk about some "added value" that they bring we believe that our experience and empathy for the startup condition can really make a difference in helping our companies handle the hazardous path to growth. The relationship with your VCs is like a marriage, and as in getting married choosing the right partner is a very important decision in the life of a young company. Entrepreneurs should seek investment partners where the "chemistry" is right - where they share similar operating philosophies, have similar ideas with regard to strategic decisions, and where there is a mutual respect and trust implicit between the parties. Entrepreneurs should also feel comfortable conducting their own due diligence with respect to the venture firm, as part of the evaluation process. 

2. What is your area of interest?

Our focus is on large market opportunities in software and the Internet being addressed by talented entrepreneurs. For more details, please see Areas of Interest. 

3. Do you prefer early, middle, or late stage investing?

We feel our greatest strength lies in helping to grow young companies. We generally prefer early stage investments where our value-added experience and contacts can make the most difference.

4. What is the average size of each investment?

We have made targeted investments from aound £500k to over £1M million depending on the needs of the company and opportunity presented. 

5. Do you prefer to lead a round?

Yes. We have chosen to make fewer, larger investments so that we can bring real focus and commitment to each investment relationship. Leading the round is consistent with this philosophy. We have been the lead investor or part of the lead group providing the first professional financing in almost all of our investments. 

6. Do you always ask for a board seat?

We have found that sitting on the board of our portfolio companies allows us to make the maximum contribution to their success - so yes. 

7. Who are Pentech's investors?

Our investors are prominent institutional investors including the European Investment Fund, and influential leaders and angels in the technology industry. We share an extremely productive relationship with our limited partners in which ideas flow in both directions and contacts and information are freely shared. 

8. What is the best way to reach you? Do I need an introduction?

We prefer business plan submissions by email. It is not necessary, but always helpful, to be referred by an industry contact or friend of the firm. Contact information can be found at Contact Us. 

9. How can I be sure you'll keep my idea confidential?

Due to the volume of submissions we receive on a weekly basis and our desire to spend our energies building great companies rather than processing paperwork, we prefer not signing NDAs (non-disclosure agreements) in the first instance. However, we believe that successful investment partnerships are predicated upon trust between the entrepreneur and the venture capitalist. As such, we jealously protect our reputation for professionalism and integrity. We will always respect the confidentiality of our discussions with you - moving forward to discussion of issue that could have aspects of inadvertent disclosure thus prejudicing potential patent positions, we will then sign a mutual two-way NDA similar to that provided under the BVCA guidelines. 

10. What information do you find most helpful in evaluating my business idea?

A complete business plan is always very helpful, but a concise executive summary can usually give us the information we need for a preliminary evaluation. While we don't require any particular format for submissions, the following is a suggested checklist of information to include. Being able to quickly identify answers to the following questions will enable us to get back to you quickly with our feedback. 

What major role in industry will your company play if successful?

What is your company's positioning statement?

What products or services will you develop to obtain this position?

Who is your customer and what is your customer acquisition strategy?

What unique competitive advantages will you have or attempt to build?

Who or what is your current competition?

Where are you in building the company? (If a startup, please describe your major milestones to success over the next year. If your product or service is in development, alpha, or beta describe how you have validated that the market is ready – customer contacts are the best validation).

Who are you and who is part of your team now? (Please include key bios, number of employees.)

What is your current capitalization structure? (Please list the owners and other investors of the company and the percentage each owns.)

We also like to see customer "pitches" where these exist. 

11. How long does it take you to make a decision?

You can generally expect to hear back from us a few weeks after submitting a business idea. We can move extremely quickly when circumstances demand. However, we do believe in a thorough due diligence process and this can occasionally extend our decision making process. 

12. What factors will influence your decision?

While we recognize that there is no single determinant of success, our investment assessment typically focuses on three core areas: the size of the market, the capabilities of the management team, and the differentiation of the company's products and ideas. We are also influenced by the interactions we've had with the entrepreneurs during the decision making process. For more information, see What We Look For.

13. What can I expect from the due diligence process - what part will I play?

Our due diligence process typically includes an examination of your key current or future customers and partnerships, a verification of the differentiation of your product or service, and an evaluation of the willingness of your customers to "part with their cash". When the time comes, you can help us by providing a list of names and contact addresses of customers or potential customers and personal references.

14. What type of exit strategy do you prefer?

We enter into every investment relationship expecting and working towards unbridled success. Markets being favourable we are always excited by IPOs but are open to other positive exit strategies, such as acquisitions, deemed appropriate to the situation and desired by company management. We firmly believe that companies are bought and not sold and that the best exit strategy is to grow revenues as robustly and quickly as possible.