Frequently Asked Questions
What is Venture Capital and it is right for me?
Venture Capital is a broad term used to describe the funding of early-stage businesses. Venture capitalists provide funding in addition to access to skills, networks and other necessary resources in order to promote the growth of potentially successful small businesses. If you have a small business that, given the additional funding and resources, has the potential to be a significant player in its market, VC might be for you. Every VC firm has a specific mandate (funding criteria). For more information around our mandate please see the next question.
What are AHV’s criteria for investment in my company?
We are not bound by particular industries but by the characteristics of the business in question. These are the characteristics we are interested in:
- Disruptive business models, enabled by technology.
- Lean business methodologies with flexible cost structures.
- Scalable business models with the potential for rapid growth.
- Businesses with a minimum viable product, customer traction & an executable business plan
- Capital intensive businesses (e.g. property investments)
- Grants, donations or sponsorships of any kind
- Non-profit businesses of any kind
How do I apply for funding?
In order for us to better assess if there is a potential match, we need some basic information about your business. If you have read our investment criteria and you think we can be a good match, you can apply for funding by filling in our application form. The application form might seem lengthy but is – currently – the most efficient way for us to get all the information we need to give you a quick answer (within 48 hours). For an overview of all the questions, please click on ‘Transcript AHV Application form’ under ‘Documents’ (on this page)
Why do we ask you to fill in an application form, instead of sending an email?
In order for us to better assess if there is a potential match, we need some basic information about your business. The application form might seem lengthy but is – currently – the most efficient way for us to get all the information we need to give you a quick answer (within 48 hours). From your side, it is a good way to prepare yourself for the fundraising process. All the questions we ask are important to any (VC) investor – if we end up not being a match, the time has not been lost and you will be prepared for the next application. For an overview of all the questions, please click on ‘Transcript AHV Application form’ under ‘Documents’ (on this page).
What is the process after I submit my application for review?
Your application will be thoroughly reviewed by our team in the first round of screening. Depending on the outcome, you may be asked for more information to clarify certain aspects of your application and invited to pitch your business in a ten minute presentation. Either way, we strive to get back to you within 48 hours. You will be provided with feedback after every stage of the process. If you are successful, we will enter into an in-depth investigation of the market and potential for your business to fit into our portfolio. If we believe the opportunity exists, our investment committee will invite you for a final pitch incorporating all the feedback to date. The first round of screening can take a few days to process. The following rounds depend very much on the quality and availability of information we have access to. It is in our best interest to make sure we process each application as accurately and efficiently as possible.
Why doesn’t AHV sign Nondisclosure Agreements?
It is not in our interest to expose ourselves to legal disputes. It is possible that your business or idea has been implemented by another company that may pitch to us that fulfills our investment criteria. We cannot afford to isolate ourselves from the investments we are interested in because of a legal document signed between us and a business we are not going to pursue.
If I get invited in for a pitch, how can I prepare for it?
We like crisp and clear messages – no information overload or ambiguous messages. Be authentic and paint a realistic picture of the business (opportunity). Please have a look at our template pitch deck, under documents, for our preferred format. If you would like to know what makes and breaks a pitch, read through Brett’s blog post.
How can AHV add value to my business, besides funding?
AHV is privileged to be able to provide access to a vast array of resources. Being able to leverage off the capabilities and experiences of the other portfolio companies and established companies in the larger group can add significant value to new investees. Access to networks, required specialised skills, strategic leadership and governance capabilities provides the incumbent business with an environment geared towards reaching their potential.
Can I raise Venture Capital if all I have is an idea?
We do not invest in ideas. Ideas are rife everywhere, it takes a specialised skill set to be able to turn an idea into a viable business. It shows ingenuity, initiative and a commitment to success by creating something tangible from an idea. A venture capitalist looks for these qualities in an entrepreneur and is much more likely to show interest if you have taken the steps to get your business running in the first place.
Where does the capital come from that AHV would invest?
AHV is a separate investment entity that invests on behalf of its funders.
Are investments by AHV debt or equity based?
We use preferred equity structures to finance ventures. These shares are convertible to ordinary equity and carry a liquidation preference clause that prioritises AHV’s shareholding in the event of a liquidation.
How much equity do I have to give up for an investment?
Each deal is different, but we generally take an equity stake between 25 – 45%. The entrepreneur should keep in mind that a venture capitalist needs to be incentivized to add value to the business and that only comes with a significant potential on the upside. An investor who takes a relatively small stake of a small business is unlikely to provide the full attention and resources you will be looking for.
Does AHV participate on my Board of Directors?
Our focus is on the ongoing management of the company as well the strategic leadership of the business. We will usually require board representation purely because this allows us to add our strategic value to your business at a high level and at an operational level.
What is AHV’s management involvement?
We understand that this is a business that you are building. We will provide guidance and operational support wherever we believe we can add value but, ultimately, this is your business. We provide strategic insights and access to our arsenal of resources but the day-to-day running of the business is entrusted to your management team. This is also why we spend significant time upfront with the team, in order to ascertain whether we can work with you and whether we believe the management of the business is able to run the business and willing to learn and adapt to the business environment.
What type of return is AHV looking for?
We typically have a longer term view than other funds so that the value we perceive and can add has the best chance of success. We are interested in businesses that can grow rapidly over this period and return multiples of what we initially invest.
On which terms does AHV invest in my business?
Each deal is approached and dealt with differently within the structure of how we work. Generally, upon the completion of an application and successes in pitches, your business and its market will be thoroughly analysed and be subject to a comprehensive due diligence phase. In this phase we will raise concerns and deal with any potential issues surrounding your business. We will then propose an investment plan subject to any milestones mutually agreed upon. Importantly, we structure the deals in a manner that we believe aligns our interests with the entrepreneur so that we can build a sustainable business.
Couldn’t find the answer you were looking for? Contact us on email@example.com.