Investment Principles
The RisingStars Growth Fund has the following principles for each investment:-
Tranched investments, starting small
RisingStars will aim to manage risk, for both itself and the founders, through an approach of prioritising, assessing and addressing critical success factors. If a business is unlikely to succeed because of a technical or IP issue it is better for all parties to know early in the process.
Lead investor, selective syndication
RisingStars will normally be the lead investor. Syndication with high net worth individuals or other venture capitalists should bring added value, not just cash. To enhance potential exits RisingStars looks for co-investors who understand the sector and can obtain leverage for the investee within that market.
Clean starts preferred
Companies which have undergone numerous rounds of funding are generally not attractive unless they have tremendous upside and potential.
Right to appoint non-executive Directors
RisingStars will have the right to appoint two Non-Executive Directors on each investment. It is essential that the Non-Executive Directors should have deep understanding of the sector, excellent networks and and be totally commercial and driven to help implement the business plan.
Exit and cash focus
RisingStars is exit and cash focused. If the management is not comfortable with this approach during the due diligence process, the Fund will not invest.