Whilst the process for making investments in each company will differ slightly, SEGF does have a fairly consistent approach to the process of making each investment as detailed below:

(i) Submission and Review of Business Plan

We prefer business plans to be submitted electronically (mail@segrowthfund.co.uk), however we can accommodate plans received through the post. It will take SEGF up to two weeks to review the plan and provide initial feedback.

(ii) Initial Meeting

We like to meet the key people behind potential investee companies early on to hear about your strategy and gauge your commitment to the venture. This also often provides SEGF with the opportunity to experience the product or service through a demonstration.

(iii) Indicative Terms

We like to give potential investees a clear idea of how we intend to structure a potential investment early on in the process. If our initial meeting is a success we will analyse your company and send you a letter that covers our intended structure for the investment and some of the requirements that will need to be fulfilled in order for us to proceed. This is not a commitment by SEGF to invest in your company but is intended to ensure that you understand what receiving investment from SEGF involves.

(iv) Initial Due Diligence

If you accept our indicative terms in principal, we will begin our due diligence process. Our aim here is to validate what you have told us in the business plan and to obtain a better understanding of your business, its markets and the viability of your strategy and ambitions. This process may involve several meetings and numerous communications.

(v) Investment Panel Meeting

Once we are satisfied with the information that you have provided to us we write a paper that is presented to our Investment Panel. The Panel’s role is to provide a highly experienced and dispassionate review of the proposals that are put forward to it and to formally approve the investment.

(vi) Legal Process and Independent Due Diligence

At this stage costs start to be incurred by SEGF and potential Investees. During this process we will issue you with an investment agreement and often employ an independent company to verify the information about your company that you have provided to us previously. We will also agree the costs involved in receiving investment from us. These will normally include legal costs, an application fee and an annual monitoring fee.

SEGF has a standard template for our legal agreements. Although it is critical that investee companies fully understand these agreements SEGF seldom participates in protracted negotiations about the terms nor deviates radically from them, since it is essential that we simplify the investment process as much as practical given the number of investments that we are making. This also keeps the legal costs associated with the investment manageable.

(vii) Completion

At this time SEGF will make the agreed funds available to be drawn down by the investee.

Duration of the Investment Process

It normally takes between 3 to 6 months from the point at which a business plan is submitted until completion, although it can take longer and in certain circumstances, such as where we are supporting an acquisition opportunity, we can also expedite the process.
 
The major factors that influence the amount of time taken to make investments are the complexity of the company being invested in and the responsiveness of its directors and advisors to requests from SEGF.