North East-based Growth Capital Ventures has facilitated over £100m in investment via its private investor network and institutional investors, backing companies that transform industries and communities.
We spoke to Dan Smith about his role, GCV’s impact to date and their future ambitions.
What is the primary focus of GCV?
To help our network of over 500 private investors build a well-diversified investment portfolio that’s growth-focused, impact-driven and provides access to non-mainstream, alternative investments across venture capital, private equity and property.
Co-investing alongside institutional investors, these opportunities include high growth start-ups that have gained market traction, more established companies set for a period of exponential growth and property opportunities supporting the strong demand for housing.
What does your role entail?
As head of marketing and investor relations, my focus is ensuring our private investor network has access to carefully researched investment opportunities to build that diversified portfolio. Discussing individual requirements and preferences with investors really allows me to tailor what we provide to their needs.
A regular example is discussing tax structures many of our investments make use of. We utilise the Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) where possible to both maximise returns and minimise downside risk by – for example – reducing income tax, offsetting capital gains tax bills and allowing investments to be free of inheritance tax liabilities.
What impact has the business made in the North East so far?
Co-investing alongside institutional investors, we’ve facilitated over £100m into high growth businesses and property development projects. This has created over 500 new jobs amongst companies with a market capitalisation of over £500m.
We’re supporting the development of 500 brand new homes in the region via Homes by Carlton. We’ve backed Atom Bank – from their initial investment round onwards – to become the UK’s first digital-only challenger bank. We’ve supported numerous technology start-ups, including Hive HR who are helping some of the world’s biggest brands engage with their employees. And that’s all from here in the North East.
Our investment opportunities target a strong financial return for our investors – often 10x money for high growth start-ups – but making a positive impact is undoubtedly at the forefront of every opportunity.
What are your plans in the next 12 months?
Growth! With interest rates on mainstream products at record lows and stock markets witnessing immense volatility, we’ve seen increased numbers of investors looking to alternative investments and fully expect our investor network to continue growing rapidly.
We have many investors who are, or were, business owners, and I am regularly welcoming more into our investor network. These business owners understand where issues in their industries exist and are looking towards alternative investments to back the next generation of British businesses set to positively disrupt them.
How do you see things evolving in the next three years?
We’ll undoubtedly see an increase in investors wanting to do two things – invest in alternative investment opportunities that are making a genuine impact and see their capital target more attractive returns than mainstream investment products.
We’re seeing it already. Increasing numbers of investors are disillusioned with traditional products, either because of the target returns or lack of impact. So, when you have access to carefully researched opportunities, for the right investor with the appropriate risk appetite, backing ambitious start-ups with the potential to deliver 10x money-on-money returns and transforming industries can be an attractive proposition.
What are the biggest challenges facing you and GCV?
Although it’s a positive challenge, the biggest we face is the volume of opportunities the investment team reviews and assesses weekly. We’ve assessed over 1,000 opportunities over the last three years but taken forward just over 20.
Every potential investment is strictly vetted to ensure it has the potential to deliver the requisite financial returns and wider positive social, environmental and economic impacts. This rigorous approach means investors receive only carefully selected, well-researched investment opportunities that can form part of a balanced and suitably diversified investment portfolio.
How do you relax away from work?
If I’m in the kitchen cooking and music is playing, there are fewer settings where I’m more relaxed!
