When we receive requests from clients requesting our feedback on the best ways to raise investment capital for their business ventures and start-up projects from Investors and Property investors in the UK - we usually send them to Venture Giant.
They primarily operate a service that connects established technology entrepreneurs and companies seeking venture capital and angel investment to vetted investors and sophisticated high net worth individuals. That’s what linkedin does, you say! Bear with us, as Venture Giant touts itself as a specialised service, strictly dealing with High net worths and entrepreneurs only.
Over the years we have been meaning to give them a write-up and a review, however, recently we received a comment from a satisfied client and we thought now would be the perfect time to explain why we choose to send clients to Venture Giant. Here is the comment:
“During February I had some real good meetings with investors [that contacted me through] venture giant. One investor im awaiting about 3 million pound funding anytime now just awaiting they are delayed in funds coming to them. Another investor wanting to invest about 700k in September. Another investor wanting to invest about 500k at the end of summer. I am hopeful that something will happen and I can report back to you with good news. I have had some excellent meetings and the investors loved my story to my success and to how I made good profits over the last years.”
Excuse the English - this is the email from a Property Developer that was forwarded to us and is one of many entrepreneurs that are near to closing a deal through investor contacts made from Venture Giant. Not only does Venture Giant target tech investment - it also deals with Property Developers and covers over 70 sectors, including niche areas like aviation. The comment attached above is from a Property Developer seeking investment to build property in London.
Venture Giant, unlike some of its other competitors in the marketplace does not operate an online community (like social networking) nor are they an unmoderated forum where an investor can sign up and just start contacting entrepreneurs.
Instead they personally review ALL of the investor applications that come through to use their service and take the time to discuss what types of investments they are seeking to invest into.
An Angel Investor Network can only be as good as its database and their decline rate for investors speaks volume of their work within the industry. Almost 5 investors to every 1 approved - all done to protect the entrepreneurs that choose to use their service – Not bad.
Now the Million pound question – The all-important pricing model of Venture Giant.
First point to be made here is that they do not charge a fee unless they choose to take on the entrepreneur’s project. So that means that they are reviewing many many proposals daily, and hand picking the proposals that they feel they can promote and find investor interest.
They have two payment options: A Premier Listing and an unusual pricing model they call a Pay on performance listing. This basically involves taking a percentage of the listing fee as security, and then charging the rest only if they are able to find investor interest. Interestingly, all investor contacts are included in this one off fee, so if an entrepreneur receives multiple contact requests from multiple investors all of these contacts are included.
When we looked into how they make enough revenue to operate the service, we found that they like AngelList have been tweaking their business model since 2010, and that they have decided to concentrate on a scalable business model, which allows them to promote multiple proposals at any given time.
At the moment, Venture Giant is one of the only investment networks that does not charge a commission on any money raised through their service as they do not get involved with the process of deal structure, which is how they can keep their fees low.
Other investment networks in the UK have been known to charge a hefty upfront fee (almost five times more than Venture Giant charges) and also charge commission on investment raised - most baffling of all, some investment networks even charge a commission if the entrepreneur chooses to sell or exit from his business in the future. Venture Giant does not do this, and as their aim is to position ourselves as a volume based deal flow service. We applaud them on this as a cash strapped entrepreneur should be able to exit from his business in the future, without having to lug around investment networks throughout their investment career.
Since the business was created they have been privileged enough to see many opportunities pass through their investor network, some have got funded and others have fallen short because a few key points were not thought through on the entrepreneur’s pitch.
The business development manager of Venture Giant has personally reviewed over 2000 proposals from entrepreneurs and has also looked at over 1500 angel investor account applications (of the 5000 received) and he provided some valuable information for this Venture Giant review.
Venture Giant was launched in the third quarter of 2010 and the company has closed over £2.7m (at time of writing) and another £2m+ worth of deals where the entrepreneur or investor has chosen to keep their deals confidential – that is an estimated saving of £350,000 including legal fees that the network has saved British Entrepreneurs, and we applaud them for this effort.
Whilst discussing the impertinent question on how they had managed to build one of the largest investor networks in the UK receiving over 5000 applications from investors, with just over a thousand individuals approved, Tim stated that Venture Giant has gone through great lengths to build their investor database by advertising on sites like DigitalLook.com targeting shareholders who have an average share portfolio of £250K.
This was a major advancement in our targeting marketing. A lot of investors in the UK, are seeking to invest in alternative investments, but want to have real ‘Skin in the Game’ by investing equity stakes upto 40% business rather than just investing £5,000 or so pounds through a crowd funding site for a few percent in a venture, “they want to invest in a large way, to profit from an entrepreneurs venture in a big way”. An example of this, is an entrepreneur called Shane Duffy, that raised £500,000 through Venture Giant after only two meetings in Derby. The full case study is documented here. Venture Giant Success Story
The knowledge and know how that a business investor can provide is sometimes more valuable than the investment itself, and can mean more to a startups success or failure in the marketplace. Something a start-up really has to consider, and what is really impressive is that Venture Gianthas access to high calibre investors that are signing up to receive deals through Venture Giant that includes investors from the Sunday Time Richlist worth £50m, one of the founders of Skype, the former director of Goldman sachs and the list continues. Source:
Venture Giant seems to be uniquely positioned to attract these investors as they have perfected the way in which deals are presented to them.
Venture Giant is definitely a service we recommend to entrepreneurs looking for alternative ways to raise investment. All of the investors that use Venture Giant can be seen at: Venture Giants Featured Investors