The EAF is an initiative advised by the EIF which provides equity to Business Angels and other non-institutional investors for the financing of innovative companies in the form of co-investments. The EAF works hand in hand with Business Angels and helps them to increase their investment capacity by co-investing into innovative companies in the seed, early or growth stage. The activity of the EAF is adapted to the Business Angels' investment style by granting the highest degree of freedom in terms of decision making and management of investments.
At year-end 2015, the EAF initiative had a volume of EUR 253m, with approximately EUR 75m already committed to Business Angels which have already built a portfolio of about 100 SMEs.
The EAF is currently operational in Austria, Germany, Ireland, the Netherlands, Spain and, subject to regulatory approval, about to be set up in Denmark in the course of 2016. In the future, EAF will be extended to other European countries and/or regions. EAF will foster and support cross border collaboration between Business Angels. It will also contribute to the establishment of European Business Angels and Family Offices as an attractive alternative asset class.
Instead of granting co-investments on a deal-by-deal basis, the EAF enters long-term contractual relationships with Business Angels. Co-investment framework agreements (CFAs) are established through which the EAF commits a predefined amount of equity for co-investments upfront to each Business Angel for future investments. For ease and speed, these CFAs are generally standardized while leaving room for adaptation to specific requirements of individual Business Angels. Such elements include for example timeframe, sector focus, and number of investments.
All investment decisions will be taken by the Business Angels and their investments will be matched on a pari passu basis, i.e. by the same amount, by the EAF. The total volumes available under an individual CFA range typically between EUR 250k and EUR 5m. The EAF does not pay a management fee to the Business Angel but shares investment-related costs on a pro-rata basis.
The EAF has a unique set-up which is adapted to the Business Angels’ investment style and needs. It provides significant financial support while granting a maximum amount of freedom to each Business Angel. Carry payments from the EAF to the Business Angel increase even further the upsides of the investments for the latter. Through the EAF, Business Angels can draw on the expertise and network of EIF, one of the most experienced Venture Capital investors in Europe.
At the same time, administration processes are designed to be as lean as possible so that Business Angels can fully focus on their investment activity. A standardized reporting tool will allow for simple and efficient reporting.
The EAF wants to support innovative SMEs. Investments are possible in all sectors and throughout the entire range of development phases of a company (seed, early or expansion stage). Co-investments under the EAF are generally focused on new investments of the Business Angels.
You should fulfil, amongst others, the following criteria:
A lean Due Diligence process and the use of CFAs ensure a short reaction time and a minimum of administrative burden for the Business Angels.
If you are eligible according to the criteria listed above, you can apply to EAF by filling out the online form. After submitting your application online, you will receive a confirmation email. Should you have any further questions or comments about EAF or should you wish to modify the information you have submitted online, please contact us by e-mail at: email@example.com