European Angels Fund (EAF)

EAF is an initiative advised by EIF which provides equity to Business Angels and other non-institutional investors for the financing of innovative companies in the form of co-investments. 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 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.

EAF has a current volume of EUR 320m, with more than EUR 200m already committed to some 80 selected Business Angels which have already built a portfolio of more than 340 SMEs co-investments.

What is EAF's geographical reach?

EAF is currently operational in Austria, Denmark, Finland, Germany, Ireland, the Netherlands and Spain. 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.

How does EAF work?

Instead of granting co-investments on a deal-by-deal basis, EAF enters long-term contractual relationships with Business Angels. Co-investment framework agreements (CFAs) are established through which 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 EAF. The total volumes available under an individual CFA range typically between EUR 250k and EUR 5m. EAF does not pay a management fee to the Business Angel but shares investment-related costs on a pro-rata basis.

What are the benefits for the Business Angels?

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 EAF to the Business Angel increase even further the upsides of the investments for the latter. Through 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.

Which companies can be financed?

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 EAF are generally focused on new investments of the Business Angels.

Are you a Business Angel interested in partnering with EAF?

You should fulfil, amongst others, the following criteria:

• adequate experience in the targeted investment area
• track record of successful investments
• good access to quality deals
• financial capacity to invest at least EUR 250k in total during the lifetime of the CFA, i.e. 10 years

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.