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 exceeding EUR 800m, with more than EUR 330m already committed to more than 120 selected Business Angels which have already built a portfolio of more than 800 SME co-investments.

What is EAF's geographical reach?

EAF is operational across Europe with dedicated national programmes for Austria, Belgium (Flanders) Denmark, Finland, Germany, Ireland, Italy, the Netherlands and Spain alongside a pan-European allocation for Business Angels in other geographies and investing across the continent.  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.

Under the CFA, Business Angels are requested to ensure appropriate background checks on investment targets and semi-annual reporting based on a standardized reporting framework.

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.

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.

Regulation (EU) 2019/2088 (SFDR):
The Fund defines with the assistance of the Investment Advisor certain excluded sectors in which the Fund is prohibited to invest directly or indirectly The selection of such sectors is based on the Investment Advisor ESG guidelines: EIF Environmental, Social and Corporate Governance (ESG) Principles as well as on investment considerations meant to avoid inter alia any actual or potential material social, governance and/or environmental negative impact on the Fund performance. Such excluded sectors are taken into consideration in the investment process and decision-making process of the Fund.

The Fund does not consider adverse impact of investment decisions on sustainability factors at the present time considering that (i) in the absence of regulatory guidance, it is not clear what regulators will expect of entities that elect to consider such matters at this time, and (ii) it is also not clear that there is sufficient data, and data of a sufficient quality, to support entities that do so, in the relevant asset classes, industries or sectors in which investments have been/may be made. Sustainability factors are environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters.