It is important that as a prudent investor you understand who we are, how we operate, and the role of the investor.
The investor network members cumulatively typically invest from a minimum of US$ 100K to a maximum of US$ 2m as a group ($3m for exceptional opportunities). Individual investments can be as low as US $3,000 without upper limit. The choice of investment is of the member. Each member of the investor network can invest in any number of transactions during the period of membership.
The funding process involves a thorough screening and due diligence process where entrepreneurs and companies are selected for presentation to the members for funding consideration.
SCIP prepares entrepreneur to present investment proposals to investor members. SCIP is a neutral party. It doesn't rate or rank investment choices. SCIP is not a broker.
We have created an efficient market place with robust corporate governance principles, monitoring mechanism and controls to enable directly connect entrepreneurs and investors. SCIP has long term engagement with both investors and entrepreneurs and our skin is in the game till exit is achieved. We do not have short term focus on getting the fundraising fee by acting just as an intermediary. We have dedicated resources to address each of the pain points of the entrepreneurs and investors throughout the process from identifying potential investments to achieving exits for the investors.
Risks Of Investment
Early-stage businesses and SMEs are nascent investment opportunities, and are ascribed a higher risk profile than stock market investments. Investment in nascent early-stage businesses is an opportunity to expect higher returns commensurate with the risk.
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SCIP Investment and expected return indicators
The investment process takes between 6 to 8 months.
We evaluate companies with the following funding needs:
1. Pre-money valuation from US$ 0 to US$ 15 m.
2. Companies that are seeking capital in the range US$ 100,000 to US$ 2 m. For exceptional businesses an upper limit of US$ 3m will be considered.
We target that the investments will achieve the following:
1. Revenue by year 5: US$ 6 to 10 m
2. Returns for equity: 10 X investment over a 7 year investment horizon or a 35% internal rate of return
3. Return on debt instruments: 15-17% per annum.
4. Years to exit: 3 to 7 years.
5. Years to breakeven for seed investments: 2-3 years
Qualitative considerations
We only recommend investment opportunities whose potential rewards are commensurate with recognized risks. Promising investment opportunities demonstrate:
1. A remarkable idea that amazes and astounds.
2. Clear plan from the entrepreneur about how he is going to execute it. Clear road map of how he will turn around the idea – key milestones.
3. Clearly articulated market position.
4. Entrepreneur with domain knowledge.
5. Strong emphasis and realistic strategy for organizational capabilities development.
6. A key member of management team with demonstrated track record in operations.
7. A realistic understanding of customer acquisition strategy.
8. Clear intellectual property strategy or position.
9. Defensible competitive position in an emerging or growth market.
10. Exit strategy for investors within 5-7 years.
11. Revenues that provide for a significant compounded annual return.
12. Investment opportunity that offers a preferred or protected equity position.
13. Clear understanding of risks involved and effective risk management strategy.
1. Access to quality investment opportunities based upon return criteria
2. Access to IPO quality investment opportunities. SCIP works with entrepreneurs and small businesses to make them presentable, 'ready for investment' for investors.
3. A structured SCIP process that facilitates a relatively quick and efficient investment decisions.
4. Investors don't pre-commit investment funds to an opaque pool and outsource investment decisions to a fund manager. Investors invest as potential investment opportunities are identified by them.
5. Investors retain right to take investment decisions. Investment and exit decisions taken by each individual investor based on their individual liquidity situation and risk profile. SCIP doesn't take investment decisions on behalf of investors. SCIP is not an opaque pool of capital. The shares are held by each individual investor. SCIP does not hold shares on behalf of investors as an intermediary.
6. SCIP has unlocked early stage investments to a wider audience of investors. Small investors (minimum investment ticket size is $3,000 per investment) are able to participate early in potentially high growth opportunities. These opportunities are the traditional preserve of Angels and VCs. Investors can create their individual portfolios of early-stage investments.
7. Ability to access multiple points of view on investments. Democratization of investment opportunities to a wider investor audience enables a richer knowledge-base to evaluate and assess investment opportunities. The SCIP process (standard appraisal documents and transparent dialogue between entrepreneur and potential investors) makes the network of investors a market place of risk; it filters investments opportunities by collecting the perspectives of many investors.
8. Easy tracking of investments. SCIP, on behalf of investors, takes an active role in ensuring that investor interest are protected through board positions and robust monitoring/reporting mechanism to manage the early-stage investment risk and ensure protection of investor's investments.
9. Cost of pre- and post-investment process borne by the investee company.
