The Eight Stages

Stage 1 - web application and review

If you are in the process of raising capital and your business opportunity meets our investment criteria, the first step is to complete and submit a funding application form for your proposal. We recommend that you read all the pages on this site before submitting an application. To assist you there is a funding application form on this website. The information you provide in this form is the information we use to make our initial assessment about whether to proceed. Please note that we do not sign Non Disclosure Agreements (NDAs) and recommend that you leave out any particularly sensitive information from the initial application form.

• We do not wish to see a business plan at this stage

Our investment team will review the investment proposal outline provided in the funding application form that you submit. We aim to contact you within 10 working days with a decision:

• If you are not successful, we will let you know by email or telephone

Stage 2 - presentation meeting

If your proposal appears to meet our criteria, we will arrange a meeting at our offices. This will be attended by at least two members of our team and should be attended by as many of your team as needed to give a full picture of your company. We would normally ask for a copy of your business plan at this stage and, if you have appointed advisers, recommend that you are accompanied by your advisers.

The meeting will last for about an hour and commences with a structured presentation from yourselves for about 15 minutes, followed by questions.

Following this initial meeting we will normally let you know by e-mail or telephone within 10 working days if we wish to proceed further with your proposal.

Stage 3 - assessment, deal structuring and submission

From this point onwards, we will assess the key parameters of your business which will usually involve:

• Provision by yourselves of detailed information about your proposal;
• At least two meetings to discuss commercial and financial aspects of your proposal, at one of which we will need to meet your full team;
• Discussion and agreement of the structure of an investment with you and your advisers; and
• Discussion and agreement of the terms with the co-investors.

Stage 4 - approval and offer

Having agreed the basis and structure of a potential investment, the investment manager leading the deal will write an investment case for submission to the Fund's investment committee. Committee meetings are held regularly.

If the investment committee approves the investment, an offer letter will be written to the company outlining the terms and conditions of the offer, which will be subject to due diligence.

On acceptance of the offer, the company pays a commitment fee of 1% of the investment value (see Costs).

Stage 5 - due diligence & legals

Commercial and financial due diligence is undertaken to confirm the accuracy of the information that has been supplied. Due diligence involves the examination of your company or proposal by external experts, such as industry specialists and professional accountants. The reports may contain a number of recommendations to help you develop and grow your business.

Completion of the investment will only occur if the results of the due diligence work are satisfactory. Legal documentation will be drawn up as part of the process and you will be asked to warrant the information provided to us.

Costs of the due diligence and legal process will be paid out of the investment.

Stage 6 - completion

At completion of the London Technology Fund's investment, cash will be invested into your company in exchange for the agreed combination of shares, loan stock etc. It may be that we will require certain conditions to be met by the company at or after completion, and the investment may be made subject to the fulfilment of these conditions.

Stage 7 - post-investment monitoring

A condition of the investment is that your company has adequate financial systems and controls. You will need to provide regular reports on business and financial progress - including cashflow projections, management accounts and audited financial statements. We are happy to help you identify suitable financial systems and controls, which will help you manage your business as it grows and provide us with the reports that we need. We may also appoint a non-executive director to the board of the company to provide support and advice to the executive directors. The NED will usually have relevant industry experience or perhaps a skillset, such as marketing, that complements the skills of existing directors.

Stage 8 - the exit

It is important to be aware that our primary investment objective is the creation of capital growth and realisation of capital gains. Accordingly, we will seek to sell our shares in your company, and realise a capital gain, usually within 5 to 7 years. Our investments are structured to encourage a sale of our shares (the "exit") within this time frame and the agreement and implementation of an exit strategy is key for all companies we back. We will assist your company in identifying and focusing on an optimal exit route.