Pi Capital and VCR, two private investor networks working in the sub GBP2 million venture capital market, are set to merge their operations. The two investment clubs will continue to operate separately as they serve different market segments but will benefit from an extended network of contacts.
The Venture Capital Report (VCR) was established as a business angel network in 1978 and now has 400 members. Since then it has raised in excess of GBP20 million for over 250 different businesses, focusing on companies that need less than GBP1 million. It will continue to publish a monthly report for its members with details of screened investment opportunities, as well as the annual The Venture Capital Report Directory. David Giampaolo, who joined VCR as chairman in December, will become chief executive of the new group. He said: “We believe that we are currently experiencing exceptional conditions for venture capital investment. The quality of business plans we see is only improving, whilst valuations remain realistic enough to create true shareholder value.”
Pi Capital is a venture capital fund manager. It was formed in 1998 to invest money raised from a club of businessmen in smaller, unquoted UK businesses. It has 200 members (there is a 10 per cent overlap of members between the clubs) and generally invests between GBP1 million and GBP2 million. As part of the new group it will continue to carry out its own due diligence, and advise its members on transactions and investor syndications. Simon Oliver, currently chairman of Pi Capital, will become non-executive chairman of the new group. He said: “The benefits of scale within a market that is currently fragmented and inefficient are clear. We are pooling the resources of some of the most astute private investors in the UK and creating a platform for access to the UK’s best entrepreneurial talent and most innovative ideas.”
The partnership can now cater for deals that had previously been rejected as too small for Pi or too large for VCR. Giampaolo said that further consolidation of the market was possible and that the group would look at other acquisition opportunities if they were a complimentary fit with the existing group.
The board of the group will include Adam Valkin and Laurent Laffy of Arts Alliance, Martin Mellish of Aspen Investment Group, Peter Cawdron from Pi Capital and John Bates, who is director of the Foundation of Entrepreneurial Management at the London Business School. Michael Stoddart, formerly chairman and chief executive of Electra Investment Trust, and Roger Brooke, founder of Candover Investments, will remain shareholders in the company.