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THIS REPORT WAS REPRODUCED UNDER A MARKETING

LICENCE PURCHASED BY FUEL VENTURES LIMITED

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© MJ Hudson Investment Consulting Limited 2019. All rights reserved.

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or transmitted in any form.

Fuel Ventures EIS Tax-Advantaged Investments

EIS Review

MAY 2019



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Contents

5 Executive Summary

9 Manager Quality

Manager Profile

Financial & Business Stability

Quality of Governance and Management Team

11 Adviser Quality

14 Product Quality Assessment

Investment Team

Investment Strategy & Philosophy

Pipeline/Prospects and current Portfolio

Investment Process

Risk Management

Key features

Performance



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Overview

Fuel Ventures Limited (“Fuel”), along with Kin Capital (“Kin” or “the Manager”), are looking to raise up to £20 million for Fuel Ventures EIS Fund (“the Fund”). Investments will be eligible for the tax years 2019/2020 and 2021/2022. Investment will be made in EIS-qualifying companies across a range of sectors but with a concentration on B2B platform businesses. Although the Fund will operate under an evergreen structure, subscriptions are expected to be allocated across quarterly tranches, or more frequently depending on the volume of funds raised. The Offer launched in February 2019, with the first tranche investments being made on 5th April 2019. The next close is scheduled for 30th July.

Investment Details:

Score: 85

Offer Type Discretionary Portfolio

EIS Strategy Generalist

EIS AUM (Pre-Offer) £6.5 Million

Adviser AUM £28.5 Million

EIS Risk Level Medium

Investment:

Minimum subscription £10,000

Maximum qualifying subscription per tax year £1,000,000

Early bird discount None

Closing Date:

There is no closing date

This document verifies that Fuel Ventures has successfully completed our independent due diligence process, having passed through all stages of the governance process in the run-up to the report’s publication on the date listed below. It has therefore been awarded the MJ Hudson Cornerstone Trustmark.

Offer: Kin Capital (“Kin” or “the Manager”) is looking to raise up to £20 million for Fuel Ventures EIS Fund (“Fuel” or “the

Fund”) for the tax years 2019/2020 and 2021/2022, to invest in EIS-qualifying companies across a range of sectors.

Investments will be made according to an investment policy whereby subscriptions are allocated to quarterly

tranches, or more frequently depending on the volume of funds raised. The Offer launched in February 2019.



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Risk Warning for EIS Schemes Individuals should always read and bear in mind the risk warning notices that are included within providers’ investment offer literature / documentation, including prospectuses, information memorandums, securities notes, brochures and other related marketing literature. Whilst the following list is not exhaustive, some of the main risks to be aware of include:

Investments are in small, unquoted companies and should be considered as high risk;

Investments are illiquid and need to be held for at least three years in order to retain the initial income tax relief;

An EIS/Seed EIS investment should be viewed as a long-term investment;

Legislation, along with the nature and level of tax reliefs is subject to change. There can be no certainty that

investments will be eligible or remain eligible for EIS/Seed EIS Relief;

Historic investment performance cannot be used as a guide to future performance, and the value of any given

investment may rise or fall;

Many EIS/Seed EIS Schemes involve investment in a single company or sector and therefore should only be

considered as a small part of an overall portfolio;

Investors may not have independent representation on the Boards of investee companies which can mean their

interests are not adequately considered relative to the executive team;

EIS/Seed EIS investments should only be considered by sophisticated investors who understand, and have given

careful consideration to, the underlying investment strategy and associated risks. For help in determining potential

investment suitability, professional advice should be sought;

Often there will be no regulatory oversight and investors will usually not be eligible for compensation if things go

wrong.

NOTE: Please be aware that the Manager mentioned in this report purchased the rights to distribute our report

only (no payment was taken to undertake the research which is fully independent). To access full research

services, including further tax-advantaged investment research reports, which can be used for the purpose of

investment advice, please visit www.advantageiq.co.uk where both individual reports and subscriptions are

available for purchase.



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Executive Summary MANAGER: Kin Capital (“Kin”), which is acting as the regulatory manager for the Fuel Ventures EIS Fund, was formed by the merger of Kin Capital Ltd, Kin Capital Partners LLP, Enterprise Investment Partners LLP, and Enterprise Incubator in 2018. The core of the business, however, dates to 2010. The company provides a range of services to investment funds, and acts as the investment manager for a number of funds in the tax-advantaged investment space. The co-founders, Christian Elmes, and Richard Hoskins, are both experienced within the industry and continue to play significant roles in the business.

INVESTMENT ADVISER: Fuel Ventures is a relatively new venture manager formed by Mark Pearson on the back of his success founding MyVoucherCodes, amongst other platform start-ups. Having started three funds to seed incubated firms, Fuel partners with Rocketspace, a prominent incubator in North London with roots in Silicon Valley- Fuel is starting an EIS fund in order to help finance the growth of the most successful entities emerging from these seed funds. The Adviser has assembled a team around Mark to build out the business as a whole, with Mr Pearson continuing to build out the capabilities as funds under management increases. The Manager is based in the offices of Rocketspace itself in Islington, London.

PRODUCT: Fuel Ventures EIS Fund is a discretionary service focused on early-stage growth companies. The Fund offers investors a portfolio of 5 -8 companies consisting of scalable digital businesses covering marketplaces, platform, software as a service (SaaS), and transactional technologies. The Fund is aiming for a target return of 2x of an investor’s subscription (excluding tax relief) within 4-7 years. The fee structure allows for 100% of the money subscribed to the offer to be eligible for EIS tax relief.

SUMMARY OPINION: Mark Pearson and Fuel have teamed up with Kin Capital to offer EIS investors the opportunity to invest into early-stage, B2B and B2B2C digital platform and SaaS businesses, mainly sourced from the most promising companies within the Fuel’s FV funds. Fuel has come a long way in a short time as an Investment Adviser, utilising Mark Pearson’s reputation for founding, growing, and exiting MyVoucherCodes, to start to build out an early-stage venture firm. Certain challenges remain: the concentration of ownership and governance, without independent checks and balances and the lack of plans to broaden the in-house decision-making process, could limit the development of Fuel and prevent it from growing into more than an extension of Mr Pearson’s personal brand, while the investment team has seen promising hires but will need to continue to grow, as well as the investment process formalise. However, there are several positives about the offering in our view: from the presence of both Mark Pearson and an experienced Advisory Committee, a focused and innovative strategy where Fuel incubates and oversees potential investee companies, and a promising early performance that hints at the potential success of the strategy. Fuel’s partnerships with both Rocketspace, who Fuel work alongside to incubate investee companies within their co-working space, and Kin Capital, who serve as an important check to mitigate conflicts as well as another layer of investment oversight, adds considerable value to the overall offering. Fuel Ventures offer is, by any measure, one of the most intriguing of the newer entrants to the EIS market and should be considered by experienced investors willing to reach beyond the ‘usual names’ in the EIS landscape to take a chance on an ‘emerging investment adviser’ who has shown early promise.



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Positives

AT THE MANAGER LEVEL:

Kin is a large and capable regulatory manager, and will help ensure the governance standards of Fuel Ventures. It

has well-developed and robust processes, as well as being financially stable and has focussed on improving its

own internal infrastructure over the last year putting it on good footing for the future;

Both Kin Capital, and Enterprise Investment Partners have an extensive track record before they merged in 2018.

The core of the Manager dates to 2010;

The Manager has a history of financial stability, and has previously enjoyed strong profits and a substantial growth

of net assets, although it should be recognised that without the continuing involvement of the Investment Advisor

it is unlikely the Manager will be able to implement the strategy.

AT THE ADVISER LEVEL:

The Adviser has already generated a certain profile through Mark Pearson’s back story and has already generated

a decent amount of fundraising for their ‘FV’ funds before this EIS fund raise which, along with their partnership

with Kin, bodes well for Fuel Venture’s continued ability to raise bigger funds for investment;

Mark Pearson’s ambition to build out a proper investment manager beyond simply his own investment interests

has led Fuel to make several new hires, including to the Business Development and Administration side of the

business, although these new hires and any additional hires in the pipeline will take time to bed in and adapt to the

wider Fuel culture and ways of working;

Mark Pearson’s ability to fund Fuel Ventures will allow it to scale more quickly than if the Adviser relied on

organic growth alone and has allowed Fuel to considerably add to both the investment team and the development

of the business as a whole, although revenues will eventually have to catch up with the increased cost level if the

Adviser is to be sustainable in the longer term;

AT THE PRODUCT LEVEL:

Mark Pearson’s history growing MyVoucherCodes lends considerable authority to entrepreneurs who favour

operational experience over purely financing, and Mr Pearson has started to build out the team with credible hires;

The ability to secure reduced-price co-working space alongside Fuel Ventures is both a compelling ‘sell’ for

potential investee companies and also allows Fuel to keep an eye on, and provide added value to, management

teams who work in the same building;

As Fuel intends to invest in companies which emerge from their FV funds and, therefore, have already an

established product and revenue profile, there are more tractable metrics (like LTV/CAC ratio1) to help see which

companies have a chance to scale with further investment;

The fund’s Advisory Committee allows the Investment Team to get specific advice from sector experts which both

adds value to the due diligence process and to the investee company post-investment, but also could act as a senior

second opinion in investment deliberations;

1 https://www.geckoboard.com/learn/kpi-examples/marketing-kpis/ltv-cac-ratio/

https://www.geckoboard.com/learn/kpi-examples/marketing-kpis/ltv-cac-ratio/



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The fact that the Fund will largely invest as a follow-on vehicle for investee companies within the Adviser’s FV

funds helps lend greater visibility to what an investor portfolio will likely look like, as well as allowing the team to

see how a management team performs before the Fund gets a chance to invest although as with any follow-on

investment in does create conflicts of interest in setting the entry price between the different funds;

While there is an obvious conflict between the FV funds and the fund under review, the presence of Kin Capital as

the entity ultimately responsible for investment allows for third-party oversight of the investment process and

could push back if Kin disagrees with an investment decision or valuation;

The investment process being largely driven by Mark Pearson can often be very short: the Adviser’s ability to

assess investment opportunities at a fast-moving stage of company development could give it an edge to slower

competitors;

The Team’s ability to directly oversee investee companies, as well as track the underlying metrics of investee

companies through the team’s ‘God View’ in their portfolio tracking tool, allows the team to respond quickly to

any sign of weak performance or other issues;

Fees are broadly in line with the market, with a decent hurdle before a performance fee is triggered;

Early performance from the Adviser’s FV funds, and Mark Pearson’s personal investment track record, show

considerable promise if this can be replicated, albeit the mandate and regulatory manager differ between

the FV funds and the fund under review.

Performance fees are subject to a 20% hurdle and based on the performance of the investor’s overall

performance.

Issues to consider AT THE MANAGER LEVEL:

Over the last year Kin made a net loss financially. Whilst this was due to investments they made to improve the

infrastructure of the Manager, Kin should make sure to keep an eye on this just to keep such investments at a

sustainable level;

The Manager is not as expert as the investment team on the companies into which the Adviser hopes to invest and

accordingly the benefits of this extra level oversight are welcome but, by definition, limited.

AT THE ADVISER LEVEL:

While the Adviser has been adept at courting media coverage and has ‘punched above its weight’ in courting tax-

advantaged investors, partly due to their partnership with an experienced tax-advantaged manager and promoter in

Kin Capital, this is still the Adviser’s first EIS fund marketed at a wider retail market and therefore it lacks of the

profile or investor servicing experience of more established managers in this space;

The Adviser has made losses so far and relies on Mark Pearson for funding while it reaches a scale that would

allow it to become self-financing. Investors would therefore have to find a level of comfort in terms of

sustainability compared to more established firms with bigger balance sheets and/or positive cashflow;

Although the Adviser is a small entity, and one could therefore reasonably expect somewhat less formality in

governance than for bigger, more complicated, investment management entities, the fact that Mark Pearson is the



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sole owner and director of Fuel Venture Limited is both a troubling concentration of power, underlines a large key

man risk, and perhaps shows a lack of willingness to expand the Adviser beyond a personal start-up and to an

established entity with independent directors on the board and staff incentivised by equity ownership and options;

Mark Pearson brought in four fellow directors in 2015 all of whom resigned in June 2016. Whilst we are told the

additions failed to deliver, it does raise questions about Mr Pearson’s willingness to share control and

responsibility for the Adviser’s future prospects, which might limit this potential.

AT THE PRODUCT LEVEL:

While recent hires to the investment team are promising, and the Advisory Committee adds considerable

experience, there is considerable key man risk around Mark Pearson, who has final sign-off on recommending

investments and, as owner of Fuel Ventures, is unlikely to be regularly contradicted by the wider team;

The Advisory Committee add considerable value, although they are not formally contracted to Fuel Ventures,

albeit two of the committee invest in Fuel’s funds and have shown their commitment to Fuel in this way;

One new analyst has joined in May, with another one due to join shortly, which, when combined with other new

arrivals to Fuel, is likely to mean that time and resources will need to be spent on training and bedding in new

arrivals;

The strategy for this new fund differs from the previous funds that FV have raised, which means that the strategy

is untested, albeit follow-on funding into companies already known to Fuel does lower the risk of this unknown;

The strategy of investing into digital platform and SaaS businesses is clear and focused, although that means that

the fund will not be as diversified across sectors, stages, and investee companies as some other funds;

There is a potential conflict in investing into companies that the Adviser has an existing relationship with, both in

terms of valuations but also disincentivising finding competing outside opportunities, although this is mitigated by

the presence of Kin Capital as regulatory manager and final sign-off on investments;

Fuel might charge investee companies when they source additional external investment, which might create a

conflict and/or divert resources from core investment activities, although Kin’s presence here is also welcome;

The lack of a formal investment committee within Fuel, exacerbated by the swift pace of assessment for potential

investments, is sub-optimal from a governance point of view, although a larger investment team might necessitate

a change going forward;

Investee company specific risks are very high at the early stage of development and accordingly a portfolio of only

five –eight companies is likely to mean the performance of investors will vary significantly depending which

companies they are invested in;

The Adviser has a very limited record on achieving exits and at this stage of its development there is no clear plan

on how exits will be achieved.

While the fees are broadly in line with the market, a new fund could have been more aggressive in setting fees

below the market average.

Although initial performance from the FV funds are promising, and Mark Pearson’s track record is an attraction

for investee companies, there is not an established track record for the fund as of yet.



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Manager Quality Regulatory Manager Profile Kin Capital (“Kin”) is the trading name of a group of companies, formed as part of the 2018 merger of Kin Capital Ltd (promotion and fundraising), Kin Capital Partners LLP (fund management and custodian/receiving agent services), Enterprise Investment Partners LLP, and Enterprise Incubator. All entities are controlled by Kin Investment Services Ltd. The group is based in Kings Cross, London and whilst the group structure is new, the core part of the business was founded in 2010. The Manager provides investment services focussed on venture capital such as aiding with fundraising, acting as fund manager, and handling client assets/money. They have a range of clients within the tax-advantaged space of a wide variety of sizes, including institutional funds. Kin employs 15 full time members of staff, including the two co-owners / co-principals Christian Elmes and Richard Hoskins. Staff participate in the ownership of the business through the firm’s EMI scheme. Christian Elmes, co-founder of the pre-2018 merger ‘Enterprise’ part of the business, is a practising member of the Institute of Chartered Accountants and Chartered Institute for Securities and Investment, with 15 years of venture capital experience and has worked in financial services for some 20 years. Richard Hoskins, co-founder of the pre-2018 merger ‘Kin’ part of the business has 14 years’ experience in venture capital, including both fundraising and fund management/administration services. He holds the IMC, Diploma in Regulated Financial Planning, is a member of the CFA Institute and sits on the Enterprise Investment Scheme Association Regulatory Committee. The remaining Kin team include specialist compliance personnel (providing services to both to Kin and its clients), investment professionals, fund administration specialists and a fundraising team. We note that (according to the latest set of financial accounts for the financial period to year end 30 September 2018), Kin Capital generated revenues of over £2,148,000, which is a compound growth of 26% over the last two years. These are consolidated figures for Kin Capital Ltd, Kin Capital Partners LLP and Enterprise Investment Partners LLP. In 2018, there was a small net loss of £30,000, from significant investment in I.T. systems and staff. Based on net profits in 2016, and 2017, and on the reasoning given by the Manager, this is unlikely to be a concerning situation, especially given the small size of the loss. Net assets as at 30 September 2018 were £571,000, which presents a significant growth since 2016, though a slight decrease since 2017 due to the net loss of £30,000. Increasing revenues while all the time investing in the businesses infrastructure and personnel has put Kin Capital in a stable position, provided they continue to keep investment and growth steady.

TABLE 1: KEY FINANCIAL METRICS SUMMARY OF KIN CAPITAL

(£'000) 2016 2017 2018 2YR. CAGR

Revenues 1,356,000 2,100,000 2,148,000 26%

Costs 1,172,000 1,590,000 2,178,000 36%

Operating Profit/(Loss) 184,000 510,000 (30,000)

Net Profit/Loss Margin (%) 13.6 24.2 -1.40

Net Assets 193,000 601,000 571,000 172%

Source: Kin Capital. Joe Lazaris serves as both the CF10 Compliance Oversight and CF11 Money Laundering functionality. He is not a director of the parent company. We have reviewed Kin Capital’s Compliance Manual (with the last review having taken place in December 2018), which outlines the appropriate measures to deal with (among others) complaints, conflicts of interest, treating customers fairly and procedures to adequately deal with FCA reporting procedures.



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Kin has provided MJ Hudson Allenbridge with a copy of its formal complaints’ procedure. The document is comprehensive and outlines necessary procedures to formally register and log a complaint, along with the appropriate timelines to address these. The firm maintains a formal complaints register, and encouragingly it is not aware of any complaints laid against it in the past 12 months. Kin offers a broad range of services and its fundraising experience sets it apart from other regulatory managers within this space, however it needs to make sure to keep the investments it makes into company infrastructure in check.



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Adviser Quality Investment Adviser Profile

Fuel Ventures Limited (“Fuel”) was founded in 2014 by Mark Pearson and made its first investment in 2015 with the launch of its first fund, ‘FV1’. It subsequently launched ‘FV2’ in 2017 and ‘FV3’ in 2018. Fuel decided to venture into the tax-advantaged market by opening its first evergreen EIS fund in February 2019, bringing the total number of different funds under its management to four. Fuel is 100% wholly owned by Mark Pearson, who initially started his career as a chef training under Gordon Ramsey, but his career took a different direction following the creation of Markco Media, the parent company of discount website MyVoucherCodes in 2006. MyVoucherCodes grew to become one of the largest consumer website for money saving coupons and comparisons in the market, and Pearson eventually sold his stake in the business for over £50 million in 2014. In the coming years, he invested his own money into seven other start-ups, mainly with a focus on SaaS and platform businesses. He subsequently started Fuel Ventures to build out his investment activities and to allow wider participation in his investment focus. To augment the capabilities of Fuel as an investment adviser, Pearson recently added Warrick Shanley as an Investment Director, with a brief to add to Fuel’s network of advisers and other intermediaries and expand Fuel’s fundraising channels, joining in April 2019 from Rockpool Investments. Jing Xu heads up Fuel’s work on international partnerships, having had experience establishing multiple businesses in China, while Michael Burnett, Hugo Cannon, and Charlie Cunningham assist with fundraising as well as supporting the portfolio. As already stated, Fuel have had three previous funds to its name with the first investment being in 2015. The first three funds are Fuel’s earlier stage funds and were regulated by Sapphire Capital Partners. Fuel’s latest fund, Fuel Ventures EIS, will concentrate on follow-on investments into their previous earlier stage funds. Kin Capital Partners has come in as the new regulatory manager for this fund. The first fund ‘FV1’ had 7 total investments while the second fund ‘FV2’ had a total of 10 investments. To date, Fuel have made 21 total investments, with a total AUM of £22 million: FV1’s fund size is £2 million over 7 investments, FV2’s fund size is £5 million with 10 total investments, with FV3’s fund size is £15 million with 5 investments made so far and a target of 10-12 companies when fully deployed; £6.5 million has been raised for the EIS fund so far, with five existing portfolio companies as at April 2019. 100% of investments made so far have been EIS qualifying, even outside of the dedicated EIS fund. Fuel plan to grow their AUM to £100 million over the next few years, expanding their investment team to 15+ people in line with the growth of assets under management. Fuel have told MJ Hudson Allenbridge that, given the early fundraising success of Fuel Ventures EIS Fund, they are keeping a close eye on other opportunities including SEIS and VCTs, among other products. Fuel have an office located in Islington, London, within the ‘RocketSpace’ building: a co-working environment for multiple companies. Fuel have utilised this to their advantage by allowing their investee companies to operate within RocketSpace to allow for constant nurturing and close monitoring by Fuel. It is therefore no surprise to know they have no plans to move office within the next three years. They also have a registered office located in Hoxton, London. Mark Pearson’s personal story, Fuel’s partnership with an established manager like Kin and incubator like Rocketspace, and the amount raised for Fuel’s funds so far, has helped to raise Fuel’s profile higher than most managers of its vintage. While recent hires on the business side- including the likes of Warrick Shanley who has tax-advantaged experience- are very welcome, it is reasonable to expect that the team might take time to cohere and gain further traction with advisers and private banks. However, a continuing track record from Fuel’s early ‘FV’ funds, as well as a continuing commitment to build out the Business Development team, infrastructure and processes, should allow Fuel to make up ground with more established managers in the tax-advantaged space.



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Financial & Business Stability

Fuel Ventures is a relatively young manager with its main source of income coming from management fees that it charges to portfolio companies from its previous funds, with investments being too recent to expect performance fees to have accrued. The Adviser’s key costs include team salaries, (reduced) office rent for the RocketSpace building, operational costs, and costs payable to third parties such as its fund managers, Kin Capital and Sapphire, and to the funds’ custodian (whose fees have been negotiated lower in recent times). These costs and sources of revenues are very much in line with firms in charge of tax-advantaged funds. Fuel have emphasised their aim to make the bulk of their money on exits rather than fees.

Mark brought in a team of Directors to help launch the fund. The initial fund turned out to be smaller than intended, and the Directors viewed as failing to deliver. To this end, Mark decided to part ways with four directors, culminating with four resignations in June 2016. Of some importance however, in the early days of Fuel Ventures, Mark Pearson invested his own money into the fund on the same terms as other investors

Financially, Fuel have recently experienced growing revenues. Revenues increased 23% from £177,810 in 2017 to £218,715 in 2018. However, the company has generated a loss in the last couple of years reflecting the smaller size and young age of the manager. There was a net loss of £160,858 in 2017 and a net loss of £391,014 in 2018. MJ Hudson Allenbridge asked for and received a letter of comfort from Mark Pearson stating his intention to carry on funding the Adviser while it reached scale and could be self-funding and, although the Adviser has been running at a loss in getting Fuel started, Kin Capital has stated to MJ Hudson Allenbridge that Fuel is currently trading on a breakeven to marginally positive basis. While we have no reason to doubt Mr Pearson’s intention to continue investing in the Adviser, and see a positive trajectory in asset raising and a growth focus from the Manager, investors will have to take it on faith that this positive trajectory will continue so that the Adviser can achieve profitability in the medium term. Performance fees from FV funds, and continuing fundraising building on Fuel’s quick start, could well make the Adviser’s financial stability look somewhat rosier in the months to come.

Quality of Governance and Management Team

Mark Pearson owns 100% of the business, and is the sole Director of Fuel Ventures Limited. Companies House records show that four other directors resigned at the same time in 2016 due to, according to Mr Pearson, poor performance in terms of helping to fundraise for the initial fund. As of yet they have not been replaced. The only oversight in terms of the running of Fuel Ventures Limited is an Advisory Board, which meets quarterly, but which mainly deal with investment matters (they are discussed, and bios outlined, below), however Fuel Ventures Ltd has assured MJ Hudson Allenbridge that, as part of this review process, that they intend to put in place an independent strategy board within the next few months to help with strategy at the top level. Sapphire Capital Partners LLP is the FCA Principal of Fuel Ventures Limited (AR) and is responsible for compliance supervision.

While Mark retains full ownership of the business, Fuel has also assured MJ Hudson Allenbridge that this will not be the case in the medium term as Fuel are implementing an EMI share scheme for key Fuel Ventures team members on top of the share in carried interest for positive performance. This should help retain senior talent and help broaden both ownership and management say over time, although not in the short term. This willingness to offer equity shares is also likely to be attractive if Fuel intended to recruit very senior investment professionals in order to supplement Mark’s experience in managing the firm as it grows.

Mark Pearson has also put in place a Board resolution outlining delegated authority for Fuel Ventures in case of his incapacitation or otherwise lack of availability, which is a welcome backstop in case of the worst case.

The current concentration of oversight for Fuel Ventures is far from best practice- which would at least require directors able to challenge the management team, as well as an Independent Director to reassure in terms of assurance of things being carried out correctly. Equally the 100% ownership of Fuel Ventures by one person is also sub-optimal: both because of the enormous amount of key man risk which accords with sole ownership, but also in terms of recruiting and retaining top talent. However, we are pleased that the Adviser was open to criticism to this end and has started to put in place policies and processes in order to ameliorate this in the future.



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Product Quality Assessment

Investment Team Fuel Ventures have a small but growing investment team who will be working on this fund. The team itself is split into two groups: the Deal Execution and Growth Capital team, with the latter taking responsibility for both business development and portfolio monitoring reporting. Fuel Ventures also has an independent Advisory Committee which provides a further level of rigour to the investment process, assessing all potential investee companies prior to investment. The Advisory Committee meets quarterly and is consulted where there are potential conflicts of interest between the different funds to which Fuel acts as adviser. There is no formal investment committee within Fuel, with Mark Pearson having the final say on all investment recommendations made to Kin Capital, whose investment committee acts as the final decision maker for the fund. Importantly, as Fund Manager, Kin is responsible for reviewing due diligence and in particular asking questions of Fuel around the valuation of follow-on investments, which is expected to be a major part of Fuel’s strategy as the fund looks to invest in the most promising companies from the Adviser’s FV funds. Kin will push back if their own valuation metrics suggest that Fuel take another look at a valuation- an example was given to MJ Hudson Allenbridge where this took place- or if supplementary due diligence is needed prior to an investment being approved. The lack of a formal investment committee within Fuel to finalise recommendations has been due to the small team size and rapid pace that Fuel moves at. In our view the lack of formality is sub-optimal, especially with the planned growth of the business and leaves investors very vulnerable should mark Pearson become incapacitated for any reason. In putting together Fuel’s investment team, Mark Pearson recruited Daniel Tait, who previously worked at Start-Up Funding Club, another EIS fund manager, to be a Principal, and who has put together many of the processes at Fuel based on his past experience. Daniel and Mark principally review the submissions to Fuel- often competing for who can find promising investee companies- and due diligence is supplemented by Stan Williams, an Investment Associate who recently joined Fuel from a large Angel network. Mark, Daniel and Stan are the team members responsible for deal origination and execution. Shiv Patel joined Fuel at the end of May 2019 as an Investment Analyst and will support this function, with another analyst hire planned. Fuel’s ‘Growth Capital’ team is responsible for both business development for Fuel as a manager, and also portfolio monitoring. Warrick Shanly and Jing Xu concentrate solely on business development, but Michael Burnett, Hugo Cannon, and Charlie Cunningham also assist with portfolio monitoring, alongside their duties assisting with fundraising. The Advisory Committee are not contractually bound to the Fund but two of them have invested their own money into the fund, as has Mark Pearson. As can be seen from the bios in the Appendix, all three have experience which is useful in both assessing and providing added value to potential investee companies. MJ Hudson Allenbridge saw evidence that the Advisory Committee served more than a “letterhead function” and actively contribute to the fund’s work, which makes it a plus to the overall team. Overall we find the team fit for purpose for a fund this size. Mark Pearson’s experience is extremely attractive to potential investee companies, and his operational and investment experience in investing in digital platforms gives Fuel a competitive advantage against some funds without such an entrepreneurial story to drawn upon. The close quarters mentorship available by basing portfolio companies in the Rocketspace offices also allows this experience to be brought to bear more often than if only confined to occasional interactions at board meetings. The addition of Kin as a third-party manager adds considerable comfort, both for their experience in the early-stage investment area, and because they can serve as a check on a team where Mark Pearson’s opinion is likely to dominate without the formal check of a formal Investment Committee. Both Daniel and Stan are solid hires for Fuel,



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with good experience and impressive knowledge of venture capital, but the team is obviously still in a stage of growing and bedding in compared to more established teams in the EIS space. We have included the bios of the key personnel in the Appendix 1 below.

Investment Strategy & Philosophy Fuel Ventures (“Fuel”) was founded in 2014 by Mark Pearson and has had three funds so far to its name (referred to as “the FV funds” hereafter). Fuel Ventures EIS (“the Fund”) is its fourth fund and was launched on the 12th February 2019. This EIS fund will act as a follow-on investment vehicle for the most successful, revenue-generating investee companies within the FV funds. The Fund is looking to raise £10 million into between 5 to 8 companies within the first 12 months. The average deal size will be £2 million with an average holding period of 5 years, meaning that the investment stage will be seed to growth stage (pre-Series A) for high-growth companies of the kind targeted for investment. Fuel has set a target for each investment which must have the independent capability of a minimum 10x return to satisfy the power law of venture capital returns (where one winner can pay for the rest of a portfolio as well as generate a profit).,. The Fund focuses on established, globally scalable digital businesses covering marketplaces, platform, software as a service (SaaS) and transactional technologies. Fuel see these sectors as highly scalable and are particularly easy to closely monitor. The 'move to online' underpins Fuel’s investment strategy over the longer term and look to only back businesses that are globally scalable. They are technologically light (compared to hard / deep science 'tech'), but commercially heavy. The Manager sees several potential exit routes for their investee companies. The most likely exit is an acquisition by a larger technology company or a competitor. Future exits may be achieved by a financing out at a future funding round, or through an IPO which is something the advisory committee has experience of, for example when Funding Circle co-founder Andrew Mullinger (member of the advisory committee) saw the £1.5 billion flotation of Funding Circle in 2018. The fund has described to MJ Hudson Allenbridge their five key investment characteristics they look for in a company: 1. Supported by long-term structural growth. More and more products/services are provided online or in the offline world, but through online marketplaces. Fuel believes that this trend is likely to continue, regardless of shorter-term cyclical demand changes. We believe that the amount of capital actively seeking digital investment opportunities is likely to increase and may support increasing valuations over the long term. 2. Easily scalable. E-commerce businesses can have a low extra cost per unit sold. In Fuel’s experience, once a digital business has a working product that is generating revenue, growth is normally limited by the market demand for the product, as opposed to the business’s ability to supply it. Market demand can then be influenced by focused online marketing. The fund will only invest in companies that are generating revenue by selling an existing product or providing an existing service. 3. Global growth potential. Whilst Fuel believe the UK is a leader in providing online services, the problems digital businesses seek to solve and services they provide are not unique to the UK. All companies the fund invests in will be revenue generating and in many cases will be seeking to trade globally. 4. Net negative churn. Even if new client acquisition stops growing, Fuel believes that revenues can continue to rise regardless, as existing customers tend to use a particular service more and more over time. The pricing model of some online services encourages this. The investment consultant will favour those opportunities that can demonstrate strong revenues and display net negative churn.



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5. Easily trackable. E-commerce businesses can generate rich performance data. This data can be used to track company performance on a daily basis against a variety of Key Performance Indicators. If there is a problem, it surfaces quickly. The company or Investment Manager can address problems swiftly. All the investments that the fund backs will provide regular performance data to the Investment Consultant. Fuel Ventures manages a set of earlier / seed stage, annual (non-evergreen) EIS funds. These are known as the 'Fuel Ventures Portfolios' or 'FV' funds: FV1 with a full deployment of £2 million, FV2 with a full deployment of £5 million and FV3 with £14 million currently being deployed. FV4 is currently open. Fuel state the fee structure of the FV funds does not create a conflict of interest with the Fuel Ventures EIS Fund, given the performance fee for both funds relies on exits / cash returned to investors, as opposed to NAV. As a whole, Fuel Ventures has raised £21 million from high net worth, family offices and institutional investors in its first three EIS funds, restricted to Professional Clients. Fuel’s philosophy is highly centred on helping chosen businesses grow through an "all under one roof" approach and believe this is distinctive from many other venture capital firms, particularly in the EIS/VCT market place. The majority of investee companies are either currently working in or have worked in the same offices as Fuel Ventures for 6-12 months plus. Fuel tell us this allows them to work closely with the founders and provide them with the mindset, support, and connections they need in order to be successful. Fuel also believe that part of the benefit to the portfolio companies being co-located are the synergies that develop between their portfolio companies. Fuel have noticed common challenges faced by its portfolio companies and actively encourage them at monthly founder events to help each other. For example, one investee company with experience of search engine optimisation (SEO) strategies was able to save another investee company CEO a large amount of money by helping him find a credible vendor (at a decent price). As well as hard examples like this, the soft examples of mentorship and support are also valuable examples. MJ Hudson Allenbridge consider Fuel Ventures’ strategy to be a considerable strength of the offering. The ability to co-locate (at reduced rates) in Rocketspace, work directly with Mark Pearson (who has grown and exited his own platform company), and gather the advice of the advisory committee, is an attractive proposition for investee companies in this space and Fuel find dealflow by investing early into these companies through the FV funds. While they may find investee companies outside of the existing “stable” of investee companies (for example, one investee company was found in the NatWest accelerator which is in the same building), this ability to “back their winners” does help de-risk the fund while allowing a relationship with entrepreneurs through investment before many other funds would be ready to take an interest.

Pipeline/Prospects and Current Portfolio As previously stated Fuel Ventures EIS will likely invest into the best-performing investee companies emerging from the FV funds managed by Fuel. As such it is possible both to see what a likely portfolio might look like, giving better visibility for investors considering this is a new fund, and it also shows the Adviser’s ability to deploy cash raised in a timely fashion. Fuel state that they would likely take larger positions with bigger cheque sizes if they were to raise or exceed their fundraising target rather than increase their portfolio size so as to maintain selectivity. Below, Table 2 shows the previous invested companies (all of which are still held at the time of writing) for Fuel Ventures in order to give an idea of the portfolio for Fuel Ventures EIS Fund:



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TABLE 2: EXAMPLE PORTFOLIO COMPANIES

COMPANY SECTOR YEAR OF

INVESTMENT BRIEF DESCRIPTION

Moteefe Digital Services

2015 Leading social commerce platform providing digital marketeers and influences an instant opportunity to sell customised on demand products globally.

EventsCase Software & Services

2016 An all-in-one event management software for event organisers including event websites, registration, ticketing, payment, event apps…

ResponseIQ Software & Services

2016 A call-back widget that offers free and instant call-backs to prospects who are on your site and ready to buy

WeGift Digital Services

2016 Creating new gift card sales channels through eCommerce and API products

Credit Digital Digital Services

2017 Point of Sale (PoS) multi-lender loan platform, helping retailers close more business by providing easy payment options.

Shift Logistic Software

2017 On demand logistics platform which aims to move anything, anytime, anywhere. A scalable network of independent ‘shifters’ facilitate jobs on demand.

Asemblr Mobile Application

2017 AR mobile application where you can create, discover and share 3D and Augmented Reality experiences

StockViews Digital Services

2018 An investment research platform

Manufacturing Source

Manufacturing Services

2018 Online platform that provides instant quotes and instant ordering of custom manufactured parts.

Perfocal Digital Services

2018 Online service for people to book a professional photographer in minutes

Source: Fuel Ventures; AdvantageIQ

Investment Process The Manager has described its investment process as follows in AdvantageIQ:

TABLE 3: INVESTMENT PROCESS

INVESTMENT

PROCESS DETAILS

Deal sourcing/ origination

This fund is predominantly a follow-on fund, so the vast majority of the portfolio companies will have already have been 'sourced' and potential investees typically will be co-located in the same building as Fuel Ventures (and have spent 6-12+ months there). There are therefore two 'investment processes' relevant here; 1. Fuel finding 'new' deals and 2. 'Follow on' investments. 1. New deals



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Sources of deal flow have evolved over the last few years. Originally Mark Pearson's reputation and high profile within the digital / e-commerce world meant that Mark Pearson was the primary source of deal flow. However, having raised £21m and invested in >20 companies within the area that the fund focuses, many of the most recent new portfolio companies are referrals from the founders of existing portfolio companies. Fuel also believe being based at the RocketSpace tech campus is filtering through into some of the better deals they are seeing. RocketSpace London (https://www.rocketspace.com/tech-campus/london) opened in 2017 on the back of the success of the first RocketSpace in Silicon Valley, which was home to Uber, Spotify, Hootsuite and other successful tech businesses. There is no obligation on tenants of RocketSpace to seek investment from Fuel, but given they are tech businesses in the same building as specialist tech investor, there is likely to be interaction. Deals are also introduced to Fuel by other VC firms, seeking to have a co-investor with an active approach (see below) 2. Follow on - more directly relevant for the Fuel Ventures EIS Fund... It is important to understand Fuel's distinctive approach to monitoring....(part of its 'all under one roof' investment approach) All of Fuel's portfolio companies are closely monitored (more 'mentored' than 'monitored') and arguably much more closely than other EIS or VCT managers - this sounds like a bold statement - however there are two principal reasons why this is possible... 1. Co-location - the majority of Fuel's portfolio companies are co-located in the same 'RocketSpace' tech campus as Fuel. This means Fuel can physically interact, mentor and advise the companies in a way that is only possible if you are sharing the same workspace. 2. Data driven companies - as all the companies are providing digital services, the companies themselves (and Fuel as manager) are very data driven. Fuel is digitally connected to its portfolio companies, monitoring a wide variety of metrics (e.g. revenue, profit, growth, unit economics etc.). Many managers claim to be 'hands on', but for the above reasons, Fuel believe they are able to be much more hands on than most. This makes Fuel an ideal co-investor and Fuel enjoy close relationships with a number of early stage VC firms (some of whom have invested in Fuel's portfolio companies at valuations significantly in excess of the price paid by Fuel).

Deal filtering and selection

For this fund... Given the vast majority of investments will be follow on, Fuel is selecting investments for this fund, based on the 'live due diligence' they are conducting through their earlier stage seed funds. Some of the investees within this fund will have been known to Fuel for 3+ years, working in the same offices. This is to an extent similar to Parkwalk's use of their Oxford / Cambridge / Bristol seed funds as



18

the source of their best deals. The difference here being the level of mentoring / monitoring that all of Fuel's portfolio companies receive. All portfolio companies are also given access to how they are performing, relative to the other Fuel portfolio companies (essentially an investee 'league' table). This creates healthy competition. Only the better performing companies will be selected for this fund. More generally, Fuel seek to invest in people as much as ideas. For companies that meet the screening criteria, meeting provides the Investment Consultant the opportunity to understand not only the company founders, but also how Fuel Ventures will be able to support the growth of the company. Once passed the Screening & Meeting stage, Fuel Venture’s evaluation process tests the assumptions of the company plans.

Due diligence process An in-depth review of the potential investee’s operations, financials and corporate governance is completed and the Advisory Committee reviews the results.

Deal approval

Each deal is proposed by the Fuel team to the independent Advisory Committee, which acts as an independent sounding board to validate Fuel Venture’s research and due diligence work. Subject to feedback / comments from the Advisory Committee, the potential investment is then proposed to the Fund Manager, using the template attached. There is an obvious conflict of interest when a manager deploys further capital into businesses that it has backed previously, especially when money has come from different funds, with potentially different remuneration structures. Whilst Fuel’s ‘FV’ funds have a performance fee, this is only paid on the basis of cash returned to investors, so for the purposes of enhancing their performance fee revenues, there is no benefit to Fuel in investing the Fuel Ventures EIS Fund at a higher valuation than previous investments. In fact, the opposite is the case, given this fund has a fund based performance fee, whereby the manager will effectively be penalised if it has an investment in the fund that returns less than £1.20 excluding tax relief. £1.20 is a higher performance fee hurdle than many growth EIS Funds in the market. Importantly as Fund Manager, Kin Capital Partners LLP will be responsible for reviewing due diligence and in particular asking questions of Fuel around the valuation of follow on investments. Given that digital technology / SaaS businesses tend to generate cash and have revenues that are less ‘lumpy’ / more regular than many hard tech business, it is relatively simple to benchmark valuations using discounted cash flow models and valuation methodologies.

Source: Fuel Ventures EIS; AdvantageIQ

A notable aspect of the Adviser’s investment process is the speed at which it takes place: the Adviser told us that some deals can be wrapped up in three weeks if everything goes according to plan. One aspect that deserves attention is the importance of honesty on behalf of the management team: the in-depth document list shown to MJ Hudson Allenbridge includes a number of sections where management must outline their own market and competitor analysis, which the Adviser then checks. While some rose-tinted optimism is to be expected, the Adviser wants to see that key metrics are fact-checked and evidence-based. The Adviser also puts a lot of weight on referencing, which the Adviser carries out according to industry best practice.



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Overall the depth and speed of the investment process is admirable, and this may well allow the Adviser to be competitive with other funding sources with more laborious processes or less hard-working teams, however it would be good to see a structure that mandates dissent to the business plans (a team member assigned as “devil’s advocate”) and more proactive, as well as confirmatory, due diligence on particular products and markets. However, these suggestions should be taken as ways of improving an already good investment process.

Risk Management Similar to other EIS funds, the primary source of risk management hinges on the depth of initial due diligence and deal analysis at the time of the original or follow-on investment. Fuel have described to us their pre-investment due diligence procedures prior to any deployment of capital, as outlined in the Investment Process section above. For investments in new companies, this includes the completion of an extensive data room providing details of company, employees, contracts, financials, legal, IP, product, customers, suppliers, and disclosure letters. Fuel then completes a due diligence review of all documents provided, background checks, market analysis, competitor analysis and founder and customer referencing. This makes up the bulk of Fuel’s due diligence process, and can highlight any potential misrepresentation by the company or its founders: a main red flag for Fuel. Fuel sits on the board of most portfolio companies for a minimum of 18 months post investment. A board seat is then only relinquished if replaced by another later-stage institutional investment and Fuel retains full information rights including board documentation. Furthermore, Fuel also request access to all portfolio companies bank accounts, CRM software, KPIs, and accounting software allowing real time overview of performance if and when needed. Fuel showed MJ Hudson Allenbridge the Adviser’s portfolio management tool, which shows underlying metric growth and performance against Key Performance Indicators, which allows the Adviser to step in if the numbers show a lack of progress. We were impressed at the quality of the data and the utility of the tool within the fund. The EIS is vulnerable to any changes in legislation although this is a feature inherent in the industry rather than specific to this fund. Fuel have assured us they will only invest in companies that have received EIS advance assurance. The EIS advance assurance application is also reviewed by Fuel’s preferred EIS adviser as part of the due diligence process to ensure eligibility. A number of clauses are then added to the investment documents to ensure the company remains EIS eligible. We see the risk management to be robust and competent for the nature of EIS investments. The due diligence for follow-on investments is particularly distinctive because of the location of investee companies within the same office space allowing for close monitoring. The ranking of investee company performance is also distinctive to Fuel, and gives a neat overview of key performance indicators so Fuel can perform swift review triggers.

Key Features

TABLE 4: FEES CHARGED TO THE MANAGER

FEE CHARGED TO:

INVESTOR INVESTEE COMPANY

Initial Fee - 3%

Custodian Fee - -

Arrangement Fee - -



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Annual Management Fee - 1.75%

Annual Admin Fee - 0.25%

Director’s Fee - -

Exit Performance Fee 20% of total return above a 120p hurdle. -

Available discounts -

Adviser charges -

Execution Only Fees All fees as above, plus any intermediary fees

Direct Application Fees Direct retail and professional clients will encounter an initial charge of 5.5%

The table above outlines the headline fees charged by Fuel Ventures EIS Fund. The initial fee, annual admin fee, and AMC is paid for by the investee companies, so that investors should be able to obtain tax relief on the full amount of their subscription. An initial charge of 3% along with an AMC of 1.75% for 5 years only (i.e. no ‘rolled up’ AMC after 5 years) and a 0.25% annual admin fee, show that the Fund fees are around average for most EIS growth offers. In addition to investment fees, Fuel may charge investment companies fundraising fees in the event that the investee companies get introduced to third-party investors. There is a performance fee in place, equal to 20% above a 1.2x hurdle return, and will only be payable once the investor has received back 100% of the originally invested amount. This hurdle is not as high as some in the market but is better than average for a growth product. Overall, these fees are relatively in line with the EIS market. However page 35 of the Investment Memorandum states "Other than this and as set out below [the fees described earlier], the Fund Manager and the Investment Consultant will not charge any additional administrative, service, dealing or exit fees to the Fund or to the underlying EIS Companies in which it will invest.". This level of transparency is uncommon, but very welcome.

Performance This is Fuel’s first dedicated EIS and, therefore, has no track record to which investors can refer. However, Fuel Ventures EIS Fund plans to follow on into many companies previously invested in by Fuel’s previous funds: FV1, FV2 and FV3. While there are important differences between the FV and Fuel Ventures EIS fund - largely a different regulatory manager (Sapphire Capital for the FV funds and Kin for the EIS fund) and a different stage of investee company development (the FV funds invest in companies who are being initially incubated in Rocketspace under Fuel’s supervision, the most successful of which graduate to the Fuel EIS fund) - investors may wish to consult the performance of the FV funds to judge the skill of the Adviser. Investors might also wish to consult Mark Pearson’s own personal investment record to give an indication of past performance for the leading member of the Investment Team. In terms of his personal track record, Mark Pearson had invested into 7 companies before he decided to set up Fuel Ventures in 2014. Mark is best known for his first and most successful venture, founding MyVoucherCodes in 2006 which ended in an exit in 2014 of 100x and a valuation of £44 million. Table 5 gives an overview of each of the seven companies that have been personally invested into by Mark.



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TABLE 5: OVERVIEW OF MARK PEARSON’S PERSONAL INVESTMENTS

D E SC R I P T IO N TY P E EQ UI T Y

%

L AS T R O UND

V AL U A T I O N

( £ ‘ 0 0 0)

M UL T I PL E O F

O R IG I NAL

INV E S TM EN T

My Voucher Codes

Largest UK consumer website for money saving coupons, comparison and 7 million email database

Marketplace 100 44,000 100x

Ve B2B conversion optimisation and email remarketing platform for ecommerce retailers globally

SaaS 10 TBC TBC

Last Second Tickets

B2C events ticketing platform for selling unused and last minute ticket inventory

Platform 80 11,000 9x

Playlists.net Platform where playlists can be discovered and submitted by anyone with a Spotify account

Platform Confidential 4x

Blottr Journalism platform with curated news Platform - - Written Off

DCM Trading sentiment technology Platform - - Written Off

Shopwave PoS B2B software that allows customers to manage up to a thousand stores at a fraction of the cost of a traditional PoS system

SaaS 30 2,100 5.3x

Paddle Everything you need to sell software with checkout, subscriptions, taxes, licensing, and insights in one unified B2B platform

SaaS 10 71,000 Partial Exit

17x

AV E R AG E :

1 9 X In terms of Fuel’s FV funds, Table 6 looks at the performance of the three FV funds, with FV1 having had longer for the portfolio for mature and showing strong performance. FV2 and FV3 have had less time for portfolio company growth and to deploy cash compared to the earliest vintage. Chart 1 shows the performance for FV1’s portfolio companies, which have seen a growth from an average valuation at the point of investment of £2 million to a current average valuation per company of £10.7 million, an overall valuation increase of 5.8x. After 7 total investments, the last investment was made in 2016. Chart 2 shows the performance of FV2’s portfolio companies which were invested into over 2017/18. Investments for both FV1 and FV2 have not yet been realised and valuations are based on the last round of external investment. At the time of writing FV2 has not had an increased valuation on 6 out of 10 portfolio companies due to it being a newer fund so has not had the chance to see increased returns. Overall is has so far witnessed an increased average valuation of 2.1x, with an initial average valuation of £2 million to a current average valuation of £4.1 million. FV2’s last investment was made in July 2018.



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TABLE 6: FV FUND PERFORMANCE TRACK RECORD

FUND NU MB ER O F

INV E S TM EN T S

AV E R AG E

INV E S TM EN T

AV E R AG E

EQ UI T Y %

AV . PR E -

MO NE Y

V AL U A T I O N

( £ ‘ 0 0 0)

TO TAL INV E S TED

( £ ‘ 0 0 0)

C UR R EN T

PO R T FO L IO

V AL U E ( £ ‘ 0 0 0 )

FV1 7 £275,097.99 14.79 2,128 1,926 7,855

4.08

FV2 10 £490,011.16 24.38 1,500 4,900 8,981

FV3 6 £819,731.24 29.98 2,190 3,279 4,754 1.45

CHART 1: FV1 (2016 VINTAGE) TRACK RECORD

CHART 2: FV2 (2017/18) TRACK RECORD

£0

£1,000,000

£2,000,000

£3,000,000

£4,000,000

£5,000,000

£6,000,000

£7,000,000

£8,000,000

£9,000,000

£10,000,000

M Source Asemblr Admendo StockViews Findoc Suggestv CreditDigital Shift

Initial Investment Curent Valuation

£0

£2,000,000

£4,000,000

£6,000,000

£8,000,000

£10,000,000

£12,000,000

£14,000,000

£16,000,000

£18,000,000

ExpoCart ResponseiQ HowNow EventsCase Bidvine Moteefe WeGift

Initial Investment Curent Valuation



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Overall, while the EIS fund does not have a direct track record to which one can refer, both Mark Pearson and the FV funds have a track record which can be referenced by investors trying to better judge the ability of Fuel to identity and grow promising investee companies. Both Mark Pearson’s results, albeit a small-ish sample of seven personal investments, and the FV funds’ progress, hint at promising results as the sample of investee companies grows and those companies already invested into have time to grow and potentially secure an exit.



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Appendix 1: Key Personnel

Key Investment Professionals

NAME JOB T ITLE DATE

STARTED BIOGRAPHY

Mark Pearson

Founder and Managing Director

Since inception

Mark Pearson is an award winning digital entrepreneur and investor. In 2006 Mark began his career in e-commerce. From an initial investment of £300 Mark grew MyVoucherCodes into one of the largest voucher code brands in Europe and the business employed circa 100 staff in the UK and India. In 2014 Mark exited the parent company of MyVoucherCodes to Monitise Plc (in a combined exit with Last Second Tickets) for up to £55 million. Mark has a personal portfolio of eight start-ups including one of UK’s fastest growing technology companies, Paddle.

Stan Williams

Senior Associate

2018

Stan has a number of years of experience helping early stage companies raise capital. He has previously worked at a leading UK angel network where he was Head of Investor Relations. Stan contributes to deal origination and supports the portfolio companies with follow-on investment.

Daniel Tait

Principal

2017

Daniel has previously worked extensively with early stage venture funds and angel investors providing high quality deal flow, due diligence and deal execution. Prior to Fuel, Daniel worked at the UK’s leading angel syndicate completing over 40 investments in two years. Daniel now assists with the deal execution and works closely with the portfolio companies post-investment.

Jing Xu

Principal

2016

Jing is a finance and legal management graduate with extensive experience managing high net worth investors. She has founded multiple businesses in China and supports the investee companies with overseas expansion and international investment.

Warrick Shanly

Investment Director

2019

Stan has a number of years of experience helping early stage companies raise capital. He has previously worked at a leading UK angel network where he was head of investor relations. Stan contributes to deal origination and supports the portfolio companies with follow-on investment.

Source: Fuel Ventures; AdvantageIQ



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Advisory Panel

ANDREW MULLINGER Andrew co-founded Funding Circle in 2009 until its IPO for £1.5bn in 2018. He served as its Chief Operating Officer and was responsible for risk management and compliance. He also worked at major investment banks Nomura and Citigroup and also as a consultant at EY where he advised financial institutions. Government and regulators on risk management and regulation.

HARRY BRIGGS Harry is an entrepreneur turned early-stage investor. He spent six years at Balderton Capital, investing in The Hut Group (valued at $3.5bn), Magic Pony (acquired by Twitter) and Revolut (valued at $1.7bn). Harry then went onto to be a Founding Partner at BGF Ventures and invested in Paddle, CareSourcer and Trouva.

SEAN TAI Sean is currently a Managing Director at Ipreo. He was previously the founder and CEO of Debtdomain until its exit to Ipreo in 2011. Based in London, Sean is co-head of Ipreo’s loan syndication business, a role which encompasses sales, finance and operations globally.

Senior Management Team

MARK PEARSON – FOUNDER & MANAGING DIRECTOR

As above

STAN WILLIAMS – SENIOR ASSOCIATE

As above

JING XU – PRINCIPAL

As above

DANIEL TAIT – PRINCIPAL

As above



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8 Old Jewry, London EC2R 8DN, United Kingdom | +44 20 7079 1000 | [email protected] | mjhudson-allenbridge.com

MJ Hudson Allenbridge is a trading name of MJ Hudson Investment Consulting Limited which is incorporated and registered in England and Wales - Registered number (07435167) - Registered office 8 Old Jewry London EC2R 8DN MJ Hudson Investment Consulting Limited is an appointed representative of MJ Hudson Advisors Limited

(FRN 692447) which is Authorised and Regulated by the Financial Conduct Authority.

NOTE: Readers should note that investment in a VCT, AIM IHT,, BR IHT or EIS carries a greater risk than some other investments, there is unlikely to be an active market in the shares, which will make them difficult to dispose of, and proper information for determining their current value may not be available.

Prospective investors are strongly advised to consult their professional adviser about the amount of tax relief (if any) they can obtain.

Although we have taken reasonable care to ensure statements of fact and opinion contained in this document are fair and accurate in all material respects, such accuracy cannot be guaranteed. Accordingly, we hereby disclaim all responsibility for any inaccuracies or omissions, which may make such statements misleading, and for any

consequence arising there from. While reports in this publication may make specific investment recommendations, nothing in the publication enclosed with it is an invitation to purchase or subscribe for shares or other securities.

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