As Co-Head of Investments, Richard’s role is to source and execute new deals, as well as advising a number of our portfolio companies.
What is the process when looking at potential portfolio companies to invest in?
The investment team meets weekly at the “pipeline” meeting to consider all new opportunities. All opportunities will have been pre-screened by a member of the team, but even those to be rejected are still doublechecked by a senior investment team member, just in case. If an opportunity is to be taken further, it is assigned to a two-person deal team of an Investment Director plus another member of the team. This team does an initial screening call, before sharing with the wider team. Before Calculus commits to a deal, there are several formal Investment Committee (IC) meetings, at which the investment is scrutinised. This will include a presentation from company management. The IC papers will detail the investment proposal, thesis, business overview, and the target market as well as the company financials and other relevant information. After this, an offer will be made subject to due dilligence.
Are the companies Calculus invest in revenue-generating?
It is typical for a technology company we invest in to be revenue-generating. As a rough guide, this will usually be around £1m per year. This isn’t always the case given the spread of sectors we invest in. Very often, healthcare companies will not have revenue when we invest, however, they will be at a very similar level of maturity to other revenue-generating companies. They may have intellectual property, science and trials – the milestones are different for these companies.
What makes a good management team?
Passion is key. The management team should believe in their business. They should have strong domain knowledge and understanding of their sector. We look for teams which we can work with, and equally who want to work with us. They need to also be willing to learn, no team is the finished article.
Post completion what does Calculus offer to an investee company?
Once the investment is completed, Calculus looks to start a partnership. There is a balanced combination of guiding, supporting, and mentoring the senior management team. This level of intimacy with our portfolio companies cultivates a productive and dynamic relationship and allows us to monitor the targets, plans and milestones established at the time of investing. We will work closely with the company over several years, providing active support and input. We share our market knowledge and connections and use our in-depth experience to help mitigate risks and enhance value.