Vala ups the ante to start-ups – we’ll invest but only if you commit to becoming more sustainable

by | Jan 18, 2022

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Vala Capital is renaming its British Ventures EIS to Better Ventures as it seeks to support start-ups becoming more sustainable – irrespective of the industry they operate in, or products they sell.

Sustainability is a core focus at Vala Capital and it believes that the climate crisis cannot be resolved by half measures. It says that real change only happens when consumers demand it – and when capital is dependent upon it. As a result, Vala will now integrate fundamental sustainability considerations into all its investment decisions across all its portfolios.

The renamed Better Ventures EIS will continue to target fast-growth British start-ups with strategies to scale quickly and become the next generation of British unicorns. However, it will invest only in companies that align not only to the interests of their shareholders but also those of wider society and the environment.

Jasper Smith(pictured), founder of Vala Capital, says: “There is a sustainability crisis that requires profound change to resolve. This cannot be solved by the small fraction of inherently sustainable businesses ­– profound change depends on everyone becoming sustainable, regardless of industry.”By making our capital conditional on change, we are putting sustainability at the heart of our decision-making, and incentivising portfolio companies to do the same. This will help portfolio companies to access further funding, and to see being ‘better’ as a competitive advantage.”

Vala will team up with FuturePlus to work closely with each portfolio company helping them set sustainability goals to plot their path to tangible change. FuturePlus is a ground-breaking platform for advising businesses, foundations, financial institutions and family offices on how to make sustainability and social purpose an integral part of their operational and investment approach. Its clients include global iconic brands, London stars like Soho House, Grind Coffee and inspirational start-ups like Oxwash.

Alex Smith, co-founder of FuturePlus, said: “The need to be sustainable is not enough. We aim to inspire businesses to actively ‘want’ to be sustainable and lead the way – taking positive action because they see the bigger picture and the greater good. And we do it by empowering and enabling positive changes in sustainability practices for every business.”

Vala Better Ventures EIS portfolio is run by a team of highly successful entrepreneurs and investors, including Vala’s founder Jasper Smith, with proven track records of delivering strong returns for shareholders. The team is targeting a 2.5x return after fees, over a five-to-seven-year time horizon.

The EIS will invest in between eight to 12 companies across sectors including technology, engineering, fintech, media and entertainment, lifestyle and wellness, and food and beverage. Companies in the latest tranche of the portfolio will be early-stage companies at different phases of growth – some will already be revenue-generating, and some will be at the pre-revenue stage of growth.

Vala plans to raise £15m over the next two years for its Better Ventures EIS. The minimum investment is £20,000 and eligible investors are expected to be able to carry back tax reliefs to the previous tax year. The initial fee for direct investors is 2.5%, with an annual management charge of 1.5%. A performance fee of 20% is payable on profitable exits in excess of 110% of the acquisition costs.

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