Our Value Proposition

We provide our Partners with easy access to Venture Capital investment opportunities and returns.
Our educational resources and initiatives improve our Partners’ investment and entrepreneurial skills.
Together with our Partners and portfolio companies’ CEOs, we strive to positively impact our Society.

227

Faraday Partners

28

Invested companies

12

€ Millions invested

Faraday Partners are individuals, small investment groups and Family Offices, with strong investment, entrepreneurial and/or business backgrounds, looking to invest in innovative Startup projects in their first commercial phases.
Our value proposition, summarized here:

Incorporate early stage Venture Capital investments in your portfolio

This asset class is the more aggressive part of an investment portfolio, capable of generating the highest returns and enhancing the expected returns of a global portfolio, while showing no correlation with other asset classes and thereby diminishing its global risk.

Our Partners can choose which Startups to invest in from the opportunities presented to them, with no upfront investment commitment and with minimum tickets of €2,000 per deal.

Senecio – Paul Klee, 1922 (click to enlarge)

Learn, learn and learn

A common denominator shared by our Partners is their intellectual curiosity, wanting to learn about successful, innovative business models, growth and investment strategies, deal closing best practices, valuations and M&A endeavours, or simply about failure factors and successful turnarounds.

At Faraday, we share this passion for business innovation, value creation and continuous learning with our Partners, Entrepreneurs and many other Stakeholders.

The Kitchen – Pablo Picasso, 1948 (click to enlarge)

Positively impact Society

Entrepreneurial activity, as particularly well exemplified by successful, high-growth innovative Start-ups, brings obvious benefits to consumers, employees and shareholders. It provides also with further positive externalities like fostered competition, knowledge sharing and wealth creation, among others.

We are deeply convinced of our activity’s relevance in this virtuous circle, and of the positive impact we have on Society together with our Partners and CEOs. For this reason, we are a signatory of the Principles for Responsible Investment, wholly committed to consistently incorporate Environmental, Social and Governance (ESG) factors in our investment decisions, thereby allowing us to enhance returns and better manage risk in the long-term, in the interests of our Partners, the environment and Society as a whole.

A Clear House – Amadeo de Souza-Cardoso, 1916 (click to enlarge)

Our Services

We align ourselves with our Partners throughout the entire investment cycle, from the screening and analysis of investment opportunities, to the implementation of a value-enhancing Exit strategy, providing efficient investment management and follow-up during the holding period:

Annual fee of € 600 for individuals and € 1,200 for small groups/family offices
Annual management fee of 2% on invested capital, reduced after 5 years.
10% success fee of profits obtained by our Partners, if 7% IRR is reached.

1. Deal Flow Generation

  • Access to >10 Investment Opportunity Reports/year on target Startups with high potential.
  • No investment commitment required. Minimum ticket per investment of € 2,000.
  • Access to quarterly events with Partners, CEOs and relevant industry players, workshops and learning resources.

€ 600/year for individuals and € 1,200 for small groups/family offices.

2. Investment Structuring & Management

  • Negotiation, legal and regulatory structuring and closing on behalf of our Partners.
  • Management of legal, tax and administrative requirements throughout the investment cycle.
  • Detailed quarterly investee company follow-up reports and full support from our experienced investment team.

Annual management fee of 2% on invested capital.

3. Empowerment & Exit

  • Strategic support to portfolio companies focused on: (i) sharing best business practices, (ii) leveraging Faraday Partners’ networks for commercial purposes and (iii) further funding and M&A/Exit strategies.
  • Additional liquidity sources after investment, accessible to Partners through a secondary market.

10% success fee of profits obtained by our Partners, only if 7% IRR is reached.

Investment Opportunities Selection Criteria

Blue Horse I – Marc Frank, 1911 (click to enlarge)

Common investment opportunity characteristics presented to our Partners are:

  • Private funding requirements between € 250,000 and € 2,000,000 per financing round
  • Minimum of 6-12 months’ commercial track record while preserving moderate company valuations
  • High business scalability potential through innovation, capital efficiency and rapid growth prospects
  • 5X minimum profitability potential for our Partners within a 3 to 5 years investment horizon

We do not invest in business models without a clear commercial strategy, nor in singular assets (such as: cryptocurrencies, commodities/raw materials or real estate, among others).

Our Ethics Approach

  • We pride ourselves in providing an excellent service and results to our Partners (91% annual membership renewal rate; >15% historic IRR) and we work tirelessly to fully align ourselves with their interests.
  • We strive to maintain the highest standards of ethics, transparency and professionalism, adhering to the CFA Institute’s Code of Ethics and Standards of Professional Conduct.
  • Faraday is a signatory of the Principles for Responsible Investment. We incorporate Environmental, Social and Governance (ESG) factors in our investment decisions, convinced of their importance in enhancing returns and better manage risks in the long-term, in the interests of our Partners, the environment and society as a whole.

Why Invest With Faraday?

Our value proposition versus other alternatives:

Direct Investment:

  • Difficult access to good opportunities without contacts, resources, sector experience or significant investment capacity.
  • Important time commitment required, both for the filtering and analysis and for investment follow-up and management.

Crowdfunding Platforms:

  • Top opportunities rarely available, as platforms normally charge Startups their fees and do not offer significant value after the transaction.
  • Not always aligned with investors’ profitability objectives, focusing instead on maximising investment volumes.

Venture Capital Funds:

  • No influence over investment decisions and impossible to create your own “cherry-pick” portfolio.
  • High minimum entry tickets (usually >€ 100,000), and difficulty accessing top VC funds.
  • No access to new opportunities in funds during divestment periods.

Interested in investing with us?

Please send us a message and one of our Managing Directors will contact you with more detail on our investment focus and services.