The Start-Up Series Fund | Information Memorandum

The Start-Up Series Fund | Information Memorandum

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CONTENTS

Important information

3

Key facts

6

1:

Investment focus

7

2:

The teams

11

3:

Taxation

13

4:

The Fund

16

5:

Fees & charges

18

6:

Risk factors

20

7:

How to invest

23

8:

Fund operation

24

Other information

29

Definitions

30

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IMPORTANT INFORMATION

THIS NOTICE IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE IN ANY DOUBT ABOUT THE ACTION YOU SHOULD TAKE IN REGARD TO THE CONTENTS OF THIS INFORMATION MEMORANDUM (“INFORMATION MEMORANDUM”) FOR THE START-UP SERIES FUND (THE “FUND”) YOU SHOULD CONTACT AN INDEPENDENT FINANCIAL ADVISER OR OTHER PROFESSIONAL ADVISER AUTHORISED UNDER THE FINANCIAL SERVICES ANDMARKETS ACT 2000 (FSMA) WHO SPECIALISES IN ADVISING ON INVESTMENTS OF THIS TYPE. RELIANCE ON THE INFORMATION MEMORANDUM FOR THE PURPOSE OF ENGAGING IN ANY INVESTMENT ACTIVITY MAY EXPOSE AN INDIVIDUAL TOA SIGNIFICANT RISK OF LOSING ALL OF THE PROPERTY OR OTHER ASSETS INVESTED. YOUR ATTENTION IS DRAWN TO THE RISKS IN SECTION 6 OF THE INFORMATION MEMORANDUM. NOTHING IN THIS DOCUMENT CONSTITUTES INVESTMENT, TAX, FINANCIAL, REGULATORY OR OTHER ADVICE BY AMERSHAM INVESTMENTMANAGEMENT LTD. BEFORE INVESTING IN THE FUND YOU SHOULD READ CAREFULLY THE CONTENTS OF BOTH THE INFORMATION MEMORANDUM AND THE APPLICATION FORM. EXPRESSIONS DEFINED IN THE APPLICATION FORM SHALL (UNLESS THEY ARE DEFINED SEPARATELY IN THAT DOCUMENT) BEAR THE SAME RESPECTIVE MEANING IN THIS INFORMATIONMEMORANDUM. This Information Memorandum constitutes a financial promotion pursuant to section 21 of FSMA, and its contents have been approved by Amersham Investment Management Ltd (‘Amersham’) which is authorised and regulated by the Financial Conduct Authority in the United Kingdom with FRN 507460 and whose registered office is 25 Lexington Street (1st Floor) London W1F 9AH. Any prospective Investor should not regard this InformationMemorandumas constituting anyadvice relating to financial, legal, taxation or investment matters. All potential Investors should, as highlighted above, seek independent financial and tax advice from a financial adviser or other professional adviser authorised under FSMA before subscribing to the Fund. Worth Capital Ltd is not an FCA authorised firm and will not be providing any investment services or undertaking any regulated activities in connection with the Fund. The Information Memorandum is issued solely for the purpose of seeking Subscriptions from prospective Investors for investments in the Fund. The Fund is an Alternative Investment Fund (“AIF”) for the purposes of the EU Directive 2011/61/EU of the European Parliament and of the Council on the Alternative Investment Fund Managers (the “AIFMD”). It is not an unregulated collective investment scheme within the meaning of section 235 of FSMA nor a Non-Mainstream Pooled Investment by virtue of it being a fund complying with the meaning of Article 2 of the Schedule to the Financial Services and Markets Act 2000 (Collective Investment Schemes) Order 2001 and, pursuant to clause 2 of the Investor Agreement, Investors are entitled only to the withdrawal rights prescribed by that clause.

Investors in the Fund will make Investments together and their Investments will be managed by Amersham on a common basis. The Fund will, therefore, constitute a collective investment undertaking within the meaning of the EU Directive 2004/39/EC of the European Parliament and of the Council on the Markets in Financial Instruments, as amended from time to time (the “MiFID”) and, by virtue of the exemption for collective investment undertakings in Article 2.1(h) of MiFID, the Fund falls outside the scope of MiFID. The communication of this Application Form and the Information Memorandum and the contents thereof is made to and directed at persons reasonably believe to be such persons as are referred to below and must not be passed on, directly or indirectly, to any other person in the United Kingdom: a. professional clients or eligible counterparties as defined in the Conduct of Business Sourcebook (‘COBS’) of the FCA’s Handbook of Rules and Guidance; b. retail clients who confirm that they will receive advice on the investments referred to in the Information Memorandum from a financial adviser authorised and regulated by the FCA. The financial adviser will receive that confirmation on behalf of the person who has approved the Information Memorandum for the purpose of section 21 of FSMA. The financial adviser will be required to countersign the Application Form. c. to the extent that the recipient is a retail client who does not fall within category (b), only clients falling within the following categories: 1. certified high net worth investor : the requirements that must be met for a person to qualify as a certified high net worth individual are that such person has signed, within the period of 12 months ending on the day on which the communication is made, a statement in the prescribed terms under COBS 4.12.6R. 2. certified sophisticated investor : The requirements that must be met for a person to qualify as a certified sophisticated investor are that such a person: a.

has a current certificate in terms of COBS 4.12.7R being one signed and dated not more than three years before the date on which the promotion is made, in writing or other legible form, signed by an authorised person in terms of FSMA to the effect that the recipient of that promotion is sufficiently knowledgeable to understand the risks associated with investments of the kind set out in the Information Memorandum, and has signed, within a period of 12 months ending with the day on which the communication is made, a statement in the prescribed terms under COBS 4.12.7R.

b.

3. self-certified sophisticated investor : The requirements that must be met for a person to qualify as a self-certified sophisticated investor are that such person has signed, within the period of 12 months ending on the day on which the communication is made, a statement in the prescribed terms under COBS 4.12.8R. Self-certified

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sophisticated investors are advised to consult an authorised person in terms of FSMA specialising in advising on investments of the kind set out in the Information Memorandum in order to assist in understanding and evaluating the risks involved. 4. certified restricted investors : the requirements that must be met for a person to qualify as a certified restricted investor are that such person has signed, within the period of 12 months ending on the day on WARNINGS The tax treatment referred to in this document depends on the individual circumstances of each Investor and may be subject to change in the future. In addition, the availability of any tax reliefs depends on the companies in which the Fund invests maintaining their qualifying status. Past performance is not a guide to future performance and may not be repeated. The value of an Investment may go down as well as up and an Investor may not get back the full amount invested. Investment in the Fund carries substantial risk. Any investment in the Fund should be regarded as being medium to long term in nature. Investors’ money subscribed to the Fund will be committed to investments which may be of a long term and illiquid nature. The companies in which the Fund invests will not be quoted on any regulated market and, accordingly, there will not be an established or ready market for any such shares. It may be difficult to obtain information regarding how much an investment is worth or how risky it is at any given time and the Manager may experience difficulty in realising the investments (for value or at all). An investment in the Fund may only be made on the basis of this Information Memorandum and the Investor Agreement. Prospective Investors should not regard the contents of this Information Memorandum as constituting a recommendation or advice relating to any legal, taxation, regulatory or investment matters and are advised to consult their own professional advisers before contemplating any investment. The Manager, its directors, officers, employees and agents do not accept any liability for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on any information or opinions contained herein or in any other communication in connection with an investment in the Fund except where such liability arises under FSMA, regulations made under FSMA or the FCA Rules and may not be excluded. The Manager has taken all reasonable care to ensure that the factual content hereof is accurate and that statements of opinion herein are reasonably held. Subject to the Manager’s overriding duty under the FCA Rules to ensure the content of this Information Memorandum is presented in a manner which is fair, clear and not misleading with respect to the persons to whom the Fund is promoted by it, the Manager accepts no responsibility to any recipient of this Information Memorandum for inaccuracies in factual representation or for any consequences to such persons as placing reliance upon statements of the Manager’s opinion except to the extent required by law. Additionally, some material included in this Information Memorandum is derived from public or third-party sources and theManager disclaims all liability for any errors or misrepresentations which any such inclusions may contain.

which the communication is made, a statement in the prescribed terms under COBS 4.7.10R. d. any person to whom the communication may otherwise lawfully be made. The transmission of the Information Memorandum or the contents thereof to any other person is prohibited and persons not falling within the description set out above should not act or otherwise rely upon it.

No person has been authorised to give any information, or to make any representation concerning the Fund other than the information set out in this Information Memorandum, and if given or made, such information or representationmust not be relied on. This Information Memorandum is only intended for release in the United Kingdom and does not constitute an offer, or the solicitation of an offer, to buy or sell any security or share. It does not constitute a public offering in the United Kingdom. In addition, this Information Memorandum does not constitute an offer or solicitation in any jurisdiction in which such offer or solicitation is unlawful or unauthorised or in which the person making such offer is not qualified to do so or to any person to whom it is unlawful to make such an offer or solicitation. It is the responsibility of any person outside the United Kingdom wishing to make an application to invest in the Fund to satisfy himself as to full observance of the laws of any relevant territory in connection therewith. Past performance is not necessarily a guide to future performance and Investors should be aware that share values and income from themmay go down as well as up and Investors may not get back the amount subscribed. Changes in legislation in respect of The Seed Enterprise Investment Scheme and The Enterprise Investment Scheme in general, and qualifying investments and qualifying trades in particular, may affect the ability of the Fund to meet its objectives and/or reduce the level of returns whichwould otherwisehave been achievable. The Information Memorandum contains certain information that constitutes ‘forward-looking statements’ which can be recognised by use of terminology such as ‘may’, ‘will’, ‘would’, ‘should’, ‘anticipate’, ‘estimate’, ‘intend’, ‘continue’, or ‘believe’ or their respective negatives or other comparable terminology. Forward-looking statements are provided for illustrative purposes only. Due to various risks and uncertainties, actual events, results or performance may differ materially from those reflected or contemplated in such forward-looking statements. Prospective Investors should be aware that the arrangements described in this Information Memorandum represent a discretionary management service subject to the terms of the Investor Agreement. Investors appoint the Manager to invest their subscription monies on a discretionary basis into the Portfolio Companies. All investments made will be held in the name of the Nominee in a way that enables each Investor’s entitlement to be separately identified. The Fund is not treated as an unregulated collective investment scheme (as defined in section 235 of FSMA) but is an alternative investment fund as defined in the Alternative Investment Managers Directive 2011. The Fund has not been approved by HMRC under section 251 of the Income Tax Act 2007. The Manager reserves the right to update this Information Memorandum from time to time. By submitting anApplication Form, you agree to be bound by the terms and conditions set out above.

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TAXATION The information contained in this Information Memorandum makes reference to the current laws concerning the Seed Enterprise Investment Scheme (“SEIS”) and the Enterprise Investment Scheme (“EIS”) Income Tax Relief and Share Loss Relief (together, the SEIS and EIS Reliefs), CGT Reinvestment Relief, CGT Deferral and the CGT Exemption (together, the CGT Reliefs), and IHT Relief. These levels and bases of relief may be subject to change. The tax reliefs referred to in this Information Memorandum are those currently available and their value depends on individual circumstances. It is the intention that the Fund would invest in companies which are Qualifying Companies for the purposes of the SEIS regime and / or for the EIS regime. Following each qualifying Investment which the Fund makes, it is envisaged that the appropriate SEIS and / or EIS Compliance Certificates will be issued to Investors which will enable them to claim SEIS and / or EIS Reliefs in respect of that Qualifying Investment. There is no guarantee however that SEIS and / or EIS Reliefs, CGT Reliefs or IHT Relief will be available on any Investment made by the Fund or that if it is initially available it will not be subsequently

withdrawn. Any references to tax laws or rates in this Information Memorandum are based on current legislation and the proposed changes described in the next paragraph, all of which are subject to change and provided as a guide only. Prospective Investors are advised to take their own taxation advice and should consult their own professional advisers on the implications of investing in the Fund. The Investment Manager intends to make Investments that meet the criteria for qualification and intends to ensure that the Qualifying Companies obtain provisional advance assurances from HMRC that the proposed Investee Companies will meet the qualification criteria. The information and illustrations in this Information Memorandum are stated as in a previous version of this Information Memorandum issued on 29 September 2016 and this updated version of the Information Memorandum is issued and dated 24 August 2018.

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KEY FACTS

Fund name

The Start-Up Series Fund (the “Fund”)

Structure

The Fund is structured as an Alternative Investment Fund (“AIF”) organised to invest in Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) qualifying businesses. An investor may indicate a preference to invest in either SEIS and/or EIS businesses. The Start-Up Series Fund is organised to invest over time in tranches in qualified finalists from a series of competitions which commenced in October 2016. The competitions are conducted (in association with startups.co.uk) by Worth Capital who also provide commercial due diligence and post-investment support. Investments in the Fund will be focused both on early-stage SEIS companies in the Consumer Goods and Services sector and in certain B2B opportunities and then as these Portfolio Companies develop to a point where further capital is needed, follow-on EIS investment or EIS investment in other EIS qualifying companies.

Objectives

Fund Manager

Amersham Investment Management Ltd.

Minimum subscription

£10,000 initial investment, with £5,000 increments (or such lower amount as determined at the Manager’s discretion).

Investment term

Investments to be held for minimum of three years to benefit from EIS or SEIS tax reliefs.

Minimum fund size

£450,000

Maximum fund size

£20,000,000

Next Interim Closing Date

15 October 2018 (or such other date as determined by the Manager).

Investment period

The Fund is intended to continue to operate over the 2018/19 and subsequent tax years as an “evergreen’ fund. There will continue to be a series of tranches of investments and the type and degree of diversification for an investor will depend on in which tranche(s) the investor is invested. Where the Fund closes later than the 2018/19 tax year, investments may fall into subsequent tax years.

Risks

A summary of the risks associated with an investment in the Fund is contained in section 6 of this Memorandum.

Suitability

The investment described in this Memorandum will not be suitable for all investors. The Fund may be suitable for UK taxpaying investors looking for a medium to long term investment whose personal circumstances allow them to seek SEIS and / or EIS relief. All potential Investors are accordingly advised to consult an investment adviser authorised under FSMA and an appropriately qualified taxation adviser prior to making an investment.

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1: INVESTMENT FOCUS

INVESTMENT FOCUS The Fund invests in product and service businesses that are in attractive markets, have innovative products or services that can create new consumption behaviours, demonstrate the marketing and communication skills to build strong brands and have potential routes to an exit at a high multiple. The Fund invests in both Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) businesses. An investor may indicate a preference to invest in either SEIS and/or EIS businesses but may not select individual investments, which is an activity carried out by the Manager.

SEIS

EIS

The Fund’s SEIS investments are sourced from the winners of the Start-Up Series – a monthly competition promoted by www.startups.co.uk. These SEIS investments are very young businesses and consequently carry high risk as well as potentially offering the prospect of high returns.

EIS investments will often be follow-on investments from the SEIS investments. They may also be sourced from outside the competition series. These EIS investments will still carry significant risks as the companies mature. Typically, the Fund will invest £300,000 to £500,000 at a pre- money valuation of £1 million to £3 million. Such investment by the Fund may be alongside other investors e.g. other funds. An investor may hold a ‘mini-portfolio’ of 2 or 3 of these EIS investments to diversify risk. The selection of these holdings is at the discretion of the Manager. A mini-portfolio is likely to be funded two to three times per year or possibly around each quarter.

Typically, the Fund invests £150,000 in each Portfolio Company at a pre- money valuation of £350,000 to £1.5 million.

An investor may hold a ‘mini-portfolio’ of 4 to 6 of these SEIS investments to diversify risk. The selection of these holdings is at the discretion of the Fund Manager. A mini-portfolio is likely to be funded two to three times per year or possibly around each quarter.

An investor may invest in one or more portfolios over time.

WORTH CAPITAL’S COMPETITION APPROACH TO INVESTING

Worth Capital have deliberately designed an investment process based around a competition to achieve 4 ways to enhance the possibility of increased returns and to reduce the risks of smaller company investment.

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1. COMPETITION REACH

The competition reach is achieved through the Start-Up Series - a series of monthly competitions promoted by www.startups.co.uk which is the UK’s largest independent online resource for anyone starting and building a new business.

www.startups.co.uk gives the competition high visibility:

• 83% of readers rate Startups.co.uk as the UK’s most useful source for advice on starting, building & growing a business.

1.2 million monthly page impressions 1

400,000 monthly unique visitors 2

38,000 newsletter subscribers 3

62,700 twitter followers 4

2. SOPHISTICATED DISTILLATION

The founders of Worth Capital – along with guest judges – run a multi-stage assessment, filtering and judging process.

‘Distillation’ criteria The value for investors is from targeting companies that are in the early stages of their development, but which possess an innovation, service or product that represents a significant high growth opportunity either in new or established markets. The expectation is for these companies to accelerate rapidly, generating better than benchmark results within a 3- to 7- year horizon. SEIS advance assurance is a mandatory condition. Then, in priority order, the criteria used to distil and select the winners are: 1. passionate, full time & experienced management team, ready to listen & learn from consumer insight and experts around them. 2. a market segment that provides sufficient future breadth and scale and has a potential entry point for a new offering. 3. strong differentiated market proposition which has the potential to lead to strong brand awareness and value. 4. early visibility that management have ability to create and execute an operating plan for their business. 5. exit aspirations, realistically achievable in 5 to 7 years.

1 Source: Google Analytics | average | January to June 2016 2 Source: Google Analytics | average | January to June 2016 3 Source: Crimson Business | August 2016 4 Source: Twitter | August 2016

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Valuation & investment level

Once ‘qualifiers’ are selected, initial interviews are completed to delve into the business plan and test the credibility of the team. At this point indicative valuations will be agreed –subject to more comprehensive commercial and technical due diligence. On this basis there is confidence in having sensible conversations with the ‘finalists’. At this point half a day is spent with each business – diving deep into their proposition, strategy and plans and getting to know the entrepreneurs. At the same time the funds needed by the business are explored – taking account of their sector, their maturity and their investment plan. The aim is to help ensure that funds available to the qualified winning businesses will therefore be tailored to their requirements – neither too little to make a difference or taking equity unnecessarily. This will set the investment level sought and commercial valuation that will be included in a term sheet that is binding on the companies should they win the competition, but that is still subject to technical due diligence and the investment decisions by the Fund Manager to invest in qualified winners. A condition of entry into the competition will be a commitment to paying a small sum for two years of Investor Director oversight from one of the Worth Capital directors or a nominated substitute. Worth Capital believes mandating an Investor Director will help to accelerate the growth of the winning businesses: • the winning entrepreneurs are pre-filtered to be those open to help, pre-disposed to listen to insight and pivot their offer, strategy and plans accordingly – avoiding for investors the frustration of having a talented ownership team stuck in one myopic view of their idea. • no idea is born fully formed – the Investor Director will stress test and improve the strategy, proposition & plans of the winning businesses. • entrepreneurs will be helped to finesse execution plans, spot the critical challenges and risk and a little external influence helps to motivate management teams and give them belief and confidence to remain on track The terms of the monitoring activities are agreed between the Manager, Worth Capital and the Portfolio Company prior to the commencement of the investment by way of letter and subscription agreements. 3. EXPERT OVERSIGHT

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INVESTMENTS MADE TO DATE BY THE START-UP SERIES FUND

The type of investments made by the Fund is illustrated by the investments made up to the date of this document.

New products

ITSY manufactures, retails & distributes products aimed to help parents with weaning children. Launching with a patent pending, portable, wireless, food processor, the ITSY BLITZ. £150,000 SEIS investment, pre-money valuation £325,000, 31.6% equity MOTO TATTOO is a revolutionary method to create custom motorcycle helmets - making them better quality, more customisable and much cheaper than existing options. £127,523 SEIS investment, pre-money valuation £650,000, 20.26% equity OUTFOX DRINKS are no-alcohol wines, beers and a cider –that taste great, are low sugar, low calorie and that keep the feel-good experience and rituals. £150,000 SEIS investment, pre-money valuation of £800,000, 15.8% equity UNI-BLOCK is a building material with high insulation performance, quick to construct and with low build costs. This type of ‘insulated concrete form’ is used in circa 10% of new construction in North

America but less than ½% in the UK. A relationship with CEMEX will drive sales. £103,909 SEIS investment, pre-money valuation of £1,350,000, 7.15% equity

New services

NOT DOGS are meaty... without the meat. Hot dogs with innovative, homemade toppings with the aim to bring delicious meat-free fast food to the market in a more trustworthy, healthier way for people, animals and the environment. £150,000 SEIS investment, pre-money valuation of £425,000, 26% equity RENTALSTEP helps responsible tenants to build their credit score and history, equivalent to someone paying their mortgage, therefore giving landlords tenants that are motivated to pay. £150,000 SEIS investment, pre-money valuation of £350,000, 30% equity BLOW DRY PASS is a monthly subscription to unlimited “good hair days” at the tap of a button. A mobile app using GPS to find branded blow dry counters in department stores, gyms, stations and other high footfall locations. £99,964 SEIS investment, pre-money valuation of £650,000, 13.33% equity MYZA is an online curated marketplace with a singular focus on sleep and the whole sleep experience. It has generous editorial -including advice from a team of leading sleep experts and professionals. £100,000 SEIS investment, pre-money valuation of £350,000, 22.2% equity NIGHTLY is the new way to book hotels – giving travellers the option to switch hotels once during their trip to get the best value, a different experience and save as much as 70%. £120,032 SEIS investment, pre-money valuation £640,000, 15.79% equity TRIBE is a travel club for a mobile-first generation creating great pre-, during and post-holiday experiences, for individuals and groups, with clever tech and guaranteeing best value for money and experience £150,000 SEIS investment, pre-money valuation of £1,300,000, 10.3% equity BUILDERS BAY is a marketplace for builders, self-builders, DIY enthusiasts and industry suppliers to buy, sell and source surplus, reclamation and new building materials, tools and plant. Serving the £28 billion building supplies industry. £140,000 SEIS investment, pre-money valuation of £650,000, 17.7% equity

New retail/distribution

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2: THE TEAMS

A COMPLEMENTARY PARTNERSHIP Worth Capital operate the Start-Up Series, assess the deal flow, negotiate their view of a fair valuation and make commercial recommendations to Amersham Investment Management who challenge the rationale and choose to accept (or reject) a commercial recommendation, before conducting further independent due diligence, authorising the investments and managing the Fund. Worth Capital then continue to liaise closely with Portfolio Companies via an Investor Director, monitor the Portfolio Companies’ progress and compile periodic reports on the Portfolio Companies for the Manager. THE PROMOTER: WORTH CAPITAL The founders of Worth Capital believe that the commercial tide has shifted, and it is start-ups and early stage growth companies that have the most potential to challenge the normal rules of business and create new consumer behaviours. Therefore, Worth Capital was formed to help new entrepreneurs obtain funds and expertise to turn their ideas into successful sustainable businesses and to deliver excellent returns to the investors that help early stage start-ups. The competition format, and the ‘engine’ of attracting entrants, distilling the entrants and providing oversight of the companies to achieve accelerated growth is operated by Worth Capital Ltd (‘Worth Capital’), a private company co-founded by Paul Soanes and Matthew Cushen and including Paul Soanes and Matthew Cushen as Directors. Worth Capital have a contract with MVF Digital Limited (the owner of www.startups.co.uk) for startups.co.uk to be the media partner to Worth Capital. MVF Digital have committed to extensive editorial coverage and promotional activity to deliver high awareness and to raise the prestige of the series.

A small Worth Capital team runs the ‘engine’ that sits behind competitions and supports the winning entrepreneurs.

PAUL SOANES

MATTHEW CUSHEN

HAYLEY ETHERINGTON

Co-founder & Director

Co-founder & Director

Business Operations Director

An entrepreneur since leaving university, Paul founded iD in 1994, growing it into a top ten UK experiential marketing agency. He subsequently founded Brandspace, Europe’s largest promotional space media agency and returned initial backers 17 x their original investment within 5 years. He is now a highly experienced seed investor and has invested in over 25 businesses since 2008.

An experienced leader in large businesses including Kingfisher & John Lewis. Then a retail consultant and subsequently a director of “?What If!”, the global innovation consultancy. For 5 years, working across sectors with the leadership teams of business such as IKEA, Waitrose, Paddy Power & AB InBev. An experienced and, so far, successful angel investor in a dozen businesses.

Hayley has 12 years’ experience in strategic client management and relationship development for brand and media partnerships, most recently at a leading marketing agency. She has worked with the Worth Capital founders for over 10 years.

Paul & Matthew are focused on maximizing the return on investment for investors and realising the full potential of the entrepreneurs, their experience including:

Hayley looks after the operation of the competition and maximising the value generated for the entrepreneurs including:

• selecting & valuing the businesses to recommend for investment by the Fund

commercial due diligence

media relations

investor protection

PR & publicity

strategy & proposition development

editorial

entrepreneur development

events

• accelerating growth reporting & annual valuations

competition operations & output.

• assessing requirements for further round funding.

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THE FUND MANAGER: AMERSHAM INVESTMENT MANAGEMENT LTD. The Fund Manager is Amersham Investment Management Ltd (‘Amersham’), a specialist investment management firm and fund manager. Founded in 2009 by two former principals of the Tradepoint Stock Exchange (which as a UK Recognised Investment Exchange in 2001 became, as Virt-x, part of the Swiss Stock Exchange), the firm is authorised and regulated in the UK by the Financial Conduct Authority as an investment manager and fund manager and as an Alternative Investment Fund Manager (AIFM) with FRN 507460.

PAUL BARNES FCCA MCSI, Director

MICHAEL WALLER-BRIDGE Chartered FCSI, MInstP, Director

Paul Barnes is a Fellow of the Association of Chartered Certified Accountants. He is also a Member of the Chartered Institute for Securities & Investment. Paul has wide experience in venture development, financial management and corporate finance and M&A disciplines. He developed and floated Tristel Plc, an infection control and hygiene products company on the London Stock Exchange’s AIM market. Paul also developed and floated Oxford Catalysts Group PLC, now Velosys Group Plc, an innovator in synthetic fuels, on the LSE’s AIM market. He established an FSA authorised and regulated corporate advisory firm, Beach Street Limited, which was sold in 2003. Paul maintains close links with business ventures as a non-executive director for a range of companies in healthcare and pharmaceuticals, biomass renewables, consumer products and wireless software engineering (the latter being Etherstack, a company which is listed on ASX, the Australian Stock Exchange).

Michael Waller-Bridge is a Chartered Fellow of the Chartered Institute for Securities & Investment.

Michael worked at the Advanced Systems Group and the Strategic Engineering Unit of the London Stock Exchange between 1986 and 1991 prior to co-founding Tradepoint, Europe’s first official electronic equities Stock Exchange where he also served as CEO between 1994 and 1997. Tradepoint was admitted to the AIMmarket in 1996 and in 2001 became, as Virt- x, part of the Swiss Stock Exchange. He has worked as an adviser with various ventures including Interactive Investor PLC, an online stockbroker, Sturgeon Ventures LLP, a business incubator and regulatory consultancy, and Pre-X Capital Management, a fund management firm. Michael took degrees in Theoretical Physics (University of Kent) and a Master’s in History of Science (Imperial College, London University), followed by an academic year as a Scientific Associate at CERN, the particle physics research organisation. He is an elected Member of the Institute of Physics, a Founding Member of the World Technology Network and an accredited Member of the Association of Photographers.

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3: TAXATION

P LEASE NOTE THIS SECTION IS A CONDENSED SUMMARY OF THE TAXATION LEGISLATION AND SHOULD NOT BE CONSTRUED AS CONSTITUTING ADVICE , WHICH A POTENTIAL I NVESTOR SHOULD OBTAIN FROM HIS OR HER OWN INVESTMENT OR TAXATION ADVISER BEFORE APPLYING UNDER THE O FFER . T AX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH I NVESTOR AND MAY BE SUBJECT TO CHANGE IN THE FUTURE .

KEY TAX RELIEFS

Qualifying Investors who qualify for SEIS may benefit from:

Qualifying Investors who qualify for EIS may benefitfrom:

50% income tax relief on amount subscribed (up to a maximum annual investment of£100,000 for the 2018/2019 tax year and/or £100,000 carried back to 2017/2018 tax year)

30% EIS income tax relief on amount subscribed up to a maximum investment of £1 million for the 2018/2019 tax year and/or £1 million carried back to 2017/2018 tax year. For Knowledge Intensive Companies the equivalent maximum limit is £2 million. 100% inheritance tax relief after two years (provided the investment is held at the time of death) EIS Capital Gains Tax deferral for the life of the investment on amount subscribed 100% tax free growth (provided income tax relief has been given and not withdrawn and disposal takes place after the end of the EIS Three Year Period) Loss relief (a loss on shares disposed of can be set against an Investor’s income or capital gain to reduce tax) Business Investment Relief (for certain UK resident non-UK domiciled Investors). No taxable remittance for foreign income or gains brought into the UK from offshore for qualifying investments for certain UK resident non-domiciled investors.

100% inheritance tax relief after two years (provided the investment is held at the time of death) 50% Capital Gains Tax exemption for chargeable gains reinvested (up to the maximum subscribed) 100% tax free growth (provided income tax relief has been given and not withdrawn and disposal takes place after the end of the SEIS Three Year Period) Loss relief (a loss on shares disposed of can be set against an Investor’s income or capital gain to reduce tax) Business Investment Relief (for certain UK resident non-UK domiciled Investors). No taxable remittance for foreign income or gains brought into the UK from offshore for qualifying investments for certain UK resident non-domiciled investors.

TAX RELIEF FOR INVESTORS Each Portfolio Company will undertake to operate within the restrictions laid down by the SEIS/EIS legislation so that the SEIS/EIS taxation reliefs should be potentially available to subscribers. Each Portfolio Company will submit an application for provisional approval to HM Revenue & Customs that its activities will qualify under SEIS/EIS legislation. There is no guarantee that formal clearance will be achieved for the Portfolio Company or that it will not be subsequently withdrawn. The monies raised from the Subscription will be used to facilitate the growth and development of each Portfolio Company and so will satisfy the risk to capital requirements. To obtain the tax reliefs described below it is necessary to subscribe in cash for fully paid-up ordinary shares (except for those shares which are bonus shares) in a qualifying Portfolio Company and claim the relief. Please note that the value of any relief depends on your individual circumstances. The summary below is based on current law and only gives a brief outline of how the tax reliefs are given. It does not set out all the rules which must be met by the Investor and the Portfolio Company. The summary is intended only as a general guide and is not a substitute for the Investor obtaining professional tax advice before applying for shares. SEIS/EIS relief as it currently stands has four elements: SEIS/EIS income tax relief Investors may obtain income tax relief in the tax year in which the shares are issued on the amount (or aggregate amount) of shares subscribed for, subject to a maximum investment of £100,000 (for the tax year 2018/19) for all SEIS investments in one or more qualifying companies and £1,000,000 for all EIS investment in one or more qualifying companies. Certain amendments affecting this provision were implemented by the UK government in the Finance Act 2018 (see below). Investors cannot obtain the tax relief if they are ‘connected’ with the issuing company. Relief may not be available if an Investor has or takes out a loan which is linked to the investment. The rate of SEIS income tax relief is 50% for the 2018/19 tax year and the rate of EIS income tax relief is 30% for the 2018/19 tax year.

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Husbands, wives and civil partners can each receive SEIS/EIS relief on subscriptions as detailed above.

The relief is given against (but cannot exceed) the Investor’s individual income tax liability for the tax year in which the shares are issued. It is also possible to carry back an EIS/SEIS subscription to the preceding tax year providing the limit for relief was not exceeded in that earlier year. Exemption from CGT Any capital gains on disposal of shares in an SEIS/EIS qualifying company realised more than three years after the date of issue of the shares or the date the Portfolio Company started trading (if later) on which SEIS/EIS income tax relief has been given and not withdrawn, are tax free. Loss relief against income or gains Tax relief is available where there is a loss on a disposal at any time of shares on which SEIS/EIS income tax relief (see 1 above) or CGT re-investment relief (see 4 below) has been given and not withdrawn, provided the relevant requirements of the legislation are satisfied. The amount of the loss (after deducting any amount of any income tax relief which remains attributable to the shares sold) can be set against the individual's gains or taxable income in the tax year in which the disposal occurs, any excess can be carried forward as a capital loss to be set off against future capital gains. Alternatively, on making a claim, the loss net of income tax relief may be set off against the Investor’s taxable income in either the tax year in which the disposal occurs or the previous tax year. CGT re-investment relief EIS re-investment relief is a deferral relief which allows the investor to defer the capital gain to a later date. There is no requirement for income tax relief to have been claimed and there is no ceiling to the amount of the gain which can be deferred. For qualifying EIS investments in 2018/19 the relief can be used to defer the gain on disposal of any asset in the 36 months before or 12 months after the Qualifying Investment is made. Unlike EIS re-investment relief which defers capital gains, SEIS re-investment relief does not just defer the gain but it exempts up to half of it from tax saving up to 14% in capital gains tax. This is available where a chargeable gain is made on a disposal in 2013/14 onwards. The maximum investment eligible for this relief is £100,000 i.e. £50,000 potential exemption from capital gains tax. Qualifying shares must have been held for a minimum of three years. The Investor must be UK resident or ordinarily resident for tax purposes both at the time of the original gain and at the time the shares are issued, and generally must not become non-resident for three years after reinvestment or the date the trade commenced, if later. Inheritance tax and business property relief An investment in an SEIS/EIS Qualifying Company will usually qualify for business property relief. Provided a shareholder has owned the SEIS/EIS shares for at least two years at the time of death (and the SEIS/EIS Qualifying Company is also a qualifying unquoted trading company), 100 per cent business property relief from inheritance tax is available under current legislation. There is no upper limit on the amount of inheritance tax relief that can be claimed in this way.

Trusts

Reliefs are available to UK resident Investors as trustees of discretionary trusts or life interest trusts. Apart from being attractive to individual investors who are UK resident for tax purposes, investing in SEIS/EIS funds offers beneficial tax planning opportunities to trustees of certain trusts.

Investor relief

Investor Relief is an extension of the entrepreneurs’ relief under part 5 TCGA which allows individuals other than employees or officers to benefit from a reduced capital gains tax rate where qualifying shares are held for three years or longer. Any capital gains realised on a disposal of Shares in the Qualifying Company after the Three-Year Period on which Investor tax relief has been given and not withdrawn will be subject, at current rates, to a 10% capital gains tax charge. This is subject to a lifetime limit of £10 million. The information above sets out a very brief summary of the current UK S/EIS tax reliefs. The value of the tax reliefs will depend on personal circumstances, which may change. References to tax are based upon current legislation and HMRC practice, which might be subject to change in the future. In addition, the availability of tax reliefs depends on the Portfolio Companies maintaining their qualifying status. Please refer to the HM Revenue & Customs website for further guidance on the tax reliefs available on S/EIS investments or consult your tax adviser.

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QUALIFYING COMPANY REQUIREMENTS

To qualify for SEIS and EIS relief, the Portfolio Company must not be listed on a recognised stock exchange and there must be no “arrangements” in place for it to become so listed. For SEIS only, the trade of the Portfolio Company must not commence more than two years before the date of the Qualifying Investment for a SEIS share issue is made by an Investor. In addition, throughout the relevant period (the period from the issue of the shares in the Portfolio Company to the date three years from the date of issue of the shares or from the commencement of trade, if later), the Portfolio Company must not be a 51% subsidiary of, or be controlled by, another company, and there must be no “arrangements” in existence for the Portfolio Company to become a subsidiary of, or be controlled by, another company. If, for genuine commercial reasons, a holding company needs to be inserted above the SEIS/EIS Portfolio Company, this should not result in the Portfolio Company losing its SEIS/EIS status provided certain conditions are met. The Portfolio Company must either exist to carry on a qualifying trade or else be the parent company of a trading group. A trading group is a group in which directly or indirectly more than 50% of the shares of each subsidiary are held by another member of the group, but any subsidiary employing any of the money raised by the issue must be a qualifying 90% subsidiary. Non-qualifying business activities (broadly, investment activities and non-qualifying trades) must not comprise a substantial part of the business of the group as a whole. The qualifying business activity for which the money is raised by the share subscription must be a trade carried on by the Portfolio Company or a 90% subsidiary of the Portfolio Company, the Portfolio Company must have a permanent establishment in the UK and the trade must be conducted on a commercial basis with a view to the realisation of profits. To qualify as an SEIS Company, the value of the gross assets of the Portfolio Company and any subsidiaries must not exceed £200,000 immediately before the issue of the shares. To qualify as an EIS Company, the value of the gross assets of the Portfolio Company and any subsidiaries must not exceed £15,000,000 immediately before the issue of the shares or £16,000,000 after. As an SEIS Company, the Portfolio Company is limited to a maximum fund-raising of £150,000 in total via SEIS and other de minimis State Aid. For shares to be eligible for EIS relief the issuing company must not have raised more than £5,000,000 through EIS, SEIS and Venture Capital Trust shares in the previous 12 months. As an SEIS Company, the Portfolio Company must have fewer than 25 full-time employees (or full time equivalent) at the time of investment. EIS companies must have fewer than 250 full time employees (or full time equivalent) at the time of investment. Most types of trades are qualifying trades but certain activities, including dealing in land and property development, are excluded. Subject to the above, please note that the taxation levels, bases and reliefs described in this document are based on existing law and what is understood to be current HM Revenue & Customs practice, but these may be subject to change. An application will be submitted to HM Revenue & Customs for approval that each proposed Portfolio Company and its activities will qualify under the SEIS or EIS, based on information disclosed. Following the issue of SEIS and/or EIS Shares by a Qualifying Company, and after a Portfolio Company has spent at least 70% of the funds raised from the issue on the Portfolio Company’s business, or has traded for four months, if earlier, the Portfolio Company can apply to HM Revenue & Customs for authorisation to issue a compliance certificate to Investors. Although the time taken by HM Revenue & Customs to grant authorisation cannot be controlled by the Portfolio Company, every effort will be made by the Manager to expedite matters and, as soon as authorisation is given compliance certificates will be distributed to Investors. Investors should then submit the certificate to the Inspector of Taxes dealing with their own affairs if they wish to claim their relief. Where the Investor wishes to treat some of the shares as issued in an earlier year (as referred to above), it would be necessary to make a separate claim using the compliance certificate. This would amend the tax return for that earlier year.

DIVIDENDS

Any dividends paid by Qualifying Companies are taxable.

AMENDMENTS TO EIS RELIEF IN THE FINANCE ACT 2018

The annual investment limit for Enterprise Investment Scheme (EIS) investors will be doubled from £1 million to £2 million, provided that any amount above £1 million is invested in Knowledge-Intensive Companies. The annual investment limit for knowledge-intensive firms will be doubled from £5 million to £10 million through the EIS and by Venture Capital Trusts (VCTs). Knowledge-Intensive Companies will be able to choose whether to use the current test of the date of first commercial sale or the point at which turnover reached £200,000 to determine when the 10-year period has begun.

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4: THE FUND

HISTORY

To invest in the winning businesses from the Start-Up Series competitions, the Fund was initially named the Start-Up Series SEIS Fund One and designed to invest up to £1.8 million in winners of the Start-Up Series and £0.3 million in other companies. The progress of investing tranches 1, 2, 3 and 4 of the Fund has led to the extension of the Fund to continue, in principle, year-on- year, and the maximum Fund size increased. Early stage SEIS Portfolio Companies may seek follow-on EIS investment after reaching the ceiling allowed by HMRC for SEIS funding (in 2018/19: £150,000 per company) and therefore EIS follow-on investment is now considered. The name of the Fund was changed to Start-Up Series Fund on 3 January 2018. INVESTMENT OPPORTUNITY The objective (defined investment policy for the purposes of the AIFMD) of the Start-Up Series Fund is to offer investors access to selected investment opportunities across a number of sectors in the UK’s growing start-up community of new business which benefit from Enterprise Investment Scheme and Seed Enterprise Investment Scheme tax reliefs. The investment opportunities shall be sourced through the competition funding method used by Worth Capital. The objective shall encompass investing in business-to- business as well as business-to-consumer businesses, using the EIS or SEIS as appropriate. The Manager considers that provided prudent and well-established practices are used to scrutinise opportunities sourced and originated from specialists such as Worth Capital, start-up and seed companies operated by either by experienced professionals or those with a particular expertise and which qualify for S/EIS tax reliefs as an investment advantage, have the potential to offer Investors an attractive return.

FUND SUITABILITY

The Fund may be suitable for UK taxpaying investors looking for a medium to long term investment whose personal circumstances allow them to take advantage of the SEIS and / or EIS relief; such that they are able to benefit from

income tax relief

• capital gains reinvestment and/ordeferralrelief.

shelter from inheritance tax

tax free capital growth

• diversifying their existing investment portfolio.

RISKS The attention of Investors is drawn to the information set out in Risks, section 6 of this document, which sets out the principal risks associated with an investment in the Fund. The tax treatment referred to in this document depends on the individual circumstances of each Investor and may be subject to change in future. In addition, the availability of any tax reliefs always depends on the Portfolio Companies maintaining their qualifying status.

INVESTMENT RESTRICTIONS

Before an investment is made in any Portfolio Company, a potential Portfolio Company shall wherever practical and applicable:

Apply for and obtain advance assurance from the Small Companies Enterprise Centre (SCEC) that HMRC will regard the shares issued by the Portfolio Company as satisfying the requirements of the EIS or SEIS scheme or provide evidence, from tax accountants, that the Portfolio Company, by virtue of an existing EIS share issue is already in a qualifying period arising from the date of their last EIS equity investment, and is still a qualifying EIS company.

Receive investment approval from the Manager.

Agree to appoint, where required by the Manager, a person nominated by Worth Capital as a non-executive director.

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