How much does Freston invest, and for what equity?
The short answer is that we can invest a relatively unlimited amount in your business through to pre IPO, as long as it’s under 29.9% equity ownership.
We invest via SEIS and EIS schemes. If you are SEIS applicable, that means we invest the first £100k under SEIS, and once your fundraising requirements exceed £100k, we migrate to the EIS scheme. EIS requires that we hold no more than 29.9% share of any investment.
In terms of equity, it depends on what stage your business is at. We invest in startups ranging from Idea (ie, pre revenue) through to first 12 months of Trading – as you can imagine, this results in a wide range of valuations!
Our approach is to give a certain amount of funding upfront, and then agree specific funding gates in 3-6 month horizons to give further funds – reflecting valuation accretion based on agreed KPIs or deliverables. For each funding gate, there is a Board Review with Sir Charles Dunstone and our Chief Investment Officer, Roger Taylor.
This approach means Founders could get anything from £10k to £150k in the initial raise, but raise up to £300-700k over the first 12 months, and much more beyond that.
What services and support do we have access to?
In addition to funding, our core services include business coaching, finding you expert mentors, regular Board meetings, flexible access to our specialist network, co-working office space, and fundraising support.
This support is virtually unlimited, and available to you on demand. We know you need the time, flexibility and control to build a product your customers will pay for, and don’t want to get distracted by forced classes, ‘speed mentorship’ with conflicting messages, and de-humanising Demo Days.
While there is no ‘one rule’, we generally find that Founders want:
- Weekly business coaching sessions with lighter touch check-ins intra-week
- A hand-selected mentor with highly relevant expertise they can reach out to every month or so
- Unlimited introductions to specialists across the full range of services, including technology, operations, and marketing
- Introductions to other investors
- Support recruiting key hires
- Desk space and meeting rooms (at fair market value)
What are Director’s fees, and why do you charge them?
Director’s fees cover a proportion of our Board, coaching, and support costs, which are fundamental to the service we offer Founders. We only back Founders who believe they can gain considerable value from our expertise and networks.
Our fees are a percent of funds raised from Freston from month 6 onwards. They are payable in monthly amounts over a 12 month period.
Do we have to move to your co-working space? How much does it cost?
Our co-working space has 70 desks and meeting rooms a stone’s throw from Latimer Road station, on Freston Road. There are ample meeting rooms, a large kitchen/ pantry, and great vibe. We currently have a number of startups here, include Five Guys, MOD Pizza, and ME + EM. And of course the Freston management team is based here.
You do not have to move to our co-working space. We believe there are benefits from being co-located with us, but understand you might have other arrangements better suited to your business’ needs.
Each desk is charged at fair market value.
What should we include in our application?
We are looking for Consumer businesses with a highly disruptive business model, led by founders with with the leadership, ingenuity, and mettle to grow a scale business.
In the first stage of the application process, simply send us (email@example.com) your standard business plan and a short video of all the founders introducing yourselves, and why you'd like investment from Freston. For this, we strongly suggest you highlight a few core things:
* The disruptive nature of your business model, and why it is unique
* How big you think your business can get by 2025, and why
* Each of your roles and credentials, and why you chose each other
* What you need from Freston for this next stage of growth
From there, we'll select you for a 1 hr face to face interview.
Why the name ‘Freston’?
Our offices are in the heart of the separatist nation, the Free & Independent Republic of Frestonia....
Yes, indeed..... In 1977, the residents of the area near Latimer Road station, a motley group of artists and musicians voted to secede from the UK. While they received responses from various MPs and government officials, their separation request was never formally denied by the United Nations. So they remain an independent and disruptive state to this day.