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Frequently asked questions
When was Rainbow established?
Rainbow was formed in 2001 and made its first investment in 2002.
Are there any restrictions on where Rainbow invests?
Rainbow can only invest in companies which are based on or use intellectual property from our partner institutes
What share of the company does Rainbow take in return for its investment?
This depends on several factors including the amount of money RSF is
investing, the stage of development of the technology, the amount of
additional coinvestment, and the extent of commercial experience in the
team.
Who makes the investment decisions?
Investment decisions are made by the Fund Manager but we work closely
with our advisory board Spectrum, and we ask prospective investee
companies to make a presentation to them.
How long does the investment process take?
This depends on the amount you are asking us to invest. For investments
of less than £25,000, we can generally make a decision in 4 weeks or
less and it may take us another few weeks to agree the detail of the
legal agreement. For larger investments, we undertake more detailed due
diligence, we ask you to make a presentation to our advisory board, and
it may take longer to agree the detailed legal documents such as the
shareholder agreement. You should allow 3- 6 months for an investment
of £100,000 or above.
What happens to the profits Rainbow makes?
Rainbow
is an evergreen fund. The profits made by Rainbow will be reinvested in
new spin out companies, for the forseeable future.
What is the relationship between the Rainbow partners and the Fund?
Rainbow
does not have a first option on any of the technologies developed by
the Rainbow partners, but it works closely with the technology transfer
offices of the partners to identify opportunities for the Fund.
What does Rainbow look for in an investment?
Rainbow
invests at the earliest stage, often before there is an established
management team or customer relationship, but the following points are
key:
- A large and preferably growing market
- Competitive advantage/ barriers to entry
- Clear ownership of intellectual property
What is the performance of the Fund to date?
Rainbow had made one realisation at a 20% IRR, and the portfolio is valued significantly above cost. |
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The Rainbow Seed Fund provides seed capital to commercialise scientific research at our partner organisations:
BBSRC, CSL, Dstl, NERC, VLA, HPA, SCRI, STFC, Macaulay, NPL and UKAEA
The Rainbow Seed Fund is managed by Midven Ltd, which is regulated by the FSA.
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