Some UK VC Firms Opening Funding Rounds To Individual Investors

Venture capital company Forward Partners is joining Draper Esprit and Augmentum in opening early-stage funding rounds and public offerings to individual investors via the PrimaryBid platform, the Financial Times reported on Friday (June 25) citing sources.

London-headquartered Forward Partners is including individual investors in an upcoming initial public offering (IPO) that aims to raise 30 million pounds, the sources told FT.

“Private markets are an exciting area which are usually impossible for normal investors to get a slice of the pie,” said Alex Davies, founder of Wealth Club, an investment service that helps wealthy clients select private investments, per FT. Davies added that investing in early-stage startups “is risky stuff” with the potential for big losses. 

Venture funds have countered that there are many benefits to backing fledgling startups and when a company has a large portfolio of new companies, it makes sense to spread out the risk, FT reported.

Tim Levene, chief executive of Augmentum, told the news outlet that no one is masking the fact that these types of investments are far from being low-risk but instead are for those investors looking for growth and “have an appetite for risk.”

Augmentum started the move to use PrimaryBid last October as a way of looking to retail investors for funding. The U.K. listed VC firm is now raising £40 million using a mix of backers that include individuals, according to the article.

BlackRock-backed Forward Partners, founded in 2013, is planning to use PrimaryBid to attract individual investors to participate in its planned IPO, which is aiming for a valuation of 125 million pounds. 

VC investments raised $48 billion in April in private company investments, second behind March’s $54 billion. The hedge fund Tiger Global, for example, extended 93 investments between January and April, more than all of 2020. First-quarter 2021 set records for startup funding and growth-stage rounds, which was pegged at $72.7 billion.