Investment Approach

The first point of contact in TRI Cap for companies seeking investment is Kathy Kinder, Investment Manager. Kathy is happy to have initial discussions about TRI Cap, our investment approach and about your company’s business plan and investment needs.

2015-08-04 13.00.31(2)Our Investment Approach

As TRI Capital is based in the Scottish Borders, members are particularly interested in businesses that are located in the Borders, Lothians and North of England, or are considering relocation to the area. We are however open to approaches from companies based elsewhere which display potential for high growth and attractive financial returns.

Each investment opportunity is considered on an individual basis and on its fit with TRI Cap’s approach. We take pride in being open and friendly, as well as thorough. We are also prepared to play a long game, working with companies both prior to and after investments to ensure that each party gets the most out of the relationship and that there are no surprises for anyone.

Typical Investee Company

Although the syndicate was created to invest in Borders-based businesses, we quickly found that we needed to expand our spatial reach to find a suitable number and range of investee companies. Within this, whilst we try to maintain a geographical spread of a reasonable travel distance from Melrose, we now have a portfolio stretching from Aberdeen to St Boswells and to Glasgow though with a concentration in East Central Scotland. We continue giving preference to Borders- based businesses.

2015-08-04 13.36.42(3)Strategically we do not invest in specific sectors, rather we provide the average investing member with the opportunity to create a reasonably balanced portfolio of SME businesses. In our portfolio we do however have a sector bias towards bio/medical devices, mainly because of individual investor interest rather than any desire to specialise in this sector.

While our preference is for early stage businesses, our portfolio ranges from spin outs and start-ups to established businesses looking to expand. In our home territory of the Scottish Borders, we have also funded a management buy-in and a buy-out from an administrator; thus helping to preserve employment in our local area.

While we prefer to hold a small (but meaningful) minority stake, our share of an investment ranges from almost 70% to less than 10% (mainly where we have co-invested with other angel syndicates or institutional investors and/or have been involved in a number of rounds.)

We have held many of our investee companies now for more than three years and are approaching the stage at which they could be sold should a buyer be found. Several are working towards IPO/trade sale and with others we are looking to realise value in other ways.

Overview of Investment Vehicles

TRI Cap is not a fund and members invest on an individual basis. We expect that this will continue on a largely equity basis in EIS/SEIS compliant businesses or those suitable for co-investment with Scottish Enterprise/The Scottish Investment Bank. Many of our investments will be alongside other angel syndicates whose members invest on the same basis as TRI Cap members.

Deal Structures

Our preferred deals are EIS/SEIS compliant, straight ordinary equity investments, however on occasion members have used Convertible Loan Stock and interest bearing loans which, where possible, are secured over the company’s assets. Deals can include management/staff options (usually exit based) and whilst we do not favour ratchet agreements they usefully provide management incentivisation where we have difficulty agreeing a valuation.