contact details

Encore Ventures LLPc/o Draper esprit, 1010 cambourne Business park, cambridge, cB23 6Dp

t: +44 (0)207 931 8800 e: eis@draperesprit.com

www.draperesprit.com

For iFa enquiries

RAM Capital Partners LLP4 staple inn, London, Wc1v 7Qh

t: +44 (0)20 3006 7530e: taxsolutions@ramcapital.co.uk

www.ramcapital.co.uk

draper esprit eis

draper esprit eis funds have been the highest rated eis for the past 3 years running by tax efficient review (88/100)

Why Draper esprit eis is different…

Draper esprit is an established venture capital fund manager and has built a track record of successfully investing funds on behalf of institutional investors since 2006.

the firm is now a listed business, Draper esprit plc, with an investor base of financial institutions and sovereign funds.

We launched our eis funds following changes announced in Budget 2012 that allowed larger firms with up to 250 employees (rather than the previous limit of 50) to raise money under eis. overnight, this made the majority of our deals eis qualifying without any change to our established investment strategy.

the Draper esprit eis funds operate alongside Draper esprit plc with a common investment strategy, shared deal flow, and a co-investment agreement between eis and pLc funds.

private investors may benefit from the additional incentives of eis reliefs*.

Draper Esprit EIS is managed by Encore Ventures LLP, a subsidiary undertaking of Draper Esprit Plc

Financial Promotion approved by Encore Ventures LLP

Draper esprit eis’s oBjective is to DeLiver tax free capitaL groWth* from eis investments

Prior Draper Esprit EIS Funds Track Record – at 31st December 2015

The valuations for the prior Draper Esprit EIS funds include the valuation of shares held by the funds, together with cash balances held by the Custodian and where relevant, proceeds that have been distributed to investors. Valuations are calculated for a £100,000 subscriber to the funds but are indicative for all subscription amounts with minor variations.

The figures shown do not include any EIS Relief which investors can claim in addition, subject to personal circumstances.

Valuations are produced in accordance with the International Private Equity and Venture Capital Valuation Guidelines (IPEV) that are endorsed by the British Venture Capital Association (BVCA).

Important Notice: Past performance is not necessarily an indicator of future results. Returns may vary as a result of currency fluctuations. The figures show valuations which are as yet unrealised, without potential performance fees.

EIS 12012 / 2013

£1.52

£1.00 £1.01

EIS 22013 / 2014

EIS 32014 / 2015

EIS 42015 / 2016

Valuation per £1 subscribed

£2.00

£1.75

£1.50

£1.25

£1.00

£0.75

£0.50

£0.25

£0.00

£1.38

Notes:EIS 1 – 2012/2013: Horizon Discovery IPO (2x multiple at IPO placement price).EIS 2 – 2013/2014: Neul M&A Exit (2x multiple).EIS 3 – 2014/2015: Majority of investments held at cost at 31 December 2015 as

they are within 12 months of the investments being made.EIS 4 – 2015/2016: Approximately 50% deployed at the reporting date.

Majority of investments held at cost at 31 December 2015 as they are within 12 months of the investments being made.

We have a broad sector approach, however we believe that most venture capital investment opportunities in Europe with the requisite characteristics for our funds fall into the following core sectors:

Consumer TechnologyCompanies with exceptional growth opportunities in international markets that are underpinned by new consumer facing products, innovative business models and proven execution capabilities.

Enterprise TechnologyCompanies developing the software infrastructure, applications and services that drive productivity improvements, convenience and cost reduction for enterprises.

HardwareCompanies developing differentiated technologies that underpin advances in computing, consumer electronics and other industries.

HealthcareCompanies leveraging digital and other technologies to create new products and services for the health and wellness markets.

We seek scalable, high growth businesses with the potential to reach $50m-$1bn+ IPO or M&A valuations

Source: Encore Ventures LLP internal records.

Draper esprit eis WiLL focus on ‘Late stage’ investment rounDs, typicaLLy £5-10m+

The diagram is reprinted by kind permission of the Tax Efficient Review.

It shows the relative size of investments made by different EIS managers and highlights the unparallelled scale of Draper Esprit EIS which operates in conjunction with Draper Esprit Plc and its larger fund(s).

• Our strategy is to use the combined scale of Draper Esprit EIS and Draper Esprit Plc funds to make larger, late stage, growth investments into companies that are accelerating their business, rather than starting up and have revenues of £2m-£20m+ at the point we invest.

• Our target is that the majority of investments (50-65%+), by value, made by Draper Esprit EIS are in these late stage ‘scale up’ growth capital deals.

• This is intended to reduce the relative risk in the portfolio by selecting companies which have already shown commercial momentum and are in ‘scale up’ mode rather than ‘start up’ mode.

• Typically, these late stage investments are £5m-£10m+ and are larger than EIS funds could access alone. Draper Esprit EIS is able to participate in these deals by co-investing alongside larger in-house funds of Draper Esprit and/or with other syndicate investors.

Average dealsize

(amount invested per deal by EIS

manager not total deal size)

Diagram 1: Investment strategies of main Generalist EIS managers raising funds in 2015/16

Seed capital/Early stage

Later Stage Develop-ment Capital Deals

Asset backed opportunities AIM stocks

Early Stage High Growth and Development capital

- high risk with hopefully high return

- all equity investment- should have potential

for rapid growth

- should have potential for rapid growth and exit within 3-5 years

- usually no bank debt because of lack of assets for security and companies may not be able to support interest payments

- focus on high growth market sectors in which company growth should be less dependent on the performance of the whole economy

- relatively low returns but should be lower risk

- companies usually

- companies should be able to sustain loan interest payments

seeking capital for expansion

- low return and should be low risk

- should be able to sup-port interest on debt

-some stocks are dividend paying

- limited liquidity- potential volatility

£2m

£1m

Calculus100%

Position of boxes in this column do not indicate deal size

£3m

Octopus Eureka50%

Octopus Eureka

50%

Downing Growth100%

Oxford Capital100%

Parkwalk25%

Parkwalk60%

Parkwalk15%

Mercia Fund Management100%

£0.5m

MMC100%

Seneca EIS80%

Seneca EIS20%

Draper Esprit95%

£10m Draper Esprit5%

27 Oct 2015

*Risk Warning: Prospective Investors should note that past performance should not be seen as an indication of future performance. The value of an investment can fall as well as rise and investors may not get back the amount originally invested. Your capital is at risk. Therefore you should only make investments in unlisted companies which you can afford to lose without having any significant impact on your overall financial position or commitments. Taxation levels, bases and reliefs may change if the law changes and the tax benefits of products will vary according to your personal circumstances; independent advice should therefore be sought. This financial promotion has been approved by Encore Ventures LLP, who are authorised and regulated by the Financial Conduct Authority (FRN: 510101).

Draper esprit has an extensive recorD of securing exits from its investments

Draper Esprit produced 22 profitable exits in the past 5 calendar years (2011-15) from investments made across all its funds. These are not all EIS investments, however we believe that under the current EIS rules the vast majority of these companies would be EIS qualifying today.

We maintain close relationships with leading European and US investment banks and follow an in-house methodology to secure timely and profitable exits of our investee companies

22 Profitable IPOs or M&A exits across all funds

Total combined enterprise value

on exit IPO and M&A placement prices

7.4xHighest multiple of gross proceeds

vs investment cost(excluding a 110x outlier which had only a

small amount of invested capital)

$3bn +

Source: Draper Esprit Plc records, press announcements, IPO filings.

summary

• The minimum subscription is £25,000.

• The target is to invest subscriptions within 12-18 months of each Close into a portfolio of 8-12 EIS qualifying companies.

• The investment strategy is that the majority of Investments by value will be made in companies that are defined as ‘late stage’ opportunities with £2-20m+ in annualised revenue at the time of investment.

• Funds raised in each Close will be invested alongside those subscribed in prior Closes and in subsequent Closes, and as co-investments alongside the larger funds managed by Draper Esprit Plc or its related parties and/or with syndicate partners.

• EIS3 certificates will be issued for each individual Investment, typically within around 8 weeks depending on the turnaround time of HMRC.

• Our target holding period is 3-5 years for each Investment.

• The exit route for successful Investments is most likely to be via trade sale (M&A) or an initial public offering (IPO) and sale of shares.

• Investors will receive distributions from the proceeds of successful realisations as they are made.

5JANUARY

5APRIL

5JULY

5OCTOBER

Fund raising close dateseach year