Questions about investing

Octopus Ventures provides its members with the opportunity to participate in private equity investment with like-minded people to reduce individuals' investment risk. Octopus will: 

• Screen investment opportunities


• Negotiate on behalf of investors


• Undertake the commercial and legal due diligence


• Offer EIS opportunities


• Proactive manage the portfolio via NED and monitor representation


• Circulate quarterly and annual reports


• Manage and drive companies to proftable exit

Often advantageous for the individual investor from an income tax and capital gains tax perspective. The enterprise investment scheme is a valuable relief for those who can find an appropriate investment. For an individual investing over £500 in eligible shares in a qualifying company, tax relief is given at the rate of 20% up to a maximum investment in any tax year of £150,000. EIS investments are exempt from capital gains tax if held for three years. In addition it may be possible to defer tax on an existing capital gain by offsetting against the EIS investment. See our paper “An Introduction to the Enterprise Investment Scheme” Professional advice should be taken on an individual basis. More information can be found on the Inland Revenue website.

There is a small annual membership fee. Octopus Ventures independent investors incur no further costs. There are no legal fees for investors, no additional due diligence fees or buried costs. Corporate members are welcome to join as well.

Please contact Alex Macpherson on 0207 436 1603 or email alex.macpherson@octopusventures.com

As we are regulated and authorised by the FSA we are required to treat all private information as confidential. We abide by strict rules of probity. In addition, access to data is limited to the executive members of Octopus Ventures each of whom is approved by the FSA.

No. We are not prescriptive .Our investors make their own decisions about when and how much to invest. Also the range of investment sizes is very wide. Some investors place in excess of £100k per investment whilst others invest more modest sums.

In joining, potential investors take into consideration the annual fee and the service that we offer. Thus, some are happy to invest as much as £200k per year while others will remain members until they have invested 10 per cent. of their capital.

Octopus Ventures proposes a wide range of businesses from start up, early stage to established companies in any sector.

In addition Octopus considers backing management teams considering MBO/MBI opportunities.

More important than company type or stage of development is the management team. We pride ourselves in identifying and supporting management teams with outstanding potential and a clear understanding and proof of how they can build sales and achieve a successful exit.

Octopus Ventures has an extensive network of contacts through its investors. They in turn advocate Octopus Ventures as a useful source of management support and funds.

Octopus is also a member of the British Venture Capital Association, National Business Angel Network and has very strong links with many introducers and business brokers.

All of these contacts generate some 2,500 business opportunities each year.

Octopus Ventures is made up of a team of professional business people with a wide range of skills in Sales, Marketing, Operations, Finance, and Human Resources. Aligned to these strong functional skills are the many years of experience in managing companies to generate sales and profits by developing new markets, new products, as well as Mergers and Acquisitions. We apply this experience when reviewing business opportunities. Our extensive evaluation of proposals includes discussions with knowledgeable Independent Investors who provide further due diligence on the attractiveness of the various opportunities presented to us each year.

We can never guarantee the timing of investment realisation. But we can avoid obvious mistakes. One of our major concerns is to sidestep participation in opportunities that are destined to be lifestyle businesses. So we look for businesses that can demonstrate a real understanding of how an exit can be effected. In addition monthly monitoring and board representation help us to maximise value for our shareholders.

A short summary is posted on the website in the “Members Area”. This outlines the basic proposition and the date and venue of management team presentations. At the same time the independent investors are provided with:

• Octopus Ventures's investment summary


• Company's business plan


• Company's financial model


• Management PowerPoint presentation

In addition there is an automatic e-mail response link to Octopus Ventures to enable an expression of interest in attending a presentation and/or a request for further information. During presentations there is a question and answer session to cover any outstanding issues.

Octopus Titan 3 will focus on businesses that have the potential to achieve a high level of profitability through the combination of:

• Scalability: the potential to deliver services to significant numbers of new customers at very low incremental cost and to generate repeat sales from customers.


• Scope: the ability to expand into complementary areas by leveraging customer and/or distributor relationships, new product development or brand positioning.


• Pricing power: an ability to charge high and defensible prices for its products or services as a result of having intellectual property rights, a strong brand, and/or a dominant position in a market niche.

Octopus Ventures will look to identify opportunities where the people involved – the entrepreneur, management team, investors, advisers and any other significant stakeholders – have a proven record of success. Although the Fund will have the ability to invest across a wide range of industries, it is expected that the focus will be on several principal sectors:

• Environment


• Technology


• Media


• Telecoms


• Consumer lifestyle and wellbeing

If the initial review of the business plan is positive, the entrepreneurs are contacted in order to arrange a meeting. The next task is to assess the management team in terms of its ability to undertake and deliver against the business plan presented. The proposition is then discussed and reviewed with other members of the Octopus investment team and a decision is taken as to whether to continue discussions with the company with a view to making an investment.

Prior to making an investment, due diligence is carried out on the potential investee company. The Octopus Ventures due diligence process includes a review of the investee company’s technology, discussions with customers and suppliers, competitive analysis, assessment of the capabilities of the management team, and financial analysis.

In addition, the input of existing Octopus Ventures clients is also sought, where appropriate, as the client base includes individuals who have or have had senior roles in a range of organisations giving them industry knowledge and experience that is relevant to an assessment of the capabilities of the potential investee company.

Additionally, Octopus Ventures also draws on professional input from lawyers, accountants and other specialists as required in order to conduct the due diligence and draw up the required legal documentation in order to complete an investment.

A director will usually be appointed to the board of each investee company by Octopus Ventures. The majority of the investments are expected to be held for approximately five years. There may, however, be opportunities to exit profitably on shorter timescales.

Octopus Ventures will conduct a regular review of the portfolio, during which each investee company will be assessed in terms of its commercial and financial progress, its strategic positioning, requirement for further capital, revolution towards an eventual exit and its current and prospective valuation.

As each company matures, the exit considerations become more specific, with a view to establishing a definitive action plan in order to achieve a successful sale of the investment.

Throughout the cycle of an investment Octopus Ventures will remain proactive in determining the appropriate time and route to exit. It is expected that the majority of exits will be by means of trade sale.

The information contained below is not intended to be a dividend or profit forecast.



In the short-term you will receive upfront income tax relief equivalent to 30% of the money that you invest.

This means that if you invest £10,000, your income tax bill for this tax year will be reduced by £3,000, providing you with an effective return after initial costs of 35% before the Fund makes its first investment.

In the medium-term, the focus of the Fund is on generating significant capital growth for investors.