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SPACE NET VENTURES(S)EIS FUND

Information Memorandum

SPNV

SPACE NET VENTURES | (S)EIS FUND 3

Important Notice

This document describes arrangements by which Investors may appoint SPNV Limited, trading as Space Net Ventures, a private limited company incorporated in England with the registered number 07455644 and whose registered office is at 29 Lincolns Inn Fields, London WC2A 3EG (the “Manager”) to act as their common investment fund manager. The Manager is authorised by the FCA to act as an investment fund manager; its FCA registration number is 610217. These arrangements constitute the Fund.

This document constitutes a financial promotion relating to the Fund and is issued and approved by the Manager for the purposes of section 21 of the Financial Services and Markets Act 2000 (“FSMA”). The Fund is a Complying Fund and so is not a UCIS. The Fund is not subject to the marketing restrictions introduced by the Financial Conduct Authority (“FCA”) in respect of “non‑mainstream pooled investments” and can be marketed to retail clients, though participation in the Fund is restricted to investors who are assessed as being capable of making their own investment decisions and of understanding the risks involved in a participation and for whom a participation in the Fund would be appropriate. The opportunity described in this document is not suitable for all Investors. Key risks are explained on pages 36 to 38 of this Information Memorandum and should be carefully considered. The value of any investment may go down as well as up and an Investor may not get back all or any of the amounts originally invested. Please note that applications may only be made, and will only be accepted, subject to the terms and conditions of the Investor’s Agreement, a copy of which can be found on pages 40 to 56 of this Information Memorandum and the terms and conditions of the Application Form. This Information Memorandum does not constitute an approved prospectus within the meaning of section 85(7) of FSMA and it does not constitute an offer to the public in the United Kingdom or elsewhere. By reading this document you represent and warrant to the Manager that, amongst other things, you are able to receive the Information Memorandum without violating applicable laws. Prospective Investors should not regard the contents of the Information Memorandum as constituting advice relating to legal, taxation or investment matters.

This Information Memorandum does not constitute an offer to any person by the Manager or an invitation for any person to make an offer to the Manager to enter an agreement with the Manager to act as their fund manager (a “direct offer financial promotion”).

If you wish to invest through your financial intermediary (whether advisory or ‘execution only’) you and your financial intermediary should both complete the INTERMEDIARY APPLICATION FORM.

If you wish to invest directly (without an intermediary) you will need to provide some information about your investment experience. Please complete the DIRECT INVESTOR APPLICATION FORM.

APPLICATION FORMS are available on request from Charlotte Surridge who may be contacted as follows:

By Email to: [email protected]

By Post to: Space Net Ventures 29 Lincoln’s Inn Fields London WC2A 3EG

By Telephone on: 0203 773 5217

4 SPACE NET VENTURES | (S)EIS FUND

Welcome to Space Net Ventures

Dear Investor,

Welcome to Space Net Ventures (S)EIS Fund. We offer investors the chance to invest in the fast growing early stage companies which develop or operate the technologies which help us and, increasingly, all of the machines around us, to communicate.

The Fund’s investment policy is to invest in the early stage companies developing and exploiting key enabling technologies underpinning the emergence of Satellite Applications and Services and the Internet of Things (“IoT”) revolution, including big data and data analysis, sensors, imaging, navigation and telecommunication technologies.

There is an overlap between both sectors and Satellite Applications can be seen as a particular sub‑segment of the broader IoT revolution, the key difference being that Satellite Applications will use data captured and transmitted by a satellite system, as opposed to more traditional earth‑based telecommunication systems.

The Investment Team of Space Net Ventures brings together a unique set of skills and extensive experience of venture capital investing in technology based companies supported by leading scientific, technical, financial, legal and business expertise.

We have identified a strong pipeline of potential deals from some renowned institutions including the Satellite Applications Catapult at Harwell, CERN, the University of Exeter, the University of Sheffield, Coventry University, Cranfield University and the Science and Technology Facilities Council and many others.

Together with our network of experienced directors and executives (“EDEN”) we believe that as well as investment we can also provide a great deal of commercial and business support to the companies in which we invest.

I look forward to welcoming you as an Investor.

Yours faithfully,

Claire Pidancet

Managing Director Space Net Ventures


Dear Investor,

I have been providing corporate, tax and regulatory legal advice to fund managers in the alternative investment fund management sector for over thirty years, helping them to structure their deals and to raise and manage their venture funds. I believe that a vibrant and growing UK economy needs efficient ways for channeling venture capital into new businesses which create jobs and prosperity; including new fund management businesses.

Space Net Ventures is a new fund management business which we are seeding with Claire. At the moment it is majority owned by the partners in RW Blears LLP, although I expect this to change over time as the business prospers. The directors are me (Non‑Executive Chairman), Claire (Managing Director) and my fellow partners in RW Blears LLP, Frank Daly, Adam Lawrence and Valerie Whalley with whom I have built a successful legal practice over the last seven and half years advising venture capital fund managers. We have been working with Claire over the last 12 months. She is a very bright mathematician, physicist and former investment banker. We are keen to seed this new fund management business, to support it where we can as the business develops, to help Claire raise the investment capital that is needed and to provide overall corporate governance.

With the support of my longstanding friend and client Terry Swainbank, who I first came to know well when we worked together in setting up the successful Rainbow Seed Fund, Terry as its first fund manager and me as the fund’s lawyer, I believe that Space Net Ventures will find and execute exciting and attractive investments in the fields of downstream satellite applications and the internet of things. Wider support will be provided by our eminent investment committee comprising Peter Dicks, the founder of Abingworth, Peter English, one of the founding partners of the Foresight Group, and John Gregory, the chairman of Foresight VCT plc, all firm friends and clients with whom I have enjoyed working for the last twenty two years or more.

Our investment committee also includes the very distinguished scientist Professor John Wood CBE FREng, the nominated chairman of the ATTRACT Project Advisory Board, a new open, pan‑EU initiative of leading European Research Institutions coordinated by CERN to accelerate the development of high‑performance detector and imaging technologies for both science and markets. I first came to know John when he was responsible for the Rutherford‑Appleton and Daresbury Laboratories and led the initiative to form the Rainbow Seed Fund for UK Public Sector Research Institutions and we are delighted to benefit from his extensive experience in science and technology IP commercialisation.

I will be investing personally in this venture and I would encourage you to do so too.

Yours faithfully,

Roger Blears

Senior Partner, RW Blears LLP, Solicitors Non-Executive Chairman, Space Net Ventures

Introduction


How to Apply

- Read this Information Memorandum

- Complete the relevant Application Form

If you wish to invest through your financial intermediary (whether advisory or ‘execution only’) you and your financial intermediary should both complete the INTERMEDIARY APPLICATION FORM.

If you wish to invest directly (without an intermediary) you will need to provide some information about your investment experience. Please complete the DIRECT INVESTOR APPLICATION FORM.

APPLICATION FORMS are available on request from Charlotte Surridge who may be contacted as follows:

By Email to: [email protected]

By Post to: Space Net Ventures 29 Lincoln’s Inn Fields London WC2A 3EG

By Telephone on: 0203 773 5217

If you need any assistance completing the Application Form or have any questions about the application process you should contact your Authorised Financial Intermediary in the first instance. Additionally, you can contact City Partnership (UK) Limited on 0131 243 7210.


Executive Summary

Satellite Applications and Internet of Things – a high growth investment opportunitySPACE NET VENTURES (S)EIS Fund, (“the Fund”) will be investing into UK based early stage companies developing and exploiting key enabling technologies underpinning the emergence of satellite applications and services and the internet of things (“IoT”) revolution, including big data and data analysis, sensors, imaging, navigation and telecommunication technologies.

In both the satellite applications and the IoT sectors, truly innovative and disruptive products and services are emerging, with massive new markets opening up, representing real high‑growth investment opportunities.

Both sectors have been identified as strategic areas of growth for the UK and benefit from a thriving and supporting ecosystem with a unique source for these key enabling technologies, in their top‑rated research infrastructure, universities, and thriving start‑ups ecosystem.

Key Facts

UK Space Sector IoT

A genuine success story A bigger revolution than the first internet revolution

Estimated at £11.8 billion in 2013 With an estimated six billion Internet‑connected “things” in use by the end of this year

A target of £40 billion by 2030 The estimated global economic impact ranging between $2.7 trillion and $6.2 trillion by 2025

Only achievable by the development of the Satellite Applications segment

The IoT is really an enabler impacting many, if not all, industries with so‑called “Smart” solutions

WHOEVER LEADS THIS FIELD WILL LEAD ECONOMIES BECAUSE THESE TECHNOLOGIES CONSTITUTE A DRIVER OF COMPETITIVE ADVANTAGE ACROSS MANY INDUSTRIES. THIS INCREASED INDUSTRIAL COMPETITIVENESS ULTIMATELY TRANSLATES INTO JOBS.

These two fields are currently attracting increased attention from investors, policy makers and global businesses.

In order to ensure optimal portfolio diversification, the Fund’s capital will be invested in various stages, from seed rounds up to series A rounds, including follow‑on rounds. The Fund will favour investment opportunities which tend to be less capital intensive, fully scalable and where the capital invested can be best leveraged. The target net annual return for an investment in the Fund after EIS income tax relief is between 14% and 24% over a five year period though the investment returns could be significantly higher or lower than this target. Share prices, their values and income may go up and down and investors may lose some or all of their original investment. Please see the key risk factors on page 36 to 38.

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Access to a unique and balanced pipeline of investment opportunitiesIn order to give access and bring a balanced portfolio of high quality investment opportunities to individual investors, our strategic approach has been to build partnerships, formal or informal, with leading universities and specialised incubators. These are some with whom we have already established a relationship:

We are continuously developing new partnerships and will be adding significant universities, research institutions and specialised incubators within the next few months to this list.

Our ability to deliver – Space Net VenturesThe Fund will be managed by SPNV Limited, trading as Space Net Ventures, which is authorised and regulated by the Financial Conduct Authority.

The Investment Team comprises Claire Pidancet, Terry Swainbank, the former and founding investment manager of the Rainbow Seed Fund, Frank Daly, Roger Blears as non‑executive Chairman and an Independent Investment Committee of Peter Dicks, Professor John Wood, Peter English and John Gregory.

Space Net Ventures has also set up an Experienced Directors and Executives Network (“EDEN”). Members of EDEN are experienced individuals with industry specific expertise and connections in the Satellite Applications and IoT fields, but also in ICT and digital technologies, Healthcare and Biotechnologies, Energy and Renewables, Engineering and Automotive, Manufacturing and Advanced Materials, which may prove relevant as and when an Investee Company approach a new market or a new industry.

This team is extremely well connected across the scientific community in the UK, across Europe and within the USA as well as within the City of London.


Table of Contents

SECTION A

A Differentiating Investment Strategy

1. Satellite Applications and Internet of Things – a high growth investment opportunitya. Investment Focus

b. The opportunity of Satellite Applications

The UK space sector is a genuine success story

The space sector is strategic for the UK

Description

A thriving ecosystem in the UK

Examples of Satellite Applications

Examples of recent investment in UK start‑ups

Major capital investment and exit opportunities

c. The Internet of Things and key enabling technologies

The Internet of Things – a second and bigger revolution

Examples – It’s all about “Smart”

Key enabling technologies behind the IoT

The UK and London – a global digital force

2. Access to a unique and balanced pipeline of investment opportunitiesa. A strategic approach and a wide-reaching deal flow from high quality sources

b. Formalised partnerships

c. Informal arrangements

3. Our ability to deliver – Space Net Venturesa. A unique set of skills and a well-connected team

b. Investment Team

c. Independent Investment Committee

d. EDEN – a supporting network


SECTION B

Details of the Fund

1. Key Fund Information

2. Investment Policy – Sector, Stages and Preferences

3. Illustrative Capital Deployment

4. Risk management a. How do we select investment opportunities?

b. How do we mentor and monitor Investee Companies

c. Exit and Distributions

5. SEIS/EIS Tax Reliefs, Fees, Expected Return, Fund structure and administrationa. Tax Reliefs

b. Fees and Charges

c. Expected Return

d. Fund structure, withdrawals and administration

6. Risk Factorsa. Portfolio Risks

b. Taxation Risks

c. Fund Issues

d. Forward Looking Statements

SECTION C

Definitions

Investor’s Agreement

Glossary


Section A ‑ A Differentiating Investment Strategy

1. Satellite Applications and Internet of Things – a high growth investment opportunitya. Investment Focus

The investment policy of Space Net Ventures is to invest in the early stage companies developing and exploiting key enabling technologies underpinning the emergence of Satellite Applications and Services and the Internet of Things (“IoT”) revolution, including big data and data analysis, sensors, imaging, navigation and telecommunication technologies.

There is an overlap between both sectors, and Satellite Applications can be seen as a particular sub‑segment of the broader IoT revolution, the key difference being that Satellite Applications will use data captured and transmitted by a satellite system, as opposed to more traditional earth‑based telecommunication systems.

In both sectors, truly innovative and disruptive products and services are emerging, with massive new markets opening up.

Both sectors have been identified as strategic areas of growth for the UK.

Both sectors benefit from a thriving and supporting ecosystem in the UK.

THE FUND IS IDEALLY POSITIONED TO TAKE ADVANTAGE OF THIS REVOLUTION.

b. The opportunity of Satellite Applications

The UK space sector is a genuine success storyIn 2013 the OECD estimated that the global commercial space economy was worth $256.2 billion.

In the UK it was already worth £11.8 billion in 2013 and had been growing by an average of 8.6% year‑on year since 2010, had trebled in size since 2000, directly employing 37,000 people and supporting an estimate of over 115,000 jobs in total, and with 40% of the world’s satellites being produced in the UK.

Furthermore, fuelled by the explosive growth of the IoT across the global economy, revenues from the wider satellite IoT services are anticipated to increase from $1.1 billion in 2013 to approximately $2.5 billion by 2023; in the UK, this is reflected in a very tangible way by, amongst other things, the increasing number of space related organisations based in Harwell, which has risen from 5 to 70 in the past five years, according to the Catapult Satellite Applications.

The space sector and space related technologies are now sparking attention from private investors, with over $200 million raised by early stage space companies in 2013.



The space sector is strategic for the UKThe Government has identified the space industry as a sector to further domestic and global innovation and create economic growth.

The aim is to increase the UK market share to 10% of the global space market, which is estimated to be £400 billion a year by 2030, which would make the sector worth £40 billion per year to the UK economy.

This greater ambition is outlined in the Space Innovation and Growth Strategy, a joint UK government and industry initiative, which was launched in 2010 to create a partnership between industry, government and academia to develop, grow and exploit new space related opportunities. In furtherance of this ambition, the UK Government has committed £1 billion to invest in the research and infrastructure of this sector.

DescriptionThe space sector is divided into an upstream segment (satellite launch and wholesale satellite operators) and a downstream segment providing “smart” applications and services, such as imaging, data analysis, communication and broadcasting to a very wide range of industries, such as transport and traffic management, land monitoring, agriculture, environment, defence, consumer mobile and consumer broadband.

In the downstream segment, the aim for the UK is to take the lead in commercial applications using space data.

Such a move has also been encouraged by the European Commission which is calling on companies to dip into its vast trove of earth‑observation data as the basis for new applications, and to strengthen Europe’s position in the increasingly competitive global space industry.

For example, all the data and images captured by Europe’s Sentinel earth‑observation satellites are available for use and could drive a vast range of applications. These satellites beam down several terabytes of raw data every day.

Therefore, within the overall value chain of the space industry, the downstream segment is where most value can currently be captured and leveraged.

THE FUND WILL FOCUS ON SATELLITE APPLICATIONS IN THE DOWNSTREAM SEGMENT, WHICH TEND TO BE LESS CAPITAL INTENSIVE AND WHERE THE CAPITAL INVESTED CAN BE BEST LEVERAGED.

A thriving ecosystem in the UKFurther to the Space Innovation and Growth Strategy report in 2010, numerous initiatives have been developed in the UK; including:

- The Satellite Applications Catapult which is helping to coordinate industry‑wide efforts to capitalise on opportunities for maximum benefit to the UK economy. Based in Harwell, it also runs five “Centres of Excellence” across the country in coordination with leading universities:

o The South West Centre of Excellence, based within the University of Exeter;

o EMBRACE – the East Midlands Centre of Excellence, based in Leicester and in partnership with the Universities of Nottingham and Leicester;

o The South Coast Centre of Excellence: based in Portsmouth; partnerships include the Universities of Southampton and Portsmouth;

o The North East Centre of Excellence: based in Durham and in partnership with Durham University and Newcastle University;

o The Scottish Centre of Excellence based in Glasgow.


- Other key players in the space sector, and in the downstream segment in particular, include:

o The European Space Agency’s new European Centre for Space Applications and Telecommunications (ECSAT) at Harwell which will further benefit the UK;

o The Surrey Space Centre within the University of Surrey;

o The incubators supported by the UK Space Agency;

o The Satellite Finance Network (SFN).

This list, while not exhaustive, illustrates the level of engagement by key players in the UK to develop a thriving ecosystem supporting innovation and to build a competitive space industry on a global scale.

Results are starting to materialize: UK start‑up companies and universities have recently achieved fantastic results in some of Europe’s biggest space technology innovation competitions that recognise great ideas with commercial potential, with five UK finalists out of 500 entries from 17 countries (European Satellite Navigation Competition (ESNC); BMVI Special Prize ‑ Ministry of Transport in Germany; Copernicus Masters Sustainable Living Challenge; European Space Agency Space Solutions; European Satellite Navigation Competition).

AS THE SUPPLY CHAIN FOR SATELLITE APPLICATIONS CONTINUES TO EVOLVE, AND WITH A THRIVING AND SUPPORTING ECOSYSTEM IN THE UK, NEW OPPORTUNITIES AND NEW MARKETS ARE OPENING UP FOR ALL STAKEHOLDERS AND NEW ENTRANTS.

Examples of Satellite Applications - One of the most well‑known and successful satellite applications is the global navigation satellite systems (GNSS). This satellite

application is used by the mass market as a navigational tool but can also be tailored to provide more specialised solutions to industries and businesses such as logging in the oil and gas industry (to log precise data on hydrological surveys) and to improve farm efficiency through agriculture precision. The latter is an example of agricultural based space technologies which are one of the world’s fastest growing sectors. This market is expected to be worth $3.7 billion by 2018 and is growing at an estimated rate of 13% per annum.

- Another example of a satellite application offering a more specialised and focused tool is DemandMet which is a weather forecasting tool used by retailers to help predict consumer needs as they are affected and varied by weather conditions. This tool provides a variance to the usual weather forecasting as it makes a distinction between, for example, warm temperatures on a rainy day in comparison to warm temperatures on a dry day. The Met Office has projected that this will help the retail industry grow by £1.1 billion per year as it offers retailers the opportunity to increase their product availability at peak times.

- There are myriads of other examples currently being developed by early stage companies, one of which is an emerging start‑up, currently seeking seed funding, with a proprietary algorithm analyzing free data from the Sentinel satellite to provide unique insight about ground motion with applications in the environment sector and oil & gas industry.

Examples of recent investment in UK start-ups - £ 0.4m seed round into a company providing innovative sat nav solutions, including indoors;

- £0.75m seed round into a platform providing analytics and high resolution imagery to the farming industry;

- £0.3m seed round into a company providing satellite analytics for the finance industry;

- £1m seed round into a company developing safety‑based technology services that directly connects users to emergency services;



- £6m series B investment into a platform that has developed a global grid of 57 trillion 3mx3m squares and that can identify with a unique address any position around the globe in 3 dimensions;

- £1.9m series A investment into a mapping platform offering virtual reality 3D map of the surrounding terrain to outdoors enthusiasts;

- £0.4m seed round to start‑up making satellite imagery available to the B‑to‑C market;

- £1m series A round into a service provider of enriched geoinformation.

Major capital investment and exit opportunitiesWhile, by its very nature, it may be difficult to predict exit opportunities for truly innovative companies, VC and growth capital investment and M&A activities tend to be a good indicator of a healthy market.

The total non‑government equity investment in commercial space ventures was below $200m worldwide in 2011; in 2016, it has already reached $1.5 billion. Major recent investments include:

- SpaceX with a total funding of £900 million in 7 rounds – US;

- OneWeb with £330 million raised in one single round, with Virgin and Qualcomm as investors – Channel Islands;

- Planet Labs with a total funding of £130 million in 5 rounds – US;

- Kymeta with a total funding of £55 million in 3 rounds – US;

- Spire with a total funding of £45 million in 6 rounds – US;

- MapBox with a total funding of £40 million in 3 rounds – US.

The strategic importance of the space sector globally is further emphasised by major corporate acquisitions, with:

- Google acquiring Skybox Imaging, which puts satellites into orbit 185 miles above Earth, for $500m in 2014;

- Planet Labs acquiring BlackBridge and its RapidEye constellation of satellites in 2015 for an undisclosed amount.

It is worth noting that these headline‑grabbing major capital investments mainly relate to the capital intensive upstream segment. And while most of these investments were based in the US, Europe and the UK in particular are taking notice:

- Airbus Group launched a $150 million corporate venture fund in May 2015;

- And on 22nd November 2016, Seraphim Capital announced the launch of an £80m space tech investment fund, having already secured £50m at first close including £30 million from the British Business Bank; it will invest in commercial applications, both software and hardware.

On this occasion, Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, commented: “The UK is a world‑leader in science and research, and as we build our ambitious Industrial Strategy it is crucial that we build on our strengths, such as satellites”.

The space sector has been identified as a strategic sector by the UK government and this has given rise to quite a unique situation. However, the target of almost quadrupling turnover by 2030 can only be achieved by a massive increase in Satellite Applications in the downstream segment and it is estimated that 80% of the targeted growth will come from the development of Satellite Applications and the use of space data in the non‑space sectors, such as medical, security, health, and population support.

The downstream segment of Satellite Applications itself is therefore likely to attract interest from a wider range of global players outside the existing space industry and from key actors of the new economy.

FOCUSING ON THE DOWNSTREAM SEGMENT AND KEY RELATED TECHNOLOGIES, THE FUND IS UNIQUELY POSITIONED TO TAKE ADVANTAGE OF THIS EXCITING AND HIGH GROWTH OPPORTUNITY.


c. The Internet of Things and key enabling technologies

The Internet of Things – a second and bigger revolutionIn 1989, a CERN software engineer developed something that changed the world: an easy way to connect any piece of information online to any other piece – the hypertext markup language that enabled the World Wide Web. Today this connects 3 billion people.

History is about to repeat itself. Now, it’s about connecting the real world and physical objects, typically with embedded sensors to those existing data systems and computer networks: the so‑called Internet of Things (“IoT”).

The Internet of Things therefore refers to a wave of thousands of little applications that are eventually woven together to make fully connected worlds: connected light bulbs, highways, office buildings, tea kettles, satellites, deep‑sea platforms. However the IoT is, in reality, a far broader phenomenon as it also requires new data, communication and computing technologies.

That the IoT will be economically important is the unanimous view of industry analysts; only the numbers differ:

- A 2014 study by Accenture found that 13% of homes already have one or more IoT devices and predicts that almost 70% will have them by 2019;

- Over six billion Internet‑connected “things” will be in use by the end of this year, and that figure is set to rise almost four‑fold by 2020, according to tech consultancy firm Gartner. Juniper Research goes further, predicting 38.5 billion connected devices by 2020;

- According to a report by the World Economic Forum, 1 trillion sensors will be connected to the internet by 2022;

- Research firm IDC predicts spending will hit $1.7 trillion by 2020;

- More conservatively, the UK Department for Business, Innovation & Skills predicts a global market of £250 billion by 2020;

- By 2025, the economic impact will range between $2.7 trillion and $6.2 trillion, according to McKinsey Global Institute.

Whichever forecasts prove correct, the impact on economies and job creation will be vast. However, the biggest difference between the first internet revolution and this one is its potential impact on our planet’s physical systems. Ultimately, it’s about making the ordinary a little more extraordinary, a little more valuable and ‑ when scaled up globally ‑ a lot more productive.

Whoever leads this field will lead economies because these technologies constitute a driver of competitive advantage across many industries. This increased industrial competitiveness ultimately translates into jobs. These technologies are also enablers for addressing the societal challenges that we will face in the coming decades (i.e. better and more inclusive health care, e‑society, greener transport, connected cities, sustainable production processes, reduction of CO2 footprint, etc.).

THE WINNERS WILL BE THE GOOGLES AND APPLES OF THE FUTURE, AND THEIR IMPACT WILL BE GLOBAL.

Examples – It’s all about “Smart”FOR ALL ITS POTENTIAL, THE IOT IS REALLY AN ENABLER IMPACTING MANY, IF NOT ALL, INDUSTRIES.

The IoT is not just a new technology segment as it is going to permeate every industry – transport, cities, healthcare, energy, agriculture, manufacturing, consumer ‑ fundamentally changing business practices, processes and the value chain.

Many of the following examples are already in use:

- Smart transport infrastructure. American futurist Daniel Burrus forsees bridges with cement equipped with sensors to monitor stresses and cracks before they cause a catastrophe. If there’s ice on the bridge, the same sensors in the concrete will detect it and communicate via Wi‑Fi to your car. All areas of transport, not just roads, will be transformed by these technologies.



- Smart Cities. Many cities will connect services, utilities and roads to the internet. These smart cities will manage their energy, material flows, logistics and traffic. Progressive cities, such as Singapore and Barcelona, are already implementing many new data‑driven services, including intelligent parking solutions, smart trash collection and intelligent lighting. Smart cities are continuously extending their network of sensor technology and working on their data platforms, which will be the core for connecting the different technology projects and adding future services based on data analytics and predictive modelling.

- Smart and connected health. Most attention to health monitoring has been focused on obvious medical needs, such as hypertensives tracking blood pressure continuously at home. However the impact can be far broader. AT&T and New York‑based 24eight are partnering to make slippers with an Internet‑connected chip for elderly people at a care centre in Texas. The number of steps a pensioner takes on the way to the kitchen could help diagnose the initial stages of Alzheimer’s disease. At the other end of the age spectrum, 24eight also created “wireless diapers”: which can send a text message to parents when a clean‑up is required. Health clinics, combining new scanners and detectors with DNA analysis, are getting better at curing and caring for each patient individually.

- Smart energy. GE is already making intelligent lighting grids, where each individual lamp can be remotely monitored and adjusted. The system makes it easy to pinpoint lamps that need changing and switch off those on empty roads. Oil companies are starting to implement mobile, sensor‑to‑machine technologies that monitor infrastructure combatting accidents in advance. The future home may use similar sensors built into the pipes that can see leaks before they occur. Rivers could Tweet their levels every few minutes, providing advance warning of floods. In the UK, the government wants energy suppliers to install smart meters in every home in England, Wales and Scotland by the end of 2020. With more than 26 million homes, this program is already underway and more than four million smart meters have already been installed across Great Britain. Don’t forget electricity grids and generators – already a sensor rich system for which new data analytics, networks and monitoring tools can save energy, balance loads and reduce carbon emissions.

- Smart and precision farming. In agriculture, farmers will be able to make better decisions on land use. Various “ag‑tech” solutions now sell a package of sensors and software designed to help farmers determine how much water to use in different parts of their fields, which can lead to better yields and save water. Elsewhere on the farm, cows that need milking won’t even need to moo anymore: it’s becoming feasible to place fitness trackers on animals to monitor their health.

- Smart manufacturing. Factories are being redesigned to take sensor‑based automation to a new level.

- Smart and connected consumer. The “smart” revolution started with the wide adoption of smart phones and is now spreading to an increasing number of everyday consumer goods such as clothes, watches or TVs to name a few.

Key enabling technologies behind the IoTTHERE ARE A NUMBER OF KEY ENABLING TECHNOLOGIES, UNDERPINNING BOTH THE FIELDS OF THE INTERNET OF THINGS AND SATELLITE APPLICATIONS, WHICH WILL BE THE CORE FOCUS OF THE FUND.

The IoT revolution is made possible by the convergence of key technological advancements, meaning the infrastructure is largely in place at an economically viable price:

- cheaper and smarter sensors are being introduced as the cost of sensors has fallen by more than half in ten years;

- ubiquitous broadband communications as the cost of bandwidth has fallen by a factor of forty;

- improved battery technologies;

- huge advances in computer power as the cost of processing has fallen by a factor of sixty.

IMAGING AND SENSORS, OR THE MANY WAYS TO DETECT AND CAPTURE DATA

Investing in some of these technologies can still be capital intensive; therefore, the Fund will focus on the least capital intensive projects, which are likely to be found alongside the following disruptive innovations within the Imaging and Sensors fields:


o Smart sensors;

o Self‑powered sensors and “energy harvesting” (making use of existing ambient energy sources to power devices);

o Sensor fusion (a combination of sensors from disparate sources);

o Bio Sensors, Optoelectronics sensors, Touchless sensors, Printed sensors; and

o 3D image sensors, enabling depth perception for devices.

VERY BIG DATA, OR HOW TO MAKE SENSE AND TAKE ADVANTAGE OF THE DATA DELUGE

However, once data has been detected and transmitted, the challenge is to store it, secure it and analyse it, in order to turn it into an application providing insight. There is a common saying that “90% of all the data in the world was generated in the last two years” and it is estimated that only 5% of data generated every day is actionable.

The Fund will focus on new technologies providing new ways of analyzing this data deluge, typically to be found in the following fields:

o High performance computing and cloud computing;

o Data analytics and machine learning;

o Big Data traffic and storage;

o Machine‑to‑Machine communication;

o Data enriching; and

o Cyber Security.

For an early stage investor, it is also worth noting that these mega trends are driving the reshaping and sometimes the convergence of traditional industry sectors. Therefore, the potential disruption is not only technological but also sometimes commercial and strategic, opening new markets and new opportunities that can benefit new entrant companies and the investors backing them.

The UK and London – a global digital forceTHE UK AND LONDON IN PARTICULAR HAVE A UNIQUE SOURCE FOR THESE KEY ENABLING TECHNOLOGIES, IN THEIR TOP-RATED RESEARCH INFRASTRUCTURE, UNIVERSITIES, AND THRIVING START-UPS ECOSYSTEM.

There is a lot of hype around the IoT and the term IoT is now often used in place of digital. The boundaries of this revolution are also fluid and by nature ever changing; it is therefore difficult to find specific IoT‑related statistics. However the following facts illustrate the potential of the UK, and London in particular, to further strengthen its position in the digital sector:

- Innovate UK estimates that the digital economy contributes 7% of national output and is growing 32% faster than the rest of the economy;

- However, only 5% of jobs and 9% of businesses form part of the UK digital workplace, which is similar to the US contribution, but behind South Korea, which leads the world at more than 11%;

- London has been ranked the number one city in Europe for supporting both startups and scale‑ups in the European Digital City Index;

- Just five years after the launch of the Tech City – Tech Nation initiative, venture capital into London digital companies is now 10 times higher than in 2010, and there was a 92% increase in new digital companies incorporated in Inner London between 2010‑13;

- London based tech companies raised $1.6 billion in the first nine months of 2016, eclipsing the $1.3 billion for the total amount raised in 2014; and

- In the last Autumn Statement, the UK Government announced £1 billion to invest in full‑fibre broadband and trialling 5G networks, further improving the digital infrastructure to put Britain at the forefront of the IoT revolution.



2. Access to a unique and balanced pipeline of investment opportunities

a. A strategic approach and a wide-reaching deal flow from high quality sources

The UK ecosystem is thriving, yet for an individual investor it can appear to be fragmented with key actors “only” producing a few investment opportunities each year. Furthermore, some established seed funds do not welcome co‑investment at seed level, making it challenging and overly time consuming for a single investor to directly build a diversified and balanced portfolio of investments.

Beyond the myth of a great genius building innovative products in a garage, we believe that start‑ups have the best chance to grow from a rich substrate when they have access to proper incubation programs, bringing complementary skills, experience, deep and relevant industry connections and financing options that are all necessary to unlock value.

IN ORDER TO GIVE ACCESS AND BRING A BALANCED PORTFOLIO OF HIGH QUALITY INVESTMENT OPPORTUNITIES TO INDIVIDUAL INVESTORS, OUR STRATEGIC APPROACH HAS BEEN TO BUILD PARTNERSHIPS, FORMAL OR INFORMAL, WITH KEY ESTABLISHED PLAYERS IN THE FIELDS OF SATELLITE APPLICATION AND IOT.

Potential investment opportunities will come from a wide yet focused range of high quality sources who are recognised leaders in the fields of Satellite Applications and IoT, and who, collectively, have a track record of high‑impact industrial spinout, including:

- UK based universities and Government funded research laboratories;

- Specialised public and private incubators;

- Various Agencies; and

- Other specialised seed and early stage fund investors.

The type of agreements we have with our partner institutions varies from:

- signed Memorandum of Understanding, whereby Space Net Ventures is assured of being presented with relevant investment opportunities;

- more informal arrangements whereby Space Net Ventures is invited to pitching events alongside other seed investors; and

- co‑investment opportunities with third‑party high quality seed investors.

OUT OF THESE VARIOUS HIGH QUALITY SOURCES AND WITHIN THE NEXT 12 MONTHS, WE ESTIMATE OUR DEAL FLOW TO INCLUDE BETWEEN 70 AND 100 POTENTIALLY RELEVANT INVESTMENT OPPORTUNITIES, RANGING FROM SEED ROUNDS TO SERIES A ROUNDS, AND REPRESENTING UP TO £75 MILLION WORTH OF EQUITY INVESTMENT; AS WE CONTINUE DEVELOPING FURTHER PARTNERSHIPS AND LOOK TO INVEST IN FOLLOW-ON INVESTMENT ROUNDS, THIS PIPELINE WILL PROBABLY DOUBLE THOUGH WE ONLY ANTICIPATE INVESTING IN 10% TO 15% OF THE OPPORTUNITIES PRESENTED TO US.

b. Formalised partnerships

Space Net Ventures has signed a Memorandum of Understanding with, or received Letter of Support from the following partners:

- The Knowledge Transfer Network (KTN) “is Innovate UK’s network partner. We work with businesses and academia to contribute to UK growth through innovation. We help companies connect to sources of finance from banks, grants and investors, as well as potential customers and potential suppliers. The Venturefest network (http://venturefestnetwork.com/) is managed by the KTN and we also run a pitchfest network.

Working with large and small companies, government agencies and research organisations, with tech hubs and startups, public funding bodies, VCs and private investors, KTN has built a unique network that helps enterprising people and companies reach the full potential of their innovative capabilities.

Established by Innovate UK to build better links between science, creativity and business, the Knowledge Transfer Network has specialist teams covering all significant sectors of the economy, from defence and aerospace to the creative industries, the built environment to biotechnology and robotics. Our expertise in connecting sectors, disciplines and skills with the right collaborations and business approach is what helps unlock the tremendous hidden value in people and companies.


In the last five years, KTN has helped thousands of businesses secure funding to drive innovation. And we support them throughout their business cycle to see that investment through to success.”

- The Satellite Applications Catapult: “The Catapult is one part of a network of elite technology and innovation centres, designed to rapidly transform great research into commercial success, with each Catapult focused on a specific area of technology and expertise with great potential. The Satellite Applications Catapult has been set up to assist the growth of the downstream space industry within the UK, helping companies with high growth potential make use of and benefit from satellite data.

The Catapult can support Space Net Ventures with deal flow and due diligence. As it enters its fourth year of operations the Catapult has engaged with hundreds of new businesses, the bulk of which are companies developing new satellite applications. Through the Catapult’s extensive network, including the Centres of Excellence (see page 14), the Catapult is engaged nationally, giving access to new investment opportunities across the UK. Space Net Ventures can utilise Catapult’s specialist technical and domain expertise to support technology and market due diligence.

Post investment, the Catapult can provide a pool of resources and expertise for Space Net Ventures’ portfolio companies to draw upon. The Catapult has a multi‑disciplinary team of subject matter experts covering the breadth of technologies and applications for integrating, processing and visualising satellite derived data. The Catapult can add further value through its vibrant network of seasoned entrepreneurs, non‑exec directors and industry experts who can share the knowledge and know‑how needed to help grow a thriving, profitable business. These can sometimes become NEDs or strengthen management.

The Catapult is well connected to the support and funding landscape in the UK and has developed links with organisations who can help the portfolio. The Catapult network stretches across the upstream and downstream Space sectors, Government organisations, trade associations, clusters, academia and networking groups. We work closely with the Oxford Harwell Space Cluster, which includes the Science and Technology Facilities Council’s (STFC’s) RAL Space, the European Space Agency (ESA), the ESA Business Incubation Centre, UKSpace and the Knowledge Transfer Network.“

- The Science and Technology Facilities Council (STFC) “is one of seven UK Research Councils funded by UK Government. We collaborate extensively with industry and our long‑term R&D underpins sectors which contribute billions of pounds annually to the UK economy, including space as well as pharmaceuticals, digital animation and communication, microelectronics and physics‑based manufacturing. STFC supports business incubation through a co‑ordinated programme of initiatives covering a broad variety of science and technology sectors. STFC manages the ESA Business Incubation Centre (ESA BIC) Harwell alongside the ESA Technology Transfer Network, a UK Space Agency Incubator, the STFC CERN BIC, the Innovation Technology Access Centre (I‑TAC) facility and the Campus Technology Hub to deliver a coherent range of business incubation facilities. Our dynamic multi‑sector campus environment gives incubatee businesses greater opportunity to interact with companies working on related technology, and raises their profile with prospective investors.”

- The University of Exeter “is a member of the Russell Group of leading research intensive universities, ranked among the UK’s top 10 and the world’s top 150 universities according to the Times Higher Education league tables. The research portfolio is worth £200m annually and 98% of the University’s research is rated as of international quality. The University has invested over £230m in the growth of interdisciplinary science and recently confirmed a major investment in establishing an Exeter Institute for Data Science. This initiative is designed to build on a regional partnership with the UK Met Office to develop a global hub in environmental data based at the City’s Global Environmental Futures Campus at Exeter Science Park. The South West Centre of Excellence in Satellite Applications, in which the University is the lead partner, also connects the South West to the national Satellite Applications Catapult. The Centre is taking a leading role in driving growth in satellite applications in South West SMEs and major Primes and will target markets for satellite applications in marine/maritime, Agritech/food‑supply and eHealth. Exeter is a member of the SETSquared partnership through which it delivers incubation and growth support for new and expanding businesses at its Exeter and Cornwall campuses and the nearby Exeter Science Park.”

- Coventry University “is proud to support the Space Net Ventures (S)EIS Fund. Our innovative activity‑led learning approach is internationally recognised and has shaped the unique culture of our forward‑facing Engineering, Environment and Computing Faculty in its £55m state‑of‑the art building. We’re inspiring people to study and conduct world leading research in a broad range of disciplines covered by the Fund, in order to widen perception about how engineering and computing can impact on worldwide cultural development.



The University generates valuable IP in all the sectors supported by the Fund and with spin‑out businesses within the last 12 months in big data analysis services and cyber security. The Engineering, Environment and Computing Faculty is our leading Faculty in disclosing ideas which lead to spin‑out opportunities. The University pre select ideas from a rigorous commercial appraisal and subsequent rapid stage‑gate process. We expect investment opportunities to arise from satellite technology to big data driven innovation, IoT, control systems and sensors.”

- The University of Sheffield: “At the University of Sheffield we have a global reputation as a research University. We are motivated to make a difference to the city, the nation and the world through our work. We welcome the opportunity to explore and develop new opportunities with Space Net Ventures across the University with our investment partners IP Group plc and the Advanced Manufacturing Research Centre (AMRC).

In December 2015, the AMRC launched its cutting edge Factory 2050 advanced manufacturing research facility. Our revolutionary, glass‑walled “reconfigurable factory” is at the heart of the University of Sheffield’s new advanced manufacturing campus on Sheffield Business Park. Factory 2050 is home to our Integrated Manufacturing Group, which is installing the cutting edge manufacturing and assembly technologies, advanced robotics, flexible automation, next generation man‑machine interfaces and new programming and training tools that will drive its research.

The AMRC now forms the core of the University of Sheffield AMRC group, along with the Nuclear AMRC, which is applying the same collaborative research model to the civil nuclear manufacturing supply chain; the Knowledge Transfer Centre, which opened in early 2012 to help us engage businesses along the manufacturing supply chain; and the new AMRC Training Centre, which opened in autumn 2013 to provide advanced apprenticeship and higher training for manufacturing companies.”

- Cranfield University “makes a world‑leading contribution to innovation. It is an exclusively post‑graduate university focussed on technology and management, regularly working on projects to high Technology Readiness Levels. Through close partnerships with industry, working with over 750 business partners in 40 countries, Cranfield’s research programmes are closely aligned with industry needs, effectively making a difference in the real‑world. Our proportion of contract research income which we receive directly from industry partners is the highest for HEIs in the UK. We work with all sizes of companies, including high growth start‑ups and medium sized enterprises looking to scale‑up. Cranfield University Technology Park, next to the University campus, is a centre for innovation and is home to more than 50 companies.

Research at Cranfield is aligned directly to the industry sectors of aerospace, agrifood, defence and security, energy and power, environmental technology, manufacturing, and transport systems. We have been at the forefront of aerospace technology for 70 years. Cranfield is the number one university in Europe in this area and the only university in the world to own and run an airport and to have airline status. Many technologies arising from Cranfield are of relevance to the Satellite Applications and Services and the Internet of Things (“IoT”) revolution. We are pleased to support the Space Net Ventures (S)EIS Fund, which is targeted at this emerging high growth technology area.”

Our MoUs are purposely non‑exclusive: while leading institutions no longer wish to be tied so closely by exclusive arrangements, we believe it is more valuable, especially in such a fast‑moving sector, to hear early about great opportunities and capture them by early stage investments rather than rely on rigid agreements.

Space Net Ventures is also a registered investor with:

- The Satellite Finance Network (SFN): supported by Innovate UK, the SFN is a network of individuals and organisations from the finance, legal, insurance, government and space technology and applications communities, from start‑ups and small companies to industry leaders, with a common interest in delivering satellite and space‑enabled projects to domestic and export markets around the world.

- GrowthShowcase: a specialised platform curated by Innovate UK, the GrowthShowcase platform currently presents 110+ investment opportunities (all sectors included), all of them having received an award, and often funding, from the various competition organised by Innovate UK and affiliated organisations.

- Oxford Angels Network: run by Oxford University Innovation, the technology transfer wholly‑owned subsidiary of the University of Oxford.

WE ARE CONTINUOUSLY DEVELOPING NEW PARTNERSHIPS AND WILL BE ADDING SIGNIFICANT UNIVERSITIES, RESEARCH INSTITUTIONS AND SPECIALIZED INCUBATORS WITHIN THE NEXT FEW MONTHS TO THIS LIST.


c. Informal arrangements

DEVELOPING THE RIGHT PIPELINE OF INVESTMENT OPPORTUNITIES FOR OUR INVESTORS IS AN ON-GOING EFFORT AND AT THE HEART OF OUR VALUE ADD.

While not formalised, we have developed close ties with a number of other organisations, which typically takes the form of being invited to numerous competitions or pitching events and being presented with investment or co‑investment opportunities. Organisations with whom we have an on‑going dialog include:

- CERN, via its Ideasquare CBI program and the Business Incubation Centre managed by the STFC in the UK;

- Imperial Innovations;

- The Catapult Future Cities;

- The Catapult Digital;

- The University of Surrey;

- GRACE ‑ University of Nottingham;

- SETsquared Partnership;

- Future Worlds – University of Southampton; and

- Other UK universities.

3. Our ability to deliver – Space Net Ventures

a. A unique set of skills and a well-connected team

The Fund will be managed by SPNV Limited, trading as Space Net Ventures, which is authorised by the UK Financial Conduct Authority under registered number 610217 to act as a manager of unauthorised alternative investment funds.

The Investment Team of Space Net Ventures brings together a unique set of skills, including technical, financial, specialised legal and business expertise, with a strong collective experience in IP commercialization.

Investment decisions will be undertaken by an Investment Committee, comprising the Investment Team and an Independent Investment Committee of highly experienced individuals with a long track record in venture capital and private equity, who can bring high level strategic hindsight and guidance on how to develop and scale up innovative companies and best position them for a successful exit.

Space Net Ventures has also set up an Experienced Directors and Executives Network (“EDEN”). Members of EDEN are experienced individuals, who all are currently holding non executive director roles and the Investment Team will, on a case by case basis, draw on their industry specific expertise and connections to mentor and help Investee Companies to grow. Some individuals – featured below – have a long experience in the Satellite Applications and IoT fields. Others have experience in other industries, including ICT and digital technologies, Healthcare and Biotechnologies, Energy and Renewables, Engineering and Automotive, Manufacturing and Advanced Materials, which may prove relevant as and when an Investee Company approach a new market or a new industry.

Collectively, the team is extremely well connected within the City of London and it is in a position to help Investee Companies navigate the so‑called “valley of death” and better access further financing, from seed stage up to series A rounds and beyond, when traditional sources of growth capital become more readily available.

WE SEE OUR ROLE AS AN INFORMED, ACTIVE AND WELL CONNECTED FACILITATOR.



b. Investment Team

Claire Pidancet, Managing DirectorWith a Masters in Applied Mathematics and Physics from Ecole Centrale Paris (France), Claire started a 14‑year career in Corporate Banking as a financial engineer, structuring and arranging complex equity, debt and hybrid financings with Natixis in Paris and ABN AMRO in London. She then moved into an international business development and managerial role for Rabobank in London, setting up asset backed financing programs across the UK, France, Italy and Spain. Since completing a dual MBA with Distinction from London Business School (UK) and Columbia Business School (US), she has been advising technology start‑ups, private investors and investment funds for the past six years, developing a deep knowledge and connections within the innovation ecosystem, in the UK and in Europe, and in particular with universities, accelerators, various corporate venture teams and family offices. More recently, she completed her knowledge in Corporate Governance, taking the Financial Times Non‑Executive Director Diploma.

Terry SwainbankTerry is a former and the first manager of the Rainbow Seed Fund, an alternative investment fund established to commercialise the technology generated from the major UK Public Sector Research Institutions, a fund on which Roger advised when it was established in 2003. Building on those early successful foundations, the Rainbow Seed Fund has since expanded into a £24 million fund and has leveraged its initial public funding with more than £150 million of private investment. In total, Terry has 33 years of venture capital experience with the last 13 years in the specialised area of investing in early stage technology spin‑outs. His venture capital career includes 3i Ventures (1983‑1984), West Midlands Enterprise (1984‑1998), Midven (1998 to 2006) and Synergis Technologies (2006 – 2013). Since 2013 he has engaged in part‑time consultancy. Terry’s role is to provide part‑time executive advisory support for Claire. Terry holds a BSc (First Class Hons.) in Minerals Engineering from Birmingham University and an MBA from Manchester Business School.

Roger Blears (Non‑Executive Chairman)Roger is a corporate finance, tax and regulatory lawyer and one of the top names in the Venture Capital Trust and Enterprise Investment Scheme industries in the UK and is known as a ‘can do’ innovative corporate finance lawyer. He has structured numerous investment funds throughout his career and, in particular, he advised on and acted as the UKLA sponsor for the first ordinary share fund of Foresight Technology VCT plc (now Foresight VCT plc), the most successful VCT fund of all time, and also on the establishment of the successful Rainbow Seed Fund for leading UK Public Sector Research Institutions. He is a former non‑executive director of Foresight Technology VCT plc (1997‑2004) and Foresight 2 VCT PLC (2004‑2008), and is currently a non‑executive director of the Enterprise Investment Scheme Association as well as the Senior Partner of RW Blears LLP, Solicitors. He is a Trustee of the Wye & Usk Foundation and also runs a small charity, the VCT Charitable Trust, which supports the education and training of young people.

Frank DalyFrank has been advising fund managers and entrepreneurs for the past six years. He has acted on numerous share offers, flotations, bond market refinancings, EIS fund launches as well as venture capital and private equity investments. He acted on the UK’s largest ever equity crowdfunding raise and the merger of six listed investment funds, the largest ever in the VCT sector. He has also carried out sizeable M&A transactions for renewable energy developers, provided on‑going regulatory advice to a leading crowdfunding platform and acted pro bono for heritage and youth education charities. He holds degrees in History from Bristol University and Law from College of Law in London and a Chartered Institute for Securities & Investment (CISI) Certificate in Corporate Finance Regulation.

c. Independent Investment Committee

Peter Dicks – Chairman of the Investment CommitteePeter Dicks has an extensive history of making venture capital investments over 40 years. He was a founder and director of one of the more successful venture capital funds in the UK, Abingworth (turning £3.8m into £95 million) which made early investments in Apple, Standard Micro Systems, 3COM, Silicon Graphics and in the UK, British Biotechnology, City Centre Restaurants and Cantab Pharmaceuticals. He is currently a director of a number of quoted and unquoted companies, including Graphite Enterprise Trust plc. In addition, he was the former chairman of Private Equity Investor plc until its recent acquisition by KHP 2 LP and he has been a director of Foresight VCT plc (formerly Foresight Technology VCT plc) since its launch in 1997 and is a director of Foresight 2 VCT plc, Foresight 3 VCT plc and Foresight 4 VCT plc. He is also chairman of Unicorn AIM VCT plc. He also has numerous connections with US Venture Capital Groups which were developed over many years.


Professor John Wood CBE, FREng – Scientific AdvisorJohn Wood is the nominated chairman of the ATTRACT Project Advisory Board, a new, open, pan‑EU initiative of leading European Research Institutions including CERN, EMBL, ESRF, XFEL, ILL and ESO plus Aalto University, ESADE and EIRMA – established to accelerate the development of high‑performance detector and imaging technologies for both science and markets. He is a former Chief Executive of the Council for the Central Laboratory of the Research Councils as Chief Executive, where he was responsible for the Rutherford‑Appleton and Daresbury Laboratories and led the initiative to form the Rainbow Seed Fund for UK Public Sector Research Institutions, in addition to shareholdings in ESRF, ILL and the Diamond Light Source. John is also the Secretary General of the Association of Commonwealth Universities, a fellow of Wolfson College, Oxford, a visiting professor at Imperial, sits on the advisory board of the British Library, the board of the Joint Information Services Committee (JISC), Chairman of the European Strategy Forum for Research Infrastructures and Chairman of the European Research Area Board in 2008, responsible for high level advice to the European Commission. Professor Wood will provide part‑time advisory services to the Investment Team.

Peter EnglishPeter has over 40 years’ investment experience and co‑founded Foresight Group in 1984, a leading, independent infrastructure and private equity investment manager with £1.5 billion assets under management, raised from UK and international private and high net‑worth individuals, family offices, pension funds and other institutional investors. Earlier in his career, Peter held a senior position with 3i Ventures, making early stage technology investments in Europe and North America. Peter remains a partner of the Foresight Group.

John Gregory John Gregory is a chartered accountant with a broad experience of banking, corporate finance and fund management. He was an executive director of Noble Fund Managers Limited until 2004. Currently, he is the chairman of Foresight VCT plc (formerly Foresight Technology VCT plc), the senior independent director of Sphere Medical Holding plc, an AIM listed medical devices company, non‑executive Chairman of Social Impact VCT and a non‑executive director or Chairman of a number of private companies. His earlier career was in the City of London and included positions as an executive director of Singer & Friedlander Holdings Limited and, before that, managing director of Henry Ansbacher & Co Limited.

d. EDEN – a supporting network

We will also be supported by members of our Experienced Directors and Executives Network (“EDEN”) which comprises highly experienced professionals in various industries, each with its own deep relevant network.

Some of the members of EDEN with experience in the Satellite Applications and IoT fields are featured below:

Maurizio Vanotti: with more than 15 years of experience in the aerospace industry, Maurizio is Head of Telecom business line at Surrey Satellite Technology, where he is in charge of the global telecom strategy and programs. He set up two innovative product lines, for which he raised 25m GBP, launched and profitably developed initiatives leading to contract and creating value for 50m+ GBP business in uncharted markets. At SSTL he also co‑led two turnaround restructuring projects through a period of exceptional growth, running the operations of a department of 150+. Maurizio has a strong network in the telecommunication and aerospace industry having operated in a multicultural environment with teams across Europe, USA and India. Earlier in his career, he held positions at OHB. Maurizio is of an entrepreneurial attitude by nature, and also acts as independent advisor to boutique VC funds. He holds a Master Degree in Aerospace Engineering from Politecnico of Milano and is a former Navy Officer, having graduated as lieutenant from the Italian Naval Academy.

Doug Liddle: Doug is the founder and CEO of In‑Space Missions Limited, a company founded to offer high quality technical and commercial expertise and sector knowledge in the space domain to a wide range of commercial and government clients. His focus is on building missions with innovative business models and technologies that exploit space based capability to grow or disrupt new and existing markets. Prior to August 2015 he spent over 20 years designing, building and selling satellites from 3kg to 3 tonnes providing imaging, communications and navigation services from space. He spent 15 years at Surrey Satellite Technology Ltd, the global leader in providing innovative small satellites, where for his last five years he was responsible for running their science, exploration and platform business. Through his activities at In‑Space Missions and Surrey Satellites he has built a strong commercial and institutional network in the UK and Europe.


Section B ‑ Details of the Fund

1. Key Fund Information

Fund Name SPACE NET VENTURES (S)EIS FUND

Fund Structure Unapproved SEIS and EIS Fund

Sector Focus Applications spinning off from Space Science and Technology and the Internet of Things

Target Portfolio Size 5‑15 companies

Minimum Subscription £10,000 and thereafter in multiples of £5,000

Maximum Subscription

Subject to the overall Fund maximum, there is no maximum for an individual investor. However, in respect of the tax year 2017/18 tax reliefs are only available on a maximum investment of £100,000 per individual in respect of SEIS reliefs and £1,000,000 in respect of EIS reliefs.

For both SEIS and EIS reliefs with carry back, an investor could invest up to twice these amounts by applying half to the tax year 2016/17 and half to the tax year 2017/18.

Closing Dates The Fund has an evergreen structure, which means that we accept investments throughout the course of the year

2. Investment Policy – Sector, Stages and Preferences

Sector - The Fund will invest in companies with innovative products or services in the fields of commercial Satellite Applications and

the Internet of Things and the key enabling technologies underpinning both fields (see Section A – 1. a Investment Focus).

- In the Satellite Applications field, it will focus on the downstream segment of the commercial space sector, although we may occasionally consider innovative products and solutions in the supply chain to satellite operators.

Stages - The Fund will invest in various stages; its core focus will be Seed rounds up to Series A rounds;

- The Fund may occasionally invest in Series B rounds;

- In each case, potential Investee Companies should be eligible to SEIS and/or EIS tax relief.

PreferencesIn order to leverage and maximize the profitability of its own investment, the Fund will seek to invest in innovative companies which,

- are or have been part of an incubation / accelerator program;

- are less capital intensive and fully scalable;

- ideally benefit or have benefited from public funding.

It is also important to note that the Fund will seek to invest in follow‑on rounds and it is likely that a second tranche will need to be raised.



3. Illustrative Capital DeploymentCAPITAL DEPLOYMENT IS THE FIRST STEP OF RISK MANAGEMENT

To ensure optimum diversification, each Tranche of the Fund will be invested in a minimum of between 5 and 10 Investee Companies.

Ideally, the Fund will seek to be in a position to invest in follow‑on rounds; follow‑on investment decisions will be taken by the Investment Committee against clear milestones being achieved, thereby supporting the most successful Investee Companies.

In order to maximize portfolio diversification and balance:

- when acting as lead investor, the Fund may open financing rounds to third‑party co‑investors, especially for follow‑on rounds;

- the Fund may also participate in financing rounds as a co‑investor, alongside other recognized seed fund managers.

The following table gives a possible example of how the capital may be deployed other a period of 2 years. This is purely illustrative, as the mix between round stages will be driven by actual investment opportunities and the size of the Fund.

Stage Average round size Number of investments Amount invested

Seed 100,000 12 1,200,000

Early Stage 800,000 6 4,800,000

Series A 2,000,000 7 14,000,000

Series B ‑ Participation 2,500,000 2 5,000,000

Total 27 25,000,000

4. Risk ManagementFurther to capital deployment, a number of key best practices will be implemented and each investment opportunity will go through a strict process.

a. How do we select investment opportunities

Due diligenceTechnical, strategic, legal and financial due diligence will be performed by the Investment Team, with the following additional support on a case by case basis:

- For scientific, technology and IP related due diligence, we may rely on analysis provided by the Catapult Satellite Applications or Isis Enterprise, the consulting arm of Oxford University Innovation, who have access to leading academics within the universities of Oxford, Cambridge, Cranfield and others.

- Furthermore, as our deal pipeline is built around Universities and specialist incubators, we will also benefit from the background analysis provided by our partner institutions.

- For legal, tax and regulatory due diligence, we will rely on the expertise of the partners of RW Blears LLP, Solicitors. The terms of engagement for RW Blears LLP must be approved by an independent member of the Investment Committee.

- For industry specific expertise and connection, we will invite a relevant member of EDEN, who may represent the Fund on the board of Investee Companies, on a case by case basis.


Investment Decision and Investment criteriaInvestment Decisions, including investment in follow‑on rounds, will be taken by the Investment Committee.

WE WILL GIVE PREFERENCE TO INVESTMENT OPPORTUNITIES WHICH:

- Are less capital intensive and fully scalable;

- Have clear application and competitive advantage;

- Have an identified exit route within 4 to 7 years;

- Benefit from a supportive environment via an incubation program, from which we think we can help build a sound management team.

Investment criteria will vary depending on the specific nature and the stage of an investment opportunity but are likely to typically include the following:

Stage: Seed - What could be the applications of the new technology? Would it be a product or a service?

- Would the new technology provide an incremental improvement to existing solutions or would it be a clear game changer? Which problem does it really solve?

- Is the prototype, if any, delivering according to its initial promises? Is the IP protected?

- What is the potential market and the realistic size of the addressable market?

- What are the existing competing solutions? In which industry? Is the relevant industry concentrated around a few key players, or is it fragmented? Could the innovative solution be better developed in collaboration with existing industry players?

- Have potential clients been approached, and what feedback have they provided?

- What is the initial route‑to market strategy?

- What is the initial business plan (business model, product road map, route‑to market / distribution, production/suppliers)?

- Does the management team need additional skills to deliver on its initial business plan, especially in area of sales, marketing and finance?

Stage: Early Stage, Series A and subsequent stages - Product / Service & Need

o Validation that the product / service solves a key issue

o Quantify the benefits for potential customers

o What is special – why will it win: disruptive technology, innovative business model

- Market

o Description, size and likely evolution of the overall market

o Who are the customers, the end‑users, the decision makers, the influencers

o List of existing customers and revenue generated through them

o List of targeted prospects

o What is the route to market strategy (Sales, Marketing, Distribution Channels)



- Industry

o Competition

o 5 Forces and value chain analysis

o Industry likely evolution and reaction

o Sustainable Competitive Advantage, differentiation

- Team

o Description

o Ability of the team to execute

o Gaps in the management team skills

o How well is the management team connected

o What is the motivation of the management team and are their rewards aligned to those of investors

- Financials

o Investment opportunity, Existing Shareholding structure

o Past financials, Financial forecasts

o Do financial forecasts realistically reflect the cost of scaling the business, in particular with regards to additional recruits

b. How do we mentor and monitor Investee Companies

Nurturing Investee CompaniesBeyond selecting a promising and viable investment opportunity, the role of a fund manager is to nurture, mentor and help Investee Companies to grow, scale up and progress towards successful exit.

We are not reinventing the wheel, as we will invest in opportunities that benefit from a supportive environment.

TO FURTHER SUPPORT OUR INVESTEE COMPANIES, THE FUND WILL HAVE ACCESS TO A GREAT WEALTH OF EXPERIENCE AND SKILLS FROM THE INVESTMENT TEAM, THE INVESTMENT COMMITTEE, SOLICITORS FROM RW BLEARS LLP AND EDEN MEMBERS.

Board representation - When investing as a lead or sole Investor, Space Net Ventures will be represented on the board of the Investee Companies;

the individual representing Space Net Ventures will be either a member of the Investment Committee or a member of EDEN, such individual being selected by the Investment Committee based on his or her industry‑specific background.

- When investing as a co‑investor alongside another experienced fund manager, Space Net Ventures may delegate board representation to such fund manager, although it may seek a board observer position.

- Direct or indirect board representation on the board of Investee Companies will ensure that Space Net Ventures has regular and timely information rights about Investee Companies and is therefore in a position to monitor investments on a regular basis through to exit/write‑off.

- In addition, each investment will be reviewed and monitored by the Investment Committee on an quarterly basis.


Fund Valuation - The type of investment made by the Fund will be illiquid by its very nature. After initial investment in an Investee Company,

liquidity events are either a subsequent round of funding raised by such Investee Company or an exit.

- Fund valuations will be prepared every 6 months and the Fund will be audited annually by the Auditors in accordance with IPEV Guidelines and will be signed off by the Investment Committee.

c. Exit and Distributions

Exit StrategyIt would be prudent to view an investment in the Fund as long term. You should only invest in the Fund if you are willing to leave the investment intact for at least four to seven years and possibly longer. Consideration of the potential exit opportunities well be an essential factor in the investment decision and we aim to exit investments as soon as commercially feasible after the minimum three year holding period and at a point we think the Fund will best realise value.

We anticipate that we should see exit opportunities for investments that we make within 4 to 7 years of investment, and possibly after the Fund has made one or more follow‑on investments, though there may be instances where realisation of an investment could take longer depending on individual investments and market conditions. Earlier exit opportunities may be considered, in particular when full realisation seems too remote and uncertain, in which case an early exit may not reflect the theoretical full eventual valuation.

We expect exits to arise from:

- Trade sale of the shares or assets of the Investee Company; or

- Sales of shares on the stock market following flotation on the AIM.

DistributionsOn sale of the Fund’s investments, the net proceeds are distributed to the Investor. If the Fund has not already terminated through the sale of all the Fund’s investments, it is intended that the Fund will have a final termination date of fifteen years, after which any remaining investments will be sold or transferred in to your name.

5. SEIS/EIS Tax Reliefs, Fees, Expected Return, Fund structure and administration

a. Tax Reliefs

By investing in the Fund, subject to their own personal circumstances, UK taxpayers should be able to benefit from a mixture of the reliefs.

These incentives are summarised below.

EIS Income Tax Relief You can claim back 30% (EIS) or 50% (SEIS) of the amount invested into EIS Qualifying Companies against income tax that you have paid, either in the year of Investment or carried back to the previous tax year.

EIS CGT Deferral You can defer CGT from the sale of other assets by investing the amount of the chargeable gain into EIS Qualifying Companies. Gains that occurred up to three years before, or one year after, the date of the EIS investment can be deferred.

SEIS CGT Wipe Out You can wipe out 50% of any CGT liability in respect of a gain which is matched in the year it arises by a SEIS Qualifying Investment.

Tax Free Gains Any profits from the sale of your SEIS and EIS shares to third parties will be exempt from CGT, as long as you have owned them for at least three years.

Loss Relief If any Investee Companies in your Portfolio are not sold at a profit, you may be able to claim loss relief. Losses may be offset against capital gains or taxable income where available.

Inheritance Tax Relief Should an Investor die, provided he/she has held his/her Investment for at least two years at the time of death, his/her Investments may be free from inheritance tax



It is important to note that, for an Investor’s ability to receive Tax Relief on their Investee Companies holdings, both they and the companies must satisfy a range of conditions. The Manager will take all reasonable steps to ensure that the companies and the Fund’s Investments satisfies the relevant criteria.

One of the key conditions for an investment to be EIS qualifying is that such investment is held for at least three years from the date of investment or, if later, the commencement of trading. For this reason, the Manager will only look to exit Investments after three years.

Qualifying criteria for SEIS and EIS companiesIn order to qualify, at the time of issue of the shares by each Qualifying Company, that company must comply with (amongst other requirements) the following conditions:

- Not be listed on a recognised stock exchange;

- No arrangements must be in place to become listed;

- It must not be subsidiary of, or controlled by, another company;

- No arrangements must be in place for the Qualifying Company to become a subsidiary or controlled by another company; and

- It must have a permanent establishment in the UK and either exist to carry on a qualifying trade or else be the parent company of a qualifying trading group.

For a company to be an EIS Qualifying Company, at the time of investment it may have no more than 249 employees and gross assets of £15 million. Immediately following an EIS investment, a company may not have gross assets of more than £16 million.

For a company to be a SEIS Qualifying Company, at the time of investment, it may have no more than 25 employees and gross assets of £200,000.

The qualifying business activity for which the money is raised by the share subscription must be a trade carried on by the EIS Qualifying Company or its subsidiaries and the trade must be conducted on a commercial basis and with a view to the realisation of profit.

An EIS Qualifying Company can raise a maximum of £5 million per year under the EIS and other risk finance schemes (SEIS, VCT and other state aid investments) and its lifetime limit is £12 million. The monies raised by the issue of qualifying shares must be utilised for the qualifying trade within two years of the share issue.

The Fund seeks to take advantage of some significant tax incentives available for investors in SEIS and EIS Qualifying Companies. These tax benefits have the effect of greatly increasing the return and reducing the risk of investing in the Fund. The Fund will aim to invest primarily during the 2017/18 tax year and Investors will be able to elect to treat such Investments as occurring in the 2016/17 tax year using the carry‑back provisions of EIS and SEIS.

The figures in this section are examples only. They are not, and should not be construed as, forecasts or projections of the likely performance of the Fund. Please note that this is only a condensed summary of the taxation legislation and should not be construed as constituting advice. Potential Investors should obtain their own investment and taxation advice before applying to invest in the Fund. The value and availability of any Tax Reliefs will depend on the individual circumstances of Investors.

EXAMPLE – Income Tax Relief EXAMPLE – Capital Gains Tax deferral/wipe out

£ Gain, which would be subject to 20% CGT £Initial investment 100,000 Initial investment 100,000

EIS SEIS EIS SEISLess income tax relief (30,000) (50,000) (30,000) (50,000)

Less EIS CGT deferral (20% on £100,000) (20,000)*OR

Less SEIS CGT wipe out (10% on £100,000) (10,000)

Net cost of Investment 70,000 50,000 Net (initial) cost of investment 50,000 40,000

*The deferred gain is crystalised on a disposal of the investment


EXAMPLE – Loss Relief EXAMPLE – Inheritance Tax Relief

£ £Initial investment 100,000 100,000

EIS SEIS EIS SEISLess income tax relief (30,000) (50,000) (30,000) (50,000)Net investment for loss purposes 70,000 50,000 CGT deferral/wipe out (20,000) (10,000)Loss relief (at 45%) (31,500) (22,500) Net investment for IHT relief purposes 50,000 40,000

IHT relief (at 40%) (20,000) (16,000)

Net loss on investment 38,500 27,500 Net cost of investment 30,000 24,000

b. Fees and chargesThere is an Initial Fee of 5.5% of your Subscription. This will be reduced to 3% where you invest through a financial intermediary and, in any event, may be waived in whole or in part if the Investor is known to us.

We are able to facilitate the payment of upfront fees to your financial intermediary in accordance with the instructions on your Application Form. Where permitted by FCA Rules we may also facilitate the payment of ongoing fees which you agree to pay to your financial intermediary as well as share part of our own fees.

An administration charge is payable which accrues daily at the annual rate of 2.50% based on the Fund’s last published net asset value of your Portfolio.

Where possible we will charge transaction fees to Investee Companies up to the amount of our administration charges otherwise payable over the first five years of the Fund calculated annually on the basis of your Subscription rather than on your Portfolio value, which transaction fees will then be offset against our administration charges as they accrue. Any transaction fees which exceed the accrued administration charges on uninvested monies which are withdrawn from your Portfolio will be rebated to you and any transaction fees which exceed the accrued administration charges at the end of each year during this initial period, when calculated by reference to your annual Portfolio value, will be carried forward for offset against future administration charges. After this initial five year period administration charges will be payable quarterly in advance. Administration charges during this initial period which cannot be offset by transaction fees and which are not covered by dividends earned from investments or proceeds realised by Investors will be charged to your Portfolio and accordingly an appropriate reserve of cash may be held uninvested within your Portfolio in order to meet such charges and you will not be entitled to the Tax Reliefs in respect of this uninvested reserve.

In order to align our interests with those of Investors, the Manager will be entitled to a performance fee based on the proceeds of realised investments plus dividends paid to Investors. This performance fee is only payable once an Investor has first received distributions from his Portfolio which equal his original Subscription net of any amounts to facilitate agreed adviser fees. For example, if (ignoring any adviser fees) an Investor’s original Subscription is £150,000, the fee will not be charged until £150,000 has been returned to the Investor. Once an Investor’s net Subscription has been repaid then a performance fee of 20% will be charged to an Investor’s Portfolio in respect of all excess sale proceeds or dividends received in respect of Investments.

The cost of all deals that abort will be borne by us. We retain the right to charge upfront arrangement fees (in addition to the transaction fees referred to above), monitoring fees and, where we have board representation, director’s fees to companies in which the Fund invests. Like the abort fees, the level of these fees cannot be determined at the outset.

Value Added Tax will be charged where applicable.

c. Expected Return

The Expected Return of the Fund as a whole depends on the progress of each of the Investee Companies.

For early stage investment in technology ventures, it is typical to observe the following outcome out of 10 investments,

- 1 or 2 companies will do extremely well and produce a return multiple around 10 times the initial investment upon exit;



- 3 or 4 companies will do reasonably well and produce a return multiple around 3 times the initial investment upon exit;

- 2 or 3 companies will just survive and produce a return multiple around 1 time the initial investment upon exit;

- 2 or 3 companies will fail and will be written off.

Based on these assumptions, the combined return multiple could range between 1.7 and 2.5 the initial investment.

The expected return will also depend on timing. Based on the assumption that exits and write‑offs will all happen at the end of the fifth year, and on the typical outcome describe above, the net annual IRR after EIS income tax relief and fees could range between 14% and 24% following investment in Investee Companies though the investment returns could be significantly higher or lower than this target.

d. Fund structure, withdrawals and administration

Fund structureThe Fund is an EIS venture capital fund where Space Net Ventures, the Manager, acts on behalf of all Investors in common by making and managing investments which fall within the common investment policy for the Fund described in this Information Memorandum.

In accordance with current FCA policy, the Fund is the regulatory client of the Manager for the purposes of determining which provisions of the FCA Conduct of Business Rules will regulate the obligations owed by the Manager to Investors in common. Accordingly, Investors will not be treated on an individual basis as clients of the Manager for regulatory purposes. The Fund will be a per se professional client of the Manager.

The Fund is an EIS Fund for the purposes of FCA regulations. It is a Complying Fund and is therefore not a collective investment scheme within the meaning of section 235 of the Financial Services and Markets Act 2000 (‘FSMA’) or a ‘non‑mainstream pooled investment’ as defined in the FCA’s Conduct of Business Sourcebook and is not expected to fall within the proposed definition of a ‘pooled investment vehicle’ as set out in the FCA’s July 2016 Quarterly Consultation (No 13).

WithdrawalsInvestors are entitled unless otherwise agreed with the Manager, under the terms of the Investor’s Agreement, to withdraw their portfolio from the Fund as follows:

- Cash: at any time;

- EIS shares: at any time after the expiry of seven years following the issue of the shares;

- EIS shares which can be dealt in on a recognised investment exchange: at any time after the expiry of three years following the issue of the shares; and

- Non‑EIS shares: at any time after the expiry of six months following the date on which they ceased to be EIS shares.

Participation in the FundThough, as indicated above, the Fund will be the client of the Manager for regulatory purposes rather than individual Investors, applications will only be accepted from Investors who in the opinion of the Manager have the necessary experience, expertise and knowledge to be able to make their own investment decisions and understand the risks of investing in the Fund.

Each Investor will separately enter into an Investor’s Agreement with the Manager when an Application to participate in the Fund is accepted. The Investor’s Agreement is set out on pages 40 to 56.

The Investor’s Agreement provides that the Manager is responsible for approving investments into suitable Investee Companies and investing Subscription Monies in them. The Manager, always consulting the Investment Committee, will have total investment discretion with regard to selecting, monitoring and realising Investments in accordance with the specified investment objectives and restrictions and in particular the need to comply with the rules set out in the Income Tax Act 2007 with a view to ensuring that the Tax Reliefs accrue to each Investor subject to their personal circumstances.


These arrangements together constitute the Fund. The Fund is not a separate legal entity in its own right. The Fund is an Alternative Investment Fund within the meaning of the AIFMD and therefore is not subject to MiFID.

HMRC StatusThe Fund has not been approved by HMRC under Section 251 of the Income Tax Act 2007. The effect of this is that Investors can (subject to their personal circumstances) obtain EIS relief in the tax year in which the Fund makes its investments in the underlying Investee Companies or carry back their EIS relief to the tax year before that in which the Fund invests in an Investee Company.

When an Investment has been made in an Investee Company and that company has been trading for at least four months, the Manager will apply to HMRC for permission to issue the relevant claim forms for the Tax Reliefs which can be used by an Investor to claim Tax Relief in respect of the amount invested in that company.

CustodyYour Subscription will be deposited by the Manager in an account with such custodians or bankers of whom the Independent Investment Committee shall approve from time to time. The Manager may make withdrawals from this account to pay for fees but withdrawals for investment purposes or to return funds to investors which exceed £100,000 will require the authorisation of one member of the Independent Investment Committee. The Manager will not be liable to any investor in the event of insolvency of any custodian or bank with whom your cash is held.

Your investments will be registered in the name of Space Net Nominees Limited which will provide nominee services to Investors in a fiduciary capacity. Space Net Nominees Limited is a wholly owned subsidiary of SPNV Limited and its directors are Roger Blears (Non‑Executive Chairman), Claire Pidancet and Frank Daly. Each time an investment is to be made by the Fund, the Manager will direct Space Net Nominees Limited to purchase and hold a specific number of investee company shares on behalf of each Investor and all such investments and the rights attaching to them will be exercisable only on the instructions of the Manager or the Investor pursuant to the terms of the Investor’s Agreement. Accordingly, Space Net Nominees Limited will be the registered owner of investments but for legal and tax purposes individual investors will be the beneficial owners of such shares and, pursuant to schedule 6 of the Companies Act 2006, investee companies will never be subsidiaries of Space Net Nominees Limited. The Manager will maintain records of Investors’ beneficial interests in the Fund’s investments and of their respective entitlements to any dividends, returns of capital or the proceeds of any exits.

Fund raising process and investment allocationAs an unapproved Fund, the Fund may have multiple closing dates. The first closing date will be on 5th April 2017. The number of shares in Investee Companies which will be issued to the Nominee on an Investor’s behalf will be calculated by reference, as nearly as practicable, to the proportion that his or her uninvested cash to the Fund bears to the total uninvested cash of all participants in the Fund after adjustment for the amount of any fund raising fees payable (and where applicable, adviser charges or commission).

Reporting and ValuationInvestors and their authorised financial intermediaries will receive a six monthly client statement electronically (unless otherwise requested) each year from the Manager. In addition, Investors will be kept informed of any significant events concerning Investee Companies within their Portfolio, such as a proposed sale. All investments in the Fund will be valued by the Investment Committee according to best practice as set out under the International Private Equity and Venture Capital (IPEV) Valuation Guidelines. Prudence and fair value are central concepts to these valuation guidelines. All portfolio company investments will be valued on a half‑yearly basis.



6. RISK FACTORSThis Fund may not be suitable for all investors. Potential investors are recommended to seek independent financial and tax advice before investing. Please note that Space Net Ventures is not able to provide you with advice about whether you should invest in this Fund.

As with many investment products, there are risks associated with investing in this Fund. We have tried to explain the material risks as clearly as possible below. Please be aware though that there may be risks not currently known to us which may also have an adverse effect on investments in the Fund.

a. Portfolio Risks

Having regard to the Fund’s investment objectives and the tax reliefs available, investment in the Fund must be considered as a long term investment.

Investors may not receive back the full amount that they have invested in the Fund. The value of each investment made by the Fund may fall, and there is no guarantee that the Fund’s investment may not lose all of its value.

The Fund is aiming to invest in highly specialised areas of technology which are complex and developing extremely rapidly; by their nature, the early stage and dynamic businesses the Fund intend to invest in will have incomplete management teams, making it an important part of the role of the executive members of Space Net Ventures to advise, nurture and develop these teams in line with the requirements of the businesses they run. With potentially fifteen or more investments this will be a demanding job and, whilst recognising the abilities and experience of the investment team, this might not be sufficient. The Independent Investment Committee may be similarly limited in expertise in aspects of the key areas of technology on which the Fund will concentrate and will be unlikely to be in a position to provide anything other than directional support and assistance to the executive members of the investment team. Space Net Ventures will seek to develop and utilise the membership of EDEN where possible to reduce these risks.

If the Fund is launched at a low level of subscription it will have all of the management issues above, less income and the need to try to raise more capital. Investment success may well provide the basis for building a successful Fund but such success could take considerable time (five to seven years and possibly longer) with several rounds of follow on investment required during which time the Manager will only have a limited level of fee income on which to maintain its business and staff. With a limited amount of capital to invest, if the Fund is unable to follow‑on when further investment is needed, it could also face dilution from new investors, taking advantage of the Fund’s lack of cash. Space Net Ventures will seek to mitigate this risk so far as it is practicable to do so. The Fund’s strategy of sourcing its deals from leading research institutions may mitigate the risk of later stage investors taking advantage of any inability of the Fund to participate in follow on funding rounds where these institutions or their staff are also investors in investee companies (whether directly or indirectly).

Investments in shares in unquoted companies are not readily marketable and the timing of any realisation cannot be predicted. You should not invest in this product unless you have carefully thought about whether you can afford it and whether it is right for you, having had the opportunity to take independent advice. You should be prepared to leave the investment intact for significantly longer than three years.

Investment in smaller and unquoted companies is likely to involve a higher degree of risk than investment in larger companies and those traded on the main market of the London Stock Exchange. Smaller companies generally may have limited product lines, markets or financial resources and may be more dependent on the skills and commitment of their management or key individuals than larger companies. The departure of any directors and/or key employees could have a material adverse effect on the Investee Company’s business. Although the Fund and Space Net Ventures may receive conventional rights granted to private equity funds and managers in the legal investment documents it negotiates with Investee Companies in connection with the Fund’s investments, as a minority investor it may not always be in a position to fully protect the interests of Investors in the Fund.

The past performance of investments made by funds managed by members of the Investment Committee should not be regarded as an indication of the future performance of investments made by the Fund.

Although members of the Investment Committee have been successful in identifying investments in the past, they may be unable to find a sufficient number of attractive opportunities to meet its investment objectives, including achievement of its target IRR, or fully invest the Fund’s capital without significant delay.


The fact that shares in EIS Qualifying Companies are, in general, not publicly traded or freely marketable may mean that proper information to determine the current value of investments will not be available.

Many unquoted companies requiring private equity investment are experiencing significant change and carry higher risk than an investment in larger or longer established businesses would.

Legal and regulatory changes could occur during the life of the Fund which may adversely affect the Fund or its Investors.

Technology or scientific research related risks may be greater in some companies although this may be justified by the prospect of higher expected returns from those investments.

b. Taxation Risks

Rates of tax, tax benefits and allowances described in this Information Memorandum are based on current legislation and HM Revenue & Customs practice. These may change from time to time and are not guaranteed. This investment may not be suitable for all investors. Space Net Ventures does not provide advice and potential investors are recommended to seek specialist independent tax and financial advice before investing. The Fund has been designed with UK–resident taxpayers in mind. If you are not resident or ordinarily resident in the UK for tax purposes, it may not be appropriate or advantageous for you to invest in the Space Net Ventures (S)EIS Fund. Applications will not be accepted from US persons.

Whilst it is the intention of Space Net Ventures to invest in companies qualifying under the SEIS and EIS legislation, Space Net Ventures cannot guarantee that all investments will qualify for SEIS or EIS Relief or IHT relief or, indeed, if they do initially, that they will continue to do so throughout the life of the investment.

Your obtaining income tax relief is subject to your making the proper filings with HM Revenue & Customs within the requisite time periods and you may lose such relief if you do not make such filings.

The dates on which initial income tax relief, CGT deferral or wipe out relief and inheritance tax relief relating to investment in SEIS and EIS Qualifying Companies are available will depend on the date on which the Fund makes its SEIS and EIS Qualifying Investments.

Following an investment in an Investee Company, the continued availability of SEIS and EIS Reliefs to the Investor relating to any individual investment depends on compliance with the requirements of the EIS legislation by both the Investor and Investee Company.

Where an Investor or an Investee Company ceases to maintain SEIS or EIS status in relation to any individual investment, this could result in the loss of some or all of the available reliefs in relation to that investment (together with a possible charge to interest thereon).

Following the admission of an Investee Company to the main market of the London Stock Exchange, (but not to trading on the AIM) or certain overseas stock markets, Business property relief for Inheritance Tax purposes will cease.

The levels and bases of reliefs from taxation may change or such reliefs may be withdrawn. The tax reliefs referred to in this document are those currently available and their value depends on the individual circumstances of Investors.

c. Fund Issues

The Fund Manager will normally allocate investments to Investors proportionate to their respective Subscriptions to the Fund. As investments arise at different times, the Subscriptions of a later Investor in the Fund may not be invested in all or any of the Investee Companies in which an earlier Investor is invested, similarly an early Investor in the Fund may not have sufficient uninvested cash in his Portfolio to participate in the same Investments as a later Investor. The Fund Manager may depart from this basis of allocation if, in its absolute discretion, it considers it appropriate to do so having regard to the overall investment policy of the Fund and the benefit of creating diversity within the Portfolios of Investors. The Manager reserves the right to return a small surplus of cash if it concludes that it cannot be properly invested.

The Manager will seek to realise Investments in an orderly fashion over a period of five to seven years from the date of investment but Investments may be difficult to realise within this period and may take much longer to realise. Even where they can be realised, this may not be on an advantageous basis as market conditions may not be propitious in respect of the sale of any shares at the time the Fund has targeted such a sale. This may significantly delay the targeted exit. It may be difficult to predict when an exit may take



place and there can be no guarantee that an exit will ever take place. Accordingly, Investors may potentially lose the total amount of their Subscription. The Manager reserves the right to cease to manage the Fund in certain circumstances set out in the Investor’s Agreement, in which event it will try to transfer its mandate to another fund manager authorised by the FCA, or terminate the Fund in an expeditious way.

Proper information for calculating the current value of the Fund’s Investments or the degree of risk posed may not be available.

There is no mechanism to remove or change the Manager of the Fund other than by way of termination of the Investor’s Agreement. The Fund should therefore be considered a captive investment and an Investor should assume that any investment in the Fund will be managed by the Manager until realised. Investee Companies may fail, as may the assets they own or operate, and Investments in Investee Companies may be realised for substantially less than the acquisition cost or may be impossible to realise at all.

d. Forward Looking Statements

Investors should not place reliance on forward‑looking statements. This Information Memorandum includes statements that are (or may be deemed to be) “forward looking statements”, which can be identified by the use of forward‑looking terminology including the terms “believes”, “continues”, “expects”, “seeks”, “intends”, “may”, “will”, “would”, “should” or, in each case, their negative or other variations or comparable terminology. These forward‑looking statements include all matters that are not historical facts. Forward‑looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward‑looking statements contained in this Information Memorandum, based on past trends or activities, should not be taken as a representation that such trends or activities will continue in the future.


Section C ‑ Investor’s Agreement

Definitions

AIFMD Alternative Investment Fund Managers Directive 2011/61/EU.

Alternative Investment Fund a CIU which raises capital from a number of investors with a view to investing it with a defined investment policy for the benefit of those investors and which is not a UCITS, in accordance with paragraph 1 of the AIFMD.

Applicable Laws all relevant UK laws, regulations and rules, including those of any government or of the FCA.

Application Form the application form which will be sent to prospective Investors and by which prospective Investors will invest in the Fund.

Application to Invest the Application to Invest made by the Investor in an Application Form

Associate any person, partnership or entity which (whether directly or indirectly) controls or is controlled by another person, partnership or other entity. For the purpose of this definition “control” shall refer to the ability to exercise significant influence over the operating or financial policies of any person or entity.

Capital Gains Deferral deferral of CGT (section 150C and Schedule 5B of the Taxation of Chargeable Gains Act 1992).

CGT capital gains tax.

CIU under the ESMA AIFMD key concepts guidelines, an undertaking which exhibits all the following characteristics:

(a) the undertaking does not have a general commercial or industrial purpose;

(b) it pools together capital raised from its investors for the purpose of investment with a view to generating a pooled return for those investors from investments; and

(c) the unitholders or shareholders of the undertaking – as a collective group – have no day‑to‑day discretion or control.

COBs FCA’s Conduct of Business Sourcebook.

Complying Fund an arrangement, specified in Paragraph 2(2)(b) of the Schedule to the Financial Services and Markets Act 2000 (Collective Investment Schemes) Order 2001 (SI 2001/1062), which is, in summary, an arrangement where:

(a) the operator will, so far as practicable, make investments which, subject to each participant’s individual circumstances, qualify for relief under Part 5 of the Income Tax Act 2007; and

(b) the minimum contribution to the arrangements by each participant must be not less than £2,000.

Distributions any amounts paid by way of dividends, tender offers, share buybacks, proceeds on a sale or liquidation of the Investee Company and any other further proceeds or value received, or deemed to be received by investors in the Investee Company in respect of their shares in that company, excluding any income tax relief and any other tax reliefs on subscription.

EIS the Enterprise Investment Scheme, as set out in Part 5 of the ITA 2007.

Qualifying Company a company whose shares qualify for the Tax Reliefs.


ESMA European Securities and Markets Authority and its successors and assigns.

Execution-Only a transaction which is executed by a financial intermediary upon the specific instructions of a client where the firm does not give advice relating to the merits of the transaction or make a personal recommendation.

FCA the Financial Conduct Authority of the United Kingdom and its successors and assigns.

FCA Rules the rules and guidance of the FCA, contained in the FCA Handbook of Rules and Guidance.

FSMA the Financial Services and Markets Act 2000 (as amended).

Fund the arrangements described in the Information Memorandum published in January 2017 for the Space Net Ventures (S)EIS Fund

HMRC HM Revenue & Customs.

IFA or financial intermediary a person authorised by the FCA to provide: i) financial advisory services; and/or ii) execution‑only services to Investors and prospective Investors. For the avoidance of doubt this includes independent financial advisers and investment brokers.

IHT inheritance tax.

Investee Company an unquoted private limited company in which the Fund invests.

Information Memorandum the information memorandum issued by the Manager in relation to the Fund dated January 2017 and all documents published by the Manager which are expressed to be supplemental thereto.

Investment an investment in securities subscribed for by the Nominee on behalf of Investors in the Fund on the direction of the Manager in accordance with the investment policy and objectives set out in the Information Memorandum.

Investment Committee Claire Pidancet, Terry Swainbank, Roger Blears, Frank Daly, Peter Dicks, Professor John Wood, Peter English, John Gregory and such other persons who may from time to time be appointed by the Manager as members of the Investment Committee.

Investment Objectives as set out in schedule 1 of the Investor’s Agreement.

Investment Restrictions as set out in schedule 1 of the Investor’s Agreement.

Investor an individual (or certain trustees) who completes an Application Form which is accepted by the Manager and so enters into an Investor’s Agreement and invests through the Fund.

Investor’s Agreement the agreement entered into by each Investor with the Manager pursuant to that Investor’s investment in the Fund, as set out on pages 40 to 56.

ITA 2007 the Income Tax Act 2007 (as amended).

Manager SPNV Limited trading as Space Net Ventures a private limited company incorporated in England with the registered number 07455644 and whose registered office is at 29 Lincolns Inn Fields, London WC2A 3EG. The FCA registration number of the Manager is 610217.

MiFID Markets in Financial Instruments Directive (Directive 2004/39/EC).

NAV net asset value.



Independent Investment Committee Peter Dicks, Professor John Wood, Peter English, John Gregory and such other persons who may from time to time be appointed by the Manager as independent members of the Investment Committee.

Nominee Space Net Nominees Limited, a private limited company incorporated in England with the registered number 10496913 whose registered office is at 29 Lincolns Inn Fields, London WC2A 3EG and which is wholly owned by the Manager.

Portfolio the Subscription Monies an Investor contributes to the Fund plus all Investments made through the Fund which are allocated to an Investor and registered in the name of the Nominee on the Investor’s behalf and which are subscribed out of such monies plus all income and capital profits arising thereon.

Quarter Date each of 5 March, 24 June, 29 September and 25 December.

Readily Realisable Investment A government or public security denominated in the currency of the country of its issuer or any other security which is:

1. admitted to Official Listing on an Exchange in an EEA State;

2. regularly traded on or under the rules of such an exchange;

3. regularly traded on or under the rules of a recognised investment exchange or (except in relation to unsolicited real time financial promotions) designated investment exchange; or

4. a newly issued security, which can reasonably be expected to fall within the above categories when it begins to be traded. Note that this term does not include AIM traded investments, nor does it include unlisted securities.

SEIS the Seed Enterprise Investment Scheme as set out in Part 5A of the Income Tax Act 2007.

Set or Tranche all those Portfolios attributable to Investors who have invested before the same Closing Date.

Subscription(s) the investment made by an Investor in the Fund in accordance with the terms of the Information Memorandum.

Subscription Monies the amount invested by an Investor in the Fund.

Tax Reliefs the tax reliefs available to EIS and SEIS qualifying Investors who have made EIS and SEIS qualifying Investments.

UCIS unregulated collective investment scheme as defined in the FCA rules.

UCITS undertakings for collective investment in transferable securities as defined in EU Directive 85/611 as amended, being investment vehicles that can be marketed across the EU.


Investor’s AgreementThis Agreement sets out the terms and conditions for the Space Net Ventures (S)EIS Fund.

1. Definitions, Construction and Interpretation

1.1 In this Agreement the definitions set out at page 40 to 42 of the Information Memorandum issued by the Manager shall apply.

1.2 Words and expressions defined in the FCA Rules which are not otherwise defined in this Agreement shall, unless the context otherwise requires, have the same meaning in this Agreement.

1.3 Any reference to a statute, statutory instrument or to rules or regulations shall be references to such statute, statutory instrument or rules and regulations as from time to time amended, re‑enacted or replaced and to any codification, consolidation, re‑enactment or substitution thereof as from time to time in force.

1.4 References to “you” or “your” are references to the Investor who enters into this Agreement with the Manager. References to the singular only shall include the plural and vice versa.

1.5 Unless otherwise indicated, references to Clauses shall be to Clauses in this Agreement.

1.6 Headings to Clauses are for convenience only and shall not affect the interpretation of this Agreement.

2. Investing in the Fund

2.1 This Agreement between you, as an Investor and the Manager comes into force on the date on which the Manager accepts your Application Form. The Manager will notify you by email (if you have provided an email address) if your Application Form is accepted. No notification will be provided if you have not provided a valid email address.

2.2 This Agreement enables you to appoint the Manager as a discretionary investment fund manager to act on your behalf to make venture capital investments in EIS and SEIS Qualifying Companies and to manage those investments in common on behalf of all the Fund’s Investors in accordance with the Investment Objective. The Fund will be a Complying Fund.

2.3 You, as an Investor, hereby appoint the Manager, on the terms set out in this Agreement, to manage your Portfolio as one of a series of similar Portfolios, which together constitute the Fund. The Manager accepts its appointment and obligations on the terms set out in this Agreement. You, as the Investor,

grant the Manager full authority, at the Manager’s sole discretion and without reference to you, to enter the kind of transactions or arrangements for your account and to invest, on your behalf, in the type of investments or assets set out in the Information Memorandum. Any Investments made on your behalf will be made on a restricted basis and limited to the types of investments detailed in the Information Memorandum.

2.4 You, as an Investor, acknowledge that the Manager has the authority to carry out administration and receiving agent services on your behalf but may appoint third parties to do so which the Manager considers suitable.

2.5 The Manager is authorised and regulated by the FCA for the conduct of UK business.

2.6 This Agreement is entered into by the Manager on behalf of itself and, to the extent that it is relevant, on behalf of Space Net Nominees Limited, the Nominee. In consideration of the Manager’s appointment, the Manager shall be entitled to the fees expressed to be payable under this Agreement.

2.7 You confirm that you have expertise, experience and knowledge in the investment field relevant to the Space Net Ventures (S)EIS Fund and that you are an experienced investor in medium to high risk, unquoted companies and have suitable knowledge of the risks associated with non‑Readily Realisable Investments such as to give reasonable assurance to Space Net Ventures, in the context of the nature of the transactions or services envisaged that you are capable of making your own investment decisions and understanding the risks involved in a participation in the Space Net Ventures (S)EIS Fund and that such participation is appropriate for you.

2.8 You confirm that you are not seeking advice from either the Manager on the merits of your Subscription and any investments made by the Fund.

2.9 You agree that the Manager, and the Nominee may hold information about you and your affairs in order to verify your identity and financial standing or otherwise in the performance of the services hereunder (among other things the Manager may consult a credit or mutual reference agency, which may retain a record of the enquiry).

2.10 The Manager has a duty to comply with the anti‑money laundering provisions of the Proceeds of Crime Act 2002, the Money Laundering Regulations 2007 and the FCA Rules. The Manager will therefore verify your identity and report suspicious transactions to the appropriate enforcement agencies. If you do not provide the identity verification information when requested, the Manager may be unable



to accept any instructions from you or provide you with any services or return proceeds to you.

2.11 The Manager will comply with FCA conduct of business rule 11.2, as more particularly detailed in Schedule 3 to this Investor’s Agreement.

3. Subscription

3.1 You, as an Investor:

(a) must make a Subscription of not less than £10,000; or

(b) may such greater Subscription (in multiples of £5,000) as you may decide.

Subject to the manager’s discretion to accept your Application to Invest in part only. If your Application to Invest is scaled back the manager will refund to you the amount of your proposed Subscription which is not accepted in accordance with clause 3.4.

3.2 You may make a withdrawal from the Fund, or terminate this Agreement, pursuant to Clause 15 below.

3.3 Your Subscription Monies shall initially be deposited in a client account held by the City Partnership (UK) Limited acting as the Receiving Agent pending the Manager accepting your Application Form at which point such monies will be transferred into a client account held by the Manager (in an interest bearing client account) pending their investment pursuant to clause 7.8.

3.4 The basis and extent of acceptance of your application will be determined by the Manager in its absolute discretion. It is intended that applications will be accepted in the order in which they are received. The right of the Manager is reserved, notwithstanding the basis so determined, to reject in whole or in part and/or scale down any application. Subscription Monies not accepted will be returned to the applicant in full by means of a cheque, posted at the applicant’s risk. The right is also reserved to treat as valid any application not complying fully with these terms and conditions of application or not in all respects complying with the application procedures set out in this Agreement. In particular, but without limitation, the Manager may accept applications made otherwise than by completion of an Application Form where the applicant has agreed in some other manner to apply in accordance with these terms and conditions.

3.5 The Fund is categorised by the Manager as a professional client for the purposes of the FCA Rules.

3.6 You confirm that you are not seeking advice from the Manager on the merits of your Subscription in the Fund and any Investments it makes.

4. Services

4.1 The Manager will manage the Fund on the terms set out in this Investor’s Agreement. The Manager will exercise all discretionary powers in relation to the selection of, or exercising rights relating to, Investments on the terms set out in this Investor’s Agreement. For the avoidance of doubt this includes any conversion of shares, the amount of capital invested in an Investee Company, voting or other rights relating to such shares, and you hereby irrevocably authorise and empower the Manager in this regard.

4.2 The Tax Reliefs are dependent on your personal circumstances as well as the actual underlying Investments made by the Fund. In providing its services to you, the Manager shall not be required to take into account taxation matters and the Manager and the Nominee do not provide tax advice. Therefore, you should seek independent tax advice to determine and understand the suitability of investing in the Fund and any effect that this may have on your own position generally.

4.3 The Manager will provide administration services for the Fund on the terms set out in this Agreement and the Nominee will provide nominee services in relation to the holding of Investee Company shares. The Manager may appoint a third party to provide administration services to the Fund on such terms as may be approved by the Independent Investment Committee.

4.4 You hereby authorise (and grant to the Manager a power of attorney for) the Manager or its agents to act on your behalf and in your name or as your nominee to negotiate, agree, execute and do all such acts, transactions, agreements and deeds as the Manager or its agents may deem necessary or desirable in connection with the Fund for the purposes of managing your Portfolio including making, and managing and disposing of Investments and cash on your behalf and generally fulfilling the objectives and purposes of the Fund (including facilitating the payment of agreed charges on behalf of Investors to their financial intermediaries). This authority (and power of attorney) shall be irrevocable and shall survive, and shall not be affected by, your subsequent death, disability, incapacity, incompetence, termination, bankruptcy, insolvency or dissolution. This authority will terminate upon the Investor ceasing to hold any cash or other assets in the Fund.


4.5 The Manager shall not have any authority to act on your behalf or as your agent, except as expressly provided in this Agreement or as the Manager may otherwise be authorised by you (or by an authorised person on your behalf) from time to time.

5. Investment Objective and Restrictions

5.1 In performing its discretionary investment management services, the Manager shall have regard to and shall comply with the Investment Objective and the Investment Restrictions.

5.2 Surplus cash held prior to investment in investee companies and, in the event of a gradual realisation of Investments prior to termination of the Fund under Clause 15.1, any cash proceeds of realised Investments, may be placed on deposit or invested in government securities or in other investments of a similar risk profile.

6. Terms Applicable to Dealing

6.1 In effecting transactions for the Fund, the Manager will act in accordance with the FCA Rules.

6.2 Where relevant, it is agreed that all transactions will be effected in accordance with the rules and regulations of any relevant market, exchange or clearing house through which transactions are executed and all applicable laws so that:

(a) if there is any conflict between the provisions of this Agreement and any such rules, customs or applicable laws, the latter shall prevail; and

(b) action may be taken as thought fit in order to ensure compliance with any such rules, customs or applicable laws.

You should be aware that Subscriptions will be invested in a range of unlisted securities and there is generally no relevant market or exchange and consequent rules and customs and there will be varying practices for different securities. Transactions in shares of such securities will be effected on the best commercial terms that the Manager can secure.

6.3 Subject to the FCA Rules, transactions for an Investor may be aggregated with those for other Investors and may be aggregated with other customers of the Manager, and of its employees and Associates and their employees. Investments made pursuant to such transactions will be allocated on a fair and reasonable basis in accordance with the FCA Rules and endeavours will be made to ensure that the aggregation will work to the advantage of each of the Investors, but you

should be aware that the effect of aggregation may work on some occasions to your disadvantage.

6.4 Generally Investments will be allocated between Investors by reference to the proportion which the Investor’s uninvested cash bears to the total uninvested cash of all Investor.

6.5 When determining the price per share and number of shares to be allocated to an Investor in an Investee Company, the Manager takes into account the following:

(a) the timing of the Investments;

(b) variations to prevent Investors having fractions of shares; entitlements to shares will be to the nearest whole share rounded down and the aggregate of fractional entitlements may be held by the Nominee for the Manager; and

(c) if one or more of the Investors has notified the Manager that they are an accountant, lawyer or other professional person who is subject to professional rules preventing him/her from making an Investment in a particular Investee Company, then the number of shares provisionally allocated to that Investor or Investors shall not be acquired for any of their Portfolios in the Fund; and

(d) whether the Investor is liable to pay their IFA (where the IFA treats the Investor as a retail client) adviser fees or (where the IFA treats the Investor as a professional client) commission (as applicable).

6.6 The Manager will act in good faith and with due diligence in its choice and use of counterparties but, subject to this obligation, shall have no responsibility for the performance by any counterparty of its obligations in respect of transactions effected under this Agreement.

7. Custody

7.1 Investments will be registered in the name of the Nominee. The Nominee is a subsidiary of the Manager. Investments within your Portfolio will therefore be beneficially owned by you at all times but the Nominee will be the legal owner of the Investee Company shares. The Nominee will not, save as set out in clauses 7.5 and 7.6, carry on any activity except as instructed by the Manager.

7.2 The Manager will hold any title documents or documents evidencing title to the Investments on behalf of the Nominee. Individual customer entitlements are not identifiable by separate certificate or other physical document of title.



In the event of a default of the Nominee, those on whose behalf securities are held in its securities may share in any shortfall pro rata. The Nominee holds the Investments pursuant to a trust under which the interests of Investors are created or extinguished when the Manager makes acquisitions or disposals in accordance with this Agreement. Pursuant to section 250(1) and 257HE Income Tax Act 2007 shares subscribed for, issued to, held by or disposed of for an individual by a nominee are treated for the purposes of the EIS and SEIS as subscribed for, issued to, held by or disposed of by the individual Investor. The Manager shall maintain at all times a record sufficient to identify your beneficial interest in the whole number of shares allocated to your Portfolio and the cash within your Portfolio.

7.3 Investments or title documents may not be lent to a third party and nor may there be any borrowing against the security of the Investments or such title documents.

7.4 An Investment may be realised in order to discharge your obligations under this Agreement, for example in relation to payment of fees, costs and expenses.

7.5 The Manager will arrange for you to receive details of any meetings of investee companies in which you are invested and any other information issued by investee companies if you at any time in writing request such details and information (either specifically in relation to a particular Investment or generally in respect of all Investments). You shall be entitled, as a matter of right, to require the Nominee to appoint you as its proxy to vote as you may see fit at any meeting of shareholders in an Investee Company in which you are invested. If you are not validly appointed as the Nominee’s proxy for the purposes of a meeting of the shareholders of an Investee Company, and upon the application of the Manager to the Nominee, the Nominee may (but is not obliged to) appoint the Manager as its proxy to vote at that meeting.

7.6 In the case of variations in the share capital, receipts of a notice of conversion or proposal to wind up, amalgamate or takeover a company in which an Investment is held for you:

(a) a bonus or capitalisation issue will be automatically credited to an Investor’s holding;

(b) otherwise (where appropriate) the Manager will be sent a summary of the proposal and the required action to be taken (if any);

(c) in the case of a rights issue or other proposed variation, the Nominee will send the Manager such summary of

the proposal and the required action to be taken (if any) as it may receive, and if no instruction is received from the Manager, the Nominee will allow the rights to lapse. Lapsed proceeds in excess of £3 will be credited to you. Sums less than this will be retained for the benefit of the Nominee. However, if nil paid rights in a secondary market are acquired for you, such rights will be taken up, unless the Manager provides contrary instructions;

(d) all offers will be accepted by the Nominee only upon instructions from the Manager;

(e) entitlement to shares will be to the nearest whole share rounded down and the aggregate of fractional entitlements may be held by the Nominee for the Manager;

(f) if partly paid shares are held for you and are the subject of a call for any due balance and no instruction is received from the Manager, the Nominee may sell sufficient of your Investments as (in its reasonable opinion) is necessary to meet the call; and

(g) in the case of a proposal to wind up, amalgamate or take over an Investee Company the Manager will be sent a summary of the proposal and the required action to be taken (if any).

7.7 Where applicable, you are responsible for complying with all requirements under the Takeover Code and to notify the FCA and the Takeover Panel of dealings in relevant shares during a takeover or merger.

7.8 You hereby authorise the Independent Investment Committee, acting as a representative organ of the Fund in its capacity as a professional client of the Manager, to:

(a) consent to and approve arrangements for the holding of money which correspond with the following conditions that;

(i) money held for an Investor is deposited with an authorised banking institution in a common call account with customer trust status, together with cash balances belonging to other Investors;

(ii) the Manager operates such account jointly with The City Partnership (UK) Limited or with such other person of whom the Independent Investment Committee shall approve;


(iii) all dealings with money in amounts exceeding £100,000 (or such other limit of which the Independent Investment Committee shall approve) shall require the prior authorisation of a member of the Independent Investment Committee;

(iv) cash balances will not be actively managed and will only attract the interest rates (if anything) applicable to call accounts;

(v) any interest earned on cash balances held for Investors will be allocated amongst Investors on such basis as appears to the Manager to be fair and reasonable; and

(vi) the Manager may decide to cease to treat as money owed to an Investor any unclaimed cash of an Investor if the Manager has taken reasonable steps to contact the Investor and to return the balance for a period of at least six years and, in such circumstances, the Manager may retain such funds for its own benefit.

(b) where arrangements for the holding of money correspond with the requirements of paragraph (a) above, to opt out of the FCA client money rules in accordance with CASS 7.10.10 and to acknowledge that money will not therefore be required by the FCA Rules to be segregated from money of the Manager and so, but for the provisions of this clause 7.8, money could be used by the Manager in the course of its own business and, were this to be the case, the Fund would only rank as a general creditor of the Manager; and

(c) approve, as they shall think fit, alternative arrangements for the holding of money by a person authorised to do so by the FCA including, if it is so authorised and so elects, by the Manager.

7.9 The Manager may debit or credit the account for all sums payable by you or to you (including dividends receivable in cash and fees and other amounts payable by you) and make adjustments:

(a) in respect of sums received by you otherwise than as a result of credits properly made to the account initiated by the Manager under this Agreement; and

(b) to effect settlement in respect of Investments.

Share dividends shall not be receivable under this Agreement otherwise than in cash.

7.10 You confirm that in no event shall an investment counterparty dealing with the Manager, or the Nominee with respect to any document signed or action undertaken for or on behalf of you in accordance with this Agreement be obliged to inquire into the necessity or expediency of any act or action of you, the existence or non existence of any fact or facts which constitute conditions precedent to acts by you or any act or failure to act by you or as to any other matter whatsoever involving you. You declare that a person who deals with the Nominee, or the Manager in good faith may accept a written statement signed by the Nominee, or the Manager to the effect that their appointment as such hereunder has not been revoked as conclusive evidence of that fact.

8. Reports and Information

8.1 You will be provided with contract notes by the Manager for each transaction.

8.2 The Manager shall send you a report relating to the Fund, complying with the FCA Rules, every six months. Reports will include a measure of performance in the later stages of the Fund once valuations are available for the Investments. Investments will be valued in accordance with appropriate IPEVC valuation rules from time to time prevailing.

8.3 The Manager shall supply such further information which is in its possession or under its control as you may reasonably request as soon as reasonably practicable after receipt of such request.

8.4 Any contract notes, statements, reports or information so provided by the Manager to you will state the basis of any valuations of Investments provided.

9. Fees and Expenses

9.1 The Manager shall receive fees on the basis set out in schedule 2 to this Agreement. The Manager will arrange for Investee Companies to facilitate the payment of such fees if practicable as well as the fees agreed by you and your IFA (or commission, where applicable) in accordance with schedule 2 of this Agreement.

9.2 The Manager may facilitate or procure the facilitation of payments in respect of charges which you have agreed with your financial intermediary as detailed in the Information Memorandum and the Application Form. You confirm that any ongoing agreed charges payable to your financial intermediary are and will be for ongoing services to you in relation the Fund. You have the right to cancel the facilitation of any ongoing charges at any time notice in writing to the



Manager. You may also request that facilitation of ongoing charges to a new financial intermediary who is advising you in relation to the Fund in place of previous financial intermediary. Any such request must be made by at least 30 days’ notice writing to the Manager. The Manager may structure the funding and payment such payments at its discretion for legal, tax and regulatory reasons from time to time. The administration of remuneration for financial intermediaries will be managed by the Manager.

9.3 The Manager shall be responsible for meeting all fees and expenses of the Nominee and any entity appointed to hold.

10. Management and Administration Obligations

10.1 The Manager shall devote all use all commercially reasonable endeavours on the basis and with the resources available to it as described in the Information Memorandum to provide its services properly and efficiently and in compliance with the FCA Rules.

10.2 Except as disclosed in the Information memorandum and as otherwise provided in this Agreement (for example on early termination) the Manager shall not take any action which may prejudice obtaining the Tax Reliefs save where the Manager considers it to be in the best interests of Investors.

11. Your Obligations

11.1 Your Portfolio, which is to be established by this Agreement, will be established on the basis of the declaration made in your Application Form which includes the following statements in relation to your Subscription:

(a) that you agree to notify the Manager if any Investment is made in any company with which you are connected within the meaning of Section 163 and Sections 166 to 177 of the Income Tax Act 2007;

(b) that you agree to notify the Manager if, within three years of the date of issue of an Investment in an Investee Company, you become connected with the Investee Company or receive value from that Investee Company; and

(c) that you will provide the Manager with your tax district, tax reference number and National Insurance number.

11.2 You hereby confirm that the information stated in the Application Form in these (and all other) respects is true and accurate as at the date of this Investor’s Agreement.

11.3 You must immediately inform the Manager in writing of any change of tax status, other material change in circumstance

and any change in the information provided in the Application Form to which Clause 11.1 above refers.

11.4 In addition, you must provide the Manager with any information which it reasonably requests for the purposes of managing your Portfolio pursuant to the terms of this Agreement.

12. Delegation and Assignment

The Manager may employ agents and sub‑contractors, including associates, to perform any administrative, custodial or ancillary services to assist the Manager in performing its services, in which case it will act in good faith and with due diligence in the selection and use of agents but (save where the agent, adviser or other persons are an Associate of the Manager, for whom the Manager will remain directly responsible to the Investor for all acts and omissions as if they were those of the Manager) the Manager will not be responsible for the acts and omissions of any such persons. For the avoidance of doubt the provisions of this clause shall apply if the Manager appoints any person other than itself to be an administrator for the Fund or if it appoints any person to provide.

13. Potential Conflicts of Interest and Disclosure

13.1 This Clause 13 list of potential conflicts of interest is not intended to be comprehensive.

13.2 The Manager may provide similar services or any other services whatsoever to any customer and the Manager shall not in any circumstance be required to account to you for any profits earned in connection therewith. So far as is deemed practicable by the Manager it will use its reasonable endeavours to ensure fair treatment as between the Fund and such clients in compliance with the FCA Rules.

13.3 The Manager and any Associate may, subject to FCA Rules, and without prior reference to you, recommend and/or undertake transactions in which they have, directly or indirectly, a material interest or a relationship of any description with another party, which may involve a potential conflict with its duty to you provided however that the Manager shall make a full and fair disclosure of any conflicts members of the Independent Investment Committee and shall act in accordance with such directions and guidelines as they may provide. If the Manager does this then neither the Manager, nor any Associate, shall be liable to account to you for any profit, commission or remuneration made or received from or by reason of such transactions or any connected transactions. For example, such potential conflicting interests or duties may arise because:


(a) the Manager or any Associate may receive remuneration or other benefits by reason of acting in corporate finance or similar transactions involving companies whose securities are held for you;

(b) the Manager or any Associate may take an equity stake in a company whose securities are held for you at a price not below the issue price available to you. Additionally the Manager may hold an equity stake in a company whose securities are held for you which was issued to the relevant member or members of the Manager at an issue price which is less than the issue price available to you where the equity stake, or the entitlement to it is acquired before shares are issued to you;

(c) The entitlement of the Manager to the performance fee described in Schedule 2 of this Agreement may be obtained by subscriptions for shares in the companies in which the Fund invests by the Manager and/or its directors, members, partners, employees, Associates and others with whom they may share such entitlement. Those shares may be subscribed at a price below the issue price available to the Investor and may dilute the returns to the Investor but only to the extent of the value of the performance incentive and to the conditions described in Schedule 2;

(d) The Manager or an Associate may provide services for other customers. In particular the manager may manage other funds and if investment opportunities are suitable for the Fund and other funds or accounts which it manages the manager will allocate those opportunities in accordance with its allocation policy as in place from time to time;

(e) any of the Manager’s directors or employees, or those of an Associate , is or may become a director of, holds or deals in securities of, or is otherwise interested in any Investee Company whose securities are held on your behalf;

(f) the transaction is in securities issued by an Associate of the Manager or the client of that Associate;

(g) the transaction is in relation to an Investment in respect of which the Manager (or their Associates) may benefit from a commission or fee payable otherwise than by you and/or the Manager or their Associate may also be remunerated by the counterparty to any such transaction;

(h) the Manager deals on your behalf with an Associate;

(i) the Manager may act as your agent in relation to a transaction in which it is also acting as agent for the account of other customers and Associates;

(j) the Manager may, in exceptional circumstances, deal in investments as principal in respect of a transaction for you;

(k) the Manager may effect transactions involving placings and/or new issues with an Associate who may be acting as principal or receiving agent’s commission. The Manager or an Associate may retain any agent’s commission or discount or other benefit (including directors’ fees) that accrues to them; or

(l) the transaction is in the securities of an Investee Company for which the Manager or an Associate has underwritten, managed or arranged an issue within the period of 12 months before the date of the transaction.

14. Liability

14.1 The Manager agrees that it will at all times act in good faith and with reasonable care and due diligence. Nothing in this Clause 14 shall exclude any duty or liability owed to you under the FCA Rules.

14.2 Neither the Manager nor its partners, officers, employees and agents shall be liable to you for any direct or indirect loss, damage, costs, charges, expenses or other claims of whatsoever nature arising under, or in connection with, things done or omitted to be done by it pursuant to this Agreement, including (but not limited to) loss or damage incurred as a result of:

(a) HMRC not granting SEIS or EIS Relief or withdrawing SEIS or EIS Relief previously claimed in relation to investee companies or any adverse tax implications of any transactions arising in connection with the Manager’s services under this Agreement;

(b) third party claims;

(c) any delay or change in market conditions before any transaction is effected on your behalf;

(d) for any losses, costs, expenses, damages and liabilities, you may suffer because of anything outside the Manager’s reasonable control to prevent and the effect of which is beyond the Manager’s reasonable control to avoid, including, but not limited to: the introduction



of any change to any law; acts or regulations of any governmental or supranational bodies or authorities currency restrictions, devaluations and fluctuations; acts of terrorism; war; civil unrest; lock‑out or strike, market conditions affecting the execution or settlement of transaction of the value of assets; faults and interruptions in executing trades or investments made on your account or, where applicable, processing investment instructions including failure or malfunction of any telecommunications or computer service or services; the failure of any relevant exchange or clearing houses; and strikes and industrial disputes not within our reasonable control;

(e) the solvency, acts or omissions of any third party we deal with on your behalf (other than an Associate of the Manager) including any broker, nominee company, Manager, settlement agent, depositary or other third party by whom or in whose control any of your investments (or documents of, or certificates evidencing, title thereto) may be held or through whom any transactions may be effected, or any other third party with whom the Manager deals or transacts business or who is appointed by the Manager in good faith on your behalf), unless the Manager has been grossly negligent in selecting or dealing with them for you;

(f) the Manager not investigating any instruction from you that it reasonably believes may be genuine which turns out not to be genuine;

(g) the Manager not following an instruction from you in accordance with this Agreement where the Manager reasonably believes that following such instruction would give rise to a breach of any Applicable Laws; and/or

(h) any error by you or your agents in sending any instructions to the Manager, or arising from you countermanding any outstanding instructions which has already given rise to binding rights or obligations.

14.3 The Manager shall not be liable to you for any losses arising from any investment decision made or for other action in accordance with this Agreement (including loss of profit, loss of anticipated profit, loss of goodwill, loss of agreement or contract, loss of business opportunity, loss of anticipated savings or indirect, special or consequential loss howsoever arising), except to the extent that such loss is finally judicially determined to have been solely caused by the gross negligence or wilful default or fraud of the Manager or any of its officers, employees or agents.

14.4 The Manager accepts responsibility for holdings of Investee Company shares in the name of the Nominee and for the acts and omissions of the Nominee, provided, however, that the Manager shall not be liable for any loss to you arising from any action it takes in accordance with this agreement, except to the extent that such loss is directly due to the gross negligence or willful default or fraud of the Manager or any of its officers, agents or employees.

14.5 Subject to Clauses 6.6 and 12, the Manager shall not be liable for any defaults of any counterparty, agent, banker, nominee or other person or entity which holds money, investments or documents of title for the Fund, other than such party which is their Associate.

14.6 In the event of any failure, interruption or delay in the performance of the Manager’s obligations resulting from acts, events or circumstances not reasonably within its control (including but not limited to acts or regulations of any governmental or supranational bodies or authorities) or breakdown, failure or malfunction of any telecommunications or computer service or systems, you acknowledge that the Manager shall not be liable or have any responsibility of any kind to any loss or damage thereby incurred or suffered by you.

14.7 The Manager gives no representations or warranty as to the performance of the Fund. Investments in investee companies are high risk, being non‑Readily Realisable Investments. There is a restricted market for such Investments and it may therefore be difficult to sell the Investments or to obtain reliable information about their value. By entering into this Agreement you confirm that you have considered the suitability of the Investment Objectives and Investment Restrictions set out in Schedule 1 to this Agreement, have read and understood the Information Memorandum including, in particular, the risk warnings set out therein, and have taken your own independent advice. Nothing in this Clause 14 shall exclude the liability of the Manager for its own fraud.

14.8 The Manager, will not be liable to you for any consequent impact on the Fund or any consequent damage or loss suffered or incurred by you in respect of the circumstances set out in this Clause 14.

14.9 Nothing in this Agreement will operate to exclude or limit any liability of the Manager: (i) in respect of fraud on the part of the Manager, or (ii) in respect of death or personal injury arising from the Manager’s gross negligence, or (iii) which otherwise cannot lawfully be omitted or excluded (including any duty or liability owed to you under the FCA Rules), or (iv) which is finally and judicially determined to have resulted from their willful default or gross negligence.


14.10 You and your professional tax adviser remain responsible for the management of your affairs for tax purposes.

14.11 The Manager reserves the right to put such controls and limitations on any account opened on your behalf as it in its reasonable discretion deems fit in response to the requirements of any duly constituted authorities including without limitation:

(a) the orders of courts binding on the Manager or duly recognised foreign courts;

(b) HMRC; and

(c) sanctions lists issued by the European Union, HM Treasury or any other similar body.

For the avoidance of doubt this Clause 14.11 shall permit the Manager to freeze your account.

14.12 The Manager is soley liable for the performance and observance of the terms of this Investor’s Agreement. The individual members of the Investment Committee are appointed by the Manager to provide advice and guidance to and generally to oversee the good corporate govenence of the Manager and the members of the Investment Committee do not owe you any duty of care or any other obligation to any other person and shall not have any personal liabiity to you whatsoever and howsoever arising.

15. Termination

15.1 The Manager will seek to realise Investments within a period of five to seven years after investment but realisations may take much longer given the type of investments envisaged. You acknowledge that there can be no guarantee as to the performance or value of Investments, or the achievability or timing of realisations. On termination of this Agreement, the Manager shall endeavour to procure that all remaining Investee Company shares in your Portfolio will be sold or transferred into your name or as you may otherwise direct. Any cash within your Portfolio will (net of fees and costs, including bank charges) be paid to you.

15.2 Unless you agree otherwise with the Manager, you are entitled to make withdrawals of Investee Company shares in your Portfolio at any time after the end of the period of seven years beginning with the date on which the shares in question were issued or withdrawals of Investee Company shares which have become listed on a recognised investment exchange or official listing in an EEA State in your Portfolio at any time after the period of five years beginning

with the date on which the shares in question were issued. If any shares are held in respect of which a claim for SEIS or EIS Relief has been disallowed or an assessment has been made withdrawing or reducing relief by reason of the body corporate in which the shares are held having ceased to be a body corporate which is a qualifying company for the purposes of the SEIS or the EIS, an Investor is entitled to make withdrawals of those shares at any time after the end of the period of six months beginning with the date on which the shares in question ceased to be relevant shares.

You are entitled to withdraw any uninvested cash in your Portfolio at any time before it has been committed to an Investee Company and subject to giving 10 days’ notice in writing to the Manager. The Manager will have a lien on all assets being withdrawn or distributed from the Fund and shall be entitled to dispose of some or all of the same and apply the proceeds in discharging an Investor’s liability to the Manager for fees which are due or which have been accrued. If you make a withdrawal of shares pursuant to this clause you will be liable for a charge equal to a fair amount determined by the Manager in compensation for its contingent entitlement to accrued performance fees.

This Agreement shall terminate upon the completion of the withdrawal from the Fund of all Investee Company shares and cash which you are entitled to receive under this clause 15.2. The balance of any sale proceeds and control of any remaining Investee Company Investments will then be passed to you.

15.3 If:

(a) the Manager gives you not less than one month’s written notice of its intention to terminate its role as Manager under this Agreement; or

(b) the Manager ceases to be appropriately authorised by the FCA or becomes insolvent

the Manager shall use its reasonable endeavours to make arrangements to transfer the Investments to another fund manager in which case that fund manager shall assume the role of the Manager under this Agreement (mutatis mutandis), failing which the Agreement shall terminate forthwith and, subject to Clause 16, the Investments held in your name shall be transferred into your name or as you may otherwise direct.

15.4 Subject always to the Manager’s discretion to determine otherwise, there is no minimum fund size.



16. Consequences of Termination

16.1 On termination of this Agreement pursuant to Clause 15, the Manager will use reasonable endeavours to complete all transactions in progress at termination expeditiously on the basis set out in this Agreement.

16.2 Termination will not affect accrued rights, existing commitments or any contractual provision intended to survive termination and will be without penalty or other additional payments save that you will pay fees, expenses and costs properly incurred by the Manager and the Manager up to and including the date of termination and payable under the terms of this Agreement.

16.3 On termination, the Manager may apply cash held for you, and may retain and/or realise such Investments as may be required to settle transactions already initiated and to pay your outstanding liabilities, including fees, costs and expenses payable which are set out in Schedule 2 to this Agreement (if applicable).

16.4 On termination of this Agreement:

(a) the Investments (and any cash) will be transferred into your name (or into such other name as you may direct) and you will be liable to pay the cost of any such transfers;

(b) the Manager will use reasonable endeavours to complete all transactions in progress at termination expeditiously; and

(c) the Manager may retain and/or realise such Investments as may be required to settle transactions already initiated and to pay your outstanding liabilities, including fees, costs and expenses payable under this Agreement (where applicable).

16.5 Termination will not affect any accrued rights, existing commitments or any contractual provision intended to survive termination and will be without penalty or other additional payments save that you will continue to be obliged to pay fees, expenses and costs properly incurred by the Manager up to and including the date of termination, and payable under the terms of this Agreement.

Confidential Information and Data Protection

17.1 Neither the Manager, nor the Investor, shall disclose to third parties or take into consideration for purposes unrelated to the Fund information: the disclosure of which by it would be or might be a breach of duty or confidence to any other person; or which comes to the notice of an employee, officer or agent of the Manager or of any Associate but properly does not come to the actual notice of that party providing services under this Agreement.

17.2 The Manager, will at all times keep confidential all information acquired in consequence of the services, except for information which: is in the public knowledge; or which they may be entitled or bound to disclose under compulsion of law; or is requested by regulatory agencies; or is given to their professional advisers where reasonably necessary for the performance of their professional services; or which is authorised to be disclosed by the relevant party, and shall use all reasonable endeavours to prevent any breach of this Clause 17.2.

17.3 The Manager may verify your identity and assess your financial standing. In doing so, a credit or mutual reference agency may be consulted which will record a search.

17.4 All data which you provide to the Manager or the Nominee is held by that party subject to the Data Protection Act 1998. You hereby agree that the Manager and the Nominee, may pass personal data to each other and to other parties insofar as is necessary in order for them to provide their services as set out in this Agreement and to the FCA and any regulatory authority which regulates them and in accordance with all other Applicable Laws.

17.5 In accordance with the Data Protection Act 1998, you are entitled, on payment of a fee, to a copy of the information the Manager and the Nominee holds about you. In the first instance, you should direct any such request to the Manager. You should inform the Manager if any information the Manager hold about you is inaccurate, so that the Manager may correct it.

17.6 You may not require the destruction or deletion of any record pertaining to you unless the Manager or the Nominee is required to destroy or delete such records by force of law or other regulatory requirement.

17.7 The Manager and where relevant the Nominee will act as data controller (and in certain circumstances, data processor) within the meaning of the Data Protection Act 1998. You hereby consent to the storage, processing and use by the Manager, and where relevant the Nominee, and their


respective agents and Associates of personal data (as defined in the Data Protection Act 1998) given by you under this Agreement in connection with the provision of the services under this Agreement. You undertake to supply personal data to the Manager and the Manager in accordance with the provisions of the Data Protection Act 1998.

17.8 Your personal data will be stored on a database, which is shared by the Manager, the Nominee and their Associates. You agree that this personal data may be used by them and/or their Associates to send you details of new and existing products or other opportunities which may be considered of interest or relevance to you (including by e‑mail) unless you notify them in writing that it may not be used in this way.

17.9 Please be advised that, by entering into this Agreement, you will be consenting to the transmittal of their data outside of the European Economic Area.

18. Complaints and compensation

The Manager has established procedures in accordance with the FCA Rules for consideration of complaints. Details of these procedures are available from the Manager on request. Should you have a complaint, you should contact the Manager.

19. Notices, Instructions and Communications

19.1 Notices of instructions to the Manager or the Nominee should be in writing and signed by you, except as otherwise specifically indicated.

19.2 The Manager or the Nominee may rely and act on any instruction or communication which purports to have been given by persons authorised to give instructions by you under the Application Form or subsequently notified by you from time to time and, unless that relevant party receives written notice to the contrary, whether or not the authority of such person shall have been terminated.

19.3 All communications with you shall be sent (whether postal or electronic) to the latest address you have supplied in writing to the Manager or the Nominee and shall be deemed received by you on the second day after posting or on the day after dispatch in the case of electronic communication. All communications by you shall be made in writing or (save as otherwise provided) by telephone to the Manager or the Nominee, in which case conversations may be recorded for the avoidance of any subsequent doubt. Communications sent by you will be deemed received only if actually received by the Manager or the Nominee. The Manager will not be liable for any delay or failure of delivery (for whatever reason) of any communication sent to you.

20. Unsolicited real time financial promotion

The Manager may communicate an unsolicited real time financial promotion (i.e. interactive communications such as a telephone call promoting an investment) to you.

21. Amendments

The Manager may amend this agreement by giving you written notice with immediate effect if such amendment is necessary in order to comply with Applicable Laws including HMRC requirements, or in order to maintain the Tax Reliefs or in order to comply with the FCA rules. Any other proposed amendments will be notified to you, and if you fail or omit to give notice of your rejection of the proposed amendment within 30 days of the date of the amendment notice, this Agreement shall be deemed amended accordingly.

22. Entire agreement and assignment

This Agreement, together with the Application Form and other documents mentioned in it, comprises the entire agreement of the Manager with you relating to the provision of the services described therein. This agreement is personal to you and may not be assigned by you without the prior written consent of the Manager. In the event of your death the Manager will continue to deal with your personal representatives. The Manager may assign the whole or part of its fees due in accordance with Schedule 2 to any Associate of the Manager and/or, where permissible in accordance with FCA Rules, to any financial intermediary representing an Investor and may also assign this agreement to an Associate by giving notice to you, provided that such Associate is authorised and regulated to perform all of the Manager’s functions hereunder and subject to any amendments required to this agreement to effect the assignment and subsequent operation by the Associate as provided in clause 21.

23. Rights of Third Parties

23.1 A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement, but this does not affect any right or remedy of such third party which exists or is available apart from that Act.

23.2 Notwithstanding any provision of this Agreement, this Agreement (and any provision of it) may be rescinded, amended or varied without the consent of any third party and section 2(1) of the Contracts (Rights of Third Parties) Act 1999 will not apply.



24. Severability

24.1 If any term, condition or provision of this Agreement shall be held to be invalid, unlawful or unenforceable to any extent, such term, condition or provision shall not affect the validity, legality or enforceability of the remainder of this Agreement.

24.2 If any provision of this Agreement is so found to be invalid or unenforceable in accordance with Clause 24.1 but would be valid or enforceable if some part of the provision were deleted or the period, area or scope of application of the clause were reduced, the clause in question will apply with any modification(s) that may be necessary to make it valid and enforceable.

24.3 The parties agree, in the circumstances referred to in Clause 24.1, and if Clause 24.2 does not apply, to attempt to substitute for any invalid or unenforceable provision a valid and enforceable provision which achieves to the greatest extent possible the same effect as would have been achieved by the provision which is invalid or unenforceable. The obligations of the parties under any invalid or unenforceable provision of this Agreement will be suspended while the parties attempt to agree the substitution.

25. Governing Law

This Agreement and all matters relating thereto shall be governed by and construed in accordance with English Law and the parties submit to the exclusive jurisdiction of the English Courts.


Schedule 1:

Investment Objective and Restrictions of the Fund

Investment Objective of the Fund1. To offer Investors the opportunity to invest in unquoted SEIS and EIS Qualifying Companies which carry on business or intend to

carry on business of a type described in the Information Memorandum published by Space Net Ventures in January 2017.

Investment Restrictions for the Fund2. In carrying out its duties hereunder in respect of the Fund, regard shall be had, and all reasonable steps taken, by the Manager

to comply with such policies or restrictions as are required in order to attract the Tax Reliefs as may be prescribed by HMRC from time to time.

3. In particular, but without prejudice to the generality of the above statements, the restrictions for the Fund are as follows:

(a) no more than 40% of the Subscription of an Investor will be invested in any one Investee Company at full fund raising provided that this shall not restrict the subsequent merger, acquisition or unitisation of Investee Companies with other Investee Companies; and

(b) each Investee Company in which Investments are made will, so far as the Manager is aware at the time of the Investment, be a Qualifying Company.

4 You, as an Investor, should be aware that the Fund’s Investments will include non‑Readily Realisable Investments. There is a restricted market for such Investments and it may therefore be difficult to deal in the Investments or to obtain reliable information about their value.

5. In the event of a gradual realisation of Investments prior to termination of this Agreement under Clause 15, the cash proceeds of realised Investments may be placed on deposit or invested in fixed interest government securities or other investments of a similar risk profile. Proceeds will be paid out on termination of this Agreement or in instalments in advance of termination, as determined by the Manager, subject to HMRC approval (if necessary).

Schedule 2:

Fees and Expenses in respect of the FundThe fees and charges payable in connection with the Fund are as set out in the section headed “Fees and Charges” on page 33 of the Information Memorandum.



Schedule 3

Execution policyThe Manager has an obligation when executing orders on behalf of Investors to obtain the best possible outcome. The FCA requires various execution factors to be taken into account including price; cost; speed; market impact, likelihood of execution and settlement; size; or any other consideration relevant to the execution of the order. Price will ordinarily merit a high relative importance in obtaining the best possible result. However, in some circumstances, the Manager may appropriately determine that other execution factors are more important than price in obtaining the best possible execution result. The Manager will determine the relative importance of the execution factors by using its commercial judgment and experience in light of market information available and taking into account the execution criteria.

The execution criteria are defined as the characteristics of the client, order (orders placed in the market will indicate a price range that is suitable for the investment decision), type of financial instrument (some shares are more liquid than others, and illiquid shares will be less easily tradable in volume) and the execution venue.

The scope of activities undertaken by the Manager does not currently include placing orders with brokers or dealers. Should the Manager place orders with brokers or dealers for execution it will satisfy itself that the broker or dealer has arrangements in place to enable the Manager to comply with its best execution obligations to its clients. Specific arrangements will be put in place such that brokers will confirm that they will treat the Manager as a professional client and will therefore be obliged to provide best execution.

The Manager may establish special purpose vehicles as investments. Investors will be issued shares in such SPVs. As shares in SPVs cannot be obtained from any other sources there is limited opportunity to apply some of the execution factors.

The Manager will review the effectiveness of its execution policy and order execution arrangements on an annual basis. Whenever a material change occurs that affects the Manager’s ability to continue to obtain the best possible result for the Investors, the Manager will notify the Investors of any material changes to its execution arrangements or its execution policy by posting an updated version on its website.

ConsentThe Manager is required to obtain your consent to this policy. This will be demonstrated by your submission of a completed Application Form to the Manager.


Glossary

Fund Manager SPNV Limited, trading as Space Net Ventures

Nominee Space Net Nominees Limited both of 29 Lincoln’s Inn Fields London WC2A 3EG

Banker Hampden & Co plc Third Floor, 36 Dover Street, London W1S 4NH

Solicitors RW Blears LLP 29 Lincoln’s Inn Fields London WC2A 3EG

Receiving Agent The City Partnership (UK) Limited 110 George Street Edinburgh EH2 4LH

www.spacenetventures.com

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