As a small venture capital funds,
together with informal investors from our network,
we provide risk-bearing capital
to promising companies in the segment of small and medium-sized enterprises.
SME private equity funds
“Our door is open to serious starting and proven entrepreneurs and investors!”
We like to connect with serious starting entrepreneurs and want to support good promising ideas and contribute through our expertise and micro-investments.
We are stubborn, fast and down to earth. We are decisive, have a lot of entrepreneurial experience and want to stimulate innovation and business development seriously. To strengthen the Asian economy, for a more sustainable society, for new business and also for a better living environment.
Likewise, with our unique investment concept, we can be an attractive proposition for the informal investor and are an excellent partner for institutional investors.
Asia Investment Services – Investment Funds Participations provide risk-bearing capital to SME companies. The participation by Asia Investment Services – Investment Funds will always consist of participation in the share capital. We become co-shareholder often next to the founder or management of the company. Particpation by Asia Investment Services – Investment Funds is always temporary. The aim is to end the participation over time if the value of the company has increased during the participation period. An exit always takes place in consultation with the management.
Our focus is primarily on new start-ups with growth potential
• in AIS Starter Seed Funds; micro-investments for a period of maximum 1 year, achieving early stage
or existing companies with a proven ‘track record’ of several or several years
• in AIS Early & Later Stage Funds; in general, an investment period of 5 to 7 years should be considered.
This last fund also includes mature companies in the expansion phase or companies that are faced with a management buy-in/buy-out as a solution for a follow-up problem of the managing director and majority shareholder. Pre-exits, in which the managing director and majority shareholder sell part of the shares to an investor to work together with that investor on future follow-up, also belong to the activities of Asia Investment Services – Investment Funds.
On a larger scale, we also invest in companies to make them ready for sale. Together with the owner/entrepreneur, we prepare, as co-shareholder in the role of interim manager, the business for a strategic takeover. With a vision of potential acquisition candidates, we restructure the company, in a period of 2 to 3 years, in such a way that the business of the acquirer can quickly and successfully integrate it. A pre-merger investment to improve gain.
Both minority interests, majority shareholdings and full acquisitions are possible. Participation can take place through an expansion of the capital and/or through a (partial) sale by existing shareholders. IN AIS there is industry specialisation, and we focus on the B2B industry / technical sector; such as manufacturing, construction, energy, logistics and trade.
Asia Investment Services – Investment Funds Participations is an independent venture capital company. The financing of participation involves cooperation with a large number of informal investors and some venture capitalists, institutional investors and banks. Our goal is to be the market leader in various Asian countries by 2025 in the field of the independent management of Informal Investors participation funds.
We distinguish ourselves through our concept
• making start-up companies ready for investment in combination with micro investments
in addition to our investment from the participation fund, we expect the leading angel investor to make available a corresponding amount,
• this gives the leading angel investor a preferential position (under certain conditions) at early and later stage investments, followed by others who have invested in the AIS Starter Seed Funds,
• in AIS Starter Seed Funds, 25k-100k + capitalised mentor days, as an average term we expect is 50% return on invested capital
• in AIS Early & Later Stage Funds 100k-1,000k, as an average term, we expect 30% return on invested capital
• our annual management fee, percentage depending on intensity, is to cover the costs of the general partner of AIS (to be invoiced in advance, payable end of the year)
• specialists in buy-in/buy-out and pre-merger investments (making companies ready to sell)
• sector expertise; SME in the B2B industry and technical sector; manufacturing, construction, energy, logistics and trade.
On a limited scale, we offer entrepreneurs and small to medium-sized business equity financing.
In AIS Starter Seed Funds and AIS Early & Later Stage Funds we manage investors’ contribution, informal investors with a similar ideal and mindset and who appreciate our working methods. In our investments, we always have an active management role, as a business mentor and, if desired, temporarily as an interim executive and ever as a member of the board of directors.
3 facts to adjust the investor financing perception
There is a lot of ambiguity about equity financing, and a lot of facts are unknown to entrepreneurs.
Let us share our opinion on these facts.
* less than 10% of start-up funding comes from equity investors
In this, we define start-up as seed and early stage and equity investors as angel investors and venture capital. 90% of start-up capital is provided by personal savings, personal loans and relatives and family. It goes without saying that the majority of equity capital is invested by angel investors as VC mainly fund in the later and mature stage. The preconception is that risk capital of participation extensive is, but it is relatively small.
* most high-growth companies are not backed by informal investors/venture capital
Surprising, because after all these companies generate the most revenue and are also less risk-full. Of course, the presence at IPO related company is considerably higher by 1/3 than in the other companies where it is less than 1/6, and also in high-growth section funding do come from personal savings, relatives and friends and (private) loans. Apparently, the deal sourcing and selection of investors is still far from optimal.
* substandard impact on the economy
Although the investments mainly start at a later stage, the economic contribution is undoubtedly considerably with 1/3 IPOs and 1/6 high-growth companies on job creation and innovation. However, in comparison with the publicity and expectations, these figures are somewhat disappointing.
Asia equity market characteristics
Asia equity funding averages, an indication
– annual total amount of $ 50.0 billion
– venture capital and angel investors do annual invest about the same amount of capital
– angel start-up and seed deals $1.0 million
– early stage deals will be around $5.0 million
– later stage deals are on a level of $10.8 million
– all of the amounts mentioned above are only indications, but all show a trend of a significant increase
The success rate of finding equity investors is low
– only a 0.6 – 0.9% of seeking companies obtain a capital injection
– although the total invested amount is equal, the angel investor invests in 35x as many companies
– for every single investment, an angel investor contact/evaluate 40 propositions and a VC even 400
The selection criteria are incredibly rigorous, but this all has to do with experience gained and the calculation method used.
The typical financial structure of equity investors is more or less based on
– an investor expects typically 10x return on capital investment over five years, or 25% to 35% per year over the full period of the investment
– an angel investor will need to have a portfolio of about 20 deals for
— in seed and early-stage: of those 20 investments 5 perform on 1 significant, 2 decent and 3 some return capital
— in later and mature stage: none of the invested companies should fail
— start-ups do fail a lot, over 50% will be (quietly) discontinued, 25% keep on struggling and as said 25% perform (so 75% do fail)
The allocation of equity investments is mainly done in the following sectors
• internet (37.4%),
• medical & healthcare (23.5%),
• telecom & mobile (10.4%),
• energy & utilities (4.3%),
• electronics (4.3%),
• consumer products (3.5%),
• other industries (16.5%).
Our approach and work method in participation
We differentiate 4 distinct activities within participation. These are
I Fund formation, raising and alignment
II Deal sourcing & selecting
III Guidance, advice and monitoring of participation
Each of these phases is equally important and in principle, we try to distribute our time evenly between these 4 activities. It should be noted, however, that due to the set-up of AIS and the use of informal investors, we can be more decisive, which in time will positively influence the return on our investments.
I Fund formation, raising and alignment
Prior to making any investments and generate an attractive return on these investments, we as all funds, have to raise capital. For this, a prospectus will be issued to potential investors who may entrust some of their wealth to the fund.
The principle of the fund is that our target sector, both in company development and type of industry, is not overcrowded with equity capital and with our expertise and effort we can generate meaningful returns.
Furthermore, we build our funds with informal investors based on trust, respect, corresponding values and prospects of fair business gain.
We have consciously opted for the corporate or open-ended fund structure; as it does not have restrictions on the number of shares that can be issued within the fund and as it is a straightforward, easily accessible for smaller participation, and an inexpensive way to put money together for to invest in a diversified portfolio.
Usually, the fund(s) will be valued periodically, each 3 months. This valuation and status of the various funds’ investments are included in a recurring report to the shareholders
We offer, under certain legal and financial conditions, a redemption option to exchange the shares for cash at the net asset value (NAV) of the specific fund. Due to this, the fund manager will have to keep some cash reserves. The fund manager determines the total scope of funds and investments for efficient execution, and close it for new investors or possibly also (temporarily) for new ventures. Similarly, he supports and coordinates the purchase and sale of shares by investors.
A fund team consists of the regional director, funds manager and an elected delegate of informal investors which also form part of the Investment team, which is supplemented by the (mentors) general partner and leading investor. Investments are assessed and only entered into at 100% consent of the investment team or 80% where the veto right of the managing director is required.
Fund prospectus will be announced on this site.
II Deal sourcing & selecting
Methods of venture capitalists to attract entrepreneurs and find investment opportunities.
– approached directly by entrepreneur
– pro-actively self-generating
– professional networking
– references of informal investors
– references others
the procedure followed by us, whereby after each phase between 35-66% proceed to a next phase
– first contact
– considered deal
— select leading general partner and informal investor
— 2-page plan: exists of business model, market, strategy, innovation, product/service, distinctiveness, competition, management team, basic P&L/cash-flow and investment deal terms.
– pitch for the investment team
– study application plan by the investment team
– review & feedback to generate modifications to plan, acceptance
– execute due diligence
– offer term sheet
– close deal (contract, transfer shares and capital)
We believe that market/industry, business model valuation (also include timing) and scalable business, for the most part, determine the success of an investment, and then only followed by the qualities of the management team.
III Guidance, advice and monitoring
The goal is to create added shareholder value during the participation.
We are a passionate investor and are committed to adding value to the company, we stand for professionalisation, strategic and operational guidance, compile boards of directors and hiring advisors and key personnel, skill building, and in-house expertise. In contrast to most equity participation institutions, we are not bankers but we are former entrepreneurs from medium to large companies, and we know the profession of being an entrepreneur. Our investments cooperate with and are in direct contact the assigned to them; general partner and leading investor. Please note: that we stand for cooperation, but we also take the initiative, and therefore in our view, a company and its entrepreneur must be ‘coachable’.
We also make our network available allowing to get access to industry experts, customers, business partners and financiers. However, at disappointing performance, we can claim our veto rights, such as control rights, liquidation rights, cash flow rights and employment terms.
We monitor the all invested companies to a large extent on
• outcomes of management meetings
• monthly financial statement
• monthly management report on
– business management
— achieved goals
— stagnations & disruptions
– the development plans
— cash flow prognoses
— valuation scalable business model
— realised milestones
— validation of the (internal) procedures
— validation of the innovations
— market entry/customer base
AIS Starter Seed Funds – our role
The goal is: making start-up companies ready for early-stage investment
• sharpening the idea until it has sufficient potential by inspiring, supporting and researching market
– needs and growth capacity
• getting the idea ready, (plans for) setting up a company and forming a clear value proposition through research, supervision and existing
– business plan with financial term planning
– create a step-by-step plan
– scalable business model
– validation of the processes and innovations
market entry plan, marketing, sales & PR
• the development phase of saleable product and financeable proposition for equity investors,
– partly through AIS own micro-investment,
– and in 2nd phase by third parties,
– advise and guide the first market exploration and set up the company structure.
AIS Early & Later Stage Funds – our role
The goal is: making the invested companies ready for a strategic take-over
• we always will create a detailed plan for growth and a planned takeover over 4 to 7 years, and this plan will also contain;
• preparing the company for a rollout, serious scaling and next stage investments, by guiding in development to optimise a market-ready product, organisation and financing and business transfer of our shares and, if desired, of other shareholders.
The ultimate goal is the exit with a substantial increase in yield.
Below the exit options for an investor such as AIS. Not all investments are successful, and the list starts with the most disadvantageous to the most yield generating option.
Logically our preference goes to buy-back and strategic acquisition for selling the shares.
– forced termination
— disadvantage: reputational damage (try to prevent it at all times), loss of invested capital/revenue
• voluntary liquidations
– write-offs, continuing is pointless and there are sufficient resources to end, needed is a mutual acceptance of the residual value of the business
— advantage: limitation of damage
— disadvantage: (partly) loss of invested capital/revenue
• trade sales
– trade (all partially) shares to cash, another company shares or a combination of both. often as a solution for conflicts, differences of insights or spreading risk
— advantage: limitation of risk and/or damage
— disadvantage: loss of invested time and probability some capital/revenue
– a possibility if you are stronger together, often applied if there are cash flow issues and it expected this can be solved by another company.
– not the best options for an exit, it is a fall-back scenario, but an ongoing concern still have some value.
— advantages: solving a problem, keep company afloat, investment damage control
— disadvantages: not a strong negotiating position
• venture capital
– more substantial sums are needed or to share risk, or if there is a very attractive cash-flow and a strategic fit, other additional or new investors can perform better, a continuation of own participation depends on whether the ability to contribute
— advantages: outcome revenue depends highly on value proposition of the company
— disadvantages: dependent position
• private offerings
– sell shares to an individual or groups to raise (additional) funds and/or a (partly) exit.
— advantages: revenue depends highly on the proposition, negotiations and position (fully or partially exit), able to choose investors/buyers, less expensive and time-consuming method
— disadvantages: needs a kind of prospectus, regulations on higher/unlimited investments sum, required reporting, a more complex/confidential transaction
• cash cow
– those investments decide themselves as they are able to pay dividends to their investors/shareholders, least likely to exit, revenue will depend on contracts
— advantages: low risk, most likely generate target, try to sell shares to other shareholders or MBO (will be financeable)
— disadvantages: monitor risk of a cash cow, conflict as investor want to exit (cash out) and has veto rights and able to sell shares, need plan for a next phase (what if cash cow breaks up)
• strategic investor
– sell shares to a strategic investor as it will fits in a portfolio, combining expertise, market etc. will be more attractive
— advantages: company will have some value for a strategic investor
— disadvantages: (lengthy) negotiation procedure may affect operations
– entrepreneur buys-back the shares from investor
— advantages: entrepreneur is known and also the financial scope, even preferable above a strategic acquisition
— disadvantages: none (if the purchase price is reasonable)
• strategic acquisition
– sales to a larger, financially stable company, the most desirable option for investors given the potential returns
— advantages: excellent returns possible, a successful investment for growth
— disadvantages: starter/entrepreneur position, uncertainty of a M&A/post-integration, failures of M&A
• IPO (initial public offer)
– do a IPO to sell part of the business (shares) to the public
— notes: given the required size, it is unlikely that our investments will reach such an exit, an underwriter is required at IPO or a reserve listing could be an option, a strategy is to buy before IPO some smaller competitors, pre-IPO regulation activities could be needed.
— advantages: (huge) revenues for former shareholders, shares exchangeable in stocks and cash, brand awareness, easier access to capital, most likely better management
— disadvantages: IPO partly failure, too low stock introduction price, more vulnerable to acquisitions, stock price fluctuations.