Annona provides seed capital in order to help budding entrepreneurs realize their vision, or to expand already existing organisations. Our investment normally comes in the form of straight equity, but we occasionally consider alternative financing structures.
The most straightforward form of an investment comes in the form of an equity stake. Annona takes minority positions in the range of 25-45%, with the intention to exit within 5-7 years. We reserve the right to appoint one or more Non-Executive Directors. Our objective is to appoint people to the Board who can share their unique expertise and will add real value to the management team.
There may be instances where it makes sense to complement an existing equity investment with other instruments that do not dilute existing equity positions. Mezzanine capital can be provided in the form of subordinated loans, with warrants or convertibility clauses used to reduce the higher interest rates that this financing carries.
Annona has experience with the concept of Royalty-based Financing schemes in combination with equity investment and/or subordinated loan constructions.
A Royalty scheme offers some specific advantages for both entrepreneur and the investor that are particularly relevant for investing in small(er) SME’s in newly emerging markets.