HOW A CLUB DEAL WITH THE ERIC OPPORTUNITY CLUB WORKS
ERIC offers complete
transparency: Information on structuring,
the fees, who gets access to the ERIC Opportunity
Club Deals and the order of subscription priority
We select an opportunity from our extensive deal flow and make a positive decision for our own investment at the same conditions.
The deal is presented to the club members. They decide after their own examination, deal by deal, whether they want to invest together with us and with what amount.
Interested club members can subscribe to their investment completely digitally via our regulatory-compliant subscription platform. If you have any questions, please do not hesitate to contact us.
By accepting the subscription, members become limited partners in a new investment vehicle per deal. The vehicle subsequently invests in the designated startup.
After 5 years, an exit (sale of the start-up or shares) takes place at a factor of 5x of the invested capital, the exit proceeds flow to the vehicle.
The limited partners receive their capital back plus the proportionate profit after capped costs of the vehicle. ERIC may receive a performance-based profit share („carry“).
Investment decisions should be made solely on the basis of the legally binding documents of the respective fund and the risks described therein. The information in connection with the ERIC Opportunity Club is directed exclusively at qualified investors in accordance with German AIF and/or EuVECA regulation.
– Any investment may result in a partial or total loss of the invested assets. –
„Thanks to my network and my advisory board mandates, I see many innovative topics in the market and have also already invested in several companies, but so far mostly only in early phases. I have now made my first growth stage investment via ERIC, a perfect match.“
— Martin Rodeck, Managing Partner @ BLACKLAKE
EXCLUSIVE BENEFITS FOR INVESTORS IN THE
EARLY-STAGE VENTURE CAPITAL FUNDS
Depending on the LP status (Gold / Silver etc.), PT1 investors receive:
(1) Discounts on the management fee
(2) Higher subscription priority over external club members
- Portfolio companies of the PT1 early-stage funds or other startups from the real estate industry or related industries which reached the so called growth-stage phase.
- Startups in this phase of the company life cycle have a statistically lower risk of default due to the fact that their products are already established. Therefore, investments in these companies offer a particularly attractive risk/return profile compared to early-stage investments.
- With the club deals, we also want to facilitate special investments, such as in companies in special situations (e.g. the turnaround phase) or so-called secondaries (i.e. share purchases from existing shareholders).
- The companies should be ready for an exit in about 4 – 5 years. This is also the targeted duration of the club deal. The actual duration depends on the exit of the underlying investment.
- The club deals are structured via lean special purpose vehicles (SPVs) in the form of a German limited partnership (GmbH & Co. KG), which bundle the investments of interested investors towards the startup.
- From a regulatory perspective, each SPV is a small Alternative Investment Fund (AIF) with an optional additional EuVECA registration. The vehicles are managed by our own and licensed fund management company (KVG) ERIC Fund Management GmbH (BaFin ID: 10151290).
- The SPVs are structured as passive asset management companies and are therefore transparent for tax purposes from a German perspective.
- ERIC Opportunity Club Deals are open to all PT1 Fund investors as well as external investors interested in investing deal-by-deal in selected growth-stage startups (i.e. no blind pool).
- Investment opportunities are exclusively aimed at qualified investors in accordance with German AIF and/or EuVECA regulation.
- In case of EuVECA registration of the club deal vehicle, the minimum investment is EUR 100,000. Otherwise, the minimum investment is EUR 200,000.
- Natural persons as well as legal entities (e.g. through their own limited liability company) can invest.
- As a rule, investors from all EU countries can invest. Investors from, for example, the UK, Switzerland or the US can only invest on request.
- Investments/subscriptions can be completed conveniently from a laptop or smartphone via our proven digital subscription solution. Once registered, your data is also available for future club offers and only needs to be updated.
- Furthermore, investors only need to submit a power of attorney for the commercial register application once, which can also be used for all future investment vehicles.
- In case of oversubscription, the subscription will be staggered according to defined priorities (-> see below).
Of course. Because we believe in the deals we propose, ERIC Group invests alongside in each deal on the same terms as the other club members.
In order to achieve a low cost ratio, management is simplified for investors and issuers compared to PT1 funds:
- Structuring, participation agreements (LPA), underwriting process, reporting, etc. are standardised as best as possible across all vehicles.
- There is only a final closing – no payment of compensatory interest required.
- The one-time fixed capital contribution must be paid in immediately after subscription. There is no capital call over several years.
- Immediate distribution of income after exit (no reinvestment).
- No investment committee or advisory board, as the investment terms are already determined in advance.
- Simplified reporting and financial statements provided to investors via an electronic platform.
- The club deals are characterised not only by an efficient legal structure, but also by a lean fee structure.
- A one-off upfront management fee replaces ongoing annual fund fees.
- In addition, the vehicles have a lower carried interest (performance-based profit participation) compared to the PT1 funds.
- Investors in the PT1 funds receive discounts on the management fees.
- The following costs are borne by the respective club vehicles up to a certain upper limit. In turn, investors benefit from the lower complexity of club deals:
a) set-up costs (e.g. for legal advice),
b) running costs (e.g. accounting, regulation) according to a clear catalogue.
- In the event of oversubscription, subscription will be staggered according to a fixed order and, in particular, ERIC Opportunity Club membership status.
- PT1 fund investors enjoy a higher subscription priority than external investors.