Each fund manager or fund advisor has been invited to answer a series of questions about their own funds as well as the market in general.
We sat down with Jaime Parodi (impACT NOW capital) and Gustavo Caiuby (Heed Capital) to find out more about impACT NOW FCR.
impACT NOW capital and Heed Capital have an experienced and diverse core team. Could you please start by giving us some background about yourself and the team working on the impACT NOW Fund?
impACT NOW FCR results from a joint partnership between impACT NOW capital and Heed Capital. The Fund is led by a sophisticated team with extensive international experience in management, entrepreneurship and investment which is supported by a strong network of innovation agents, impact key players and renowned institutions. The team presents 20+ years of experience in:
- Finance and M&A, by advising, participating and closing transactions with a total value of more than 2 Billion Euros
- Innovation, digital transformation and startup mentoring
- International economic development
Has the management/advisory team invested in impACT NOW FCR and, if so, why? If not, why not?
General Partners are committing 1% of the fund target size because they believe in the mission of this fund as well as its own capabilities on creating a positive social and environmental impact in the world while producing financial returns for its investors.
ESG principles are at the core of the impACT NOW FCR’s strategy. Could you please explain to us what exactly ESG is and why you feel it’s relevant both as a general investment practice and, more specifically, within the context of a Golden Visa eligible fund?
ESG stands for Environmental, Social, and Corporate Governance. ESG criteria are a set of standards to evaluate a firm’s collective conscientiousness for social and environmental factors. impACT NOW FCR is focused on creating a positive impact towards the achievement of the UN 2030 Sustainable Development Goals.
impACT NOW FCR’s Management Team believes in its vision of reshaping Capitalism to transform traditional “risk-return” business into “risk-return-impact” business, and where its investors in general, and Golden Visa investors in particular, has an enormous active role to play. It is possible to do well by doing good, and Impact is becoming not a way of doing business but the only way.
impACT NOW FCR places a large emphasis on the United Nations’ Sustainable Development Goals. Are there any particular SDG’s that you’re focusing on and, if so, how do these influence your investment decisions?
UN 2030 Sustainable Development Goals comprises the impACT NOW FCR’s investment framework. The Fund will invest in early-stage impact startups that offer innovative global scaled solutions to tackle social and environmental problems at the heart of the SDGs. Even though The Fund is operating in a small ecosystem and The Management needs to be open to a wider scope, the range is still too broad. Hence, The Fund will sharpen its focus towards startups aligned with its pipeline opportunity and team expertise & passion.
The Fund will look with special affection, but not limited, at startups working on the following SDGs:
- SDG #3: Ensure healthy lives and promote well-being for all at all ages
- SDG #4: Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
- SDG #8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
- SDG #12: Ensure sustainable consumption and production patterns
- SDG #13: Take urgent action to combat climate change and its impacts
The Golden Visa program’s rules require funds to invest at least 60% of their capital in Portugal. How do you see this limitation affecting impACT NOW FCR’s ability to source suitable investment opportunities?
impACT NOW FCR already takes into consideration this condition in its investment strategy. Its management regulation states that The Fund will invest at least 60% of its total assets in Portuguese Commercial companies. Therefore, its plan is to invest in early-stage and follow-on rounds in impact startups from Portugal (60%) and Iberia + CPLP (40%).
Portugal presents a booming startup ecosystem supported by its strong business and living fundamentals plus the cost efficiencies of its talented workforce. In addition, the momentum is unique since the Government is paving the way for impact investors, so they are able to align their capital with their values, by creating incentive programs allowing the ecosystem to flourish.
How would you describe impACT NOW FCR’s risk profile; Conservative, Moderate, or Ambitious?
Venture Capital investments always present an ambitious risk profile. impACT NOW FCR’s strategy is to create a portfolio of startups well diversified in order to mitigate the risk.
The Golden Visa rules state that a qualifying investment must be held for just five years but the impACT NOW FCR’s lifetime runs for longer. Could you please elaborate on the fund’s term including the launch date, subscription period, and investment period?
impACT NOW FCR’s lifetime is 10 years. The reason for that is that impact investing is more passive than traditional venture capital investments. It requires more time to create, validate and scale impact business models successfully.
The launch date will be as soon as the first 2M€ are subscribed. Expecting to get this threshold at the end of October 2021. The subscription period will be held until July 12, 2023. With an initial closing at 5M€ (or July 12, 2022) and a final closing at 10M€ (or July 12, 2023).
It is important to highlight that the Managing Entity will be able to issue the declaration needed for the Golden Visa application as soon as The Fund reaches the 2M€ threshold.
On average, how long does it take to onboard an investor into impACT NOW FCR and what are the main obstacles in the onboarding process?
In regards to The Fund’s subscription process, it usually takes 3-5 business days after receiving the scanned copies of the forms from the investors.
The main obstacle is the response by the investor.
The impACT NOW FCR has a capital and return distribution strategy which is slightly different from most Golden Visa-eligible funds. What can you tell us here about how that distribution strategy operates and how can potential investors find out more?
The Fund does not intend to distribute annual dividends prior to the end of the Fund term because investing in impact startups requires different levels of development and management compared with investing in other asset class funds, for example, real estate assets funds.
Contact Jaime Parodi (impACT NOW capital) and Gustavo Caiuby (Heed Capital) from impACT NOW FCR nowMin investment: €100,000 · Lifetime: 10 years · US Citizens: OK! 👍🏽· Subscription deadline: July 2023 🗓️
In general, some investors are cautious because of the funds’ lock-in periods. How do you plan to deal with investors who wish to exit impACT NOW FCR before its full lifetime?
The Fund does not allow early redemption. It is possible to negotiate the shares in a secondary market but due to the illiquidity of its assets, the investors need to find someone willing to purchase its shares.
It appears that the impACT NOW FCR collaborates with a wide range of partners. Could you please share some examples of how these partnerships benefit the fund?
impACT NOW FCR is surrounded by a world class network allowing access to the best opportunities by actively contributing to startup deal-flow sourcing as well as facilitating strong synergies to deliver The Fund’s smart money approach, helping the invested startups with needs of mentoring, business development or fundraising.
Many of those considering the Golden Visa are currently comparing funds vs real estate, What advice can you offer to help investors make the right decision for them?
The main advantages of investing in impACT NOW FCR vs investing in other asset classes are:
- The professionalism in the management of The Fund, done by Impact Now Capital and Heed Capital
- Capital gains and dividends distribution present tax advantages by investing in Venture Capital funds which are not present in direct investments like real estate ones
For people who are unfamiliar with investing in funds and may even be nervous about learning, what advice would you like to give them?
Any investors who would like to know more about that specific subject can reach out to us for a one-to-one conversation.
Considering the incoming Golden Visa rule change changes on January 1st 2022, what advice would you give to investors who are currently looking into the program?
As The Management believes in The Fund’s investment strategy, it is interesting investing in impACT NOW FCR after January 1st 2022 but if the investor does not want to have a higher portion of his/her investment portfolio allocated in illiquid assets, then it is better to invest before the end of the year.
What is your outlook for Portugal from both an investment and lifestyle changes perspective over the coming years?
The Management is very confident because the startup ecosystem has been growing in the last years and they believe that it is a trend that will continue in the following ones.
In addition, the country presents strong business and living fundamentals in the form of excellent infrastructure and services as well as high quality of life at a competitive cost.
Is there anything else you would like to share with potencial investors?
We encourage the potential investors to get in touch with us because it is always better to listen and learn more by talking to a person instead of making decisions directly on the summarized information provided here.