Everything worth knowing about how we have redesigned our Acceleration Programme to invest in startups - Demium

Everything worth knowing about how we have redesigned our Acceleration Programme to invest in startups

In November 2020, we launched Demium Capital, our very own VC Asset Management Company, with a first €50M fund, to invest in entrepreneurial talent. In 2021, we made headway by launching an Acceleration Programme to endorse already-founded startups. So how did the idea for the Programme come forth? And what is it about? To find out, we sat down with Ignacio Parada, the Acceleration Programme Director.

1. Where did the Acceleration Programme idea come from? What is the purpose of the Programme?

The entrepreneurial ecosystem is vast and so is the Demium history.

Following a year of investing exclusively in talented entrepreneurs from our own incubation programmes, we decided to go a step further and endorse those entrepreneurs whose businesses enjoy a more mature standpoint. Our explicit aim is to bring startups to a seed round, once they closed their pre-seed stage with us.

This is how we do it: we work with startups in early-stage commercialization and speed up this process with an eye on satisfying performance metrics, nailing market positioning and executing strategic planning. We invest €150,000 at the start of the Programme via Demium Capital investment funds. Valuation is negotiable between both parties.

2. How is this programme different from similar programmes in the market?

The key advantage lies in the core of Demium Capital and its engagement to the Programme.

Unlike conventional venture capitals, the investment made by our fund goes hand-in-hand with our Incubation and Acceleration Programmes.

The chief value of the Acceleration Programme doesn’t only lie in the €150,000 initial investment, made directly after the commencing of the Programme.

Capital raise strategy is crucial for any startup we work with; but we go way further and deeper from day one, regarding major areas that pertain to early-stage companies, such as financial modelling, marketing strategy or tech development.

3. Tell us about the organizational structure of the Programme.

The Programme is broken into four parts: Pre-Acceleration, Initial Investment, Acceleration and Post-Acceleration.

FIRST PART – Pre-Acceleration: over the course of a month, the Acceleration Team works closely with the pre-selected startups in order to prepare them for the Investment Committee of Demium Capital. We validate the company strategy, assess its position, work on the pitching presentation to the Investment Fund and make headway with the fundamental elements of the VC investment thesis. It’s for the Investment Committee to decide whether a startup joins the Acceleration Programme with an initial investment of €150,000.

During this preparation month-period, we do pro-bono work. This means that if the startup doesn’t get the approval of the Investment Committee, they can carry on free from any type of contractual obligation with Demium.

SECOND PART – Initial Investment: As soon as the Investment Committee green-lights the startup, we start off with the process of capital increase.

The shareholder’s agreement is negotiated, which will define the participation role of Demium Capital according to the cap table (Capitalization Table) of the startup and the valuation point of the latter.

This process may take around two months to cover and will end with the Demium Capital investment of €150,000. Additionally, €100,000 of co-investment capital may be added from a different venture capital fund.

THIRD PART – Acceleration: Over the six months of the duration of the Programme, we work together with the startups to multiply business valuation.

During the first month, we centre on defining our needs and goals for the next five months of the programme. 

Once they have been outlined, we begin the five-month objective execution period. Each startup will be assigned eight to twelve coaches in different areas that will work with you on a weekly basis to help reach the goals. Meantime, we will put you in touch with our network of more than 1,000 investors so you can make connections with them and pursue potential investment opportunities.

This stage ends with the realization of the goals. This is when we start negotiating with VCs or Business Angels that you already hold talks with. 

FOURTH PART – Post-Acceleration: Over the following six months, we will be focusing on the next investment round. Demium Capital may invest up to €350,000 added to the €150,000 initial amount, ergo investing a total of €500,000 in your startup.

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