Frequently asked questions on venture capital investments are listed here below. Answers relating Solus Capital can be found by clicking on the questions.
The primary investment focus areas of Solus I. are: Electronics, Robotics, Photonics, Materials Technology, Bionics, Packaging Technology, Chemical Industry, Light Industry, Construction, Logistics.
Secondary investment focuses are the so-called S3 industries, such as Automotive, Health-care, Green Economy, Agriculture, Food-processing, Info-communication (Fintech included) and Smart City solutions.
In addition to financing the innovations in these industries, modernizing investments of the 21st century (Digitization, Robotics, Automation, IoT, etc.) in traditional industries can also be financed.
Solus II. can finance micro-, small-, and medium-sized enterprises with development targets aligned with the so-called Digital Welfare Program primarily in the fields of education (EdTech), government administration (GovTech), health-care and welfare (MedTech, SportsTech), digital economy (AgTech, Ecommerce, Sharing economy), IT-security (Cybersecurity) and the most modern innovations (5G).
Solus Capital intends to fund start-ups and businesses at different levels of development, and with different exit techniques; however in any case the investment must meet the criteria set for micro, small- and medium-sized enterprises. These development phases and exit techniques are as follows (the latter in brackets):
- Early start-up phase, 0-1 year old companies (open-ended scheme)
- Early growth phase, 1-4 years (open-ended)
- Late growth phase, 4-7 years (open or closed ended)
- Mature phase, 7+ years (open or closed ended)
With open-ended schemes the goal is to jointly sell the company by all shareholders to a third party buyer (e.g. professional industry player, or listing on a stock exchange) usually within 5-7 years after the initial venture capital investment.
Here the goal primarily is to allow the founders of the company to re-possess the control over the company. The shares of the venture capital investor are re-purchased by the founders according to a fixed timeline and at a fixed price.
The typical amount of investment into the target company is between 200 and 1,500 million forints at Solus I., and between 10 and 500 million forints at Solus II. The investments are usually split into parts (e.g. 100 million forints upfront, then after reaching a milestone another 100 million forints). The primary form of investment is equity capital, which can be supplemented by a shareholder’s loan (or other types of debt).
Solus Capital can finance the personal-, subcontracting-, service-related, and the development costs and expenses arising at the headquarters, sites and branches of companies located in the so-called convergence regions (i.e. outside the central region of Hungary).