Revenue model
Fee revenue is critical to delivering the aim of creating a sustainable business model for the CoVentures scheme. It recognises that start up and early stage businesses do not have sufficient revenue funding to secure professional services on a daily rate (consultancy) model, so the scheme, which is still being tested, involves some early risk being carried by UECE Ltd.
There are four main key toolkit areas where this is possible:
- Non-Executive Director Roles: Whether acting as a launch director for a University spin out/pull out company, or acting in a temporary capacity in a turnaround project, CoVentures mentors can extract fees for this role.
- Success Fees: Invariably linked to funding, industry norms are low single digit percentages (2%-5% of funds raised). These fees tend to be irregular in nature and difficult to forecast accurately.
- Portfolio Management and Equity Ownership: In the fullness of time these are likely to represent the highest level of income.
- Project fees: This revenue line will capture fees earned for specific projects such s Information Memorandum or introductory fees for corporations. Commission fees may also be possible.
These four areas of revenue potential should access all areas of the business cycle, from early stage to exit sale.
