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Governance

A copy of Draper Esprit’s Corporate Governance Statement dated July 2021 can be found here.

1. Incorporation and Registered Office

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Draper Esprit plc is a company incorporated in England and Wales with registered number 9799594 and its main country of operation is the UK. The registered office of Draper Esprit plc is 20 Garrick Street, London, England, WC2E 9BT.

2. Business Description

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Draper Esprit is one of the leading venture capitalist investors involved in the creation, funding and development of high-growth technology businesses with an emphasis on digital technologies in the UK, the Republic of Ireland and the rest of Europe.

3. Corporate Governance

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The Company complies with the UK Corporate Governance Code.

The Directors are responsible for the determination of the Group’s investment policy and setting the strategic aims and objectives of the Group, and have overall responsibility for the Group’s activities including the review of investment activity and performance. The Board will meet at least six times per annum (and on an ad-hoc basis when necessary between the scheduled meetings), the Audit, Risk and Valuations Committee will meet at least three times per annum, and the Remuneration Committee and Nominations Committee will each meet at least two times per annum.

A copy of Draper Esprit’s Corporate Governance Statement can be found here.

4. Board Members

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The Directors are as follows:

Karen Slatford (Independent Chair)

Karen is non-executive Chair of Draper Esprit plc. She is also a non-executive director of AIM-quoted Accesso Technology Group plc and Softcat plc, a FTSE 250 IT infrastructure provider, and senior independent non-executive director of LSE and NYSE listed Micro Focus International plc. Karen began her career at ICL before spending 20 years at Hewlett-Packard Company, where in 2000 she became Vice President and General Manager Worldwide Sales & Marketing for the Business Customer Organisation, responsible for sales of all HewlettPackard products, services and software to business customers globally. Karen holds a BA Honours degree in European Studies from Bath University and a Diploma in Marketing.

Martin Davis (Chief Executive Officer)

Martin Davis is the CEO of Draper Esprit. He has more than 20 years of experience in financial services and joined Draper Esprit from Aegon Asset Management, where he was the Head of Europe, Aegon Asset Management & CEO Kames Capital. Prior to Aegon Asset Management, Martin served as CEO at Cofunds, spent eight years at Zurich Insurance Group, and was also CEO of Zurich’s joint venture, Openwork, the largest network of financial advice firms in the UK. Prior to this, Martin held senior management roles at Misys, Corillian, and Reuters. Martin also served for 11 years in the British Army. Martin has an MBA from London City Business School (CASS) and Diplomas from the Institute of Marketing and the Market Research Society.

Stuart Chapman (Chief Portfolio Officer)

Stuart was a Director of 3i Ventures in London before he co-founded Draper Esprit. He has over 25 years of venture capital experience in Europe and the US – including founding 3i US in Menlo Park, CA. Stuart was responsible for Draper Esprit’s investments in Lagan Technology (sold to Verint), Redkite (sold to Nice) and Kiadis (sold to Sanofi). Stuart serves as a director with Netronome, Aircall, Resolver, Realeyes, Riverlane and Conversocial; and as observer with Graphcore and Crate. Before 3i, Stuart was involved in software and systems implementations for Midland Bank. He is a graduate of Loughborough University and currently serves on the Strategic Advisory Board for the Loughborough School of Business.

Benjamin Wilkinson (Chief Financial Officer)

Ben has been CFO of Draper Esprit since 2016. Prior to Draper Esprit, Ben served for five years as CFO of AIM-listed President Energy Plc, where he was responsible for all financial aspects of the Group. During his time at President, Ben was a key part of the Board that undertook investments into Argentina and Paraguay and raised $175 million across several equity issuances with shareholders such as IFC/World Bank and significant UK institutional investors. Ben is a Chartered Accountant, FCA, with a background in M&A investment banking from ABN Amro/RBS where he was involved with multiple cross-border transactions and corporate financings, both debt and equity. Ben is a graduate of Royal Holloway, University of London with a BSc in Economics.

Grahame Cook (Independent Non-Executive Director)

Grahame Cook is an experienced public company non-executive director, with over 20 years’ experience as an audit and risk committee chairman. Grahame’s background is in investment banking, with 20 years’ experience of M&A, equity capital markets and corporate advisory. Grahame started his career at Arthur Andersen, where he qualified as a chartered accountant. He became a Director of Corporate Finance at Barclays de Zoete Wedd in 1993, and then joined UBS as a Managing Director, member of its global investment banking management committee and global head of equity advisory. At UBS he was responsible for creating its industry sector teams, including tech and healthcare. In 2003 he became joint chief executive officer at WestLB Panmure where he built a pan-European business focussed on growth companies and ran a €100m technology fund. He advised the London Stock Exchange in 2003 on the creation of its TechMark growth segment. Grahame sits on a number of technology and technologyrich healthcare company boards, both listed and unlisted. Grahame holds a Double First Class Honours degree from the University of Oxford.

Richard Pelly (Independent Non-Executive Director)

Richard is a non-executive director and advisor in the area of micro, small and medium-sized businesses. Up until April 2014, Richard was the chief executive of the European Investment Fund (‘‘EIF’’), Europe’s largest investor in venture capital funds. Before joining EIF in April 2008, Richard was managing director of structured asset finance at Lloyds TSB Bank in London from 2005 to 2007. From 1998 to 2005, he worked for GE Capital, first as chairman and CEO of Budapest Bank in Hungary and then as CEO of UK Business Finance within GE Commercial Finance. Prior to his career at GE, Richard worked for Barclays Bank in various functions in the UK and in France from 1977 to 1997. Richard holds an honours degree in Psychology from Durham University and an MBA with distinction from INSEAD Fontainebleau. In 2003, he was awarded an OBE in the Queen’s Honours List for Services to the Community in Hungary.

Gervaise Slowey (Independent Non-Executive Director)

Gervaise Slowey is a non-executive director with a background in senior management, international business, marketing and media. She serves as a non-executive director on the boards of Wells Fargo Bank International (WFBI), Ulster Bank Ireland DAC, Eason PLC (Ireland’s largest book retailer) and the Institute of Directors in Ireland. She also chairs the Performance and Remuneration Committee for Ulster Bank Ireland, and the Nomination Committee for WFBI. Gervaise was CEO of Communicorp Group (now Bauer), Ireland’s largest independent radio group for four years to the end of 2016. Prior to that Gervaise held senior roles in Ogilvy Worldwide for 16 years, most recently Global Client Director. Gervaise has also served on the boards of the International Rice Research Institute, a global organisation dedicated to abolishing poverty and hunger among those dependent on rice, and the Institute for International and European Affairs (IIEA).

Sarah Gentleman (Independent Non-Executive Director)

Sarah is Non-Executive Director, Chair of the Remuneration Committee and Member of the Audit, Risk & Nomination Committees at Rathbone Brothers. She has over 30 years' experience working in a combination of strategic and financial roles, having started her career as an analyst at McKinsey & Company. These include Business Development Director at Egg UK and Chief Financial Officer at LCR Telecom. Until 2012, she was a sell side banking analyst at Sanford Bernstein where she covered French, Spanish and Italian banks. Most recently, Sarah has been working as an advisor to early-stage technology companies with a focus on FinTech.

5. Director Roles and Responsibilities

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Karen Slatford, as Chair, is responsible for leading an effective Board, upholding high standards of corporate governance throughout the Group, particularly at Board level, and ensuring appropriate strategic focus and direction. Karen Slatford is also Chair of the Nominations Committee.

The Chief Executive Officer (Martin Davis) has overall responsibility for proposing the strategic focus to the Board, delivery of the business model & strategy and the day-to-day management of the Group's business.

Grahame Cook is an independent Non-Executive Director and is the chair of the Audit, Risk and Valuations Committee. Grahame is also a member of the Remuneration Committee and Nominations Committee as well as being the Senior Independent Director on the Board.

Richard Pelly is an independent Non-Executive Director and a member of the Audit, Risk and Valuations Committee, Remuneration Committee and Nominations Committee.

Gervaise Slowey is an independent Non-Executive Director and is a member of the Audit, Risk and Valuations Committee, Remuneration Committee and Nominations Committee.

Sarah Gentleman is an independent Non-Executive Director and chair of the Remuneration Committee as well as a member of the Audit, Risk and Valuations Committee and Nominations Committee.

The Non-Executive Directors are available to engage with shareholders should they have a concern that is not resolved through the normal channels.

Stuart Chapman is the Chief Portfolio Officer and ensures that the Board is properly briefed on the operating performance of the business, including in respect of the investment portfolio. Stuart is supported in respect of HR matters, risk and compliance by the HR Manager and General Counsel respectively.

Ben Wilkinson is the Chief Financial Officer and is responsible for the Group's finance and investor relations functions.

The Board has a Diversity & Inclusion Policy which sets out the crucial role that diversity and inclusion has to play in the leadership of the Company, and the targets that the Company is committed to meeting in the coming years. A copy of the Board D&I Policy can be found here.

6. Matters reserved for the Board

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The Schedule of Matters Reserved for the Board of the Company sets down those powers reserved for the full Board of the Company and which are not delegated to the Company's Executive Directors. The list contains some matters which the Board cannot, as a matter of law, delegate. In accordance with the Company’s articles of association the Board may, however, appoint committees as it thinks fit to exercise certain of its powers.

The following list is a summary of matters that require approval of the Board:

  • The Group's business and investment strategy;
  • The approval of any single investment by the Company that is greater than £10.0 million or 10% of market capitalisation;
  • Structure and capital of the Group;
  • Financial reporting, financial controls and dividend policy and approving annual budgets;
  • Internal control and risk management (including the Group's appetite for risk);
  • The approval of significant contracts and expenditure; and
  • Appointments to the Board and its Committees.

Please see schedule of matters reserved for the Board of Directors here.

7. Committees

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The Board has established an Audit, Risk and Valuations Committee, a Remuneration Committee and a Nominations Committee, with formally delegated duties and responsibilities as described below.

Audit, Risk and Valuations Committee

The Audit, Risk and Valuations Committee is responsible for ensuring that the financial performance of the Group is properly reported on and monitored. Its role includes monitoring the integrity of the Group’s financial statements, reviewing significant financial reporting issues, reviewing the effectiveness of the Company’s internal control and risk management systems and overseeing the relationship with the external auditors (including advising on their appointment, agreeing the scope of the audit and reviewing the audit findings). Its role includes reviewing the Company’s valuation policies and procedures to ensure that the Board is fulfilling its obligations relating to the independent and proper valuation of the underlying Group investments. It is also responsible for establishing, monitoring and reviewing procedures and controls for ensuring compliance with the relevant regulatory regime. The audit, risk and valuations committee will normally meet not less than three times a year.

As at 9 September 2021, Grahame Cook chairs the committee and its members include Richard Pelly, Gervaise Slowey and Sarah Gentleman. The UK Corporate Governance Code recommends that all members of the audit, risk and valuations committee be non-executive directors, independent in character and judgment and free from any relationship or circumstance which may, could or would be likely to, or appear to, affect their judgment and that one such member has recent and relevant financial experience. The Board considers that the Company complies with the requirements of the UK Corporate Governance Code in this respect.

Please see Terms of Reference of the Audit, Risk and Valuations Committee here.

The Remuneration Committee

The Remuneration Committee recommends the Group’s policy on executive remuneration, determines the levels of remuneration for the Company’s executive directors and the Chairperson and other senior executives and prepares an annual remuneration report for approval by the Shareholders at the annual general meeting assists the Board in reviewing the structure, size and composition of the Board. The committee is also responsible for reviewing succession plans for the Directors, including the Chairperson and the Chief Executive Officer and other senior executives. The Remuneration Committee will normally meet at least twice a year.

As at 9 September 2021, Sarah Gentleman chairs the Remuneration Committee and its members comprise Grahame Cook, Gervaise Slowey and Richard Pelly. The UK Corporate Governance Code recommends that all members of the Remuneration Committee be non-executive directors, independent in character and judgment and free from any relationship or circumstance which may, could or would be likely to, or appear to, affect their judgment. The Board considers that the Group complies with the requirements of the UK Corporate Governance Code in this respect.

Please see Terms of Reference of the Remuneration Committee here.

The Nominations Committee

The Nominations Committee is responsible for reviewing succession plans for the Directors, including the Chairperson and the Chief Executive Officer and other senior executives. The Nominations Committee will normally meet at least twice a year.

As at 9 September 2021, Karen Slatford chairs the Nominations Committee and its members comprise Grahame Cook, Richard Pelly, Gervaise Slowey and Sarah Gentleman. The UK Corporate Governance Code recommends that all members of the Nominations Committee be non-executive directors, independent in character and judgment and free from any relationship or circumstance which may, could or would be likely to, or appear to, affect their judgment. The Board considers that the Group complies with the requirements of the UK Corporate Governance Code in this respect.

Please see Terms of Reference of the Nominations Committee here.

8. Board evaluation

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The Board conducts formal performance evaluations each year . The process is carried out by way of detailed questionnaires completed by each member of the Board and covering topics such as the composition of the Board, the quality and timeliness of information provided, relationships between the Board, shareholders, employees and other stakeholders, and succession planning. The responses are collated by the Company Secretary, who presents a summary of the results to the Board for discussion.

The Board will typically agree a number of specific actions to take forward during the forthcoming year in order to improve its efficiency and effectiveness.

9. Committee evaluation

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Committee evaluation is also conducted by way of questionnaires, with the questions asked including the extent to which the Board's Committees are properly constituted and received appropriate information in order to discharge their duties, whether each of the Committees had performed their role and responsibilities, as detailed in their Terms of Reference and the reporting of the Committee activities to the Board.

10. City Code on Takeovers and Mergers – Mandatory Bid

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The City Code on Takeovers and Mergers (“the Takeover Code”) applies to the Company. Under Rule 9 of the Takeover Code, if a person acquires an interest in Ordinary Shares which, when taken together with Ordinary Shares already held by them or persons acting in concert with them, carry 30 per cent. or more of the voting rights in the Company; or a person who, together with persons acting in concert with them, is interested in not less than 30 per cent. and not more than 50 per cent. of the voting rights in the Company acquires additional interests in Ordinary Shares which increase the percentage of Ordinary Shares carrying voting rights in which that person is interested, the acquirer and, depending on the circumstances, its concert parties, would be required (except with the consent of the Takeover Panel) to make a cash offer for the outstanding Ordinary Shares at a price not less than the highest price paid for any interests in the Ordinary Shares by the acquirer or its concert parties during the previous twelve months.

Investor relations - contact us

IR@draperesprit.com

11. Major Shareholding Notifications

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A summary of Major Shareholding Notification requirements can be found here.

12. Investing Objective and Investment Policy

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The investment objective of the Group is to generate capital growth for Shareholders by the creation, funding, incubation and development of high-growth technology businesses.

The Group intends to meet its investment objective by: (i) providing early stage businesses with initial smaller rounds of seed and series A primary investments, co-investments and commitments to third party seed funds; (ii) making larger series B+ and later series C+ primary investments and co-investments for scaling technology companies; and (iii) undertaking secondary transactions.

The Group will seek exposure to early stage companies which combine technology and service provision, are able to generate strong margins through significant intellectual property or strong barriers to entry, are scalable and require relatively modest investment. The Group will primarily seek exposure to developing companies in, but not limited to, the following sectors of the digital economy: consumer technology, enterprise technology, hardware and deeptech and digital health and wellness.

The Group’s main focus is on making investments in the UK and Europe.

No investment will be made if its costs exceed 15% of the Gross Portfolio Value at the time of investment. A further investment may be made in an existing portfolio business provided the aggregate cost of that investment and of all other unrealised investments in that portfolio business does not exceed 15% of the Gross Portfolio Value.

The Group is committed to a policy of responsible investment that includes due consideration of Environmental, Social and Governance (ESG) factors through the lifecycle of our investments, from pre-screening to exit in alignment with the UN Sustainable Development Goals (UN SGDs) and the UN Principles for Responsible Investment (PRI) (to which Draper Esprit became a signatory in 2019). We aim to use our platform in venture capital to encourage and promote our values and ESG considerations in developing best-in class technology companies and achieving strong returns for our investors

13. Form of investment

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Investments are expected to be mainly in the form of equity, although investments may be by way of debt, convertible securities or investments in specific projects. In the case of equity investments, the Directors intend to take positions (with suitable minority protection rights where appropriate), primarily in unquoted companies. Draper Esprit (acting through the relevant Group entity) is an active investor, often taking a board position on the investee company.

Given the time frame to fully maximise the value of an investment, the Board expects that investments will be held for the medium to long term, although short term disposals of assets are also considered where the return on investment is commercially and/or circumstantially compelling and in line with the Group's investment strategy. The Directors intend to re-invest the proceeds of disposals in accordance with the Group’s investing policy unless, at the relevant time, the Directors believe that there are no suitable investment opportunities, in which case the Directors will consider returning the proceeds to shareholders in a tax efficient manner.

14. Notice to U.S. persons

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The ordinary shares of Draper Esprit plc ("Ordinary Shares") have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States and the Ordinary Shares may not be offered, sold, exercised, resold, transferred or delivered, directly or indirectly, within the United States or to, or for the account or benefit of, U.S. Persons (as defined in Regulation S under the U.S. Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction in the United States. There will be no public offer of the Ordinary Shares in the United States. Any offer or sale of Ordinary Shares will be outside the United States to non-U.S. Persons in offshore transactions in reliance on the exemption from the registration requirements of the U.S. Securities Act provided by Regulation S thereunder. The Company has not been and will not be registered under the U.S. Investment Company Act of 1940, as amended (the "U.S. Investment Company Act") and investors will not be entitled to the benefits of the U.S. Investment Company Act.

The Company and certain of its subsidiaries and subsidiary undertakings may be passive foreign investment companies ("PFIC") for U.S. federal income tax purposes, and they could each be a PFIC in future years and, if the Company and/or certain of its subsidiaries and subsidiary undertakings are PFIC, U.S. taxable investors may be subject to adverse U.S. tax consequences in respect of an investment in Ordinary Shares by a U.S. Person.

The Ordinary Shares have not been approved or disapproved by the U.S. Securities and Exchange Commission, any state securities commission in the United States or any other U.S. regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of any offering of Ordinary Shares. Any representation to the contrary is a criminal offence in the United States and any re-offer or resale of any of the Ordinary Shares in the United States or to U.S. Persons may constitute a violation of U.S. law or regulation.

15. Borrowing

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On 28 May 2019, the Board approved a credit agreement for a £50.0 million facility with Silicon Valley Bank and Investec to fund the future growth plans of portfolio companies. The term has subsequently been extended to 2024 and increased in size by £15.0 million to £65.0 million in line with the growing portfolio.

The Company will seek to maintain a conservative level of gearing and limit its borrowings to a maximum of 25 percent of the Group's net asset value.

16. Treasury

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Cash held by the Group pending investment, reinvestment or distribution is managed by the Group in accordance with the Group’s treasury policy and placed in bank deposits with major global financial institutions, in order to protect the capital value of the Group’s cash assets. Investments are held by subsidiaries incorporated for the purpose of holding investments.

Esprit Capital Partners LLP, Encore Venture LLP and Elderstreet Investments Ltd (all of which are FCA-regulated Alternative Investment Fund Managers and wholly owned subsidiaries of the Company) respectively manage the historic Esprit Funds, Encore Funds and Draper Esprit VCT plc in accordance with each of their respective investment objective and policy. The investment objective and policy applicable to the historic Esprit Funds, Encore Funds and Draper Esprit VCT plc is distinct from the investment objective and investment policy of the Group.

18. Advisors

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Company Secretary

Prism Cosec Limited Highdown House Yeoman Way Worthing West Sussex BN99 3HH

Nominated Adviser and Joint Broker

Numis Securities Limited 10 Paternoster Row London EC2M 7LT United Kingdom

Euronext Dublin Adviser and Joint Broker

Goodbody Stockbrokers UC, Ballsbridge Park Ballsbridge Dublin 4 Ireland

Legal Advisers to the Company (as to English law)

Gowling WLG (UK) LLP 4 More London Riverside London SE1 2AU United Kingdom

Reporting Accountants and Auditors

PricewaterhouseCoopers LLP, 7 More London Riverside, London, SE1 2RT, United Kingdom

Registrar

Equiniti Limited Aspect House Spencer Road Lancing West Sussex BN99 6DA United Kingdom

Legal Advisers to the Company (as to Irish law)

Maples and Calder (Ireland) LLP, 75 St. Stephen’s Green Dublin 2 Ireland

Financial Public Relations

Powerscourt Limited, 1 Tudor Street London EC4Y 0AH United Kingdom

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This website provides general information about Draper Esprit plc and its group of companies. The information contained in this website, including any material you may hereafter access, does not constitute an offer of securities for sale in the United States, Canada, Japan, Australia or South Africa or any other jurisdiction. Securities may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended, or an exemption from registration. For US regulatory reasons, US Residents are not to enter this part of the website.

Draper Esprit plc is not offering any securities or services in the United States or to US residents through any Draper Esprit website. A "US Resident" includes any US person, as well as (i) any natural person who is only temporarily residing outside the United States, (ii) any account of a US person over which a non-US fiduciary has investment discretion or any entity, which, in either case, is being used to circumvent the registration requirements of the US Investment Company Act of 1940, and (iii) any employee benefit or pension plan that does not have as its participants or beneficiaries persons substantially all of whom are not US persons. In addition, for these purposes, if an entity either has been formed or is operated for the purpose of investing in a particular security or obtaining a particular service, or facilitates individual investment decisions, none of the beneficiaries or other interest holders of such entity may be US Residents. Terms used in this paragraph (including the term "US person") have the meanings given to them in Regulation S under the US Securities Act of 1933.

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Draper Esprit plc is managed by Esprit Capital Partners LLP. No warranty is made by Draper Esprit plc or by Esprit Capital Partners LLP as to the accuracy or completeness of any information on this website. Any price information or indications of past performance on this website are for information purposes only, are subject to change without notice and can in no way be construed as a guarantee of future performance. There can be no guarantee that any investment objectives will be achieved.

It should be remembered that the price of shares in Draper Esprit plc and the income from them can go down as well as up and there is a significant risk of losing capital. We strongly encourage private investors to seek professional financial advice, before reviewing any of our literature.

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