Guest Editorial Series: Charles Sidman and ECS Capital Partners

In the first edition of our Guest Editorial Series, we are pleased to hear from Charles Sidman presenting ECS Capital Ventures:

Everyone involved in the European Business Angels Network (EBAN) itself, and the entrepreneurial community as a whole, understands that investments in the early-stage ecosystem constitute a unique, attractive and critically important asset class.  Not only do multiple studies show that these investments generate higher returns on average than other major asset classes, but these returns are largely uncorrelated with those of other assets and therefore play a valuable role in anyone’s overall portfolio.  Most importantly, investments in this asset class provide essential support to the entrepreneurs and their enterprises that are the true engines of economic development worldwide, generating the increased wealth, jobs, taxes, standard of living, etc., that societies and governments so value.

Unfortunately, several economic facts of life, plus happenstances of historical development, make our present early-stage financial system less functional and attractive for participants and stakeholders than it could be.  With many players operating effectively in silos with primarily their own kind, there is too much one-size-fits-all thinking rather than respect for and fostering of diverse policies, participants and mechanisms.  We know from biology that the more diverse an ecosystem, the greater is its functional potential and robustness.

Of great concern, the vast majority of individuals and parties that have sufficient capital to participate in this asset class do not do so, due to expressed concerns about risk, feasible and adequate diversification, complexity, (in)efficiency, competition and/or the sheer effort required.  For the sakes of everyone involved or affected, we should enable the participation of these absent players through means that are agreeable and respectful to them and do not require unwelcome activities or pursuits.   On the other hand, everyone who is active today or becomes so tomorrow will benefit from better collaboration at all levels.  In particular, more plentiful and diverse deal flow and access, greater consensus concerning fair and effective deal terms, better joint pre-investment diligence and post-investment monitoring, and more effective pooling of financial resources are aspects that could be significantly improved for the benefit of all.  All of these issues are well understood by EBAN and its members.

ECS Capital Partners, an active associate member of EBAN, has been designed to contribute to just such integration, synthesis and collaboration in the global early-stage ecosystem.  It is committed to superior financial returns, primarily from enterprises based on sophisticated (“deep”) science and technology, but simultaneously, for reasons of both ethical choice and compelling market needs, with companies producing positive social, environmental, or human impact (summarized in the United Nations’ 17 Sustainable Development Goals, or SDG’s).  ECS is now raising up to $100MM USD, to operate from the earliest stages of start-up development (particularly in collaboration with active Angels and their groups worldwide) through later (usually VC-dominated) growth.  Due to active external collaborations as well as vertical integration within ECS, Angels and their groups will have access to broader deal flow opportunities, more funding for local companies, and financial resources to continue to be represented and safeguarded in later rounds.  Larger later-stage investors will benefit from a greater supply of well-known and deeply understood candidates for follow-on funding.

For individuals and entities not opting for active direct involvement, ECS provides an entire multi-stage, diversified portfolio in this asset class, managed professionally and with adequate financial resources and discipline, for as little as a $25K USD commitment.  Additionally, with participation in several hundred well chosen initial companies, and follow-ons in the more successful, ECS will provide its investors with an Intelligent (i.e. still highly selective) Composite or Index for the early-stage asset class.