Proper Business How we invest

Patient capital.
Modest returns.

We invest at pre-seed and seed, lead the round, and stay with you through patient equity and revenue-based financing. No fund clock. No unicorn required.

Typical parameters

We only invest in companies that have adopted the Proper Business provisions in their articles — see the provisions page for the full legal language. The provisions require three numbers to be set by the founder; the ranges below are what we consider sensible.

Pay ratio
3–10×
Highest to lowest paid. We suggest 5×.
Investor return cap
5–20×
On capital invested. We suggest 10×.
Founder wealth cap
£5–30m
Your number to set. We suggest £15m.

Typical funding

Pre-seed cheque
£100k
Leading a £200–250k round at £1m pre-money.
Seed cheque
£200k
Leading a £400–500k round at £2m pre-money.

These rounds are smaller than typical venture because your business shouldn't need more. Capital efficiency is a feature, not a constraint. Future growth capital comes through revenue-based financing — no further dilution, no new shareholders, no new pressure.

What we back

UK-based
You're building in the UK — we want to be able to meet you, know your market, and be useful to you beyond the cheque.
Already earning
Someone is paying you for something — or will be very soon. We're not here to fund the search for a business model.
Doesn't need much
Your plan works with small rounds. If the business only functions at scale with large amounts of external capital, the Proper Business model probably isn't the right fit.
Probably not a fit You're looking to top up an existing round, your model requires significant capital before it generates revenue, or your primary goal is a large exit rather than a sustainable, profitable business.

The honest comparison

Everything flows from one number: the return their investors expect.

The pension funds, endowments, and institutions that back a typical venture fund expect to earn 15% IRR per year, net of fees. That is not greed on the VC's part — it is their fiduciary obligation, baked in before they ever meet you. And it determines everything that follows.

To hit 15% net IRR over a 10-year fund life, a £100m fund needs to return roughly £400m to its LPs — before management fees and carry. VC funds are built around a power law: a small number of very large outcomes drive the returns. This isn't a flaw in the model — it's the model. But it does mean that to work for their investors, VCs need to back companies that could plausibly be worth £500m or more. A company that returns a solid 5× on invested capital — genuinely excellent by most measures — barely moves the needle for a fund of that size. The arithmetic shapes everything: which companies get backed, what growth rates get encouraged, and what kind of exit gets celebrated.

We target 4% IRR, net of fees. That is not a rounding error. It is the structural foundation of a completely different relationship — and it changes every dimension of what working with us actually looks like.

Standard VC
Proper Business
Investor IRR target
15%+ net of fees. Requires the fund to return ~4× capital over 10 years — almost entirely from a small number of breakout outcomes.
4% net of fees. Achievable from a portfolio of durable, dividend-paying businesses. No breakout required.
Lifestyle
Fundraising is an ongoing part of the job. Growth expectations are set by investor timelines as much as business fundamentals. Exit is the goal, and working toward it shapes most major decisions.
Build at the pace the business warrants. No new shareholders after seed. No external growth targets. The measure of a good year is a profitable, well-run company you still control.
Timeline
10-year fund life. Exit pressure — IPO or acquisition — begins around year five or six, on the investor's schedule, whether the moment suits you or not.
No fund clock. Run your business for five years or fifty. Profitable and independent is success, not a consolation prize.
Likelihood of a return
VC is a power law model — a small number of outcomes drive fund returns. Founders in companies that don't reach those outcomes often make less than they expected, even when their business was genuinely good.
If you build a durable, profitable business, you will reach your personal wealth cap. Not might. Will. The model does not require you to win a lottery.
What an exit looks like
IPO or trade sale, typically after 8–12 years, at £500m+. For the right company going after the right market, this can be exactly the right outcome.
A profitable business that could exit for £30–100m after 5–8 years — or simply keep running and paying dividends.
Founder ownership at exit
Typically 5–10% by the time multiple rounds of dilution have played out. The headline exit number can look impressive while the founder's actual share is a fraction of it.
50–70%. Two small rounds, no further dilution. What you build, you keep.
Personal wealth
High ceiling — £50m–£500m+ in the best cases. Actual outcome depends heavily on dilution across rounds, liquidation preferences, and exit timing. Variable by design.
Ceiling of £10–30m. A smaller number — but a real one. A founder who is genuinely wealthy, with surplus flowing to causes they chose on day one. The outcome is yours to define.

What we are not

We are not a venture fund. We do not need a unicorn. We won't push you toward an exit you don't want or a funding round that changes the nature of what you're building. We have one fund cycle: indefinite. If your business is profitable and you want to stay independent and pay dividends for twenty years, that is a perfectly good outcome for us.