W&F October 2017

www.wealthandfinance-news.com 24 Wealth & Finance International - October 2017 Cottonwood provides disruptive capital to disruptive technology businesses. The firm focuses its investments on high specification technology and hard science, which is patent based. Also, the firm concentrates on investing in robotics, photonics, optics and advanced materials. Lastly, Cottonwood places a focus on the automotive industry, clean energy, sensor technology, high- tech health, and lastly nanotechnology. Working within the wealth and finance industry, there are many projects and new clients which are undertaken on a regular basis. Alain explains the firm’s approach to client service, telling us how he ensures that clients receive the best support possible, and expert advice from the company. “Cottonwoods’ Limited Partners are pension funds, HNWI’s, asset managers, foundations and corporates. We update our clients every quarter about the progress of the growth of our investments.” Furthermore, this responsibility to provide the best results to clients can be linked to the company’s overall mission, as Alain alludes to. Bringing its partners, the best returns is vital to the success of the firm. Investing in the best technology is a big contributor to creating success, enabling the company to roll out its start-ups globally. “Customer focused, Cottonwood invests in high tech technology and the goal is to bring our LP’s the best returns. We can reach these goals, but only if we invest in the best available technology in order to roll-out our start-ups on a global scale. To achieve this, our seed rounds are higher and we connect our start-ups to our corporate network. We have intensive contacts with 60 corporates on top-level and three of them are investing in us. With the higher seed round the start-up can attract directly from the beginning top management to prepare the company on a global scale.” Alain tells us what the internal culture is like within the firm, and he explains how he plans to cultivate this. Supporting staff to ensure that they can provide the best service is bought about by a professional approach, but there is a relaxed atmosphere between staff. “Essentially, we have three equal partners; the internal culture inside is informal but professional. When working externally, we behave like top professionals, which we are. Most of the technical talent that we hire, we spot around the technical universities and research institutes. For recruiting top management for our investments, we have our own worldwide network.” Ensuring that it stays ahead of emerging developments within the finance sector, Cottonwood employs techniques which means it is ready to adapt to any advances. Alain talks about the large network that the firm possesses, which opens up a huge amount of opportunities and avenues for the company to take advantage of. “Crucially, Cottonwood has a large network and often gets handed first opportunities. Not only from the various ecosystems, research institutes and technical universities but also from corporates, for whom an investment often comes too early. “Fundamentally, the company has virtually exclusive access to real science based innovation at the founding/seed stage in its markets. As such, once Cottonwood is known to exist in its markets there is significant in-bound deal flow generated from the research and entrepreneurial community.” Interestingly, Alain comments on Cottonwood’s financial performance over the past twelve months, as he lists the secrets behind its success. He notes the hands-on mentoring that the company provides, as well its global corporate network. “Cottonwood’s performance on Fund I is 39% IRR and a cash-on-cash return is 4.1x. Regarding our secrets, Cottonwood uses a higher first investment round; with the extra money, the start-up can attract directly from the beginning top management and outsource crucial technology development to Cottonwood Technology Fund is a top performing early stage venture capital fund with a regional focus on Southwest USA and Northern Europe. Alain le Loux MSc. MBA gives us an insight into the company’s services, as well as detailing the firm’s overall mission. Private Equity Excellence 1710WF14 “Fundamentally, the company has virtually exclusive access to real science based innovation at the founding/seed stage in its markets.” professionals. Our worldwide corporate network means Cottonwood has warm contacts at 60 corporates from the Global-500 Cottonwood at the highest level (CTO, Head of Corporate Development or Head of Corporate Venturing). Hands-on mentoring is in place at the company, and Cottonwood is always active in the board of the start-up and focuses primarily on strategic guidance, attracting potential partners, potential customers, attracting senior management and follow-on capital.” Looking to the future, Cottonwood is currently fundraising for their Fund III, with a size of €100 million. There is an exciting future ahead for the company as it prepares to adapt to any developments she foresees and how will she adapt around these. “Ultimately, I foresee an increase in investments in private equity; early stage investing is for much professional investors still not common, but they have to keep in mind it can bring better returns than average.”