Draper Oakwood launches in UK

Founded by Aamer Sarfraz, who has set up a string of companies through Indus Basin Holding including Texas-based United Guar and Rice Partners, Draper Oakwood is looking to invest in growth companies in exchange for a share in future revenues, rather than for a stake in the business.

The newly formed investor has labelled its approach as "R Round" investing, or "Royalty Round". According to the firm, royalty-based finance is prominent in the oil & gas, healthcare and mining industries, and it now wants to make it available in other sectors.

This structure of investment means that entrepreneurs do not give up any equity or control in their business. It also means that entrepreneurs do not have to provide collateral or guarantees, which they would do if receiving bank funding.

The new firm has been endorsed by the Draper Venture Network. It aims to start investing early next year. However, it won't be raising a fund; instead it will work with a small number of institutional investors. It will focus on investments in the UK and Europe, though its mandate will be to invest globally.

Other Draper Oakwood team members include senior director and chair of the investment committee Rod Perry, who was previously global head of venture capital at 3i. Another former 3i partner from the venture team, Ali Erfan is now a director at Draper Oakwood, while Richard Atterbury, former vice-chair at Nomura International and previously co-head of European capital markets and global co-head of the financial sponsors group at Lehman Brothers, is also a director at Draper Oakwood.

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• Topics
• Venture
• Early-stage
• Expansion
• Venture