Investment memorandum
As an investment boutique, we’re always between the investors and entrepreneurs.
Our goal is to collaborate with individuals who create new technologies for the future, take responsibility for their work, and are ready to deliver returns to investors.
Who we are
As an investment boutique, we’re always between the investors and entrepreneurs. We engage in projects and businesses that have the potential to change the world for the better. Our goal is to collaborate with individuals who create new technologies for the future, take responsibility for their work, and are ready to deliver returns to investors.
I am Arkady Rakhilkin, CEO of the investment boutique Seven Rivers Capital, a financier and investor. Over the past 25 years, I have been involved in a series of deals and projects, totalling a funding amount of $150mln. My partner, Erzhan Durumbetov, Chief Investment Officer, possesses exceptional experience in the preparation and organization of complex structural transactions in the capital market. The primary assets of our company are expertise and experience founded on complete dedication to each deal. The fundamental principle of our participation is an exclusive mandate and transparency.
Funding Sources
We do not raise the money to traditional funds for further investment, as we do not believe in the efficiency of such structures. We carefully prepare the deal structure so that the investments are not wasted on diligence costs and a clear ROI.
Our investors’ funds are transparent in origin, confirmed by reputable banks and legal firms. Our major clients are investors and entrepreneurs who themselves are experts in their respective fields from Europe and the Middle East.
What We Can Do for Entrepreneurs
We assist in fundraising, participate in strategy development, prepare M&A, and generate business development ideas. We establish networking and conduct financial model audits. The key principle is that after organizing the deal, we continue to support both the investor and the business until the achievement of our crucial milestones. In simple terms, we act as professional matchmakers in the world of capital and ideas and are morally responsible for their strong alliance.
What We Offer to Investors
Our main focus is Fintech & Marketplace businesses. Over the next 10 years, more than 0.5 billion people will generate about $300 billion annually by purchasing and paying for goods and services in the digital world. In China and India alone, the growth of population (up to 3 billion), economy and per capita income allowed them to take 2nd and 3rd place in the world, including due to technology and the construction of digital infrastructure and e-government. The next center of such Digital growth is Central Asia and Africa. Frontier markets, where many transactions are carried out manually or in person, will soon be flooded with investment money with a greater appetite for risk to transform them into an online world.
We organize deals:
– In international technology startups in IT, operating on SaaS, B2B, and B2C models in emerging markets with basic digital infrastructure. Our main focus is on P2P Payment/Card Technology, BaaS/Digital Banking, and ecosystems based on sharing-economics ideas. Generation Z, the primary consumers for the next 20 years, adopting a shared consumption model without ownership rights and financing each other without traditional banking involvement. Software products based on sharing-economics principles set a global trend, excluding traditional exchange of “goods – money – goods.”
– We believe in sharing economy. The global trends consist of collective use of clothing, home appliances, real estate, modes of transportation, hotels and even money, based on user’s consent. This generates a need for “smart cities” based on development of smart transport and housing systems as well as rational and responsible use of resources, which lead to creation of new business models. The sharing economy is one of the most rapidly growing market phenomena in history. Since 2010, investors have contributed over $23 billion in venture capital funding to start-ups that are using a share-based business model. As many of the share-based firms are private, it is difficult to know the exact size of the sharing economy.
– Our experience includes traditional oil, gas and mining enterprises and deposits. About 80% of the world’s electricity is currently generated by power plants operating on gas, oil, and coal. Copper is required for electricity transmission, and lithium is needed for battery production. We recognize the importance of investing in technologies for environmentally conscious hydrocarbon/metal extraction and have significant experience in organizing financing and M&A in such deals.
– Post-COVID development of cloud services, data transmission/storage systems, and data centers has led to a rapid expansion of remote services. Cloud infrastructure (or IaaS – Infrastructure as a Service) is a virtual data center for any business and government organizations. Consists of virtual machines, processing power, RAM, disk storage and internal networks. In the cloud you can host a CRM system, a database, an accounting program, a website, an application, or even the entire IT infrastructure of a company. For greater fault tolerance and business reliability in the cloud, you can build a backup site. Cloud solutions are suitable for solving any problems of enterprises, local governments, private corporations in any sector. There is especially great demand for such services in the public sector. Creating and storing backup copies of critical data or building a backup site in case of force majeure, transferring one service or the entire IT infrastructure to the cloud – these are the latest trends in working with data.
– Access to medical and educational services for the broader population is an essential part of the modern world. We cohort projects in MedTech, EdTech, and Tele-medicine that have obtained the necessary certificates from government bodies for their expansion/scaling into new markets.
How to Initiate Negotiations with Us
For initial project or deal consideration, we require a teaser, financial model, and beneficiaries’ track records. If inquired, we organize a meeting/conference call with the founders/initiators. The main topics are vision, strategy, values, paths to success, team professionalism, founders’ motivation, market and business parameters, product, and customer components. We then conduct our own due diligence and decide whether to proceed with the deal or decline.
Preparing a deal or business/startup for financing/investment requires preliminary work: financial statement audits, data room population, stress analysis of the economic and financial model, legal opinion, deal structure preparation, investment teaser, and memorandum. All this work is carried out by us and under our guidance, but costs are carried out by the deal’s beneficiaries.
How we do investment process
We act as professional intermediaries between the capital market and business. We assess crucial criteria influencing investors’ decisions and put significant effort into deal preparation. Our analysis and packaging convey current company results, business/project’s scalability, business model’s sustainability/profitability, team motivation, and professionalism to the investor.
Substantial work is carried out before presenting data to the investor; we usually start after signing the NDA, Exclusive Engagement Letter, and payment of the non-refundable initial Fee, demonstrating the seriousness of the beneficiary’s intention.
Next, we prepare the necessary materials and create a shortlist of suitable investment account criteria. Next an NDA is signed and the teaser offered for consideration. If interested, the investor provides a Letter of Intent (LOI) and gains access to the prepared Data Room. Upon confirmation of interest in entering the deal, the investor provides Proof of Funds, signs a head of terms with the beneficiary, and initiates the Due Diligence process as part of deal preparation. The escrow agent typically guarantees the deal’s execution and the payments. In case of success, we receive a Success Fee, ranging from 3.5% to 10% of the financing amount, depending on its size.