Venture Capital
Reinvented.
Draper Esprit plc Annual Report 2020
Year ended 31 March 2020
Registration number 09799594

The future.
Built by entrepreneurs.
We back Europe’s best entrepreneurs. As one of the most active
venture capital firms in Europe, Draper Esprit invests in high growth
technology companies with global ambitions. We fuel their growth
with long-term capital, access to international networks, decades of
experience building businesses and the knowledge that a better future
requires new thinking.
We reinvented venture capital. We don’t just invest in entrepreneurs,
we are entrepreneurs. Our public listing and multifund model allow
us to provide entrepreneurs with a more flexible approach to funding,
to back the best teams for longer, and give investors access to a new
asset class.
We are global. The best entrepreneurs will take their companies
beyond Europe. To help them, we are part of the Draper Venture
Network, a global community of 24 independent funds. We have
collectively backed businesses such as Baidu, Tesla, Cambridge
Silicon Radio, Graphcore and Revolut.
In This Report
02
Performance Highlights 2020
03
Chair’s Introduction
04
CEO’s Statement
07
Case Study: Experience Matters
Strategic Report
10
Market Context
12
The Investment Opportunity
13
Our Investment Strategy
14
Supporting Companies for Growth
15
Case Study: Pod Point
16
Our Investment Criteria
17
Seed Funds Update
18
Our People
20
Our Pools of Capital
21
Our Portfolio
22
What’s in a Share?
23
Our Partnership with Earlybird
24
Activity in the Year
26
Case Studies: Fintech
29
Portfolio Review
33
Core Company Updates
41
Financial Review
44
Key Performance Indicators
45
Sustainability
48
Section 172 Statement
52
Principle Risks
Governance
58
Board of Directors
61
Chair’s Corporate Governance Report
65
Audit, Risk and Valuations Committee Report
67
Remuneration and Nomination Committee Report
72
Directors’ Report
74
Directors’ Responsibility Statement
Financials
78
Independent Auditors’ Report
84
Consolidated Statement of Comprehensive Income
85
Consolidated Statement of Financial Position
86
Consolidated Statement of Cash Flows
87
Consolidated Statement of Changes in Equity
88
Notes to the Consolidated Financial Statements
117
Company Statements of Financial Position
118
Company Statement of Changes in Equity
119
Notes to the Company Financial Statements
126
Directors, Secretary and Advisers
127
Notice of Annual General Meeting
131
Glossary 
The Strategic Report comprising the inside cover to page 55 has been
approved by the Board and signed on its behalf by 
B.D. Wilkinson 
26 June 2020
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Performance Highlights 2020
£40m
Profit after tax of £40m
(year to 31 March 2019:
£111m).
Operational highlights

- The value of the core portfolio companies has increased to £471m
from £415m as at 31 March 2019.

- Invested in 9 new companies (including 4 via Earlybird VI*) and 19
existing portfolio companies (including 4 via Earlybird VI*) during
the year.

- Committed to 4 new seed funds, bringing the total seed fund
of funds portfolio to 20 with total commitments of £39m. £13m
drawn down at year-end, of which £7m was drawn during FY2020.

- Acquired the remaining interest in Encore Ventures LLP, the
partnership which manages Draper Esprit’s EIS funds.

- Appointment of Martin Davis as Chief Executive Officer in
November 2019.

- A focus on scaling our investment capability and building out the
infrastructure to support the next stage of our journey.

- Reacted quickly to the COVID-19 pandemic to safeguard
employees, our investments and monitor the liquidity of the
Company.
“Now more than ever, technology plays an integral role
in all our lives and has enabled us to adapt to rapidly
changing circumstances and challenges.”
Karen Slatford
Non-Executive Chair
10%
Gross Portfolio Fair
Value increase of 10%
with a £59m fair value
movement in the year
(31 March 2019:
£140m, 58%).
£40m
Cash realisations of £40m
(year to 31 March 2019:
£16m), with further
exits amounting to
approx. £80m announced
post year-end.
<1%
Operating costs (net of
fee income) continue to
be less than the targeted
1% of year-end NAV.
£34m
£34m available cash
resources at year-end
and undrawn debt
facilities of £5m, further
complemented by c.£50m
from EIS and VCT funds
(31 March 2019: £150m+).
555p
NAV per share increase
by 6% to 555 pence
(year to 31 March 2019:
524 pence).
£703m
Gross Portfolio Value
increased by 18% to
£703m (31 March 2019:
increase of 144% to
£594m).
£90m
£90m invested by the
Group (year to 31 March
2019: £226m including
£106m via Earlybird),
and a further £38m was
invested by EIS/VCT (year
to 31 March 2019: £35m).
£660m
Net Assets of £660m
(31 March 2019: £619m).
US$1.8bn
US$1.8bn raised by the core
portfolio in the year
(year ending 31 March
2019: US$1.6bn).
Highlights
Annual Report 2020


Post period-end

- Extended the term of the revolving credit facility with Silicon Valley
Bank and Investec by 1 year to 2023 and increased its size by £10m to
£60m in line with Draper Esprit’s growing portfolio.

- Zynga Inc. announced their agreement to acquire Peak Games for
$1.8bn, which will, subject to closing, indicate a fair value holding for
Draper Esprit of approximately £80m, representing a fair value uplift
of £26m in the year ending 31 March 2020 and a further approx. £12m
anticipated post year-end (actual returns are subject to completion
conditions, including FX movements, and acquirer share price
movement with respect to the stock component).

- Simon Cook will be stepping down from the Board from 1 July 2020.
Simon will remain with the Company as founding partner and focus
on generating new deals and will continue as a board member for a
number of portfolio companies.

- Actively appraising dealflow opportunities and making selective
investments in high quality companies in markets that benefit from the
accelerated transition to digital such as Cazoo (online car retailer).

- Portfolio companies continue to raise financing rounds (some after
the COVID-19 pandemic had impacted the economy), such as Aircall
and others as yet unannounced.
Some of the above measures are Alternative Performance Measures (“APMs”) - see note 30 to
the consolidated financial statements for further details.
*Reporting threshold – companies with a NAV of £1 million or more.
Karen Slatford 
Non-Executive Chair
Following another strong year of financial and
operational performance, I am delighted with
the progress that Draper Esprit has made to
invest and support Europe’s highest growth
technology businesses especially as we face
the impact of the COVID-19 crisis.
Now more than ever, technology plays an
integral role in all our lives and has enabled us
to adapt to rapidly changing circumstances
and challenges.
Draper Esprit has always been focused on
investing in the technology of the future and
this will be even more critical to help kickstart
the global economy.
During the year, we have continued to
make investments in four key sectors of:
(i) consumer technology; (ii) enterprise
technology; (iii) digital health & wellness;
and (iv) hardware & deeptech. The majority
of the portfolio is well positioned to benefit
from historic trends, some of which
have been accelerated by the impact of
COVID-19. Companies focused on secure
cloud, automation, online financial services,
gaming/entertainment, and digitalisation
are continuing to trade well with minimal
disruption and there are indications of strong
market growth for high quality companies
operating in these areas.
In parallel with our continued focussed
portfolio approach and our vision to
democratise venture capital we have also
made some investments in our own business
to build the infrastructure that will enable
us to broaden our appeal to a wider pool
of investors who would not usually have
access to private high growth technology
companies.
Martin Davis joined us in the latter part
of 2019 as Chief Executive Officer. Martin
brings with him experience of working in both
technology businesses and in senior roles
in financial services. Simon Cook remains
with the firm and will focus on what he
loves best, working with entrepreneurs in our
existing portfolio and identifying new exciting
investments as Founding Partner of Draper
Esprit. Stuart Chapman continues to bring his
experience as a critical member of the Board
and senior Executive team. As well as these
changes to our senior leadership team, we
expanded our HR, IT and legal functions and
welcomed new members to the Partnership
team, including two internal Partner
promotions, one new Investment Director
hire, and a new Senior Partner appointment
post year-end.
We believe the combination of Martin’s
experience with Simon and Stuart’s deep
sector commitment and long standing
expertise in working with start-up and scale-
up businesses, combined with a team of
talented investment professionals position
us well to compete for and invest in Europe’s
most exciting technology companies.
To reinforce our commitment to entrepreneurs
we also acquired the remaining interest
in Encore Ventures LLP in March 2020, the
partnership which manages Draper Esprit’s
EIS funds. During the year we supported our
existing portfolio with follow-on capital while
also backing new firms, including making
investments in an exciting fintech business
and a pioneering IoT start up through to
a digital analytics firm and a graphene
technology company.
The end of this financial year saw an
increasingly challenging environment
resulting from the COVID-19 pandemic.
We took early steps to implement measures
to safeguard employees, in our business,
and to ensure increased dialogue with our
portfolio companies by providing advice and
support throughout this difficult time.
Although a small number of our portfolio
companies operate in industries which
are more directly affected, such as travel,
leisure and hospitality, the vast majority
of our portfolio remains optimistic and are
preparing for a faster transition to digital
and stronger growth when the economic
environment starts to improve. We remain
one of a small number of companies with
the resources to provide growth and support
to businesses which will benefit from the
key trends which are likely to accelerate as
part of the post COVID-19 recovery. We
are continuing to see a strong pipeline of
exciting opportunities and look forward to
maintaining our outstanding investment
track record.
Once again, I would like to thank the team
at Draper Esprit for their enthusiasm and
flexibility during this difficult period and for
their continued commitment to our portfolio
companies. We look forward to the future
with confidence with a more experienced
operational team, an exciting portfolio
of existing companies and a pipeline of
ambitious potential investments.
See more at: draperesprit.com
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Chair’s Introduction
Annual Report 2020

Chair’s Introduction
Martin Davis
CEO
I have been deeply
impressed with the
quality of our team
and our investment
expertise, the
strength of our
existing portfolio
and the depth of
our pipeline.
Overview
Having joined the business in November
2019, I have been deeply impressed with
the quality of our team and our investment
expertise, the strength of our existing
portfolio and the depth of our pipeline.
The Group has had an active year of
investing and further building the portfolio.
We have remained focused on providing
European entrepreneurs with the capital
they need to become global leaders while
continuing on our mission to democratise
venture capital and provide our investors
with access to high growth, privately owned
technology companies.
At the end of our financial year, the
COVID-19 virus led to a global pandemic,
the impact of which is clearly profound,
both from the perspective of public health
and the economic outlook. The necessary
restrictions imposed by Governments
on businesses and employees in order to
contain the spread of the virus significantly
curtailed the operations of many businesses
across the wider economy, however our
portfolio remains overall very well positioned,
in particular given the expected acceleration
in the transition to digital.
Over the medium to long term, we
believe the recovery from the pandemic
will sharply accelerate the trends which
Draper Esprit’s portfolio businesses focus
on. Transformations such as secure cloud
infrastructure, remote financial services,
online gaming and entertainment, and
digital health all stand to benefit from
the societal shifts which the crisis has
engendered. These dynamic businesses
are weathering the current environment
well and we are confident they will emerge
stronger when economic activity normalises.
Prior to the pandemic, the Group was on
track to achieve its targeted annual 20%
portfolio growth through the cycle and,
despite the current market backdrop, has
still delivered strong growth across the
business. During the year, our Gross Portfolio
Value grew from £594.0 million to £702.9
million with a gross fair value movement of
£58.5 million (year to 31 March 2019: £140.1
million), a 10% Gross Portfolio fair value
increase in the year.
Our focus now is to build on this strong
financial performance by continuing to hire
the best deal-making talent in the sector
and, as our deal team grows, to ensure that
the infrastructure is in place to support it.
We are committed to building best-in-class
processes and capabilities that will enable
us to maintain the integrity and agility of
our investment process as we support high
quality and exciting businesses successfully
navigate this challenging time.
Draper Esprit’s position as one of Europe’s
most active VCs, and our long and
deep understanding of the needs of this
community, put us in an excellent position
to play a leading role in helping European
technology entrepreneurs build the future.
Operating review
Our structure as a publicly listed company
investing alongside co-investment funds
differentiates us from our competitors and
helps us in our aim of providing European
entrepreneurs with the capital they need
to become global leaders. Being publicly
listed means that we have the flexibility,
and access to different sources of capital, to
provide teams with the backing they need at
the time they need it most.
We also believe that the high standards of
governance, oversight, and transparency to
which we are held as a result of our listing is
fundamental to our success at a time when
the companies we invest in are increasingly
mindful of who they choose to partner with.
Over the last decade we have witnessed a
historic shift in the capital markets from
public to private with companies staying
private for longer, raising more capital and
reaching greater levels of maturity before
exit. This has led to a rapid expansion of
both new VC funds and the total level
of fundraising. We have also witnessed
Europe starting to realise its potential as a
technology powerhouse. Given the flexibility
in our structure and the experience and
expertise within our team, Draper Esprit
is in an excellent position to benefit from
opportunities that these trends provide.
Leveraging our co-investment model
provides improved access to the best deals,
as well as managing third-party funds. On
10 March 2020, we acquired the remaining
interest in Encore Ventures LLP, the
partnership which manages Draper Esprit's
£40m
Cash realisations in plc
£90m
Cash invested in next
generation companies
£660m
Net Assets
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CEO’s Statement
Annual Report 2020

CEO’s Statement
EIS funds, better aligning our group structure
to support the continued scale-up of our
business whilst simultaneously increasing our
fee revenue. The Group also holds a 30.77%
stake in leading VCT manager Elderstreet
Holdings Limited, which manages Draper
Esprit VCT plc (LSE:EDV), with an option to
acquire the remaining interest.
Our disciplined approach to investment
remains central to our overarching strategy;
while we continue to review thousands
of potential portfolio companies, we only
invest in those with strong technology and
capital-efficient business models, visionary
management teams and robust gross
margins. As we scale our business, we will
maintain this discipline, which is particularly
relevant in the current downturn.
We continue to invest at strong rates,
investing £89.9 million in new and existing
portfolio companies (year to 31 March
2019: £226.4 million), which included our
continued investing through our partnership
with Earlybird in Germany and seed funds
strategy, to give us more breadth and scale.
The £89.9 million included funding to 19
scale-up companies from our existing
portfolio as well as to 9 new portfolio
companies (including 4 follow-on and 4
new investments via our partnership with
Earlybird*). During the year, we generated
£39.5 million of cash through exits including
amounts held in escrow. The value of our
gross portfolio grew by 18%.
Successful exits
During the year, we announced the sale of
our full stake in Pod Point, the UK's largest
independent provider of electric vehicle
charging, to EDF Energy, representing a
return of 2.3x, with an IRR of 39% over 3
years.
Having backed Pod Point through a critical
stage in the company's development and
supported it through its journey, their
new partnership with EDF is an exciting
development for the business and a prime
example of how Draper Esprit is able to
help portfolio companies secure important
backing from strategic partners.
We also received proceeds from the partial
sales of our stakes in Transferwise, UiPath,
and Codility, and the sale of our full stake in
Finnish DevOps company, Bitbar, alongside
proceeds from amounts previously held in
escrow relating to past disposals.
Post year-end, Zynga Inc. announced their
agreement to acquire Peak for $1.8 billion,
which will, subject to closing, indicate
a fair value holding for Draper Esprit of
approximately £80.0 million via Earlybird IV
(actual returns are subject to completion
conditions, including FX movements, and
acquirer share price movement with respect
to the stock component).
Since IPO, as at year-end we have exited
22 companies, realising over £105.0 million
in cash, with further proceeds expected
subject to closing, as referenced above,
from the sale of Peak of approximately £80.0
million post year-end. An advantage of our
model is that we have the ability to build a
portfolio with assets of varying maturity, for
example through secondary deals, providing
us with a strong cycle of realisations across
the breadth of the portfolio.
Investments
Our unique structure enables us to offer
funding options to entrepreneurs at all
stages of their growth. We have the
flexibility to back companies through the
lifecycle, from seed via our seed funds
strategy to scale-up, through to IPO or
acquisition.
New portfolio company investments
We partnered with a range of high growth,
ambitious technology start-ups during the
period through our investments in new
portfolio companies: Thought Machine,
Sweepr, Decibel, Freetrade, and Paragraf.
We have also invested in new portfolio
companies via our partnership with
Earlybird, including GetSafe, Instamotion,
Aiven, and Isar Aerospace.
Seed fund strategy
Our seed fund strategy continues to give us
access to the best early stage deals across
the markets where we operate, while also
ensuring that early stage opportunities
across Europe are well funded with capital.
Building a community of seed funds gives
us access to high quality deal flow and
allows us to work alongside a network of
funds from across Europe to fuel the next
generation of visionaries, the best of whom
we help when they need later stage funding
to grow.
In the year, we have committed a further
£5.3 million to 4 new funds, FRST Ventures,
Change Ventures, 7 Percent Ventures, and
LDV Capital.
To 31 March 2020, the Group has made a
total commitment of £39.1 million to 20
funds, with £13.3 million invested at the
year-end, of which £7.2 million occurred
during the financial year. The remaining
commitments will be drawn down over
approximately a 5-year period.
Follow on investments
During the year, we continued to support
our portfolio companies by participating in
later funding rounds, as well as by providing
hands-on support to help them scale in their
respective markets. Our portfolio companies
continued to capitalise on their position
as global companies able to compete on
the international stage in their respective
markets. The core alone raised US$1.8 billion
capital in the year.
Sustainability
Building on our existing business culture,
committed to positive change and
sustainability, we continued to enhance
our Environmental, Social and Governance
(“ESG”) practices during this financial
year, both in our own business and within
our investment process. The Board is
committed to the importance of ESG,
including through our investment practices
as signatory to the UN Principles of
Responsible Investment. During the year we
have established an ESG committee, which
is mandated to implement a 12-month
roadmap to progress our ESG journey,
with actions including the adoption of
an evolved responsible investment policy,
enhancements to our investment checklists,
a portfolio benchmarking exercise, and the
development of monitoring tools for internal
and external deployment. More details of our
notable achievements during the year and
plans for the future can be found on pages
45 to 47.
Summary
The priority over the coming weeks and
months is for us, as an industry, to support
businesses in this difficult period and to
identify those with strong business models,
who will continue to succeed and indeed in
some cases play an important role in the
recovery of the world from this crisis.
We will continue to focus on being active
board members and building stakes over the
long term through primary and secondary
investments to generate strong cash
realisations on exit with a long-term aim to
be self-financing. We will continue to evolve
our model, recognising the opportunity
of bringing in third party investors and
reducing the net cost base of our operations
with fee income, as is demonstrated through
our acquisition of the remaining interest
in Encore Ventures LLP during the year, as
well as the option to acquire the remaining
interest in Elderstreet Holdings Limited.
*Reporting threshold - companies with a NAV of £1.0 million or more.
CEO’s Statement
Annual Report 2020
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CEO’s Statement
Annual Report 2020
At the start of the new financial year, we
further enhanced our investment and
platform team and we will continue to build
the infrastructure to support the long-term
growth of the business, whilst maintaining
the integrity of our investment process.
We remain passionate about democratising
entrepreneurship and creating jobs across
the UK and Europe and, whilst we are
mindful of the continued impact on the
global economy following the COVID-19
pandemic, ongoing uncertainty caused by
Brexit, and the broader political climate, we
believe our dual listing in London and Dublin,
as well as strong cash reserves and access
to a broad suite of funding sources including
our existing revolving debt facility (extended
and increased post year-end), will enable us
to continue to access the best deals across
the UK and Europe.
We continue to see a strong pipeline of
deal flow and will continue to leverage our
networks, including from our seed funds
strategy, to source the best companies
through the stages. Recent portfolio funding
rounds, for example cloud-based voice
platform, Aircall’s, Series C post year-end,
demonstrates the strength of the portfolio
and highlights the focus on sectors which
will benefit from an accelerated transition
to digital.
Outlook
We have entered the new financial year
with a well-positioned portfolio and in a
strong position to capitalise on our growing
reputation as one of Europe’s leading
venture capital business. At the same time,
we must be cognisant of the wider market
uncertainty and increased pressures on the
global economy, which have the potential
to impact our portfolio companies and, by
extension, our own business.
Our growth target for the coming financial
year is 15%, with an expectation of returning
to 20% through the cycle whilst recognising
the volatile environment in which we are
currently operating.
Our mission to empower Europe to invent
the future remains central to our ongoing
strategy and this, alongside our progress in
building the infrastructure required to scale
the Group, means that we are well placed to
drive long-term, sustainable returns for all of
our stakeholders.
COVID-19
The ongoing spread of the COVID-19 virus
continues to be, first and foremost, a public
health crisis, but the impact on the economy
and businesses is clearly also very significant.
We took early steps and have continued
to put in place measures to safeguard
our employees, manage our business and
support our portfolio companies.
Keeping our team safe
We quickly put in place robust measures
to protect staff via travel and face to face
meeting restrictions, flexible working plans
and remote working, alongside regular
virtual communication within teams and
across all staff. Given the nature of the
business and our role in the technology
sector, we were well placed to mitigate the
impact of social distancing on our team’s
day to day operations. Our broader team
includes the management of the portfolio
companies who also acted swiftly to protect
their people.
Supporting our portfolio companies
We have maintained high levels of dialogue
with our portfolio companies throughout the
crisis, many of them receiving operational
support and advice. Our team has worked
to guide our portfolio companies and assist
them to access various elements of the
Government’s financial assistance packages
as these have developed. Our investments
are guided by a strong syndicate of
investors and we remain well financed with
cash resources to provide support where
necessary.
Strong balance sheet
The Group has implemented bi-weekly Audit,
Risk and Valuations Committee meetings
with an enhanced focus on liquidity, both of
our business and of the portfolio companies,
including an ongoing assessment of their
funding requirements. The Group reports
net assets of £659.6 million, with available
cash resources at year-end of £34.1 million
(including restricted cash) and £5.0 million
of undrawn debt, complemented by £50.9
million from EIS/VCT. This was enhanced
post year-end as we extended the term
and increased the size of our revolving
credit facility by £10.0 million in June 2020.
In addition, post year-end Zynga Inc.
announced their agreement to acquire Peak
Games for $1.8 billion, which will, subject
to closing, indicate a fair value holding for
us of approximately £80.0 million (actual
returns are subject to completion conditions,
including FX movements, and acquirer share
price movement with respect to the stock
component).
Valuations
An appraisal of valuation metrics has been
adopted to reflect the rapid shift in the
economic environment, and lower growth
forecasts for 2020 and 2021 have been
assumed for companies whose business
sector or model have been directly impacted
by COVID-19. The Group consistently applies
multiples lower than those prevailing for
comparable quoted companies to mitigate
stock market volatility. The long-term
potential of the portfolio remains positive and
we expect the value of the portfolio to grow
post COVID-19 particularly in light of the
accelerated transition to digital, however we
are mindful of the uncertainties surrounding
the pace of the anticipated recovery of the
broader economies.
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Written by Stuart Chapman
Chief Portfolio Officer
Venture capital investing relies on the
potential of combining youthful energy
and ideas with wisdom and experience.
There’s no set rule as to whether it is the
entrepreneur or the investor who possesses
these qualities. But if it is the investor who
brings experience to the equation, precisely
what type of experience can make a big
difference. In a buoyant market, experience
can take a back seat to energy and ideas.
But when storms arise, having experienced
previous cycles as an investor can make all
the difference. It is this experience that is
key to surviving difficult periods positioning
a company to grow as the economy
recovers.
Living the Cycle
The venture capital industry in Europe has
come a very long way in the last decade,
with ever greater amounts of money raised
and new funds being created. This has
been a boon for entrepreneurs looking to
raise capital but it brings with it problems
in investor experience. The long boom since
the trough of 2008-09 means that most VC
funds today lack experience of completed
cycles, even from their most senior investors.
Also, the move towards investors having
a background as entrepreneurs means
that those who have some experience of
recessions, but in a down cycle, having
experience of your own company is different
to managing a portfolio of companies.
Perspective matters.
What Are We Facing Here?
Most investors in our industry today have
only been doing so for the last 5-10 years.
If you’ve been in the tech industry for at
least 15 years, your frame of reference for
economic challenge will be the financial
crisis of 2008. Superficially this is appealing
– a recession that affected the wider
economy at a very deep level. However, to
get a better understanding of the impact
on the tech industry, you need to go back
almost 20 years to the dotcom bust. The
characteristic impact of the dotcom bust
was a sharp demand shock – unlike 2008,
liquidity is available, but portfolio companies
are rapidly forced to respond to new
circumstances.
Where Experience Counts
When facing these circumstances,
having experienced investors is vital.
Some investment funds respond to these
challenges simply by allocating funds to
less risky areas. But venture capital is based
upon having a working knowledge of how to
knuckle down and work constructively with
portfolio companies as they rework business
plans under tight deadlines and substantial
pressure. Experienced investors become
the sounding board for entrepreneurs
and can prove the difference between
businesses surviving, thriving or failing. To be
a venture capitalist in a crisis is more than
just about wise capital allocation, it is a
specific combination of experience, energy,
pragmatism and empathy.
The Draper Esprit Advantage
This perspective, and younger experience,
is alive within Draper Esprit, and younger
investors can tap this experience. It is the
difference between what we at Draper
Esprit offer versus our competitors, whether
listed asset managers or private VC fund
managers. Today, as with every day, we
work closely with our portfolio companies
to deliver their visions and achieve outsized
growth, whatever the cycle brings. We do
this because we know that benefitting from
an economic recovery requires patience and
Draper Esprit plc is a fund structure that
provides the flexibility to wait out the bad
and deliver in the good.
draperesprit.com
7
Case Study: Experience Matters
Annual Report 2020

Case Study: Experience Matters
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“Draper Esprit has always been
focused on investing in the
technology of the future and
this will be even more critical
to help kickstart the global
economy.”
Karen Slatford 
Non-Executive Chair
Strategic Report
Annual Report 2020
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Strategic
Report
Strategic Report
Annual Report 2020
The decade to 2020 witnessed a historic shift impacting the venture capital markets, and despite (or perhaps
because of) the range of political uncertainties that have challenged the UK – Europe’s largest market for
technology and venture capital – it has continued to show the direction of travel across the region.
The following are trends we have observed shaping the technology investment environment:
Public to Private
Part of a wider global trend, the last decade and especially the
last 5 years have witnessed a shift in capital markets from public
to private. This has in turn seen a ramping of VC fundraising in
major markets such as the US and Europe, as well as a concurrent
shift in asset allocation and increase in private market allocation
by crossover investors. We see, with increasing frequency, these
investors making direct private investments.
Staying Private Longer
The shift from public to private is deeply entwined with the trend for
companies to stay private longer, raising more capital and reaching
greater levels of maturity. The growing ubiquity of “Unicorn”
technology companies is one such outcome of this trend.
More Funds, More Funding, Winners at the Top
This increase in private capital has led to a rapid expansion of both
new VC funds and the total level of fundraising. But it is the top end
of the market that has shifted most. In 2010, a single fund of US$1
billion or more was rare; today, such funds are increasingly common.
Two consequences of this trend are of great interest to Draper
Esprit: firstly, the opportunity to make secondary investments into
technology companies as they outgrow the capabilities of their early
private investors. Secondly, the potential value of raising specific
growth funds which follow the growth of companies through their
lifecycles. The flexibility of the Draper Esprit model combining a listed
evergreen fund with other funding structures allows shareholders to
benefit from participation in these historic shifts.
Europe’s Growing Influence
In the last decade, Europe found its technological feet. Historically
underweighted at a global level, Europe has begun to realise its
potential as a technology powerhouse, with a rapidly growing
market share of technology investment deals compared to the US.
In sectors such as Artificial Intelligence (AI), European companies
are considered a match for US competitors; in sectors like fintech,
they are widely considered as superior. European companies are
considered more capital-efficient than US competitors, which goes
some way to explaining why Europe still underperforms the US in
value of technology deals. However, the growing number of inbound
deals from the US into Europe has made Europe an increasingly
competitive market opportunity.
0
20
40
60
80
100
120
140
160
180
€0
€2
€4
€6
€8
€10
€12
€14
Number of VC funds raised
Amount of VC funds raised (Bn)
2013
2014
2015
2016
2017
2018
2019
2020
Number of funding rounds >$2M
Amount funded (Bn)
0
500
1000
1500
2000
2500
€0
€5
€10
€15
€20
€25
€30
€40
€35
2013
2014
2015
2016
2017
2018
2019
2020
European VC Funds Raised
Data source: Dealroom
VC Investment into EU Tech
Data source: Dealroom
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Market Context
Annual Report 2020

Market Context
Number of EU Unicorns (Cumulative)
2013
2014
2015
2016
2017
2018
2019
2020
0
20
40
60
80
100
120
140
160
180
200
United Kingdom
Denmark
Germany
Norway
Netherlands
Finland
Sweden
Russia
France
Italy
Switzerland
Belgium
Spain
Austria
€0
2018
2017
2016
2019
2020
€2
€4
€6
€8
€10
€ Billions€12
Q2
Q1
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
€0-10M
€10-25M
€25-50M
€50-100M
€100M+
COVID-19 Impacts
After an initial shock caused to the business environment by COVID-19, the
technology industry is rapidly moving towards a new mode of operation with
mixed, medium term implications for historic trends. On 20 April 2020, Numis
published a detailed snapshot of European technology investor opinions*, noting:

- Investors are becoming more selective

- Greater emphasis on follow-on investments

- Historically buoyant valuation will compress, but greater competition for
quality deals

- Focus on revenue generating businesses in sectors such as fintech and SaaS
The report looks to experience of past shocks – 2001 dotcom crash and 2008
global financial crisis – demonstrating advantages provided to investors with deep
experience of technology investment across multiple cycles.
“The flexibility of the
Draper Esprit model
combining a listed
evergreen fund with
other funding structures
allows shareholders
to benefit from
participation in
these historic shifts."
*Source: speakerdeck.com/dkelnar/whats-next-for-private-markets
Investments in Europe by round size
Data source: Dealroom
Number of EU Unicorns (Cumulative)
Data source: Dealroom
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Market Context
Annual Report 2020
The Investment Opportunity:
“We find the most promising private
technology companies in Europe, with
the potential to become global leaders.”
Access high growth private technology companies
We are guided by years of experience in scaling high-growth technology companies.
We invest incrementally, with a long-term outlook, to build value over time.
Invest in Europe’s most ambitious tech
companies
We find the most promising private
technology companies in Europe, with
the potential to become global leaders.
We meet thousands of companies a year
and invest in approximately 15-30 a year,
including follow-on. Our brand, access to
the Draper Venture Network (see page
14), and seed fund strategy (see page 17),
mean we have a large pipeline of deals in
the ecosystem to ensure we can take a
market-wide view before investing. In order
to identify, attract and originate the most
exciting technology prospects in Europe, the
Group has worked to establish an internal
dual-platform investment process that
facilitates early targeted engagement whilst
retaining a focus on price discipline.
Within the dual-platform process, the
Partnership team focuses on deals, our
portfolio companies and their founders while
the Platform team focuses on supporting
deal flow and collaborating with the
entrepreneur community, other investors
and the wider ecosystem.
Sustainable investment in growing
companies
As part of our strategy for sustainable
growth, we invest small amounts early, and
reserve more capital for later stage rounds.
This type of investment is not a “win or lose”
game: we invest incrementally, building
value over time.
The portfolio we have is diversified across
sectors and geographies, and our core
portfolio holdings are held at conservative
valuations based on growth projections and
captive market size.
Experience drives our success
Our team is highly experienced: we have
been investing in technology for over 20
years. We typically take a seat on the board
of our portfolio companies, with significant
investor rights. Many of the team also
offer specific domain expertise and have
experience as technology entrepreneurs,
which aids our decision-making and ability
to give the companies the right connections
and best advice.
As a Group we have a track record of
delivering 20% growth through the cycle,
driven by the revenue growth of the
underlying portfolio companies. To date,
we have exceeded this target with strategic
acquisitions of portfolio companies and by
increasing our stakes in our core holdings.
Prior to the pandemic, the Group was
on track to achieve its targeted portfolio
growth and, despite the current market
backdrop, has still delivered strong growth
of a 10% Gross Portfolio fair value increase in
the year.
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The Investment Opportunity
Annual Report 2020
Our Investment Strategy
“We source the best deals from thousands
of companies and provide them with the
capital, expertise and networks to fuel
their growth.”
How we back businesses
We invest in growing technology companies from across Europe. We source the best deals from thousands of
companies and provide them with the capital, expertise and networks to fuel their growth.
Growth investing from Series A onwards is our core business, with the majority of our capital allocated to later
stage investment rounds. We recognise the needs of the entrepreneur and are dynamic in finding the best capital
solutions to fit their requirements.
Follow on
We can back businesses at all stages of
their growth until exit – often right up to
acquisition or IPO.
Fund of funds
While we do not make direct seed
investments, we support companies
from their inception and by partnering
with funds from across Europe investing
in earlier stage businesses. Through these
partnerships we can identify the most
promising opportunities and can support
their business through our broader plc and
co-investment strategy as they scale.
Series A
Businesses scale up and raise their Series A
usually at the point that companies have
found product-market fit and need to scale
their operations quickly.
Series B, C & onwards
As businesses look to expand internationally
and dominate globally, we invest the
majority of our capital in the Series B+ part
of the funding cycle. With the maturing of
the European venture capital ecosystem we
are seeing companies raising larger rounds
to capture markets and fuel growth, which
is enabling companies to remain private
for longer. We are increasingly leading and
investing in later stage growth rounds.
Secondaries
Whether it is helping companies find liquidity
for their early backers, or a fund that has
timed out looking to sell a whole portfolio,
we look at the best opportunities in the
market. We look for the same characteristics
as our primary investment operations:
ambitious tech businesses looking to grow.
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Our Investment Strategy
Annual Report 2020
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Global firepower
As the European arm of the Draper Venture
Network (DVN), we help companies with
rapid and international growth. Founded
by Tim Draper, the network reaches from
Silicon Valley to China, Brazil to Japan. The
network allows us to gather like-minded
funds from around the world to invest in the
brightest companies.
The network helps us support companies
as they grow – providing the sort of
international introductions that can spark
years of growth or put companies in touch
with potential acquirers.
It is also a chance to share expertise on
markets and hear from the world’s brightest
entrepreneurs and investors in the world.
Each year, the DVN hosts its annual CEO
Day, where CEOs from across the globe
gather to gain fresh insight, speed date with
corporates and get a grasp of technology
trends shaping the globe. This year, in light
of COVID-19, the annual CEO day is taking
place virtually.
Long term capital
Our structure as a growth-focused
technology venture capital firm dual-
listed on the London and Euronext Dublin
stock markets means we are not tied
to a specific time period of investment;
we have the flexibility to find the best
opportunities for entrepreneurs – and to
back companies from scale-up all the
way to IPO or acquisition. With a public
balance sheet, we can take a longer view,
allowing shareholders to capture value as
companies reach their full potential.
Hands-on support
When we invest, we offer a lot more than
money. We typically take a seat on the
board of the company, to offer support
and guidance as it grows and scales.
This means we can actively manage our
investments and put valuable experience
to good use, right where it matters.
We also run events and offer specific
training for portfolio companies, including
trend spotting, panel discussions, and
focused networking to help our companies
get ahead.
Raising Seed
Series A
Series B
Series C
Pre IPO
Fund of Funds
PLC
EIS
VCT
PLC
Earlybird
PLC
Our Shareholders
UK
EUR
Supporting Companies for Growth
Annual Report 2020
Supporting Companies for Growth
Pod Point was founded in 2009 in the aftermath
of the financial crisis by Erik Fairbairn who
saw electric cars as the next major mode of
transportation. The UK’s largest independent
provider of electric vehicle charging, Pod Point
has manufactured and sold over 69,000 charging
points across the UK and Norway. Aside from
establishing an extensive public charging network
connecting EV drivers with 3,000+ charging bays
at locations including Tesco, Lidl, and Center
Parcs, they also install home smart charging
ports for customers of major automotive brands;
Audi, Nissan, Volkswagen, and Hyundai. Pod
Point has already powered over 158 million miles
of electric driving.
After 3 years of working closely with Erik and his
team, helping them navigate through critical
development points in their business, we sold our
shares in Pod Point to EDF Energy. Draper Esprit
received a return of 2.3x with an IRR of 39% over
3 years. EDF, which is part of the EDF group, the
world’s biggest electricity generator, acquired
majority shares in Pod Point and a joint venture
with Legal & General Capital. We believe that
EDF is the best partner to support Pod Point as
they roll out more charging points and become
leaders in their space.
“We’re incredibly proud of the
progress Pod Point has made
in building the most advanced
intelligent charging network
in the UK and we look forward
to watching their continued
momentum as part of
EDF Energy.”

Martin Davis
CEO
£5.4m
Total invested
£12.4m
Total proceeds*
Case Study
Pod Point
2017
2018
2019
2020
Draper Esprit invests £3.4 million
in Pod Point.
Draper Esprit invests £2.0 million in
Pod Point from PLC.
Sold over 27,000 charging points.
Sold over 50,000 charging points.
Total of £5.4 million invested overall in
Pod Point to date.
44 million miles of electric driving.
Draper Esprit sells shares in Pod Point
to EDF Energy.
Sold over 69,000 charging points, 158
million miles of electric driving.
*Including the maximum £0.3m of amounts held
in escrow.
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Case Study: Pod Point
Annual Report 2020
Screen thousands
Across our investment platform, we look at
thousands of businesses a year – searching for
the brightest opportunities, and the clearest
visions. We do not start from nothing:
our fund of funds strategy helps us spot
the best ideas to back.






We invest in high-growth technology companies
We look for high-growth companies with strong
technology products and business models with
experienced and visionary management teams
that have the ability to be a category leader. They
operate in new markets, with serious potential for
global expansion. Significantly, they have strong
gross margins and capital-efficient business
models to enable sustainable growth and future
profitability. We look for businesses that will be
attractive candidates for eventual acquisition or
IPO, with valuations from US$50.0 million to US$1.0
billion and beyond.

We invest in companies as they grow
Companies are remaining private for longer and
therefore public market investors have reduced
access to the value generated by early-stage
growth companies. Private equity and mutual
funds are becoming an increasingly attractive
option for late-stage funding, compared to the
time-consuming and costly process of going public.
As many start-ups are prioritising growth over
profits in an effort to gain market share, they may
not prosper in a public market environment which
values profitability. Draper Esprit enables investors
to access such companies. By investing at the
high-growth phase of a company’s lifecycle, before
companies consider an exit strategy via acquisition
or IPO, we give our shareholders access to the value
this phase generates.
The investment process
Together with Earlybird, we screen thousands of businesses every
year in order to find the best opportunities.
Talk to 1,000+
We talk to the most promising
businesses that clear our screening
process, getting to know the teams,
their ways of thinking and their
ambitions.
Invest in 15-30
We make 15-30 investments a year,
including follow on investments,
bringing the most ambitious tech
companies into our portfolio.
Facilitate growth and build stakes
We put cash in for rapid scale-ups, to help bring
a team’s vision to life. We make introductions,
and fuel global ambitions.
Exit
We are not confined to 5-year cycles. Whether
to a strategic buyer or as an IPO, companies
exit when they reach maturity or when they
have established a strategic
position in their ecosystem.
draperesprit.com
Our Investment Criteria
Annual Report 2020
16

Our Investment Criteria
V E N T U R E C A P I T A L
D I G I T A L E A S T I I
US based fund manager
investing across Europe
In October 2017, we launched our seed fund of funds programme. Since then, we have invested in 20 seed funds
from across Europe, commiting £39.1 million, which will be invested over approximately 5-10 years. Those funds
already have over 300 portfolio companies and have raised £1.1 billion in total. To 31 March 2020, £13.3 million of
commitments have been drawn down, of which £7.2 million was in the current financial year.
The strategy is simple: by seeding the early stage ecosystem, we can
source the best companies for Series A and B, pool expertise from
sector specific funds, and benefit from scouts based in every corner
of Europe. Whether hunting for a company looking to change the
way we eat in France, manufacture products in Berlin, or develop
novel hardware in Cambridge, the seed funds in which we invest
always have one eye on the next trend.
In return, we ensure that the early stage market is well funded and
able to help their most promising companies scale up when they
need later stage funding to grow.
2.5 years after launch, our seed fund programme has committed
over £39.1 million to 20 early stage funds, with a further 4 approved
by the Investment Committee. These funds have invested in over
300 companies and have raised an aggregate amount of capital of
£1.1 billion. The programme has a healthy pipeline of opportunities
and by 2022 we expect to invest in a total of 40-45 funds getting
exposure to 1,200-1,500 companies.
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Seed Funds Update
Annual Report 2020

Seed Funds Update
Partnership team
Our Partnership team is made up of experienced
investors - founders, CEOs, start-up advisors, private
equity and investment bankers, and even a doctor, in
their past lives. The point is we recruit the very best to
work at Draper Esprit, and to us, the best come with
years of knowledge and real-life experience. They know
how to support start-ups because they have been
through it themselves. They’re here to bring hands-on
support and advice to every team we back, helping
them to grow and scale.
Our mission is to empower Europe to invent the future.
Success depends on genuine collaboration, so when we
meet teams that share our way of thinking, we back
them all the way. As a group, we’ve been doing this for
over 20 years – experienced investors bringing global
firepower and a long-term view. We believe in Europe’s
potential to grow the companies that will shape the
future. We’re here to help make that happen, by
growing our community of extraordinary teams – a
team of teams. And by reinventing European venture
capital – long-sighted, flexible and global.
Our companies use new technology to create better
ways of doing things. We focus on 4 sectors; enterprise
technology, digital health & wellness, hardware &
deeptech, and consumer technology. We also look at
areas where these sectors overlap like fintech, which
operates between consumer technology and enterprise
technology.
We’re constantly imagining better ways we can build
up and support our portfolio companies and to do that
we need to have a strong infrastructure. To strengthen
that infrastructure, we’ve recently added a new senior
partner to our investment team. In the period, we
internally promoted two members of the investment
team, Nicola McClafferty and Vinoth Jayakumar,
to join the partnership group. The promotions of
Nicola and Vinoth significantly strengthen Draper
Esprit’s leadership team and enhance the investment
committee. Draper Esprit recognises that the
most important investment is in people and these
appointments support the company’s continued
leadership expansion and growth across Europe, while
Nicola’s experience in Consumer Tech and Vinoth’s deep
knowledge of Fintech further deepen our sector focus.
Our Partnership team works hard to make sure we find
and offer the best opportunities to the founders of
tomorrow as well as support the companies already in
our portfolio. With the support of the Platform team,
they’re here to engage, support, and invest in the
entrepreneurs of the future.
The best entrepreneurs are persistent, analytical and great leaders. Having
been a founder and start-up advisor myself, I lived through the highs and lows
of our industry. Following a thesis-based investment approach and identifying
teams with the right skill set are essential to create big success stories.
Christoph Hornung Investment Director, Deep Tech
I focus on the team and the problem they
are trying to solve. Ambition matters.
The wildest, craziest, biggest ideas
usually turn into the best companies,
as our partner Tim Draper has shown us
many times.
Simon Cook
Founding Partner
AI and machine learning will force
dramatic step-changes in technology.
Not just in terms of the early applications
we see now, but the pressures on
infrastructure and hardware. We haven’t
seen even a fraction of the uses yet – and
that’s an exciting vortex to be in.
Stuart Chapman
Chief Portfolio Officer
I need to share your passion, not your
sector. I’m thesis-driven, looking for
entrepreneurs with a bold vision,
ambition to challenge a market, and
the potential to create big, sustainable
businesses. That’s the beauty of our
model: we can support you all the way,
to create long-term category market
leaders.
Jonathan Silbia
Partner,
Fund of Funds
I’m passionate about Growth and
enabling the best entrepreneurs to
scale their companies to become global
winners.
Will Turner
Senior Partner
I’m an entrepreneur turned VC, with the
first 10 years of my career spent building
companies hands-on. I’ve been a founder
and CEO and created Datanomic which
we sold to Oracle.
Richard Marsh
Partner, EIS & VCT,
Enterprise & SaaS
The rules are changing. From consumer
behaviour to workforce expectations and
the impact of automation on our lives,
retail brands face a huge challenge, and
an even bigger opportunity in the next
decades.
Nicola McClafferty
Partner,
Consumer
Training as a doctor was my comfort
zone. I stepped out of it. Venture capital
gives me a way to help people make real
advances in healthtech – and support
companies that will shape the future for
us all. When I invest, I look for founders
who are just as excited about their teams
as they are about their idea.
Vishal Gulati
Venture Partner,
Digital Health
I’m excited for the future of finance.
Insurance. Fintech. Proptech.
Cybersecurity. I’m interested in it all – but
especially in companies that see ways
to challenge a whole stack of financial
products and services, not just the easy
pickings.
Vinoth Jayakumar
Partner,
Fintech
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Our People
Annual Report 2020

Our People
Marketing, Comms and
Proposition Management
Deal flow & Lead Generation
Deal Delivery & Research
Draper Esprit
Content and Events
Community &
Network Events
Portfolio/Start-up
Engagement & Support
Operations & Reporting
Platform team
Making smart investments is key to succeeding in
venture capital and so is an investing firm’s ability to
engage, support and collaborate with the entrepreneur
community, other investors and the wider ecosystem.
This starts from early seed stage while companies are developing their
propositions, through to when companies are seeking and preparing for
the most optimal route to exit. Our Platform team has been established
and developed to enable Draper Esprit to take the lead across each of
these functions.
Over the last year we have grown and developed our marketing
capability, including a new Marketing Director and the establishment
of a new role of Community Manager. This expertise has allowed us
to take a flexible and broad-ranging approach to marketing in the
UK and Europe. In an industry which typically relies on conferences
and events, during the COVID-19 period Draper Esprit has adapted
towards online projects, content development and media
engagement to improve our connections with entrepreneurs and
communities that best align with our strategic interests today and
tomorrow. By having a closely integrated team, we’ve become better
at identifying prospective companies to partner with and initiating
conversations at the correct stage in their journey in order to offer
them our relevant experience and guidance.
Also key is our support programme for core portfolio companies –
we directly engage with their marketing leadership to ensure the
highest standards are shared and maintained across the portfolio.
We produce content and host events that are designed around
specific C-suite functions, for example finance, marketing and
business development, to ensure that the events are relevant and
highly targeted to our portfolio and wider community. We have
also been utilising our new and improved office space and digital
properties to host events for support and social networking, providing
entrepreneurs with a forum of peers to help deal with the challenges
they face in scaling their businesses.
“By having a closely integrated team, we’ve
become better at identifying prospective
companies and initiating conversations.”
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Our People
Annual Report 2020
Develop and maintain close
collaborative partnerships
with prospective and existing
portfolio companies and
ensure they are professionally
supported at the point they are
looking for Series A+ funding so
they can benefit from Draper
Esprit’s expertise in scaling
tech start-ups and helping
them expand to international
markets.
Research, identify, engage and
support tech start-ups as they
develop their businesses and
look to scale their operations.
Work closely with the
Partnership team to support
ongoing deals, providing
founders with guidance on
growing business operations
and, where appropriate,
advising on their marketing
communications.
Lead marketing for Draper
Esprit in order to raise its brand
awareness and community
engagement across the UK
and broader European tech
entrepreneur and investor
communities.
4
3
2
1
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Draper Esprit VCT
In 2016, Draper Esprit acquired a 30.77%
stake in leading VCT manager Elderstreet
Holdings Limited, which manages Draper
Esprit VCT plc (LSE:EDV). At the 30
September 2019 half-year report, it had AUM
of £45.9 million. Since then it has received
further subscriptions of £11.3 million. The
funds co-invest with the plc in UK deals.
Draper Esprit EIS
On 10 March 2020, the Group acquired
the interest it did not already own in
Encore Ventures LLP, an FCA-regulated
management vehicle and the partnership
which manages Draper Esprit’s EIS funds.
Following the acquisition, the Group now
owns 100% of Encore Ventures. With 6 co-
investment funds, it has raised over £146.5
million to 31 March 2020.
The Encore Funds have been independently
reviewed for 6 years in a row as the highest
ranked growth EIS fund. They scored 89/100
in the Tax Efficient Review, the highest
ranked growth EIS fund as of April 2020.
Since 2019, they are the top rated EIS
provider in the Allenbridge review. The funds
co-invest with the plc in UK deals.
Earlybird Digital West
In July 2018, Draper Esprit announced a
strategic partnership with Earlybird Digital
West to share deal flow and resources to co-
invest in high growth technology companies
across Europe, in particular the German-
speaking market. As a part of this, Draper
Esprit has a 50% stake in Earlybird’s Digital
West Early Stage Fund VI (“Earlybird Fund
VI”), commitment of €87.5 million of which
€60.0 million has been invested.
For more information on the partnership
with Earlybird, please see page 23.
A multiplatform strategy
In the past 4 years, we have scaled our platform to
enable our investors to to access the best deal flow
across Europe. Our co-investment partners bring
third-party capital, enabling the plc to build a more
material stake in companies, while also increasing
our reach into the best companies. Meanwhile, the
management and performance fees received from
the third-party funds offset management costs for
plc shareholders.
The plc balance sheet forms the core investment
vehicle for the Group. 30% of the Group investment
capital goes towards smaller and early stage
investments. In the UK, Draper Esprit EIS and Draper
Esprit VCT invest alongside the plc. In Europe, these
deals are done either directly through or alongside
Earlybird Digital West via our strategic partnership.
70% of the deals we do are invested in larger and
growth stage deals (either follow-on from our
emerging portfolio or new companies), these deals
are done, predominantly, through the plc balance
sheet. As the European market matures, there is an
increasing market for these growth deals, in which
we recognise the opportunity to build external
third-party assets. The permanent capital model of
a listed vehicle also provides additional flexibility to
build stakes in the top performing investments over
time as opportunities arise.
Plc co-investment structure
Our Pools of Capital
Annual Report 2020

Our Pools of Capital
Consumer technology
New consumer-facing products,
innovative business models, and
proven execution capabilities
that bring exceptional
opportunities enabled by
technology.
Hardware & deeptech
The deeper technologies that will
spark advances in computing,
consumer electronics and other
industries.
Digital health & wellness
Using digital and genomic
technologies to create new
products and services for the
health and wellness market.
Enterprise technology
The software infrastructure,
applications and services
that make enterprises more
productive, cost-efficient, and
smoother to run.
We invest across 4 sectors in high growth European technology companies*:
*Reporting threshold – companies with a NAV of £1 million or more.
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Our Portfolio
Annual Report 2020

Our Portfolio
Benefits of this approach
Gain access to private technology
companies
As companies stay private for longer, it
is getting harder for investors to access
high growth technology companies in the
public markets. Our listed evergreen vehicle
provides investors with ongoing liquidity that
private limited partnership models do not
allow.
It is not a blind pool
Investors can see the assets upfront and
gain exposure to a range of companies
across a range of maturities.
Build stakes
The permanent capital model of a listed
vehicle provides the flexibility to build stakes
in the top performing investments over time,
as opportunities arise.
~67%


Core holdings
The companies in the portfolio
representing 67% of Gross
Portfolio Value, which is 67%
of the Net Asset Value (NAV).
Draper Esprit provides follow-
on capital, developing a more
significant stake in the business
once it has proven its business
model.
~33%


Emerging companies
The Group invests in
entrepreneurial and fast-
growing tech businesses.
~5%


Cash
When companies exit, the cash
generated is returned to the
balance sheet and re-invested
into new opportunities in the
market.
~-5%


Other assets and liabilities
Other assets and liabilties of the
Group.
“A share in Draper Esprit gives
investors access to Europe’s
technology innovators,
years of investor expertise,
and a sustainable
investment model.”
~5%
Cash
-
~-5%
Other assets
and liabilities
~33%
Emerging
Companies
~67%
Core
Holdings
As our companies grow, we provide follow-on capital to
build our stake. 67% of Gross Portfolio Value and 67% of
our Net Asset Value is distributed in the top 16 companies,
representing our core holdings. By doubling down on the
winners in our portfolio, we manage the risk exposure of
the portfolio and generate improved upside.
Equally, our more flexible approach to capital enables
the companies themselves to grow over a longer period,
creating value to the benefit of our shareholders. When the
companies exit, the cash is returned to the balance sheet,
so we can re-invest it in new opportunities.
22
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What’s in a Share?
Annual Report 2020

What’s in a Share?
draperesprit.com
The last few years have seen a number of start-up hubs emerge or mature across Europe. Entrepreneurs don’t
need to move to Silicon Valley to access capital and build their businesses; unicorns are popping up in London,
Berlin, Paris and Stockholm. Since 2001, the UK alone has recognised 18 unicorns.
Our ambition is to support entrepreneurs building global businesses,
no matter where they base themselves across the continent.
To do that well, it requires local connections to build long-lasting
relationships with entrepreneurs in the cities they live and work in.
Our partnership with Earlybird
In July 2018, Draper Esprit signed a strategic partnership with
Earlybird Digital West to share deal flow, talent, and resources. When
thinking of a new partner, “fit” is everything. We focus on Series A,
B, and beyond. The name is on the tin for Earlybird: they invest early,
from seed to Series A. We invest from offices in the UK and Ireland.
They, from Berlin, Munich and Istanbul.
The partnership with Earlybird not only gives Draper Esprit a
platform of further scale, a larger pipeline of deals, and a larger pool
of expertise, it also gives Draper Esprit shareholders greater exposure
to some of Europe’s best companies. As European venture capital
markets mature, we have scaled our platform to ensure we provide
our shareholders with the best opportunities.
To date, we have invested £131.4 million into Earlybird, valued at
£187.3 million.
Secondaries
By investing in opportunities like EB IV Fund we are able to further
diversify our investment strategy, investing in secondaries which
allow us to blend the maturity of our assets. Secondaries typically
span across a smaller period of time or about 2-3 a year, at which
point in time they mature and become a realisable asset. The capital
provided from those investments following maturity can then be
reinvested and used to accelerate our broader investment activities.
We’re all about investing smarter not harder.
Investing in secondaries like Earlybird or through our fund of
funds strategy gives us access to the best early stage companies
and allows us to develop a deeper knowledge of early stage
companies. When we partner with funds like Earlybird that have
deep geographical links we effectively increase the range of our
investment teams, to drive efficiencies and expand our exposure
to a broader range of geographies.
Peak Games
In January 2019, Draper Esprit announced that it had furthered its strategic partnership
with Earlybird Digital West (“Earlybird”), a German Venture Capital firm with a focus on early
stage investments in Europe. We strengthened our relationship with Earlybird by acquiring a 27% interest in
Earlybird’s EB IV fund for approximately €63 million (approximately £55 million).
As a result of our investment in the EB IV fund, Draper Esprit
acquired underlying holdings in nine high growth technology
companies including Istanbul-headquartered Peak Games.
Peak Games has successfully built a global user base for its
community-based, multiplayer board and card games as well as
its innovative casual puzzle games. Over 275 million users around
the world have now installed at least one of the company’s
products with the US, UK and Japan representing almost three
quarters of the Group’s total revenue. Its most popular game to
date is Toy Blast, a matching puzzle.
Post year end it was announced that Peak entered into a sale
agreement with Zynga Inc for $1.8 billion, comprised of approx.
$900 million cash and $900 million of Zynga common stock. Upon
completion the acquisition would represent a fair value holding
for Draper Esprit in Peak of approx. £80 million (actual returns
are subject to completion conditions, including FX movements,
and acquirer share price movement in respect of the stock
component), which is approx. an anticipated further £12 million
increase on the fair value holding of Peak at 31 March 2020.
The acquisition is subject to customary closing condition and is
expected to close in the third quarter of 2020.
"We believe there will be many new successes yet and the European video games
industry will continue to attract the smartest entrepreneurs in the world, and
we look forward to meeting them and backing them with the right amount of
capital for the long term, in any kind of transaction as necessary."
Simon Cook, Founding Partner
23
Earlybird Partnership
Annual Report 2020
24
draperesprit.com

Initial investments

Follow-on investments

Exits

Via Earlybird
Deal Sourcing Strategy
April
June
August
May
July
September
**
**
**
Activity in the Year
Annual Report 2020

Activity in the Year*
October
December
February
November
January
March
* All companies listed represent investments of over £1.0 million.
** Partial sale of shares, remains a holding.
25
draperesprit.com
£89.9 million investment in new and existing companies
from 1 April 2019 to 31 March 2020
£44m
Initial investments
£39m
Follow-on investments
£40m
Exits
£7m
Seed funds
Activity in the Year
Annual Report 2020
Revolut
Launched in July 2015, the app-based bank allows users to create an
account in 60 seconds, spend abroad in over 150 currencies with no
fees, hold and exchange 25 currencies in-app and send free domestic
and international money transfers at the real exchange rate.
Building on top of their FX product, Revolut has “rebundled” parts
of a bank and developed various other products to add onto its
platform including insurance, commission free stock trading, and
cryptocurrencies. The platform is live in 36 countries globally, including
in Europe, Asia, and the US, and with 12 million users they continue to
expand internationally.
Draper Esprit invested in the Series C in 2018 at a company valuation
of $1.7bn. Revolut subsequently raised a $500m round at a valuation of
$5.5bn in February 2020.
N26 (backed via Earlybird)
Mobile banking app, N26 helps users
simplify and manage their savings in real
time and provides benefits like fee-free atm
withdrawals, payments in foreign currencies,
and travel insurance coverage.
Today N26 has more than 5 million customers
in 25 countries across Europe and the US
(250k customers).
£7m
invested by plc
in FY19
£11m
invested by plc
in FY19/FY20
At Draper Esprit we have been building a thesis on the future of financial services.
This has been broadly split into B2C and B2B propositions.
Working through the thesis of how fintechs can create value for
consumers by sitting in the flow of funds; in either capturing income
or capturing spend and building on the future of the user experience
designed around best-in-class products. This has typically happened
with a card-based or an app-based interface.
The first wave of companies built on the thesis of “unbundling” a
bank; innovating on one specific vertical or product, with a better,
faster and cheaper alternative. This was quickly followed by a second
wave of “rebundling” a bank; adding on further products and
services that replicate a full alternative banking offer.
We believe that the neo-bank markets are not ‘winner takes all’ and are large enough for multiple ventures to
succeed. N26 is another break-out player in the space.


Case Studies: Fintech
Annual Report 2020
Case Studies: Fintech
26
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Following Draper Esprit’s own IPO, democratising access to the venture capital asset class, we have invested in
companies like Freetrade and CrowdCube who are on a similar mission.
£4m
invested by plc
in FY19
Crowdcube
Fundraising over £800 million and funding 3 UK born
unicorns (Revolut, Monzo, and Brewdog) since 2011,
leading crowdfunding company Crowdcube has also
undertaken some record-breaking fundraisers like
Freetrade (fastest ever to reach £1m, in 77 seconds), Curve
(fastest ever to reach £4m, in 42 mins) and Monzo (£20
million in two days).
In the past, technology has been a private affair,
with companies taking longer than ever to go public,
crowdfunding (using a portfolio approach) opens up an
asset class to everyone, so that investors can benefit from
exposure to high growth tech companies. It’s why we went
public ourselves – we wanted to open up VC and provide
entrepreneurs with long term patient capital.
£4m
invested by plc
in FY20
Freetrade
With over 150,000 customers Freetrade is on a mission to open up
stock market investing to all segments of the population with a
commission-free product that enables people to buy shares in UK
and US companies as well as access ETFs in a variety of segments.
Their product pipeline includes products such as fractional shares,
which would make Freetrade the first stockbroker in the world to
offer this in connection with UK and EU shares.
FCA-regulated, FSCS scheme protected and a member of the
London Stock Exchange (LSE), Freetrade is changing the way
investing has always been done by democratizing the process and
bringing access and control to users though their mobile devices.
In 2020 post period-end, Freetrade fund raised £7m via community
fundraising platform CrowdCube from more than 8,000 investors in
just a few short days. Now with over 150,000 customers, Freetrade’s
community is at the heart of its success. Freetrade now has nearly
8,000 shareholders following six crowdfunding campaigns with
Crowdcube.
Case Studies: Fintech
Annual Report 2020
27
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As we increasingly delve deeper into B2C propositions,
Draper Esprit has also been exploring the technology
stack that will enable the financial services products
of the future. These ‘backbone’ technologies have
historically been seen and utilised as systems of record
but are seeing a paradigm shift towards systems of
intelligence. Three key areas of interest have been in
fraud, payments and core banking systems.
Draper Esprit has a long history of investing into banking
technology, backing companies like Red Kite (acquired
by NASDAQ traded NICE Systems) and Neteconomy
(acquired by Fiserv). Recent investments in this space
include Form3 and Thought Machine.
Form3
Form3 provides real-time cloud-native end-to-end payments-as-a-
service to combat the ever-evolving regulated payments sector, by
making payments faster, easier and more cost effective for banks,
fintechs, financial institutions. By removing the need to manage
and focus solely on the complexities of the evolving payments
infrastructure, Form3 enables banks and fintechs to focus on
building better customer propositions and growing their businesses.
The company’s infrastructure significantly reduces downtime and
allows for system upgrades to be achieved more seamlessly. Working
with companies like N26, Ebury, and Prepay Solutions, Form3 is
helping to improve efficiency, issuing customers real bank account
numbers for their clients, and decreasing the amount of time
needed to complete and manage real time payments.
£3m
invested by plc
in FY19
Case Studies: Fintech
Annual Report 2020

continued
28
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Fin ech: Recent Investments
Thought Machine
Thought Machine enables banks from Tier 1
to challengers to revolutionise themselves by
providing access to their cloud-native, next
generation, core banking engine technology
– Vault. Incumbent banks have historically
seen Cost/Income ratios that are typically in
the 60-70% range, which makes it incredibly
difficult and unprofitable to launch new
propositions as they are built on legacy
technology.
Cloud-native, modern core banking systems
will enable banks such as Lloyds Banking
Group to re-platform legacy brands such
as Intelligent Finance in order to build
propositions that can compete with emerging
challenger banks. The adoption of cloud-
based core banking software will also lead to
a significant reduction in technology costs – in
the case of Lloyds, it is expected to save in
excess of £100m.
Cloud-native core banking is becoming
the most common and desired target
architecture for the world’s banks, Thought
Machine’s technology is at the forefront of this
revolution, enabling innovation for incumbent
banks and fintechs alike.
Draper Esprit led Thought Machine’s recent
Series B funding round where they raised £63.8
million to drive expansion into Asia and North
America and to continue investing in their core
engine.
£16m
invested by plc
in FY20
Overview
As we build the infrastructure required to scale our operations, we continue to back new and existing portfolio
companies whilst maintaining the integrity of our investment and valuations process.
At the end of the financial year, we were all
faced with an evolving environment as a
result of the COVID-19 pandemic. We have
reviewed the current impact and modelled
the potential future impact of COVID-19
on our portfolio. While we anticipate a
period of trading slowdown, we also remain
very positive about the long term areas of
growth in the markets that our companies
address such as artificial intelligence,
cloud computing for remote working
and digital health. Many of our portfolio
companies generate recurring revenues and
the geographic diversity of our portfolio,
combined with the broad cross section of
areas in which they operate, means that
we are not overly exposed to any individual
market or sector.
Portfolio
Our portfolio is balanced across four sectors;
(i) consumer technology; (ii) enterprise
technology; (iii) digital health & wellness;
and (iv) hardware & deeptech.
We have continued our focus on finding the
most exciting new technology companies
and have invested in 9 new companies
during the year (including 4 via Earlybird).
Thanks to our evergreen strategy, we have
been able to increase our stakes in our
existing portfolio companies and have
invested in 19 existing portfolio companies
during the year (including 4 via Earlybird).
Realisations in the year have increased from
£16.0 million in the year ending 31 March
2019 to £39.5 million from partial and full
disposals, including amounts which were
held in escrow.
There are 16 core portfolio companies
accounting for c.70% of the Gross Portfolio
Value. They comprise Graphcore, Trustpilot,
Peak Games (acquisition agreement
announced post year-end), Transferwise,
Smava, Perkbox, M-files, Ledger, Ravenpack,
UiPath, Revolut (included in FY2020
interims), Aircall, Thought Machine
(new entrant), ICEYE (new entrant),
FinalCad, and Aiven (new entrant). Pollen,
SportPursuit, N26 and Lyst are constituents
of the emerging portfolio. Pod Point was
part of the core in the year ending 31 March
2019 and was fully realised in the year ending
31 March 2020.
Investments
During the year ending 31 March 2020,
£89.9 million (31 March 2019: £226.4 million)
was deployed from the plc, with a further
£38.1 million (31 March 2019: £35.1 million)
deployed from EIS/VCT.
New investments
In the year, the Group invested in new
companies, including:

- £16.5 million into Thought Machine,
the cloud native core banking
technology firm, leading a Series B
funding round of US$83.0 million
to drive global growth and banking
transformation mission, with a further
£7.4 million from EIS/VCT;

- £10.1 million in Decibel, a London-
based software company focused
on digital experience analytics to
improve user interface on company
websites, leading its US$17.0 million
Series B round;

- £4.0 million into stock investing app,
Freetrade, with £3.0 million from EIS
and VCT funds, as part of its Series A
round;

- £2.7 million from plc leading an €8.0
million Series A funding round in
Sweepr, the Dublin-based customer
experience platform for smart devices
in the connected home;

- £0.9 million from plc and a further
£1.7 million from EIS/VCT into
Cambridge-based graphene
electronics technology company,
Paragraf, as part of a £16.2 million
round; and

- A range of new investments via our
strategic partnership with Earlybird
Digital West*, including:

- £4.4 million into Helsinki-based
software company Aiven,
which combines the best open
source technologies with cloud
infrastructure, and raised US$40.0
million in Series B funding round led
by IVP;

- £2.5 million in Getsafe, a Heidelberg-
based company which uses AI to
manage insurance via smartphones;

- £1.9 million into Instamotion, an
online transaction platform for used
cars; and

- £1.1 million into space tech company,
Isar Aerospace.
Follow-on investments
As part of our strategy to provide companies
with continued support throughout their
lifecycle, the plc participated in a number of
follow-on investments, including:

- £3.8 million into ICEYE, the Finnish
microsatellite manufacturer;

- £2.5 million bridging loan into Pollen,
formerly known as Verve, an invite-
only marketplace that enables people
to bring their friends to the best
experiences and share rewards;

- £2.2 million into Realeyes, the machine
learning platform which measures
emotions through facial recognition;

- £2.1 million into Roomex, the corporate
travel software company;

- £2.0 million into IESO Digital Health, the
mental health app;

- £1.4 million into the online medical
consultation service, PushDoctor;

- £1.0 million into a Series C round for the
menstrual cycle tracker app, Clue;

- £1.0 million in the intelligent information
management solution provider, M-Files;

- A range of follow-on investments via
our strategic partnership with Earlybird
Digital West*, including:

- £6.3 million in Berlin-headquartered
digital banking company N26 as part
of a US$170.0 million round;

- £1.7 million into eHealth Medidate,
the vertically integrated digital
services platform for selective medical
treatments;
29
draperesprit.com
Portfolio Review
Annual Report 2020

Portfolio Review
Core
Emerging
33%
67%
Number of Companies —
split by sector
Consumer
Tech
33%
Enterprise
Tech
38%
Hardware &
Deeptech
17%
Digital Health
& Wellness
12%

- £1.2 million into Movinga, a fixed-priced personal moving
services platform; and
- £1.1 million in Allthings Technologies, a digital tenant
management platform.
Seed funds
Our seed fund investment strategy gives us access to the best
deals across Europe to fuel the next generation of investors and
visionaries. We are then well positioned to support the best of them
when they need later stage funding to grow.
During the year, we have made commitments to an additional 4
seed funds meaning that to date 20 seed fund deals have closed
across various sectors and locations in Europe. This amounts to
commitments of £39.1 million with £13.3 million invested at the year-
end, of which £7.2 million occurred during the financial year. Through
this strategy, as at 31 March 2020, we have invested indirectly
in over 300 companies via these seed funds. New seed funds
committed to this year, include:

- FRST Ventures – A France-based venture fund with a €1.5 million
plc commitment;

- Change Ventures – Latvia-based seed stage fund investing in the
Baltic states with €1.5 million commitment;

- 7 Percent Ventures – London-based tech start-up VC with £2.0
million commitment; and
- LDV Capital – A US-based deep tech early stage venture fund
investing in Europe with US$0.75 million commitment.
Realisations
During the year, the plc realised £39.5 million from partial and full
disposals of investments, including receipts of escrow amounts. Key
partial and full realisations during the year include:

- £12.1 million, as well as £0.3 million amounts held in escrow, from
the full disposal of Pod Point to EDF Energy for a transaction value
ahead of September 2019 held fair value and representing 2.3x,
with an IRR of 39% over three years;

- £15.3 million gross proceeds were received for the part realisation
of Transferwise (£15.0 million net proceeds); and
- £4.6 million from the partial disposal of our stake in UiPath.
Post period-end, Zynga Inc. announced their agreement to acquire
Peak Games for $1.8 billion, which will, subject to closing, indicate
a fair value holding for Draper Esprit of approximately £80.0 million
via Earlybird IV (actual returns are subject to completion conditions,
including FX movements, and acquirer share price movement with
respect to the stock component).
Some of the above measures are Alternative Performance Measures (“APMs”) - see note 30 to the consolidated financial statements for further details.
*Reporting threshold – companies with a NAV of £1 million or more.
Core Holdings % of GPV — March 2020
Number of Companies — split by sector
Portfolio Review
Annual Report 2020
30
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Portfolio Review continued
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
21
10
FY18
39
15
FY19
50
16
FY20
Core
Emerging
0
100
200
300
400
500
600
700
800
£244m
£354m
£594m
£703m
£90m
£59m
£40m
31 March
2018
30 September
2018
31 March
2019
31 March
2020
Invested
Realised
Fair value
movement
$0m
$40m
$20m
$80m
$60m
$120m
$100m
$180m
$160m
$140m
$200m
$83m
$121m
$187m
FY18A
FY19A
FY20B
45%
55%
Number of Companies
Gross Portfolio Value Progression (£ millions)
Average Revenues — Core
31
draperesprit.com
Portfolio Review
Annual Report 2020


£0m
£50m £100m £150m £200m £250m £300m £350m £400m £450m £500m £550m £600m £650m
£750m
£700m
Remaining
Portfolio
Total
£87m
£68m
£65m
£31m
£28m
£24m
£22m
£20m
£20m
£18m
£17m
£17m
£15m
£14m
£13m
£12m
£232m
£703m
31st March 2019
Realised
31st March 2020
Invested
Fair value movement
Fair value decrease
Gross Portfolio Progression — by Portfolio Company
(£ millions)
Portfolio Review
Annual Report 2020
32
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Portfolio Review continued
The data infrastructure management platform, Aiven, allows
developers to focus on application building while the platform
manages open-source databases and messaging systems for
business clients on all major cloud platforms. The company
possesses 8 open-source products, 6 Clouds, and covers 87 regions
with headquarters in Boston, Berlin, Sydney, and Helsinki.
Aiven achieved SOC 2 compliance and became the first cloud service
to provide hosted PostgreSQL, in October 2019. In December 2019,
the company announced it had tripled its revenue run rate and
added former Amazon Head of Business Development Olaf Schmitz
to the company’s Board.
In February 2020 Aiven raised US$40 million in its Series B fund
raise led by Silicon-Valley-based IVP. Existing investors Earlybird VC
and Lifeline Ventures, as well as family offices of Risto Siilasmaa,
chairman of Nokia, and Olivier Pomel, founder of Datadog, were
also involved in the round.
Post period end the company announced two executive hires, VP of
marketing and VP of sales EMEA to fuel Aiven’s global expansion.
Aiven’s operational capability is secured by a globally distributed
team that is able to work remotely in order to provide support for
its service, which is a self-hosting, fully automated platform that
requires little human support. Remote work is a normal part of
everyday life at Aiven, so COVID-19 has had minimal impact for the
company.
£12.8m
Investment valuation
£5.0m
Invested
Cloud-based call centre system, Aircall, has launched a new partner
program to help agents and resellers sell their phone solution to their
server message block customers. The new channel partnerships will
enable further growth as it helps companies reach new audiences.
Aircall also launched its App Marketplace featuring +60 integrations
with best-in-class technology partners, creating a truly connected
ecosystem for voice.
In the post Covid-19 climate, demonstrating the value of the product
to provide its customers with integrations, flexibility, productivity
tools, Aircall has raised US$65 million in Series C. Funding was
led by DTCP with participation from new investors Swisscom and
Adam Street, existing investors including eFounders, Draper Esprit,
Balderton Capial and NextWorld participated in the round. This most
recent funding round brings the company’s total funding to date to
over US$100 million. Aircall is headquartered in Paris and New York.
It has more than 300 employees and has acquired 5000+ clients in
over 1500+ companies. The company also hired Sandrine Meunier
as Chief People Officer. Aircall founders, Pierre-Baptiste Bechu and
Xavier Durand, were named on Forbes 30 under 30 in tech 2019.
The global pandemic has caused a rise companies working from
home. Aircall’s cloud-based software connects remote teams and
enables them to stay productive and provide a work life balance.
With features like ‘Live feed’ managers are able to monitor
productivity, seeing which employees are on shift, on calls, and a full
view of the connected workstream. The Live feed integration also
eases the process of remote onboarding of new staff, being able to
track their onboarding status and add them to the system remotely.
Aircall unifies information by providing a singular inbox allowing
for ease in information sharing with tracking tags and comments.
Aircall has also created online resources for managers and staff to
help with productivity, remote working and working from home.
£24.3m
Investment valuation
£9.9m
Invested
33
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Core Company Updates
Annual Report 2020

Core Company Updates
Finalcad is a construction management application that allows
architects, field workers and contractors to run synchronised project
builds and risk management solutions that provide progress reports,
defect management, quality controls and analytics. The company
launched Finalcad Live, “Slack” for construction, enabling real-time
defect-tracking connected to the daily site log on to the platform.
Several strategic hires were made across the business including;
Franck Le Tendre, former Industry Director EMEA at Dropbox, as CEO.
Since 2012, Finalcad has delivered more than 20,000 projects in 35
countries and has raised over US$55 million in funding from Draper
Esprit, Cathay Innovation, Salesforce Ventures, Serena, Aster, and
CapHorn. In September 2019, the company was selected to be part
of the Next 40, a collection of France’s most promising start-ups, an
initiative run by Cédric O, France’s Secretary of State for the Digital
Sector.
By digitizing processes, allowing companies to capture relevant data
and share it in a paperless process, and creating permanent digital
records of health, safety, and environment information Finalcad is
helping companies adjust to COVID-19 workplace restrictions and to
keep employees safe.
£12.4m
Investment valuation
£12.4m
Invested
Graphcore, the machine intelligence semi-conductor company,
has developed IPUs (Intelligent Processing Units) which enable
unprecedented levels of compute. In May 2019, the company
announced that Dell was one of the first customers to build an IPU-
based Dell platform combined with Graphcore’s Poplar software stack.
The company also announced its collaboration with Microsoft Azure
in mid-November 2019. Microsoft is the first major public cloud
vendor to offer Graphcore IPUs to support next generation machine
learning. The partnership development is a testament of the
maturity of Graphcore’s patented IPU technology.
In February 2020, Graphcore raised a US$150 million Series D
extension round for research and development including investments
from new investors; Baillie Gifford, Mayfair Equity Partners and M&G
Investments as well as participation from previous investors Merian
Chrysalis, Ahren Innovation Capital, Amadeus Capital Partners and
Sofina. Other existing shareholders include BMW, Microsoft, Atomico
and Demis Hassabis of DeepMind.
In April 2020, Graphcore launched its new Poplar Analysis Tool, part
of Graphcore’s PopVision family of analysis tools that help users gain
a deeper understanding of how their applications are preforming
and utilising the IPU.
Graphcore has +200 employees with plans to hire additional staff, Iin
light of Coivid-19 the company has opted to conduct their hiring online in
order to keep up with their goal of 500 employees. Graphcore has offices
in Bristol, London, Cambridge, Palo alto, Oslos, Bejing, Hsinchu, Seoul,
New York, Seattle and Austin. In a demonstration conducted by Microsoft
machine learning scientist, Sujeeth Bharadwaj, a Graphcore IPU was used
to recognize Covid-19 in chest x-rays. Bharadwaj’s demonstration showed
that the Graphcore chip could speed up the process to 30 minutes as
opposed to the 5 hours a conventual chip might take, foreshadowing the
future success and breakthroughs Graphcore’s chip could accomplish.
£86.8m
Investment valuation
£13.7m
Invested
34
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Core Company Updates
Annual Report 2020

Portfolio Review continued
ICEYE empowers others to make better decisions in Governmental
and commercial settings by providing access to timely and reliable
satellite imagery.
The company’s radar satellite imaging service, with coverage of
selected areas every few hours, both day and night, helps clients
resolve challenges across a variety of sectors such as maritime,
disaster management, insurance, finance, security and intelligence.
Founded in 2014, ICEYE is the first organisation in the world to
successfully launch synthetic-aperture radar (SAR) satellites with
a launch mass under 100 kg. ICEYE currently has three satellites in
orbit with plans to launch several new units over the next few years.
The company hired Dr. Mark Matossian, an aerospace industry
expert, as CEO of ICEYE US, Inc indicating plans to expand to the US
market. Dr. Matossian most recently served for more than a decade
in program management at Google, including manufacturing and
launching the Terra Bella imaging constellation.
In the midst of COVID-19 ICEYE SAR satellite constellation is
monitoring the world under lockdown, tracking significant pattern-
of-life changes like the significant impacts being had on theme
parks and cruise ships.
£13.9m
Investment valuation
£7.5m
Invested
Ledger, the cryptocurrency and blockchain hardware security
wallet successfully launched the Nano X product and Ledger
live companion software. The Nano X received CSPN (First Level
Security Certificate) certification issued by the National Agency for
Information Systems Security (ANSSI). The Ledger Vault continues to
be sold across Europe, Asia, and the US as an enterprise solution.
The company continues to pursue partnerships like the one with
Engie, the French multinational electric utility business, to augment
the ways in which its technology can support IOT applications. The
company is also working with Veolia subsidiary, Birdz, a pioneer
in remote water consumption metering, to ensure authenticity of
the drinkable water collection data as well as Bitstamp, the world’s
longest-standing and largest European cryptocurrency exchange (by
trade volume) and Shapeshift, the cryptocurrency trading platform.
The company now has 200 global employees working in its Paris,
New York, Hong Kong, and Vierzon bases and 1 million users in over
165 countries with1.5 million units sold.
£17.7m
Investment valuation
£17.7m
Invested
Core Company Updates
Annual Report 2020
35
draperesprit.com
M-Files is an intelligent information management platform, that
organises customers’ content with the ability to connect to existing
network folders and systems to enhance them with the help of AI
to categorise and protect information. In the period, the company
announced that its platform is now linked to Microsoft Office
365, Microsoft Teams, and Salesforce Customer 360, and has also
publicised attainment of SOC 2 compliance.
M-files grew subscription based annual recurring revenue by over
100% in 2019. In addition to hiring a new CMO, the company has
won a number of awards, including the European Investment Bank’s
2019 Innovation Award and Best Overall Document Management
software of 2020 by Business.com.
The information management platform allows businesses to enable
secure access to documents and information while minimizing risk
as well as connects existing business systems and data archives
without the need for immediate data migration. M-Files offering
has helped businesses as they shift to remote working to digitise,
organise, and work more effectively during the COVID-19 pandemic.
£20.0m
Investment valuation
£5.0m
Invested
Peak, the mobile games developer, continues to grow at pace,
surpassing US$1 billion in player spend led by its 2015 release Toy
Blast.
Over 275 million users world-wide have installed at least one of the
company’s products. Its most popular games, Toon Blast and Toy
Blast, have more than 12 million average mobile DAUs (Daily Active
Users).
The UK is the publisher’s second largest market at 4.2% of player
spend, followed by Japan at 4%. The company’s titles are most
popular in the United States accounting for c.68% of revenue.
Post year end it was announced that Peak entered into a sale
agreement with Zynga Inc for $1.8 billion, comprised of approx.
$900 million cash and $900 million of Zynga common stock. Upon
completion the acquisition would represent a fair value holding
for Draper Esprit in Peak of approx. £80 million (actual returns
are subject to completion conditions, including FX movements,
and acquirer share price movement with respect to the stock
component), which is approx. an anticipated further £12 million
increase on the fair value holding of Peak at 31 March 2020. The
acquisition is subject to customary closing conditions and is
expected to close in the third quarter of 2020.
£67.8m
Investment valuation
£25.4m
Invested
Core Company Updates
Annual Report 2020
36
draperesprit.com

Portfolio Review continued
Perkbox is an employee wellbeing platform that provides a unique
employee experience, enriching the personal and working life of
employees. It offers a suite of products including a platform with
access to best-in-class Perks, Perkbox Recognition, Perkbox Insights
and Perkbox Medical. It serves organisations of all sizes from SMEs to
large companies in the UK such as Nando’s, OpenTable, Rentalcars,
and Purplebricks.
In March 2019 the company raised £13.5 million in a round led by
Draper Esprit, alongside several previous angel investors. Since then
the company has signed up a series of new partners including Krispy
Kreme, Café Nero, Wasabi, Café Rouge, Bella Italia, ASDA, Dune,
Philips, Sainsbury’s and H&M. The company continues its global
expansion with 113 perks live on its Australian platform and their
France team being awarded the “Innovation Award” at the SalonCE
Fair.
Perkbox offers resources that have become particularly useful in
light of COVID-19, the platform offers online GPs on-demand, online
employee recognition, real-time feedback, and perks like online
shopping discounts, free online fitness classes and 24/7 online
learning.
The company has made several key new hires to support its future
growth plans including Marissa White as Revenue Operations
Director and Ed Ellis as Organisational Readiness Director. Perkbox
ranked 25th in 2019 as one of FT’s ‘Europe’s Fastest Growing
Businesses’.
£19.9m
Investment valuation
£14.0m
Invested
RavenPack is a leading big data analytics provider for financial
services. The company’s products allow clients to enhance returns,
reduce risk and increase efficiency by systematically incorporating
the effects of public information in their models or workflows.
RavenPack’s clients include some of the most successful hedge
funds, banks, and asset managers in the world.
The ‘Ravenpack Connections’ tool has been introduced as the
company’s latest innovation to reveal business relationships
and interconnections among thousands of entities including
organisations, lead businesspeople and political figures affecting
capital markets. The tool allows researchers to discover interesting
themes, actionable ideas, and develop unique investment strategies.
In October 2019 the business raised a Series B Round of US$10 million
from the technology advisory and investment firm GP Bullhound.
Ravenpack intends to use these fund to expand into Asia, and
diversify their product offering in order to better target corporate
customers.
In response to the COVID-19 pandemic, Ravenpack created a free
coronavirus news monitor. The monitor is a live and interactive
website built to track the latest news and trending topics
surrounding the pandemic. The tracker provides real-time media
analytics, COVID-19 case tracking, and a live news feed. Ravenpack
released the tracker in response to client requests for data-driven
insights to support their decision making during the current
uncertain market conditions.
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£30.9m
Investment valuation
£7.5m
Invested
Core Company Updates
Annual Report 2020
37
draperesprit.com
Revolut, a global challenger bank and currently Europe’s joint-
top most valuable fintech bank supports 140 currencies, with no
international transaction fees, boasts 10+ million customers and
oversees 350m+ transactions.
In February 2020, Revolut raised a US$500 million Series D round
led by TCV valuing the company at a post-money valuation of
US$5.5 billion The company plans to use the funding to build new
products and grow into new markets, enhance its existing products
for existing users, launch new lending services for both retail and
corporate customers and to enhance its operational infrastructure
to support its continued growth.
The company currently has over 2,000 employees and its service
is operational in the UK, Europe, Singapore and Australia with
plans to launch in the US and Japan in upcoming months. In 2019,
Revolut rolled out a product called Revolut Junior in the UK for
under 17s to help teach financial literacy and teach children about
money management from a young age. Revolut also announced
integrations with Paymo, a productivity and time management
app, Adzooma, an online marketing optimizing AI platform, and
Invoiceexpress, an online invoicing software solution.
Former Standard Life Aberdeen co-Chief Executive, Martin Gilbert,
joined as executive chairman post year end and Revolut appointed
Pierre Decote as the new group chief risk officer in 2019.
£21.7m
Investment valuation
£7.4m
Invested
Launched in 2007, Smava, the online lending platform provides easy
access to the best conditions for consumer loans from more than 25
banks. The company is the largest specialised loan market place in
Germany, providing access to over €3 billion a year in loans. Smava
was also the first German company to offer negative interest rates.
In 2019 Smava announced plans to IPO, after achieving a consistent
growth Compound Annual Growth Rate (CAGR) of 90% from 2012.
In May 2020, it was announced that Smava raised €57 million in
debt and equity financing.
Smava’s early 2020 partnership with S-Kreditpartner GmbH part
of Landesbank Berlin AG has facilitated consumers to consumers
obtaining cheap loans with Smava.
£16.7m
Investment valuation
£14.5m
Invested
Core Company Updates
Annual Report 2020
38
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Portfolio Review continued
The money transfer service, TransferWise, is used by over 7 million
people and allows individuals and businesses to send money
internationally without hidden fees. It sends on average of over
£4 billion a month. TransferWise continues to pursue its mission of
money without borders with its platform launching in Singapore,
Poland, and the Ukraine with new currency lines being introduced
in several countries in Africa and South America. The company
appointed two non-Executive Directors to the board, the CFO of
Adyen, Ingo Uytdehaage, and David Wells, former CFO of Netflix.
TransferWise continuously works towards immediate money transfers
and direct debits, currently launched in the UK and EU, with plans
to roll out with more currencies. TransferWise also announced
integrations with Xero, to help accountants with bookkeeping
for business payments, GoCardless, to bring low-cost currency
conversion to recurring payments, and Alipay, allowing users to send
Chinese Yuan instantly.
£15.0m
Investment valuation
£5.9m
Invested
£17.4m
Investment valuation
£16.5m
Invested
Leading UK fintech company, Thought Machine, offers cloud native
core banking infrastructure to both incumbent and challenger
banks. The company’s technology provides an alternative more
flexible cloud-based solution. Thought Machine offers a single
software solution that banks can configure to provide any product,
user experience, operating model or data analysis capability. Vault,
the company’s core offering provides a next generation core banking
platform that enables banks, both established and challenger, to
compete in a cloud-based era.
The Fintech 50-ranked company was founded in 2014 by former
Google engineer, Paul Taylor. Thought Machine has employed over
300 employees in London with plans to continue to scale to 500
employees.
Thought Machine launched its Google Cloud Partnership in
November 2019. The company also recently announced a new
project, Vault Rare, intended to harness Vault’s full core capability
to allow the customers of Thought Machine’s client banks to edit,
adjust and even visually style banking products themselves. Lloyds
bank, Atom bank, SEB and Standard Chartered are all customers.
Core Company Updates
Annual Report 2020
39
draperesprit.com
Online global review site, Trustpilot, raised its Series E round of
US$55.0 million in March 2019. The company’s website has tracked
over 77 million reviews, with over 344,000 web domains reviewed
since it launched in 2007, is ranked in the top 1% of websites
(Alexa ranking). Trustpilot has also made several significant hires
adding a new Chief Marketing Officer, Chief Human Resources
Officer, and Chief Legal & Policy Officer to its team, promoting
strategic members of its leadership team and adding to its Board of
Directors. Trustpilot has over 800 employees in its 8 office locations
in Copenhagen, London, Edinburgh, New York, Denver, Berlin,
Melbourne, and Vilnius.
In its latest drive towards trust and transparency, Trustpilot launched
‘transparency reviews’ which provides detailed information on how
every company invites, receives and responds to reviews across over
345,000 domains globally.
£65.3m
Investment valuation
£29.7m
Invested
April 2019, Uipath, a Robotic process automation (RPA) software
company, raised its Series D investment round of US$568 million at
a post-money valuation of US$7 billion making Uipath the highest-
valued AI enterprise software companies in the world. The round was
led by Coatue Management with participation from Earlybird VC
Dragoneer, Wellington, Sands Capital, Accel, funds and accounts
managed by T. Rowe Price Associates, CapitalG, and Sequoia.
During the period between 2017 and 2019, the software company
has increased its annual recurring revenue (ARR) from US$8 million
to US$360 million, exceeded 6,000 customers and increased its
operating revenue by 37,463% making it one of the fastest growing
companies in the world. During the year, UiPath has been ranked in
Deloitte’s 2019 Technology Fast 500 number two spot and post-
period-end, was recognised as the fastest growing technology
company in the Americas and overall number two in FT America’s
Fastest Growing Companies 2020 list.
UiPath boasts 50% of the top 50 Fortune Global 500 as customers,
including American Fidelity, BankUnited, Duracell, Google, Ricoh,
Shinsei Bank, Uber, Virgin Media and World Fuel Services. The RPA
enterprise software provider has been working with healthcare
providers during the COVID-19 outbreak, automating processes to
free up frontline health care staff providing immediate benefits to
patients and giving long term ability to reduce appointment booking
administration time.
£28.0m
Investment valuation
£11.0m
Invested
Core Company Updates
Annual Report 2020
40
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Portfolio Review continued
“The pace of change
is accelerating and
our portfolio is well
positioned to lead
and benefit from
the transitioning
economies.”
Ben Wilkinson
CFO
Summary
The year ending 31 March 2020 has been
another active year during which we
have been building the infrastructure
required to scale the Group. During the
year, we invested £89.9 million from the
plc, alongside a further £38.1 million from
EIS/VCT. We secured a £50.0 million debt
facility (with an extension and increase
to £60.0 million post year-end), adding
further investable capital, and completed
the acquisition of the remaining interest
in Encore Ventures LLP, to better align
the Group structure to support continued
growth. The progress in the year has built on
the strategy of scaling our operations while
providing investors with access to the best
private technology companies in Europe.
The end of this financial year saw a rapidly
evolving environment resulting from the
COVID-19 pandemic. We were quick to
take necessary measures to safeguard our
employees, our investments and monitor the
liquidity of the Group. We took early steps to
prudently manage our business and remain
well financed.
Prior to the pandemic, the Group was on
track to achieve its targeted 20% portfolio
growth through the cycle and despite the
current market backdrop, has still delivered
strong growth across the business. In light
of the volatility that we have seen in the
markets in relation to asset valuations and
the shifting picture in the real economy, we
have re-appraised the valuation measures
for each of the portfolio companies
during our year-end process. With the
stark business interruption created by a
lockdown across the global economies being
somewhat softened by rapid Government
intervention, the picture of the recovery
is still unclear. What has been a clear
trend over these past few months is the
accelerated transition to digital and the
infrastructure required for remote working,
automated processes and e-commerce
- with the concomitant trends for online
payments and digital banking.
We have been very pleased with the
robustness of the portfolio during this
period and with the flexibility demonstrated
by the portfolio company management
teams to rapidly adapt their strategies and
models. We have taken an appropriately
prudent approach to the valuation process
to reflect reduced expectations of revenue
growth in the coming year but have also
seen valuation increases supported by third
party funding rounds. The pace of change
is accelerating and our portfolio is well
positioned to lead and benefit from the
transitioning economies.
Portfolio Valuation
The Gross Portfolio Value of £702.9 million
has grown by £108.9 million from prior year
(31 March 2019: £594.0 million). Growth is a
result of £89.9 million (2019: £226.4 million)
invested during the year and £58.5 million
(2019: £140.1 million) of fair value growth,
net of realisations of £39.5 million (2019:
£16.0 million). The Gross Portfolio is subject
to deductions for the fair value of the carry
liabilities and deferred tax to generate the
net investment value of £657.3 million (2019:
£562.1 million), which is reflected in the
consolidated statement of financial position
as a financial asset held at fair value
through the profit or loss. The Gross Portfolio
Value Table below has been generated to
reflect the gross and net movement in value
of the portfolio during the period.
The net fair value gain on investments of
£40.8 million is reflected in the consolidated
statement of comprehensive income. A
deferred tax provision of £5.3 million is
accrued against the gains in the portfolio
to reflect those portfolio companies where
the Company owns less than 5% of the
equity holding. This amount is netted off
against the investments in the consolidated
statement of financial position. Carry
balances of £40.6 million are accrued to
management teams, including previous and
current employees of the Group based on
the current fair value at the period-end and
deducted from the Gross Portfolio Value.
Some of the measures are Alternative Performance Measures (“APMs”). Please see note 30 to the consolidated financial statements for further details.
41
draperesprit.com
Financial Review
Annual Report 2020

Financial Review
For valuations as at 31 March 2020, lower
growth forecasts for 2020 and 2021 have
been assumed for companies impacted by
COVID-19. The Group consistently applied
multiples lower than those prevailing for
comparable quoted companies to mitigate
stock market volatility. Companies within
our core portfolio holdings which have
valuations based on revenue-multiples have
an average multiple of 3.2x.
Our pre-COVID-19 expectations were in
line with our 20% growth target through
the cycle and, despite the impact of the
pandemic, we have achieved a Gross Fair
Value increase in the year of £58.5 million,
which represents Gross Portfolio fair value
growth of 10% (2019: £140.1 million, 58%).
Post period end it was announced that Peak
Games had entered into a sale agreement
with Zynga Inc, subject to closing, for $1.8
billion, comprised of approx. $900 million
cash and $900 million of Zynga common
stock. Upon completion the acquisition
would represent a fair value holding for
Draper Esprit in Peak of approx. £80 million
(actual returns are subject to completion
conditions, including FX movements, and
acquirer share price movement in respect of
the stock component), a fair value uplift of
£26 million in the year ending 31 March 2020
and a further approx. £12 million anticipated
increase post year-end. The acquisition is
subject to customary closing condition and
is expected to close in the third quarter of
2020.
Consolidated statement of
financial position
On 10 March 2020, the Group acquired
the legal and beneficial interest it did not
already own in Encore Ventures LLP, the
partnership which manages Draper Esprit’s
EIS funds. Following the acquisition and as
at 31 March 2020, the Group owns 100% of
the interest in Encore Ventures LLP. Going
forward, the acquisition will eliminate the
non-controlling interest line in the Group’s
financial statements. During the current
financial year, profit attributable to non-
controlling interest to 10 March 2020
amounted to £0.7 million. This transaction
results in a change in ownership interest
accounted for under IFRS 10 as an equity
transaction.
Net assets have increased £41.0 million to
£659.6 million at 31 March 2020 (31 March
2019: £618.6 million).
The increase in net assets reflects positive
performance of investments, as well as
increases in trade and other receivables (see
below).
A loan liability is recognised in respect of
the amount drawn down at year-end of
£45.0 million (undrawn £5.0 million at 31
March 2020). In June 2019, the Company
entered into a new revolving credit facility
agreement with Silicon Valley Bank and
Investec raising £50.0 million of debt capital.
Post year-end the facility has been increased
by £10.0 million to £60.0 million reflecting
growth in the balance sheet, which is
supported by an independent valuations
process. The facility reduces the overall cost
of capital of the Company and provides
financial flexibility to fund the future growth
plans of the Group’s portfolio companies.
As a revolving credit facility, draw downs
and pay downs are driven by portfolio
investments and realisations. (see note 21
for further details).
From 1 April 2019, the Group applied IFRS
16 Leases using the modified retrospective
approach. See further details in significant
accounting policies – note 4. The impact
on the consolidated statement of financial
position has been the recognition of right-
to-use assets of £1.3 million at 31 March
2020 (recognised under property, plant
and equipment) as well as the introduction
of corresponding lease liabilities of £1.3
million. In the consolidated statement
of comprehensive income, during the
year, depreciation charges of £0.3m were
recognised in respect of the right-of-use
assets and interest of £0.09 million was
recognised in respect of the lease liabilities.
These balances reflect the lease of offices at
20 Garrick Street, London.
The largest items in trade and other
receivables at year-end relate to accrued
income in respect of management fees
for the period between 1 January 2020 and
31 March 2020 of £2.2 million and a loan
from the Company of £3.7 million to Esprit
Capital I Fund No.1 & No.2 LP (see note
31) as well as associated accrued interest
of £0.2 million. Further amounts include
overhead recharges, timing differences on
investment proceeds, prepayments and
other receivables.
Year-end cash balance reflects the opening
cash balance of £50.4 million at 31 March
2019, the subsequent drawdown on the debt
facility of £45.0 million (net of repayments),
investments of £89.9 million, realisations
of £39.5 million, £8.5 million of net loans to
group and related companies, net proceeds
for the issue of shares during the year, and
the operating costs of the business. At year-
end, the Group has available cash resources
of £34.1 million (including £1.9 million of
restricted cash - see note 21) at the plc,
£50.9 million within our EIS/VCT funds and
£5.0 million undrawn under our revolving
credit facility (with a further £10.0 made
available post year-end).
Consolidated Statement of
Comprehensive Income
Investment income for the year comprises
£40.8 million of unrealised investment
gains (31 March 2019: £114.7 million) and
fee income of £11.3 million (31 March 2019:
£6.1 million), which is generated from
management fees and director fees. General
& administration costs of £9.8 million in
the period reflect the changes to our team
as we build the infrastructure to grow
(including associated recruitment fees), as
well as increases in marketing costs and
professional fees. Net operating costs (net of
fee income) as a % of NAV are substantially
less than 1% and targeted to remain below
this level.
Financial Review
Annual Report 2020
42
draperesprit.com

Financial Review continued
Gross Portfolio Value Table 
Investments
Fair Value of
Investments
31st March
2019
£m
Investments
£m
Realisations
£m
Draper Esprit
(Ireland) Limited
£m
Movement
in Fair
Value
£m
Fair Value of
Investments
31st March
2020
£m
Interest
FD category *
at reporting
date
Graphcore
78.6
-
-
-
8.2
86.8
B
Peak Games
41.7
-
-
-
26.1
67.8
B
Trustpilot
62.0
-
-
-
3.3
65.3
C
Ravenpack
15.6
-
-
-
15.3
30.9
D
Ui Path
33.0
-
(4.6)
-
(0.4)
28.0
A
Aircall
9.9
-
-
-
14.4
24.3
B
Revolut
7.4
-
-
-
14.3
21.7
A
M-files
17.2
1.0
-
-
1.8
20.0
B
Perkbox
23.7
-
-
-
(3.8)
19.9
C
Ledger
17.7
-
-
-
0.0
17.7
B
ThoughtMachine
0.0
16.5
-
-
0.9
17.4
B
Smava
23.5
-
-
-
(6.8)
16.7
B
Transferwise
27.7
-
(15.0)
-
2.3
15.0
A
ICEYE
3.7
3.8
-
-
6.4
13.9
B
Aiven
-
5.0
-
-
7.8
12.8
B
FinalCad
12.4
-
-
-
0.0
12.4
C
Remaining Portfolio
217.9
63.6
(19.9)
-
(31.1)
230.5
-
Total
592.0
89.9
(39.5)
-
58.7
701.1
Co-invest assigned to plc
2.0
-
-
-
(0.2)
1.8
Gross Portfolio Value
594.0
89.9
(39.5)
-
58.5
702.9
Carry external
(27.6)
-
-
-
(13.0)
(40.6)
Portfolio deferred tax
(5.4)
-
-
-
0.1
(5.3)
Trading carry & co-invest
1.1
-
-
-
(0.8)
0.3
Draper Esprit (Ireland) Limited
-
-
-
4.0
(4.0)
0.0
Net portfolio value
562.1
89.9
(39.5)
4.0
40.8
657.3
Post-balance sheet events

- Extended the term and increased the size of the revolving credit
facility, provided by Silicon Valley Bank and Investec, by £10.0
million to £60.0 million

- Zynga Inc. announced their agreement to acquire Peak Games
for $1.8 billion, which will, subject to closing, indicate a fair value
holding for Draper Esprit of approximately £80.0 million via
Earlybird IV (actual returns are subject to completion conditions,
including FX movements, and acquirer share price movement with
respect to the stock component).
The financial year to 31 March 2020 has seen further growth in the
Group and we continue to scale the platform to deliver further
growth for our shareholders.
*Fully diluted interest shares categorised as follows: Cat A: 0-5%, Cat B: 6-10%, Cat C: 11-15%, Cat D: 16-25%, Cat E: >25%.
Financial Review
Annual Report 2020
43
draperesprit.com
44
draperesprit.com
Key Performance Indicators
Annual Report 2020

Key Performance Indicators
KPI
How measured
Progress
1. Growth in value of
the portfolio
Fair value determined using International Private Equity and Venture
Capital Valuation Guidelines for the year-end and interim reporting
periods.
Gross Portfolio Value has
increased to £702.9 million,
reflecting an increase of
18.3% (FY19: £594.0 million).
2. Realising cash
Cash generated from portfolio company exits against original cost.
£39.5 million (FY19: £16.0 million)
realised in the period.
3. New investments
Deploying funds for investments into new portfolio companies, follow-
on investments into existing companies, stake building into existing
companies and secondary investments.
£89.9 million (FY19: £226.4 million)
invested in the period from plc,
with a further £38.1 million across
EIS/VCT (FY19: £35.1 million).
4. Deal flow
Tracking private company financing rounds across Europe and analysing
against the Group’s internal CRM database to determine if the
opportunity was known to the Group.
Through our brand and network,
we continue to access high quality
deal flow across Europe.
5. Cash balances
Maintaining sufficient liquidity to meet operational requirements, take
advantage of investment opportunities and support the growth of
portfolio companies.
£34.1 million (FY19: £50.4 million)
at year-end (including restricted
cash).
Undrawn balance from our
revolving credit facility at year-end
was £5.0 million (£50.0 million
facility, extended and increased to
£60.0 million post year-end).
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Sustainability
Following a year that encompassed devastating forest fires in Australia,
rising ocean temperatures, continued stories of racial and gender
inequality across every walk of life and some of the largest fines in history
for corporate data protection failures, the importance of environmental,
social and governance issues have never been as acute or necessary as
they are now. The business community has work to do around ESG, and
Draper Esprit is firmly committed to playing its part.
During the previous financial year, the Board
of Directors approved the formalisation of
Draper Esprit’s ESG strategy to build upon
the existing positive practices undertaken
by the business. This financial year, we
have continued that journey and taken
steps towards the overarching ambition of
embedding ESG considerations into all of our
investment and business decision-making
processes.
Notable milestones have been achieved
during the past 12 months, which should
be considered against the backdrop of an
embedded business culture committed
to positive change and the principles of
ESG, both in our own business and in the
companies that we invest.
Tasked with the day-to-day management
and oversight of the Group’s ESG
implementation strategy is a core steering
committee that was established earlier in
the year by appointment of the Executive
team, and comprises representatives from
each of the legal/compliance, finance,
investment, HR, and marketing functions,
under executive sponsorship of CFO Ben
Wilkinson.
The steering committee is mandated to
implement a 12-month ESG roadmap
prepared in early 2020 in consultation
with external ESG specialists which
sets out a pathway for adoption of an
evolved ESG investment policy; updated
investment checklists with enhancements
to include ESG/RI considerations; a
portfolio benchmarking exercise; and the
development of ESG monitoring tools for
internal and external deployment.
It is our intention to operate in line with the
UN’s Sustainable Development Goals, the
BVCA Responsible Investment Management
System and our own obligations as
signatories to the UN’s Principles of
Responsible Investment.
Our ESG ambitions are an ongoing and
evolving process that we are committed
to build and develop over time. Whilst we
acknowledge that there is a long way to go
on this journey, meaningful steps have been
taken during the year across multiple areas
within our business.
Environment
Through our investment activities, we
have helped businesses like Pod Point
(exit in February 2020) to rapidly scale
up their award-winning electronic vehicle
charge point solution; Everoad (post year-
end merged with Sennder) to leverage
technology solutions to build efficiencies
and carbon reductions into the global
freight management industry; and Aircall
to facilitate cloud-based calling solutions
reducing the need for travel. We will
continue to look for environmentally minded
investment opportunities and have adapted
our internal due diligence questionnaire
accordingly.
Within the plc, we have invested heavily
in Zoom video conferencing solutions to
encourage video calls in lieu of domestic or
international travel. We have also continued
the push towards a paperless working
environment with the adoption of improved
internal IT and document sharing solutions.
During the year, we commissioned a full
carbon footprint report and balancing
programme, which was completed post
year-end in May 2020 with certified
B-Corp, C-Level Earth Limited, allowing us
to compensate for our 260 tonnes of CO2
“Our ESG ambitions
are an ongoing
and evolving
process that we
are committed to
build and develop
over time.”
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Annual Report 2020
through investment in two Plan Vivo accredited projects, namely
(i) forest restoration and protection with Hadza Hunter Gatherers
in Tanzania and (ii) reforestation with The CommuniTree Carbon
Program in Nicaragua.
We propose to build upon the steps taken in the coming year with
input from external specialists to determine how we can best
engage our portfolio companies to help reduce and counteract
carbon emissions.
Social
Our existing portfolio is full of companies doing remarkable things to
enhance health and wellbeing (e.g. Endomag, Push Doctor, Ieso
Digital Heath, Lifesum, Fluidic Analytics and Miracor Medical
Systems), encourage social engagement (e.g. Perkbox, Aircall and
Resolver), and improve pro-consumer compliance (Kaptivo and
GetSafe).
We have also been making adjustments within our own business
to drive social change by hiring a dedicated Human Resources
Manager; engaging with entrepreneurs in hosted themed events,
including a ‘Women in VC’ event; and continuing to offer highly
competitive remuneration and benefits packages to all of our
personnel. Various policies are in place within the Group designed
to protect and empower personnel, including Anti-bribery and
corruption, Whistleblowing and Health and Safety, all of which are
reviewed annually and, where relevant, amended or supplemented
to accommodate the evolving risk profile of the business.
We are an equal opportunities employer and very proud of our
diverse workforce, which is built to reward people on ability,
regardless of gender, age, race or sexuality. We see our differences
as one of our greatest strengths, and only have to look at the range
of participation in panel events that our team undertake in multiple
languages across different continents, to see the clear benefits of
embracing all backgrounds into the workforce.
For the year ahead, we will be continuing our inclusive recruitment
policy and engaging further with our community of entrepreneurs
and portfolio companies in the UK and Europe to promote
awareness of social issues and encourage action where possible.
CommuniTree
Monitoring the success of C-Level carbon balancing through reforestation
“We see our differences as one
of our greatest strengths, and
only have to look at the range
of participation in panel events
that our team undertake in
multiple languages across
different continents, to see the
clear benefits of embracing
all backgrounds into the
workforce.”
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Hadza Hunter Gatherers
C-Level carbon balancing with communities protecting forests
Governance
Draper Esprit has a strong track record of investing in businesses
that either enhance the state of the art in digital security technology
(e.g. Ledger’s crypto security solutions or Fraugster’s Ai technology
focused on eliminating payment fraud), or facilitate greater
transparency, accountability and/or protection in existing systems
(e.g. the technological security advances being driven in the banking
industry by Form 3, Revolut, N26, and TransferWise, or the crowd-
generated consumer confidence platform provided by TrustPilot).
Good governance and cyber resilience are also critical to our own
operations. By virtue of the FCA-regulated investment activities
undertaken within the broader Group, and the status of the
Company as a publicly traded entity subscribed to the Quoted
Companies Alliance (QCA) Corporate Governance Code, we are the
subject of robust risk management and governance arrangements,
and have this year further bolstered our internal systems and
processes in a number of ways.
A dedicated IT Manager has been hired to implement various security
enhancements into our IT environment including the introduction of
Mimecast cloud-based email security and archiving; investment in
Microsoft Office 365 cloud computing; bit locker device encryption
and remote wiping functionality; and Cyber Essentials accreditation.
Post year-end, external penetration testing was performed against
our internal infrastructure, to assess the overall security posture of
our IT environment, with zero critical or high risk areas identified.
Complementing the technological changes is the addition of our
first Legal Counsel who has been working with our internal and
external IT and compliance advisors to build policy and systems
designed to protect our data and redouble our commitment to
minimising compliance risk and preventing bribery and corruption.
Responsibility for governance within the Group ultimately sits with
the Board (comprised of 4 Executive and 3 Non-executive Directors
to ensure a suitable level of independent thought and challenge),
but is also permeated throughout the Group by regularised training
and internal processes designed to ensure observance of good
governance at every stage of investment.
Remuneration policies are regularly reviewed by the Board’s
Remuneration & Nomination Committee and are designed to ensure
that all reward and recognition structures are aligned with the
broader goals of the Company’s stakeholders by dissuading risk-
taking practices that are inconsistent with the goals and parameters
established by the Board.
Under Section 172(1) of the Companies Act 2006, a director of a
company must act in the way he or she considers, in good faith,
would be most likely to promote the success of the company for
the benefit of its members as a whole, and in doing so have regard
(amongst other matters) to:

- the likely consequence of any decision in the long-term;

- the interests of the company’s employees;

- the need to foster the company’s business relationships with
suppliers, customers and others;

- the impact of the company’s operations on the community and
the environment;

- the desirability of the company maintaining a reputation for high
standards of business conduct; and
- the need to act fairly as between members of the company.
The following disclosures describe how the Directors have had regard
to the matters set out in Section 172(1)(a) to (f) of the Companies
Act 2006 and forms the Directors’ statement under section 414CZA
of the Companies Act 2006. Examples have been included both of
the routine application of such considerations in the ordinary course
of business, and their role in certain key Board decisions during the
course of the year.
Key stakeholders
The Board considers its key stakeholders to be its employees, its
portfolio companies, its investment partners, the community in
which it operates (and broader community), the environment, its
suppliers and advisors, and its shareholders.
Having regard to this divergent range of interests is a key part of the
Board decision-making process, noting that it is not always possible
to balance those different interests to deliver the desired outcome
for each interested party.
How does the Company engage with its key stakeholders?
The Company, under the direction of the Board, is committed to
engaging with all of its key stakeholders to understand the wider
impact of the Company’s operations. As set out below, the Board
directly and indirectly engages with stakeholders in a variety of
ways, and factors these considerations into its long-term strategic,
operational and financial goals. For more details on how our Board
operates, and the way in which it reaches decisions, please see the
Chair’s Corporate Governance Report on pages 61 to 64.
How does the Company engage with its key stakeholders?
Employees
Why we engage
Engagement with employees by the Executive and Non-Executive teams promotes a strong business-wide corporate culture of
governance, which facilitates the ability of decision makers to appropriately discharge their duties and reduce or remove Group exposure to
unacceptable levels of risk.
How we engage
Due to the Group’s relatively small employee base, the Directors engage directly with employees on a day-to-day basis. The Non-Executive
Directors have an open invitation to attend weekly Investment Committee meetings and speak with employees in person, both during the
investment decision-making process and in informal social settings.
All employees have clear reporting lines which facilitate and encourage direct access to the Executive team. Regular fitness and proprietary reviews
are undertaken in line with regulatory requirements, which forms part of the culture of the business.
HR undertakes regular anonymous employee surveys to provide people-centric insights to the Board.
In its decision-making process, the Board regularly considers the impact of its decisions upon the Company’s staff and affiliated personnel as well
as the surrounding business culture.
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Section 172 statement
Portfolio companies
Why we engage
Our open and inclusive approach is key to the hands-on way in which our team supports the growth of our portfolio companies. Engagement
with portfolio companies through all stages of growth allows us to better support those businesses and their management teams via access
to our expertise, capital and wider network. Our approach to portfolio engagement also provides us with more regular and better visibility on
portfolio company practices, progress and culture, which in turn informs the way in which we are able to provide support.
How we engage
We have regular contact with our portfolio companies by taking a board directorship or attending meetings as an observer, as well as through
informal channels by building strong relationships with entrepreneurs and their leadership teams.
Many of our team offer specific domain expertise relevant to the particular business of our portfolio companies and also bring operational
experience as technology entrepreneurs in their own right, which enables us to provide companies with tailored connections and advice.
We run regular events and training sessions including trend spotting, panel discussions, focused networking and breakfast briefings to support
our portfolio teams with best practice guidance and knowledge sharing. Events during the current year have included our annual investor day,
a Women in VC event, and dedicated roundtable forums for portfolio CFOs and CMOs.
Consideration of portfolio company performance is a standing agenda item at each Board Meeting.
Please see the Portfolio Review and Core Portfolio Updates section on pages 29-40 as well as the case studies on pages 15, 23, and 26-28 for
more information on the work we do with our portfolio companies.
Investment partners
Why we engage
Leveraging our co-investment model offers improved access to the best deals and, by extension, the best returns for all of our stakeholders.
Through active collaboration with likeminded investment partners, we achieve cultural alignments and can provide a broader range of
collaborative investment optionality to our prospective and existing portfolio companies.
How we engage
The Group works closely with its investment partners, Draper Esprit EIS (Encore Ventures LLP), Draper Esprit VCT (Elderstreet Investments
Limited), Earlybird, and across Draper Esprit’s fund of funds strategy. As strategic partners, we share deal flow and resources to co-invest in
high growth technology companies across the UK and Europe. Representatives of our investment partners are invited to attend Investment
Committee meetings, and the Executive team engage directly with our investment collaborators on a regular basis.
We work closely with our investment partners to ensure an alignment of culture and long-term goals that allow for sustainable growth and
positive returns and outcomes for all our key stakeholders. Board consideration is regularly given to the strategic positioning and relationship
between the Group and its investment partners.
The community
Why we engage
As part of our longstanding aim of democratising venture capital (as evidenced by our decision to IPO in 2016), we are committed to building
engagement with the community, particularly in the context of our continued focus on sustainability, environment, social and corporate
governance issues.
How we engage
We regularly hold thematic events across the regions and sectors we focus upon which are open to members of the entrepreneurial ecosystem
and others within the broader community.
In addition to enabling our portfolio companies and wider partners to meet and gain valuable insight, these events also give us regular
opportunities to engage with these communities and strengthen our relationships and influence within them. As signatories to the UN Principles
of Responsible Investment we are committed to encouraging dialogue around ESG themes, as further considered in pages 45 to 47.
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Shareholders
Why we engage
The Board recognises the critical importance of understanding, and aligning to, the expectations of our shareholders. Regular dialogue with
shareholders through a range of different channels helps us to understand their short and long-term views; engage with their ambitions;
and address their concerns.
How we engage
Regular communication with institutional shareholders is maintained through individual meetings hosted by members of the Executive team,
particularly following the publication of interim and full-year results. The Chair of the board of Draper Esprit plc also maintains direct contact with
the Company’s largest investors both in writing and through attendance at meetings.
The Company’s shareholders are invited to attend our annual Investor Day at which a selection of portfolio companies are invited to present,
allowing for direct engagement between Draper Esprit, its shareholders and our portfolio companies.
The Board encourages shareholders to attend and vote at the Company’s Annual General Meetings, at which members of the Board are in
attendance and available for shareholder questions. Investor relations are a standing item on the Board’s agenda.
Suppliers and advisors
Why we engage
Our suppliers work with the Draper Esprit plc and broader Group to ensure that we can provide an appropriate level of service and regulatory
compliance function.
By being selective in our choice of suppliers and fostering robust relationships with those that we choose to work with, we ensure that the
Group efficiently and sustainably engages the right services for our business in line with applicable laws, regulations and best practice.
How we engage
The Group engages its suppliers (locally, and where appropriate, globally) on the basis of proven track record with observance of minimum
levels of performance, ethics and governance in order to create value and mitigate risk.
A variety of independent professional advisors are utilised by the business to assist with our regulatory and legal compliance, including by
way of example: banks, lawyers, accountants, auditors, brokers, compliance specialists, branding and publishing sector specialists.
The Group has a positive and open relationship with all of its advisors. These relationships are typically owned at Director level within, or
where necessary, by an appropriately skilled manager. Regular contact is maintained to ensure alignment of expectations and interests.
The environment
Why we engage
Concerns around Environmental Social and Corporate Governance (ESG) issues have become increasingly important to the Company and to
the wider business community, particularly in respect of climate change and carbon emissions.
Engagement with ESG-focussed strategies is of ever-growing significance, both from a broad planetary/societal perspective, but also in the
context of evolving investor expectations within the VC community.
How we engage
The Company and broader Group is committed to positively engaging with sustainability and ESG issues. The Company is a signatory to the
UN Principles of Responsible Investment and is in the process of developing and implementing its environment-focussed strategy applicable
to the Group and to our portfolio companies. A core steering committee has been established by the Board and mandated to deliver an ESG
roadmap during the coming financial year. More detail is provided on pages 45 to 47.
Steps that have already been taken include a full carbon footprint analysis and offsetting programme, allowing us to balance 100% of our
direct CO2 equivalent greenhouse gas emissions through investment in accredited projects; investment in Zoom video conferencing solutions
to discourage unnecessary travel; and a push towards a paperless working environment with the adoption of improved internal IT and
document sharing solutions.
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Section 172 statement continued
Examples of stakeholder considerations in certain key Board decisions during the year
In discharging its duties, the Board considers the views of its stakeholders alongside information pertaining to key areas such as principal risk
and legal and regulatory compliance. Information is channelled to the Board in the form of reports circulated in advance of each meeting,
regular director dialogue, and in-person presentations.
This information informs our short and long-term strategy, and financial and operational performance. The below are a few examples of the
application of such information in certain key decisions made during the year to 31 March 2020.
Board decision
Considerations
The Board considered and agreed the
appointment of a new CEO.

- The need to recruit a talented individual who was the right fit and who both understands,
and can develop, the short and long-term culture and ethos of the business.

- The requirements of the shareholders and market.

- The need to consider long-term succession planning in all Board appointments.
The Board considered and approved the
entry into a £50m debt facility with Silicon
Valley Bank and Investec.

- The Group’s access to additional financing flexibility.

- The ability of the Group to invest in new investment opportunities and continue backing
our existing portfolio.

- The ability for employees in the investment team, and the broader Group, to undertake
investment activity at scale with the opportunity to participate in upside of successful
capital deployment.

- The quality of the counterparties.
The Board approved the adoption and
implementation of a Group ESG Strategy.

- Engagement with critical issues relating to community and the environment.

- The ESG demands and expectations of shareholders.

- Please see pages 45 to 47 for further information in this regard.
The Board considered and approved the
acquisition of the outstanding interest in
Encore Ventures LLP, bringing Encore’s EIS-
focussed activities 100% within the Group.

- The ability of the Group to continue to offer an array of investment opportunities to its
shareholders including access to EIS-focussed funds.

- The requirements of portfolio companies for growth capital whilst they scale.

- Consideration of the long-term growth and sustainability of the business.
The Board considered the structures required
to scale the business whilst maintaining the
integrity of the investment process.

- The means by which to achieve the best returns for shareholders in the short and
long-term.

- The strategic positioning of the Company with its investment partners.

- The opportunities for key personnel within the business to be given greater
responsibility and opportunity.
The Board reviewed the results of employee
pulse surveys and agreed a number of
employee related initiatives to be carried out
by the senior leadership team.

- The need to focus upon business culture within the employees under the stewardship of
the HR Manager appointed in late 2019.

- The approval of further regular shortened anonymous surveys to gauge areas for
development.
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#
Risk
Possible consequences
Mitigation strategies
1.
Coronavirus
(direct and
indirect impact
of COVID-19)
The activities of the Group and of its portfolio
companies are likely to be negatively impacted in the
short to mid term by the direct and indirect impact
of the global spread of COVID-19 coronavirus,
including (without limitation) risks connected to
market instability; macro-economic disruption;
share price volatility; reduced investor activity;
disrupted cross-border trade; impaired supply chains;
reforecast asset valuations; and the strong possibility
of a global recession. The Group’s operations
may also be adversely affected by associated
commercial, legal and practical risks outside the
control of the Group such as widespread sickness
across the workforce, quarantine restrictions, labour
unrest or civil disorder.
These risks will be shared across all businesses globally
including the Group’s competitors, whether public or
private. Due to the Group’s industry, structure and
relative size, the impact of COVID-19 are likely to be felt
less acutely by Draper Esprit than in other more directly
affected sectors, for example those in retail or travel, or
those businesses which cannot be structured to allow for
remote working.
In order to mitigate direct risks, a variety of measures
have been taken by the Group to ensure that the
business can continue operating safely, effectively, and
in line with its legal and regulatory obligations. Such
measures include a fully engaged business continuity
plan involving homeworking across the workforce;
a cloud-based IT infrastructure with suitable access
to data, core systems and virtual meeting facilities;
rapid-deployment internal and external communication
channels; internal escalation processes to assist
the Group in fulfilling its operational and regulatory
requirements; and contingency planning at an executive
level for different outcome trajectories.
With respect to those portfolio companies whose
business is more acutely exposed to the immediate
impact of COVID-19 (for example those in travel), the
Company is able to help mitigate such risks by the
provision of support, information and guidance to
founder teams to assist with, for example, applications
for available state loan schemes and strategic advice
on market opportunities. Funding can also be advanced
by way of investment or debt where there is a suitable
business case to do so.
The Company will continue to be informed by reliable
data sources in connection with the spread and impact
of COVID-19, including government advice; regulatory
guidance; and best practice trends as these emerge.
Strategically, our focus on promising technology
companies means that we are also well placed to
continue to spot new investment opportunities in
emergent areas, for example in digital health and
remote working.
The Board considers the following to be the principal key business
risks faced by the Group. The Group’s strategy is aligned to mitigate
these risks as outlined below.
The Board regularly reviews the risks faced by the Group and
functions to ensure that effective and appropriate mitigation
strategies are established, maintained and updated where needed.
There may be additional risks and uncertainties, which are not
known to the Board, as well as risks and uncertainties, which are
currently deemed to be less material, but may also adversely impact
performance.
It is possible that several adverse events could occur simultaneously
which could collectively compound the possible impact on the
Group. Any number of the below risks could have a material adverse
impact on the Group’s business, financial condition, results of
operations and/or the market price of the ordinary shares.
Of the principal risks detailed below, #1 and #16 are new in the year.
The Board considers #1 and #2 to be emerging risks and that #6, #7,
and #14 also contain emerging elements.
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Principal Risks
53
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#
Risk
Possible consequences
Mitigation strategies
2.
The UK’s exit
from the EU
may impact
negatively upon
the Group
The terms of the UK’s eventual transition out of the
EU are currently largely unknown, but could result in
economic instability or the withdrawal of certain EU-
driven frameworks within the financial environment,
which could affect investor confidence and limit
access to capital for the Group and/or its portfolio
companies. Brexit may also affect the Group’s ability
to make investments into Europe, and expose the
Group and its portfolio companies to currency risk;
recruitment challenges; and regulatory adjustments.
The Board has taken legal and regulatory advice on the
Group’s exposure to Brexit-related risk and continues to
monitor the impact of transitional negotiations as the
UK leaves the EU.
The Company is dual-listed on AIM in London and
Euronext Growth in Dublin, thereby providing flexibility to
participate in European investments going forward.
The Group’s strategic partnership and investments with
Earlybird Digital West, part of the German-originated
Earlybird VC firm ensure continued access to investment
opportunities in continental Europe.
3.
The investment
portfolio
businesses are
at an early
stage and carry
inherent risk
The technologies, services or business models
developed by these businesses may fail and/or
these businesses may not be able to develop their
offering into commercially viable products.
The investment team, comprised of experts in their
particular sector, undertake rigorous due diligence
prior to any investment and thereafter provide active
guidance and management capabilities to businesses
that are invested in.
The Group typically secures a significant minority stake
in portfolio companies with board participation and
consent rights allowing a level of visibility and control.
The financial structure of investments provide downside
protection. Technology solutions are also used by the
team to assess and track progress once an investment
has been made.
4.
Portfolio
value may be
dominated by
single or limited
number of
companies
If one or more of the core portfolio companies
experience significant difficulties or suffer poor
market conditions (whether related to COVID-19
or otherwise) such that their value is adversely
affected, this could have a material adverse
impact on the overall value of the Group’s
portfolio of investee companies.
The Group adopts a spread sector approach with a focus
on 4 core areas. Risk is diversified within the portfolio by
not focusing on any one sector and by deploying capital
across early and growth stage businesses.
By leveraging the Group’s fund of funds capability, new
seed-stage investment opportunities are identified early
to ensure a broad array of investments in a way that
spreads risk.
5.
The Group will
hold non-
controlling
interests in the
investment
portfolio
businesses
Non-controlling interests may lead to a limited
ability to protect the Group’s position in such
investments.
The Group is an active manager of its investments and
usually takes a board or observer position on portfolio
companies. Investments are made with suitable minority
protections, typically including preferential share
rights on distributions and consent/veto rights on key
decisions. Furthermore, investments are often made in
businesses in which other institutional investors are also
shareholders, affording a greater degree of collective
protection.
6.
Proceeds from
the sale of
investments
may vary
substantially
from year to
year
The timing of portfolio company realisations
is uncertain and cash returns to the Group are
therefore not predictable.
The Group maintains sufficient cash resources to manage
its ongoing operational and investment commitments.
Regular working capital reviews are undertaken using
cash flow projections, and the financial performance of
the Group is a standing agenda item at meetings of the
executive management team and the Board.
Principal Risks
Annual Report 2020
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Risk
Possible consequences
Mitigation strategies
7.
Fluctuations in
foreign exchange
rates may
adversely affect
the performance
of the Group’s
portfolio
Certain investments of the Group are made or
operate in currencies other than Sterling and
the Group may make certain future investments
in other currencies and in companies that use
other currencies as their functional currency.
Accordingly, changes in exchange rates may
have an adverse effect on the valuations and/or
revenues of the Group’s investments, and on its
investments’ ability to make debt payments, pay
dividends or make other distributions.
The Board regularly reviews and considers the possible
impacts of currency movements on the Group’s
portfolio. Portfolio companies generate revenues across
a range of currencies, predominantly US Dollars, Sterling
and Euro, and a degree of natural hedge therefore exists.
The Group does not currently operate hedging
arrangements to mitigate its exposure to fluctuations
in exchange rates but relationships with forex service
providers are in place in the event that the Board decides
to make such arrangements.
8.
Portfolio
company
valuations
are subject to
change
The valuations of the Group’s underlying portfolio
of investments are substantially based on the
revenue generated by these businesses.
Each of these businesses, and therefore their
ability to generate revenue, are subject to the
macroeconomic environment in the sectors and
territories in which they operate, some of which
have been particularly impacted by the spread of
COVID-19 since January 2020.
Similarly, where comparable peer groups are used
as a benchmark to determine valuations based on
revenue multiples, the performance of the peer
group will impact portfolio valuations.
The Group invests across a spread of geographies and
sub-sectors, which provide diversification in revenue
sources, macroeconomic risks and peer groups.
The Group has established an enhanced Audit, Risk,
& Valuation Committee chaired by a non-executive
director, with responsibility for, amongst other things,
valuing portfolio companies and scrutinising such
valuations. Valuations are carried out in line with BVCA
and IPEV guidelines and are audited annually.
The Group also has an internal Portfolio & Exits
Committee chaired by the Chief Portfolio Officer and
reporting into the Board, which meets regularly to
monitor portfolio performance and strategy.
9.
The Group is
dependent on
a relatively
small number
of shareholders
who hold a large
proportion of
the total share
capital of the
Group
The decision by a major shareholder to dispose
of their holding in the Group might have an
adverse effect on the Group’s share price and/or
operations.
During the period, the Board has engaged with
the market to attempt to diversify the shareholder
composition of Draper Esprit plc, resulting in a more
balanced share register.
The Directors seek to communicate and build a mutual
understanding of objectives between the Group and its
shareholders through regular announcements, annual
/ half-yearly reports, and periodic presentations and
meetings.
10.
As a publicly
listed entity,
any group or
individual can
acquire shares in
the Company
The actions or reputations of shareholders in
Draper Esprit plc are outside the control of the
Company but can impact on the reputation of
the Group by association.
The Board and wider public relations function within
the Group clearly communicate the culture and ideals
of the Group and actively seeks to work with likeminded
partners who share the Group’s broad approach to
investment.
11.
The Group and
its portfolio
companies
are subject to
competition risk
The execution of the Group’s investment strategy
depends primarily on the ability of the Group to
identify and capitalise on investment opportunities.
A number of other players in the market compete
with the Group for investment opportunities.
The competitive pressures faced by the Group
may prevent it from identifying investments that
are consistent with its investment objectives or
that generate attractive returns for shareholders.
The Group may lose investment opportunities in
the future if it does not match investment prices,
structures and terms offered by competitors, but
conversely may experience decreased rates of return
and increased risks of loss if matching unfavourable
terms.
Competition for investment opportunities is based
primarily on pricing, terms and structure of a proposed
investment, certainty of execution and, in some cases,
brand or reputational presence.
The Group seeks to mitigate competition risks through
diversified sources of opportunities, creation of a strong
brand based on a reputation of successful experiences
with entrepreneurs, and by demonstrating ongoing
financial discipline in its investment decision process.
To further distinguish itself from its competitors, the
Group operates a patient capital co-investment strategy
that allows for access to the public market as well as
collaboration with EIS and VCT-driven investments.
Principal Risks
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#
Risk
Possible consequences
Mitigation strategies
12.
The Group
may not be
able to retain
and attract
investment
team members
and support
staff with the
right skills and
experience
The industry in which the Group operates is a
specialised area and the Group requires highly
qualified and experienced management and
personnel. If the Group does not succeed in
recruiting or retaining the skilled personnel
necessary for the development and operation
of its business, it may not be able to grow as
anticipated or meet its financial objectives.
The Group carries out regular market comparisons for
staff and executive remuneration and offers highly
competitive packages to its personnel. Senior executives
are shareholders in the business and the Group operates
appropriate incentive programmes to align individuals
with the Group’s strategy over the long term.
The Group encourages staff development and inclusion
through coaching and mentoring.
13.
Esprit Capital
Partners LLP or
Encore Ventures
LLP cease to be
authorised as
fund managers
by the FCA
Should Esprit Capital Partners and/or Encore
Ventures cease to be authorised and regulated
by the FCA as AIFM’s then they would no longer
be permitted to perform the role of investment
manager.
The Group ensures that Esprit Capital Partners and Encore
Ventures fulfil their ongoing requirements under FCA
rules. External compliance and legal advisors are engaged
to ensure that the Group is continuously monitoring
and improving systems and processes to navigate the
changing legal and regulatory landscape.
14.
Cyber security
incidents may
affect the
operations and
reputation of
the Group
A significant cyber/information security breach
could result in financial liabilities, reputational
damage, severe business disruption or the loss
of business critical or commercially sensitive
information.
To ensure operational resilience and minimise the risk
and impact of the occurrence of cyber security incidents,
the Group utilises reliable software and hardware and
operates firewalls, anti-virus protection systems, email risk
management software and backup procedures.
During the period, the Group attained Cyber Essentials
accreditation and hired a Head of IT and Legal Counsel
with data protection expertise to manage and advise the
business on the mitigation of cyber security risk.
The Group will continue to review its cyber security and
information security systems, policies and procedures with the
continued oversight and support of outsourced IT providers.
15.
Inadequate
governance
could expose the
Group to risk of
mismanagement
An inadequate culture of governance could allow
situations to occur where decision makers fail to
adequately discharge their duties or expose the
Group to unacceptable levels of risk.
All senior managers or personnel within the business whose
function involves investment-related risk are internally
vetted, assessed and appraised on an ongoing basis to
ensure that they are fit and proper to perform their duties
and competent to meet the highest standards of integrity
and performance in line with regulatory guidance.
Robust governance processes and procedures are
operated at a Group-wide level, including 3 non-executive
directors on the Board of Draper Esprit plc to ensure
that the executive team are subject to discussion and
challenge on all important business decisions.
The Group continues to fully engage with the requirements
of the Senior Managers & Certification Regime (SM&CR).
Lines of accountability and responsibility for senior
management functions are clear and monitored on an
ongoing basis.
16.
Default or
breach of terms
of the debt
facility
The Company has an existing debt facility in place
with Investec and Silicon Valley Bank for £50m,
which post year-end was extended and increased
to £60m. In the event of default or material
breach of the terms of the loan agreement,
including debt covenants, the Company may be
unable to draw further funds and/or could the
repayment of the loan and any unpaid accrued
interest could be triggered.
The debt facility is a 3-year structure including a 24-month
repayment period, which the Board believe is sufficient
relative to the liquidity of the underlying assets
There is substantial headroom within the agreed debt
covenants to mitigate any likelihood of a breach or default
by the Company.
Observance of the terms of the facility agreement,
including the debt covenants, is closely monitored on an
ongoing basis, and regular contact with the lenders is
maintained to ensure the smooth operation of the facility.
Principal Risks
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Governance
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“The portfolio investments that we
have undertaken during the year,
together with the revolving credit
facility agreed in June 2019 and
the completion of our acquisition
of Encore Ventures, demonstrate
how we have continued to execute
against our strategy and deliver
growth and scale in our portfolio,
as well as our own business, which
we believe will continue to drive
long-term, sustainable returns for
our shareholders. ”
Karen Slatford 
Non-Executive Chair
Governance
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Board of Directors
Karen Slatford
Non-Executive Chair
Age 63
Karen is non-executive Chair of Draper Esprit plc. She is also a
non-executive director of AIM-quoted Accesso Technology Group
plc and Softcat plc, a FTSE 250 IT infrastructure provider, and senior
independent non-executive director of LSE and NYSE listed Micro
Focus. Karen began her career at ICL before spending 20 years
at Hewlett-Packard Company, where in 2000 she became Vice
President and General Manager Worldwide Sales & Marketing for the
Business Customer Organisation, responsible for sales of all Hewlett-
Packard products, services and software to business customers
globally. Karen holds a BA Honours degree in European Studies from
Bath University and a Diploma in Marketing.
Martin Michael Arthur Davis
Chief Executive Officer
Age 57
Martin was appointed as CEO of Draper Esprit in November 2019. He
has more than 20 years of experience in financial services and joined
Draper from Aegon Asset Management where he was the Head of
Europe, Aegon Asset Management & CEO Kames Capital. Prior to
Aegon Asset Management, Martin served as CEO at Cofunds, spent
8 years at Zurich Insurance Group, and was also CEO of Zurich’s joint
venture, Openwork, the largest network of financial advice firms in
the UK. Prior to this, Martin held senior management roles at Misys,
Corillian, and Reuters. Martin also served for 11 years in the British
Army. Martin has an MBA from London City Business School (CASS)
and Diplomas from the Institute of Marketing and the Market
Research Society.
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Equity Capital Markets
Strategy
Venture Capital
Tech/Software
Healthcare/Biotech
Finance & Accounting
Corporate Finance and M&A
Governance & Compliance
Board skills matrix
Proportion of directors with strong competency
Proportion of directors with experience
Benjamin David Wilkinson
Chief Financial Officer
Age 39
Ben was appointed to the Board on 4 June
2019, having joined the Group as CFO in
2016. In addition to his responsibilities for
the Group’s finance and investor relations
functions, Ben serves as a member of the In-
vestment Committee. Ben has led on recent
equity and debt raises totalling over £350.0
million. Ben is an experienced leader of pub-
lic company finance teams having previously
served for 5 years as CFO of AIM-listed Pres-
ident Energy PLC where he was responsible
for all financial aspects of the group. During
his time at President, Ben was a key part of
the Board that undertook investments into
Argentina and Paraguay and raised US$175
million across several equity issuances with
shareholders such as IFC/World Bank and
significant UK institutional investors. Ben is a
Chartered Accountant, FCA, with a back-
ground in M&A investment banking from
ABN Amro/RBS where he was involved with
multiple cross border transactions and cor-
porate financings, both debt and equity. Ben
is a graduate of Royal Holloway, University
of London with a BSc in Economics.
Stuart Malcolm Chapman
Chief Portfolio Officer
Age 50
Prior to establishing the Group with Simon
in 2006, Stuart was a Director of 3i Ventures
in London. Having joined 3i in 1992, he has
over 25 years’ venture capital experience in
Europe and the US. He was a founding
partner of 3i US, based in Menlo Park, CA
from 1999 until 2003. Stuart was responsible
for Esprit’s investments in Lagan Technology
(sold to Verint), Redkite (sold to Nice) and
Kiadis (IPO). Stuart serves as a director with
Netronome, DisplayData, Resolver, Realeyes,
Crate and Conversocial; and as observer
with Graphcore. Prior to 3i, Stuart was
involved in software and systems implemen-
tations for Midland Bank. He is a graduate
of Loughborough University and currently
serves on the Strategic Advisory Board for
the Loughborough School of Business and
Economics.
Simon Christopher Cook
Founding Partner
Age 51
Simon has been active in the UK venture
capital industry since 1995. Previously, Simon
was a partner with Cazenove and with
Elderstreet Investments and a director at 3i in
Cambridge. In 2006, he led the management
buy-out of Cazenove Private Equity and
acquisition of Prelude Ventures, and he
negotiated the Group’s partnership with the
Draper Venture Network in 2007 and led the
fund partnerships with Seedcamp in 2017
and Earlybird in 2018. Simon has invested in
a number of successful technology start-ups,
including Cambridge Silicon Radio (IPO),
Virata (IPO), Horizon Discovery (IPO), nCipher
(IPO), Lovefilm (sold to Amazon), Zeus (sold
to Riverbed), Podpoint (sold to EDF) and KVS
(sold to Veritas). Simon currently serves as a
director or observer with Freetrade, Ledger
and Trustpilot. Prior to venture capital, Simon
worked as a strategy and IT consultant at
KPMG, where he established the Digital
Media strategy consulting practice, and
as a computer games developer, running
his own development company started
at age 19. Simon is a graduate of the
University of Manchester Institute of Science
and Technology (“UMIST”) with a BSc in
Computation. He is a former member of the
EVCA Venture Platform group and was voted
VC Personality of the Year 2008.
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Board of Directors continued
Grahame David Cook
Non-Executive Director
Age 62
Grahame Cook is an experienced FTSE and
AIM non-executive director, with extensive
experience as an audit committee chairman.
Grahame’s background is in banking, where
he specialised in healthcare. He has over
20 years’ experience of M&A, equity capital
markets, and investor relations. Grahame
started his career at Arthur Andersen, where
he qualified as a chartered accountant. He
was a Director of Corporate Finance at BZW,
and then joined UBS as a member of the
global investment banking management
committee and global head of equity
advisory. He then became joint chief
executive officer at WestLB Panmure where
he built a pan European Tech team and ran
a €100m technology fund. Grahame now sits
on a number of boards, including Horizon
Discovery Plc, a genomics company and
Attraqt plc, an AI SaaS company. Grahame
holds a Double First Class Honours degree
from the University of Oxford.
Richard Fowler Pelly OBE
Non-Executive Director
Age 65
Richard is a non-executive director and
advisor in the area of micro, small and
medium-sized businesses. Up until April
2014, Richard was the chief executive of the
European Investment Fund (‘‘EIF’’), Europe’s
largest investor in venture capital funds.
Before joining EIF in April 2008, Richard
was managing director of structured asset
finance at Lloyds TSB Bank in London from
2005 to 2007. From 1998 to 2005, he worked
for GE Capital, first as chairman and CEO
of Budapest Bank in Hungary and then
as CEO of UK Business Finance within GE
Commercial Finance. Prior to his career at
GE, Richard worked for Barclays Bank in
various functions in the UK and in France
from 1977 to 1997.
Richard holds an honours degree in
Psychology from Durham University and
an MBA with distinction from INSEAD
Fontainebleau. In 2003, he was awarded an
OBE in the Queen’s Honours List for Services
to the Community in Hungary.
As Chair, I am responsible for leading the Board and upholding high
standards of corporate governance throughout the Group, and particularly
at Board level. I am therefore pleased to introduce our Corporate
Governance Report.
My colleagues share the view that sound
governance is fundamental to the successful
growth of the business. We continue
to apply the principles of the corporate
governance code for small and mid-size
quoted companies published by the Quoted
Companies Alliance (the “QCA Code”).
This Corporate Governance Report sets out
how we apply the QCA Code principles,
and summarises both how our Board and
Committees operate, and their key activities
during the year.
Compliance with the QCA Code
The Board believes that it applies the ten
principles of the QCA Code, but recognises
the need to continue to review and develop
our governance practices and disclosures
in order to ensure they support the growth
and strategic progress of the business and
the effective application of the principles
going forwards. Our governance structure
provides a framework of established and
clearly articulated roles, authority limits and
controls, which allows the Executive team to
focus on delivering the investment strategy
of the Group. These systems are designed
to support our compliance with the QCA
Code, the AIM Rules, the Euronext Growth
Rules, the Full Scope AIFM regulations and
other legal, regulatory and compliance
requirements, which apply to us.
Deliver growth
The Board has collective responsibility for
setting the strategic aims and objectives
of the Group. Our strategy is articulated in
the Strategic Report on pages 3 to 55 and
on our website. The portfolio investments
that we have undertaken during the year,
together with the revolving credit facility
agreed in June 2019 and the completion
of our acquisition of Encore Ventures LLP,
demonstrate how we have continued to
execute against our strategy and deliver
growth and scale in our portfolio, as well
as our own business, which we believe will
continue to drive long-term, sustainable
returns for our shareholders. The Board
reviews the Group’s strategy each year,
which takes into account the expectations
of the Company’s shareholder base and its
wider stakeholders and social responsibilities.
The Board also has responsibility for
the Group’s internal control and risk
management systems. The Board regularly
reviews the risks faced and ensures the
mitigation strategies in place are effective
and appropriate to the Group’s operations.
More information on the principal risks faced
by the Group is set out on pages 52 to 55.
Dynamic management
framework
As Chair, I consider the operation of the
Board as a whole, and the individual
performance of the Directors. During
the year, we conducted a detailed Board
performance evaluation process, as
described in further detail on page 64. The
results of the evaluation indicated that the
Board and its Committees are operating
effectively, and highlighted some areas for
continued improvement to ensure that our
processes continue to support strong and
effective governance.
The Company operates an open and
inclusive culture, and this is reflected in
the way that the Board conducts itself. We
believe this makes a valuable contribution
to our ability to execute our strategy and
deliver value for our shareholders and other
stakeholders. The Non-Executive Directors
and I regularly attend the Company’s offices
and other Company events, and I frequently
attend the Company’s weekly Investment
Committee meeting. With a relatively small
employee base, such interactions mean it
is fairly straightforward for the Board to
promote and assess the desired corporate
culture. Our open and inclusive approach is
important not just in the way we operate as
“Recognising the
increasing focus on
environmental, social
and governance (“ESG”)
issues in the investment
community, and
following the Board’s
approval of the Group’s
ESG strategy in the
previous year, the
Group signed up to
the UN Principles of
Responsible Investment
during the year.”
Karen Slatford
Chair
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Chair’s Corporate Governance
Report
an internal team, but also in the hands-on
way in which our team supports the growth
of our investee companies. The Board
recognises the importance of retaining a
proactive focus on culture as the Company
grows, and in line with the outcomes of the
Board evaluation detailed on page 64, will
be continuing our focus on this area during
the coming year.
Build trust
The Board recognises the importance of
understanding the expectations of our
shareholders, and a description of our
activity in this area is set out on page 64
and within the s172 Statement on pages 48-
51. Investor relations is a standing item on
the Board’s agenda and we receive regular
feedback from the Executive team on their
discussions with shareholders and potential
investors. Recognising the increasing focus
on environmental, social and governance
(“ESG”) issues in the investment community,
and following the Board’s approval of the
Group’s ESG strategy in the previous year,
the Group signed up to the UN Principles
of Responsible Investment during the year.
More detail is provided on pages 45-47.
The Board will continue to monitor its
application of the QCA Code principles
and ensure that our corporate governance
framework continues to evolve in line with
the strategic development of the Group.
Composition of the Board
Including the Chair, as at 31 March 2020 the
Board comprised seven Directors, of whom
four were Executive Directors and three were
Non-Executive Directors.
During the year and following a period of
significant development since the Group’s
IPO in 2016, the Group announced the
expansion of the management team. Martin
Davis was appointed as Chief Executive
Officer, whilst Simon Cook, the previous
CEO and co-Founder, was appointed as
Chief Investment Officer. This additional
appointment to the Board enhanced the
senior leadership team and together with
the other Executive Directors, the team
will continue to implement the Company’s
strategy.
On 28 May 2020, it was announced that
Simon Cook would step down from the
Board on 1 July 2020. Simon will remain with
the Company as founding partner and focus
on generating new deals and will continue as
a board member for a number of portfolio
companies.
The Board has determined that each of the
Non-Executive Directors are independent,
and the Company therefore complies
with the QCA Code with respect to the
independence of the Board. The skills and
experience of the Board are set out in their
biographies and the Board skills matrix on
pages 58-60.
Collectively, the Non-Executive Directors
bring an appropriate balance of functional
and sector skills and experience such that
they are able to provide constructive support
and challenge to the Executive Directors. The
Directors believe that between them, the
Board as a whole possesses the necessary
mix of experience, skills, personal qualities
and capabilities to deliver the strategy of the
Company for the benefit of its shareholders
over the medium to long-term.
The combined Remuneration and
Nomination Committee has responsibility
for succession planning at Board and Senior
Executive level. The Committee intends to
increase its focus on developing formal long
term executive management and Board
succession plans during the financial year to
31 March 2021.
The Board recognises the benefits of
diversity, including as to gender, whilst
ultimately seeking to appoint the best
candidate for the role based on objective
criteria when considering new Board and
Senior Executive appointments. The Board
currently consists of 1 female and 6 male
Directors.
The Non-Executive Directors each attend
external events and seminars to receive
updates on matters such as financial
reporting requirements and corporate
governance. The Company Secretary also
ensures that the Board is updated as to
developments to corporate governance
practice and forthcoming changes to
legislation or regulation, which may impact
the Company.
How the Board operates
The Directors are responsible for the
determination of the Company’s investment
policy and strategy and have overall
responsibility for the Company’s activities,
including the review of investment activity
and performance. The operation of the
Board is documented in a formal schedule
of matters reserved for its approval. This
is reviewed annually, and includes matters
relating to:

- The Group’s strategic aims, objectives and
investment strategy;

- The approval of any single investment
greater than £10.0 million or the sale of
any assets where the proceeds will be
greater than 10% of market capitalisation;

- The approval of any investment decision
where a conflict of interest exists;

- Structure and capital of the Group;

- Financial reporting, financial controls and
dividend policy and approving annual
budgets;

- Internal control and risk management
(including the Group’s appetite for risk).

- The approval of significant contracts and
expenditure; and
- Appointments to the Board and its
Committees.
Day-to-day management of the Group
during the year to 31 March 2020 was the
responsibility of the CEO, Founding Partner,
CPO, CFO and the Executive Management
team.
Board meetings
The Board met formally 6 times during
the year. Board meetings may also be
convened on an ad-hoc basis from time to
time in order to consider specific corporate
activity, and a number of unscheduled
Board and Committee conference calls
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Chair’s Corporate Governance
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have taken place to consider the impact of
the COVID-19 epidemic on the Company’s
business and operations.
The Directors are expected to attend all
meetings of the Board and the Committees
on which they sit. The Executive Directors
are required to devote their full time and
attention to the business of the Company
and the Non-Executive Directors are
expected to devote sufficient time to the
Company to enable them to fulfil their
duties as Directors. The Board is satisfied
that the Chair and each of the Non-
Executive Directors devote sufficient time to
the business, in accordance with the time
commitment requirements set out in their
individual Letters of Appointment, and they
each maintain open communication with
the Executive Directors and the Executive
Management team between the formal
Board meetings.
The table below shows Directors’ attendance
at formal scheduled Board and Committee
meetings during the year.
Director
Board
(out of 6
meetings)
Audit,
Risk and
Valuations
Committee
(out of 3
meetings)
Remuneration
and
Nomination
Committee
(out of 5
meetings)
Karen Slatford
6
3
5
Martin Davis1
3
N/A
N/A
Simon Cook
6
N/A
N/A
Stuart Chapman
6
N/A
N/A
Ben Wilkinson2
5
N/A
N/A
Grahame Cook
6
3
5
Richard Pelly
6
3
5
1 Martin Davis was appointed as a Director on 4 November
2019 and attended all Board meetings held after that date.
2 Although Ben Wilkinson attended all Board meetings held
during the year in his capacity as CFO, the table above
reflects his formal attendance record as a Director having
been appointed to that role on 4 June 2019.
Board activity during the year
The Board has an agreed schedule of
activity covering regular business updates
and financial, operational and governance
matters. Each Board Committee has also
compiled a schedule of work to ensure
that all areas for which the Board has
overall responsibility are addressed and
reviewed during the course of the year.
These schedules of activity are reviewed at
least annually to ensure that key matters
and developments are discussed at the
appropriate time.
Board and Committee papers are distributed
to Directors in advance of the meetings, and
each meeting is minuted by the Company
Secretary. Every Director is aware of their
right to have any concerns minuted.
Board Committees
The Board has delegated specific
responsibilities to the Audit, Risk and
Valuations Committee and the combined
Remuneration and Nomination Committee,
details of which are set out in the respective
reports of the Committees below.
Each Committee has written terms of
reference setting out its duties, authority
and reporting responsibilities. The terms of
reference of each Committee were reviewed
by the Committees and the Board during
the year, and these will continue to be
reviewed on an annual basis going forward
to ensure they remain appropriate and
reflect any changes in legislation, regulation
or best practice. The terms of reference are
available on the Company’s website:
https://draperesprit.com/investors/plc.
External advisers
The Board seeks advice and guidance on
various matters from its Nomad (Numis
Securities), Euronext Growth adviser
(Goodbody Stockbrokers), and its lawyers
Gowling WLG (UK law) and Maples and
Calder (Irish law). The Board also uses the
services of an external provider, Prism Cosec,
for company secretarial support, Mercer
for remuneration advice, and is advised on
compliance matters by IQ-EQ.
Conflicts of interest
At each meeting of the Board or its
Committees, the Directors are required to
declare any interests in the matters to be
discussed and are regularly reminded of
their duty to notify any actual or potential
conflicts of interest. The Company’s Articles
of Association provide for the Board to
authorise actual or potential conflicts
of interest where lawful and deemed
appropriate to do so.
The Group also has a long established
conflicts of interest policy, under which
employees and Executive Directors are
prohibited from investing in companies that
fall within the target investment focus of the
Group, and which requires Non-Executive
Directors to seek approval from the Group
Compliance Officer, Stuart Chapman, if
they wish to invest in companies falling
within the mandate of the Group.
Internal controls
The Board has ultimate responsibility for the
Group’s system of internal controls and for
the ongoing review of their effectiveness.
Systems of internal control can only identify
and manage risks and not eliminate them
entirely. As a result, such controls cannot
provide an absolute assurance against
misstatement or loss. The Board considers
that the internal controls, which have
been established and implemented, are
appropriate for the size, complexity and risk
profile of the Group.
The main elements of the Group’s internal
control system include:

- Close management of the day-to-day
activities of the Group by the Executive
Directors;

- An organisational structure with defined
levels of responsibility;

- Specified investment approval levels and
financial authority limits;

- An annual budgeting process, which is
approved by the Board;

- Monthly management reporting against
agreed KPIs (KPIs are further outlined on
page 44 of the Strategic Report); and
- Financial controls to ensure that the
assets of the Group are safeguarded and
that appropriate accounting records are
maintained.
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The Board continues to review the system of
internal controls to ensure it is fit for purpose
and appropriate for the size and nature of
the Company’s operations and resources.
Board evaluation
The Board conducted a formal performance
evaluation process during the year, building
on the previous Board evaluation, which
took place in February 2019. The process was
carried out by way of detailed questionnaires
completed by each member of the Board,
covering topics such as the composition
of the Board, the quality and timeliness of
information provided, relationships between
the Board, shareholders, employees and
other stakeholders, and succession planning.
The responses were collated by the Company
Secretary, and discussed by the Board at its
meeting in March 2020.
The Board has agreed a number of specific
actions to take forward during 2020 in order
to improve its efficiency and effectiveness.
These included improvements to the Board
process, increasing the oversight of risk
(principally through the Audit, Risk and
Valuations Committee), and focus on
the development and communication of
corporate culture (to be led by the CEO).
Relations with shareholders and
stakeholders
Regular communication with institutional
shareholders is maintained through
individual meetings with the Executive
Directors, particularly following the
publication of interim and full-year results.
During the year, the Chair also wrote to the
Company’s largest investors, and attended
meetings with significant shareholders.
The Board also encourages shareholders
to attend and vote at the Company’s
General Meetings, at which the Board
is also in attendance and available for
shareholder questions. Investor relations
are a standing item on the Board’s agenda,
and the executive team routinely updates
the Board as to outcomes of their meetings
with shareholders and potential investors.
These initiatives help us to understand
shareholders’ views and to address their
concerns.
Due to the Company’s relatively small
employee base, the Directors are able to
engage directly with employees, and the
Non-Executive Directors have an open
invitation to attend the Company’s weekly
Investment Committee meetings.
The Company’s other key stakeholders are
our investee companies, with which we have
regular contact, in particular where we
have a seat as a director or Board observer
of that company. We host an annual CEO
day for our investee companies, to which
our Directors, shareholders and key advisers
are also invited. This forms part of a wider
events programme targeted towards
our investee companies and early stage
companies. For our portfolio companies, we
participate in an annual CEO conference
in Silicon Valley via the Draper Venture
Network to connect them to corporates,
partners and investors globally. For the wider
community, we regularly hold thematic
events across the regions and sectors we
focus on. In addition to enabling our investee
companies and wider partners to meet
each other and gain valuable insight, these
events also give us regular opportunities to
engage with these communities and thereby
strengthen our relationships with them.
For more information on our stakeholder
considerations please see our section 172
Companies Act 2006 disclosures found on
pages 48 to 51.
Annual General Meeting
The Annual General Meeting will take
place at 11.00 a.m on Monday 27 July 2020
at 20 Garrick Street, London WC2E 9BT.
The Notice of the Annual General Meeting
and the ordinary and special resolutions to
be put to the meeting are included at the
end of this Annual Report.
Due to the ongoing COVID-19 pandemic,
and the stay at home measures put in
place by the UK Government, the Board
has decided to run the 2020 AGM as a
closed meeting. As a result, members will
not be permitted to attend the meeting in
person and access will be refused. Quorum
will be achieved through the attendance
of two Company director shareholders
and/or employee shareholders. Under the
circumstances, members are encouraged
to submit their proxy form to ensure that
their votes are registered. The Board strongly
advises members to appoint the chairman
of the meeting as proxy for all votes.
Karen Slatford
Chair
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Chair’s Corporate Governance
Report continued
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Audit, Risk and Valuations
Committee Report
Grahame Cook 
Chair of the Committee
On behalf of the Board, I am pleased to
present the Audit, Risk and Valuations
Committee Report for the year ended 31
March 2020.
During the year, it was agreed that the
Committee’s name would formally be
changed to the Audit, Risk and Valuations
Committee to reflect the specific focused
valuations work undertaken to review
the Group’s investment valuations, and
appropriate changes to its terms of
reference were approved by the Board at its
meeting in March 2020.
The Audit, Risk and Valuations Committee
is responsible for ensuring that the financial
performance of the Group is properly
reported on and monitored. Its role includes
monitoring the integrity of the Group’s
financial statements, reviewing significant
financial reporting issues, reviewing the
effectiveness of the Company’s internal
control and risk management systems
and overseeing the relationship with the
external auditors (including advising on their
appointment, agreeing the scope of the
audit and reviewing the audit findings). It is
also responsible for establishing, monitoring
and reviewing procedures and controls for
ensuring compliance with the AIM Rules
and Euronext Growth Rules. The Committee
reports regularly to the Board on its
activities and makes recommendations, all
of which have been accepted during
the year.
Members of the Audit, Risk and
Valuations Committee
The Committee consists of 3 independent
Non-Executive Directors: Grahame Cook
(as Chair of the Committee), Karen Slatford
and Richard Pelly. The Board is satisfied that
Grahame Cook, who is a qualified Chartered
Accountant and an experienced Non-
Executive Director and audit committee
chair, has recent and relevant financial
experience.
The Audit, Risk and Valuations Committee
met formally 3 times during the year (and
on 5 occasions since the year-end – 2
formally scheduled meetings and a further
3 to monitor liquidity and funding options as
a result of COVID-19) and going forward will
continue to meet at least 3 times per year
at appropriate times in the reporting cycle
and otherwise as required. A program of
regular conference calls of the Committee
was established in March 2020 in response
to the COVID-19 epidemic to monitor the
Company’s liquidity and scenario planning
for FY2021. The Committee also meets
frequently with the Company’s external
auditors.
Duties
The duties of the Audit, Risk and Valuations
Committee are set out in its terms of
reference, which are available on request
from the Company Secretary or on the
Company’s website:
https://draperesprit.com/investors /plc.
The main items of business considered by
the Committee during the year included:

- Review of the risk management and
internal control systems;

- Review and approval of the interim
financial statements and the external
auditors’ report thereon;

- Detailed review of investment valuations
and supporting information including
COVID-19-specific considerations where
relevant;

- Review of the year-end audit plan, and
consideration of the scope of the audit
and the external auditors’ fees;

- Review of the Annual Report and financial
statements, including consideration of the
significant accounting issues relating to
the financial statements and the going
concern review;

- Consideration of the external audit report
and management representation letter.

- Meeting with the external auditor without
management present;

- Assessment of the need for an internal
audit function;

- Review of whistleblowing arrangements;
and
- Review of terms of reference.
Role of the external auditor
The Audit, Risk and Valuations Committee is
responsible for monitoring the relationship
with the external auditor, PwC, in order to
ensure that the auditor’s independence and
objectivity are maintained. As part of this
responsibility, the Audit, Risk and Valuations
Committee reviews the provision of non-
audit services by the external auditor and
the Audit, Risk and Valuations Committee
Chair is consulted by management prior
to the external auditor being engaged to
provide any such non-audit services. The
breakdown of fees between audit and non-
audit services is provided in Note 8 to the
consolidated financial statements.
Having reviewed the auditors’ independence
and performance, including partner rotation
requirements, the Audit, Risk and Valuations
Committee has recommended to the Board
that a resolution to re-appoint PwC as the
Company’s auditor be proposed at the
forthcoming Annual General Meeting.
Audit process
The external auditor prepares an audit
plan for its review of the full-year financial
statements, and the audit plan is reviewed
and agreed in advance by the Audit, Risk
and Valuations Committee. Prior to approval
of the financial statements, the external
auditor presents its findings to the Audit,
Risk and Valuations Committee, highlighting
areas of significant financial judgement for
discussion.
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Audit, Risk and Valuations
Committee Report continued
Internal audit
The Audit, Risk and Valuations Committee has again considered the
need for an internal audit function during the year and continues
to be of the view that, given the size and nature of the Group’s
operations and finance team, there is no current requirement
to establish a separate internal audit function. As part of that
consideration, the Committee noted the additional assurance
provided to it and the Board through regular externally facilitated
compliance checks, internal legal counsel, and through assessments
of the Company’s compliance with AIFM regulatory requirements,
for example via the role of the depositary, Aztec Financial Services (UK)
Limited.
Significant issues considered in relation to the
Financial Statements
Significant issues and accounting judgements are identified by the
finance team and the external audit process and then reviewed by
the Audit, Risk and Valuations Committee. The significant issues
considered by the Audit, Risk and Valuations Committee in respect
of the year ended 31 March 2020 are set out below:
Risk management and internal controls
As described in the Corporate Governance Report on pages 61
to 64, the Group has established a system of risk management
and internal controls. The Audit, Risk and Valuations Committee
is responsible for reviewing the systems of risk management and
internal controls and has reviewed both the risk register and
management’s progress in implementing and maintaining such
control systems during the year. The Committee is satisfied that the
internal control systems, which have been established, are operating
effectively.
During the year, the Committee reviewed a detailed analysis of the
Group’s internal governance and control systems and is satisfied
that the systems in place are appropriate in the context of the
Company’s size and operations. The Committee has also reviewed
the Company’s risk register, with particular focus on the principal
risks and uncertainties for the Company. We are satisfied that
these risks are appropriately identified, and that the approach
to addressing and mitigating those risks is within the defined risk
appetite levels agreed by the Board.
Going concern
The Committee has acknowledged its duty to review the Annual
Report and financial statements, including the going concern
assessment. The assessment of going concern is overseen by the
CFO and subject to review and challenge by the Committee and
subject to approval by the Board. Following review and challenge, it
has been deemed appropriate to prepare the financial statements
on a going concern basis, having taken into account the impact of
COVID-19 on the Group and the principal risks and uncertainties
facing the Group including those relating to liquidity and solvency.
For further details, please see the Directors’ Report - page 73.
Share dealing, anti-bribery and whistleblowing
The Group has adopted a share dealing code in conformity with the
requirements of Rule 21 of the AIM Rules. All employees, including
new joiners, are required to agree to comply with the code. The
Group has also adopted anti-bribery and whistleblowing policies,
which are included in every employee’s staff handbook, as well as
systems and controls to ensure compliance with those policies.
The Group operates an open and inclusive culture and employees are
encouraged to speak up if they have any concerns. The aim of such
policies is to ensure that all employees observe ethical behaviours
and bring matters which cause them concern to the attention of
either the Executive or Non-Executive Directors.
Grahame Cook
Chair of the Audit, Risk and
Valuations Committee
26 June 2020
Significant issue/
accounting
judgement identified
How it was addressed
Fair value of
investments in
unlisted securities
The Audit, Risk and Valuations Committee
reviewed the fair value of unlisted
securities established with reference to the
International Private Equity and Venture
Capital Valuation Guidelines as well as the
IPEV Board, Special Valuation Guidance
issued on 31 March 2020 in response to
the COVID-19 crisis (“IPEV Guidelines”)
by management. Management’s
methodologies and assumptions were
reviewed and challenged over a number
of meetings. The Committee agreed that
management’s approach was appropriate
and was satisfied with the fair value
recognised as at 31 March 2020 in respect
of these unlisted securities.
Impact of COVID-19
on the Group and its
financial statements
The Committee has held regular meetings
to monitor the impact of COVID-19 on
the Group, including liquidity, and have
reviewed the Annual Report and financial
statements. Following challenge and
review, it has been deemed appropriate
to prepare the financial statements on a
going concern basis taking into account
the impact of COVID-19. For further
details, please see the Directors’ Report -
page 73.
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Remuneration and Nomination
Committee Report
Karen Slatford 
Chair of the Committee
I am pleased to present our Remuneration
and Nomination Committee Report, which
summarises the work of the Remuneration
and Nomination Committee, as well as the
remuneration policy and remuneration paid
to Directors during the year. This report
is developed in accordance with the QCA
Code.
Remuneration and Nomination
Committee
The members of the Remuneration and
Nomination Committee (the “Committee”)
are Karen Slatford (Chair of the
Committee), Grahame Cook and Richard
Pelly, all of whom are independent Non-
Executive Directors of the Company.
The Committee operates under terms of
reference, which are reviewed annually and
approved by the Board. The Committee’s
core responsibilities include:

- determining the policy for the
remuneration of the Executive
Directors and recommending the total
remuneration packages (including
bonuses, incentive payments and share
options or other awards) for those
individuals;

- determining the remuneration of the Chair
of the Board (Karen Slatford does not
Chair or attend the Committee’s meetings
when the remuneration of the Chair is
discussed); and
- identifying and nominating members
of the Board and recommending the
composition of each Committee of
the Board (including the Chair of each
Committee).
During the year the Committee appointed
Mercer as external consultants to advise on
remuneration matters on an ongoing basis.
The Committee met formally on five
occasions during the year under review
and has met once since the year-end. The
Committee will meet at least twice per year
going forward.
The activity of the Committee during
the year was predominately focused on
remuneration matters, including approving
the remuneration package for the new Chief
Executive, Executive Director allocations
under the Carried Interest plan and awards
of options under the Company Share Option
Plan. It also approved bonus payments
to the Executive Directors following the
assessment of performance against agreed
financial Key Performance Indicators, and
approved the performance measures for the
2020/21 annual bonus. The bonus amounts
paid in respect of the year ended 31 March
2020 are set out in the table on page 70.
The Committee, working closely with
the new CEO, has also fully reviewed
remuneration structures of the Company
and has approved a number of changes,
including to the Remuneration Policy
for Executive Directors, to apply from
the 2020/21 financial year onwards. The
principal reason for the changes is to align
the Company’s executive remuneration
structure with the typical structures
adopted by larger AIM and Main Market
listed companies, while ensuring that the
staff are appropriately incentivised in the
roles that they carry out. The key change
to the Remuneration Policy for Executive
Directors is that their long-term incentive
will move from the previous combination of
participation in the Carried Interest Plan and
Company Share Option Plan, to a new Long-
Term Incentive Plan (LTIP) which will operate
as an extension of the existing Company
Share Option Plan (CSOP) (see below).
Changes to the CSOP rules to facilitate the
new LTIP arrangements were approved by
the Board in June 2020. The Company’s
investment team will continue to participate
in the Carried Interest Plan. The Committee
has also agreed that the maximum annual
bonus opportunity for Executive Directors
will be 100% of salary. 2020/2021 will be
a year of transition to a full LTIP scheme
such that in financial year 2021/2022 the
Executive Directors will cease to participate
in any new carried interest scheme.
In response to the impact of COVID-19 on
the Company, Executive Director salaries
have not been increased for 2020/21. The
Committee reviewed the Chair’s fee, and
the Board reviewed Non-Executive Director
fees during the year, and although changes
were approved because fees had not been
reviewed for four years since AIM admission
and benchmarking indicated that they had
fallen behind market, it was agreed with the
Chair and Non-Executive Directors that they
would defer 20% of those increased fees
from 1 May 2020 in line with similar salary
deferrals agreed by the Executive Directors.
The Executive Directors have elected to
defer 20% of their salaries for three months
and will use these deferred balances when
paid to purchase Draper Esprit shares in the
market.
In respect of its Nomination responsibilities
and following the results of recent Board
performance evaluations, the Board’s
composition and succession planning
have become a key area of focus for the
Committee. During the year, the Committee
appointed Russell Reynolds, a leadership
advisory firm, to carry out a review of
succession. As part of this project, Russell
Reynolds carried out psychometric testing
of the Executive Directors and held one
to one interviews with each of the Board
members. Russell Reynolds also assisted
with the search process for the role of CEO.
Following a formal interview process and
discussions by the Committee Martin Davis
was appointed as CEO.

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Remuneration and Nomination
Committee Report continued
Remuneration policy
The objective of the Company’s
remuneration policy is to attract, motivate
and retain high calibre, qualified executives
with the necessary skills and experience
in order for the Company to achieve its
strategic objectives. The Directors also
recognise the importance of ensuring that
employees are incentivised and identify
closely with the success of the Company’s
strategy. Accordingly, the Committee’s aim
is to provide a framework for remuneration,
which creates an appropriate balance
between fixed and performance-related
elements.
It is the Committee’s intention that
performance-related remuneration is linked
to the achievement of objectives, which are
closely aligned with shareholders’ interests
over the medium term.
During the year, the Committee has
approved amendments to the Company’s
remuneration policy for Executive Directors
such that the main elements of the
remuneration package for Executive
Directors from 2020/21 onwards will be:

- Base salary.

- Performance-related annual bonus.

- Other benefits (including life and health
insurance).

- Participation in the Company’s Long-
Term Incentive Plan (fully replacing
participation in the Carried Interest Plan
in 2021/22).
Executive Directors’ service
contracts
The Executive Directors are appointed
under service contracts, which are not for a
fixed duration and are terminable upon six
months’ notice by either party.
Non-Executive Directors
Each of the Non-Executive Directors is
appointed under a letter of appointment
with the Company. Subject to their re-
election by shareholders, the initial term
of appointment for each Non-Executive
Director is three years from Admission to
AIM, and their appointments are terminable
upon three months’ notice by either party.
The Non-Executive Directors’ fees are
determined by the Board, subject to the
limit set out in the Company’s Articles of
Association. There have been no changes
to Non-Executive Directors’ fees during the
year.
The Draper Esprit plc Share
Option Plan (“CSOP”)
The Committee is responsible for granting
awards of options under the CSOP,
which was adopted by the Company on
1 August 2016. All employees are eligible
to participate in the CSOP. The Executive
Directors have outstanding awards
previously granted under the CSOP, but
following Board approval of the LTIP (see
below) will not be eligible for future CSOP
awards, other than the further CSOP grant
to be made to the CEO following publication
of the Annual Report described below.
Instead the Executive Directors (in addition
to other employees) may be granted awards
under the LTIP.
The CSOP comprises two parts. Options
granted under the first part are intended to
be qualifying CSOP Options under the CSOP
Code set out in Schedule 4 to the Income
Tax (Earnings and Pensions) Act 2003. This
means that options granted under that part
are subject to capital gains tax treatment.
Options granted under the second part are
not tax-favoured options.
The CSOP Rules specify that no options may
be granted more than ten years after its
adoption, and that the number of ordinary
shares in the Company over which options
may be granted on any date is limited so
that the total number of ordinary shares
issued and issuable in respect of options
granted in any ten-year period under the
CSOP and any other employees’ share
scheme of the Company will be restricted to
5% of the issued ordinary shares from time
to time.
A grant of options under the CSOP was
made to Martin Davis following his
appointment as CEO in November 2019.
More details of this grant can be found
in the Share Options table on page 71. A
further grant of 200,000 options under the
CSOP will be made in July 2020 following
publication of the Annual Report.
No further grants were made to Executive
Directors under the CSOP during the year.
Long-Term Incentive Plan
(“LTIP”)
The Committee will also be responsible
for granting awards of options under the
LTIP, which was adopted by the Board in
June 2020. All employees will be eligible to
participate in the LTIP. The LTIP will consist
of options granted under part 2 of the CSOP
with a nominal value exercise price.
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The following performance share awards will be granted to the Executive Directors:
Description
of award
An award of options, with a nominal value exercise price, exercisable subject to the satisfaction of the
performance targets.
Face value
Chief Executive Officer - 100% of salary
Chief Portfolio Officer - 100% of salary
Chief Financial Officer - 100% of salary.
Performance
period
1 April 2020 to 31 March 2023
Performance
targets
Stretching performance targets have been set to achieve maximum award potential, with no additional stretch
performance opportunity in recognition of the current environment of increased volatility.
40% of the award is based on absolute total shareholder return (“TSR”) measured over the performance period and
vests 50% at threshold, increasing on a straight line basis to 100% for achieving target performance.
40% of the award is based on group realisations during the performance period and vests against both annual and
aggregate realisations over the period.
20% of the award is based on new third party assets under management (“AUM”) measured over the performance
period and vests 50% at threshold, increasing on a straight line basis to 100% for achieving target performance.
Lock-up
Vested and exercised awards will be subject to a one year lock-up from the end of the performance period.
Under the Company’s malus and clawback
policy, any LTIP award may be forfeited
or reduced prior to vesting in exceptional
circumstances on such basis as the
Committee considers fair, reasonable and
proportionate. This would include material
misstatement of Group financial statements,
or cases where an individual is deemed to
have caused a material loss for the Group as a
result of reckless, negligent or wilful actions or
inappropriate values or behaviour.
In developing the rules of the new LTIP,
the Committee and the Board have taken
the opportunity to enhance the terms
and conditions (for example malus and
clawback, and the introduction of a post-
vesting holding period) with the intention
of moving towards an LTIP structure in line
with the typical approach adopted by Main
Market listed companies.
Carried interest plan
The Company has established carried
interest plans for the Executive Directors (see
below), other members of the investment
team and certain other employees (together
the “Plan Participants”) in respect of any
investments and follow-on investments
made from Admission. To 31 March 2020
each carried interest plan operates in
respect of investments made during a
24-month period and related follow-on
investments made for a further 36-month
period. From 1 April 2020 the carried interest
plan will operate for a five year period in
respect of any investments.
Subject to certain exceptions, Plan
Participants will receive, in aggregate, 15%
of the net realised cash profits from the
investments and follow-on investments
made over the relevant period once the
Company has received an aggregate
annualised 10% realised return on
investments and follow-on investments
made during the relevant period. The
carried interest plan from 1 April 2020 has
an aggregate annualised 8% realised return
on investments and follow-on investments
made during the relevant period, to bring
the plans more in line with market.
The Plan Participants’ return is subject
to a “catch- up” in their favour. Plan
Participants’ carried interests vest over five
years for each carried interest plan and are
subject to good and bad leaver provisions.
Any unvested carried interest resulting from
a Plan Participant becoming a leaver can
be reallocated by the Remuneration and
Nomination Committee.
As noted above, from 2021/22 onwards,
the Executive Directors will not be eligible
to participate in new carried interest plans,
and instead will participate in the Long-Term
Incentive Plan.
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Remuneration and Nomination
Committee Report continued
Annual bonus
The 2020/21 annual bonus for Executive Directors will be assessed against financial KPIs and personal objectives, with 75% of the bonus
opportunity assessed against the corporate financial measures and 25% against personal measures. Challenging targets have been set, with
a maximum of 100% of the annual bonus potential earned for achieving target performance. Actual performance targets are not disclosed
as they are considered to be commercially sensitive at this time.
The remuneration policy for 2020/21 will operate as follows:
Role
Basic salary/fee
£’000s
Maximum bonus
potential
Executive
Martin Davis
Chief Executive Officer
420
100%
Stuart Chapman
Chief Portfolio Officer
289
100%
Ben Wilkinson
Chief Financial Officer
274
100%
Non-Executive
Karen Slatford
Chair of Board, Chair of Remuneration & Nomination Committee
–
–
Grahame Cook
Chair of Audit, Risk and Valuations Committee
–
–
Richard Pelly
Non-Executive Director
–
–
Statutory information
The following information includes disclosures required by the AIM Rules and UK company law in respect of Directors who served during the
year to 31 March 2020.
Directors’ remuneration (audited)
The following table summarises the gross aggregate remuneration of the Directors who served during the year to 31 March 2020:
Basic salary/fees
£’000s
Pension
contributions
£’000s
Taxable benefits
£’000s
Performance–
related bonus
£’000s
Year ending 31
March 2020
Total
£’000s
Year ending 31
March 2019
Total
£’000s
Executive Directors
Martin Davis
175
26
4
300
505
0
Simon Cook
348
52
11
134
545
503
Stuart Chapman
289
43
1
111
444
415
Ben Wilkinson
226
34
1
103
364
0
Non-Executive Directors
Karen Slatford
80
0
0
0
80
80
Grahame Cook
40
0
0
0
40
40
Richard Pelly
40
0
0
0
40
40
Total
1,198
155
17
648
2,018
1,078
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Share options (audited)
The individual interests of the Executive Directors who served during the year under the CSOP are as follows:
Date of grant
Number of CSOP
options
Number of
unapproved
options
First exercise
date
Exercise price
Martin Davis
26/11/19
6,424
193,576*
26/11/22
£4.67
Simon Cook
28/11/16
8,450
226,385
28/11/19
£3.55
28/11/17
–
234,835
28/11/20
£3.87
30/07/18
–
178,100*
30/07/21
£4.92
12/02/19
–
178,434 *
12/02/22
£5.30
Stuart Chapman
28/11/16
8,450
226,385
28/11/19
£3.55
28/11/17
–
234,835
28/11/20
£3.87
30/07/18
–
178,100*
30/07/21
£4.92
12/02/19
–
178,434*
12/02/22
£5.30
Ben Wilkinson
28/11/2016
8,450
166,198
28/11/2019
£3.55
28/11/2017
-
174,648
28/11/2020
£3.87
30/07/2018
-
178,100*
30/07/2021
£4.92
12/02/2019
-
178,434*
12/02/2022
£5.30
* Options subject to a performance condition of an 8% per annum share price hurdle.
The details of the CSOP are set out in Note 13 to the consolidated financial statements.
Directors’ share interests (audited)
The interests of the Directors who served in the year and who held an interest in the ordinary shares of the Company are as follows:
Number of ordinary shares as at
31 March 2019
Number of ordinary shares as at
31 March 2018
Martin Davis
–
–
Simon Cook
1,344,306
1,619,306
Stuart Chapman
1,344,306
1,619,306
Ben Wilkinson
5,604
–
None of the Non-Executive Directors currently holds shares in the Company.
Karen Slatford
Chair of the Remuneration and Nomination Committee
26 June 2020
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Directors’ Report
The Directors present their report together
with the audited consolidated financial
statements for the year ended 31 March
2020.
Results and dividends
The Group’s profit for the year was £40.4
million (year ended 31 March 2019: £111.2
million). In accordance with our dividend
policy as stated in our Admission document,
the Directors do not recommend the
payment of a dividend.
Future developments
Details of future developments and events
that have occurred after the balance sheet
date can be found in the Strategic Report
comprising the inside cover to page 55.
Review of business
The Chair’s Introduction on page 3 and the
Strategic Report, comprising the inside cover
page to page 55, provide a review of the
business, the Group’s performance for the
year ended 31 March 2020, key performance
indicators and an indication of future
developments and risks, and form part of
this Directors’ Report.
Directors
The Directors of the Company who held
office during the year were:
Stuart Chapman
Grahame Cook
Simon Cook (stepping down from 1 July 2020)
Martin Davis (appointed 4 November 2019)
Richard Pelly
Karen Slatford
Ben Wilkinson (appointed 4 June 2019)
Brief biographical details for each of the
Directors are given on pages 58-60.
Directors’ interests
A table showing the interests of the Directors
in the share capital of Draper Esprit plc is set
out in the Remuneration and Nomination
Committee Report on page 71.
Directors’ indemnity provisions
As permitted by the Articles of Association,
the Directors have the benefit of an
indemnity, which is a qualifying third-
party indemnity provision as defined by
Section 234 of the Companies Act 2006.
The indemnity was in force throughout the
financial period and at the date of approval
of the financial statements.
The Company has purchased and
maintained throughout the financial period
Directors’ and Officers’ liability insurance in
respect of itself and its Directors.
Political donations
The Company made no political donations
during the year up to 31 March 2020.
Financial instruments
The financial risk management objectives of
the Group, including details of the exposure
of the Company and its subsidiaries to
financial risks including credit risk, interest
rate risk and currency risk, are provided
in Note 29 of the consolidated financial
statements.
Share capital structure
At 31 March 2020, the Company’s issued
share capital was £1,189,181.52 (2019:
£1,179,254.70) divided into 118,918,124 (2019:
117,925,470) ordinary shares of £0.01 each.
Details of the movements in issued share
capital in the year are set out in Note 24 to
the consolidated financial statements.
The holders of ordinary shares are entitled
to 1 vote per share at meetings of the
Company. There are no restrictions on the
transfer of shares.
Substantial shareholdings
As at 31 March 2020, the Group had been
notified, in accordance with Chapter 5 of the
Disclosure and Transparency Rules, of the
following holdings of significant shareholders
in the Company:
Number of
ordinary shares
% of total
voting rights
Invesco Asset Management
15,425,308
12.97
National Treasury Management Agency
14,004,502
11.88
Merian Global Investors
10,725,050
9.09
British Business Bank
7,142,857
6.06
Canaccord Genuity Wealth Management
6,875,065
5.83
T Rowe Price Global Investments
6,722,000
5.70
Brunei Investment Agency
4,761,904
4.04
Armor Advisors LLC
4,993,750
4.00
Baillie Gifford
4,462,879
3.78
Blackrock
3,878,343
3.29
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Disclosure of information to
auditors
As far as the Directors are aware, there is
no relevant audit information of which the
Group’s auditors are unaware, and each
Director has taken all reasonable steps that
he or she ought to have taken as a Director
in order to make himself or herself aware of
any relevant audit information to establish
that the Group’s auditors are aware of that
information.
Going concern
The Directors have assessed going concern,
considering both the Group’s current
performance and future outlook, including:

- An assessment of the Group’s liquidity
and solvency position using a number of
adverse scenarios to assess the potential
impact of COVID-19 on the Group’s
operations and portfolio companies. The
Group manages and monitors liquidity
regularly and continually assesses
investments, realisations, operating
expenses and receipt of portfolio cash
income including under stress scenarios
ensuring liquidity is adequate and
sufficient. As at 31 March 2020 the Group
has available cash resources of £32.3
million (and restricted cash of £1.9 million)
(2019: £50.4 million) with a further £5.0
million available from undrawn credit
facilities. The cash position was further
enhanced by an additional £10.0 million
extension to the revolving credit facility
with Silicon Valley Bank and Investec and
the sale of Peak as disclosed in note 22.
As at 31 March 2020, the Directors believe
the Group has sufficient cash resources
and liquidity and is well placed to manage
the business risks in the current economic
environment.

- The Group has to comply with financial
and non-financial covenants as part of
the revolving credit facility entered into
with Silicon Valley Bank and Investec.
An assessment of forecast covenant
compliance was undertaken using
a number of adverse scenarios on
valuations. Under each adverse scenario
the Group still had sufficient headroom
in order to comply with the covenant
obligations as set out in note 21.

- An assessment of the potential impact
of COVID-19 pandemic was undertaken
on portfolio company valuations with
a particular focus on performance and
future outlook including cash runway and
ability to generate earnings, supply chain
risk, revenue model risk as well as the
longer-term view of their ability to recover.
After making enquiries and following
challenge and review, the Directors have
a reasonable expectation that the Group
has adequate resources to continue in
operational existence for the foreseeable
future. For this reason, they continue to
adopt the going concern basis in preparing
the financial statements.
Independent auditors
PwC has indicated its willingness to continue
in office as auditor and a resolution to
re-appoint them will be proposed at the
forthcoming Annual General Meeting.
Annual General Meeting
The Annual General Meeting will be held
at 11.00 a.m. on Monday 27 July 2020. The
Notice of the Annual General Meeting and
the ordinary and special resolutions to be
put to the meeting are included at the
end of this Annual Report and financial
statements.
Due to the ongoing COVID-19 pandemic,
and the stay at home measures put in
place by the UK Government, the Board has
decided to run the 2020 AGM as a closed
meeting. As a result, shareholders will not
be permitted to attend in person and access
will be refused. Under the circumstances,
shareholders are encouraged to submit
their proxy form to ensure their votes are
registered, and are strongly advised to
appoint the chair of the meeting as their
proxy for all votes.
Employees
Employees are encouraged to be involved
in decision-making processes and are
provided with information on the financial
and economic factors affecting the Group’s
performance, through team meetings,
updates from the Chief Executive Officer
and via an open and inclusive culture.
Applications for employment by disabled
persons are always fully considered, bearing
in mind the aptitudes of the applicant
concerned. In the event of a member of
staff becoming disabled, every effort is
made to ensure that their employment
within the Group continue and that
workspace and other modifications are
made as appropriate. It is the policy of the
Group that the training, career development
and promotion of a disabled person should,
as far as possible, be identical to that of a
person who does not suffer from a disability.
The Directors’ Report was approved by the
Board on 26 June 2020 and is signed on its
behalf by:
Ben Wilkinson
Chief Financial Officer
26 June 2020
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Directors’ Responsibilities Statement
The Directors are responsible for preparing
the Annual Report and the financial
statements in accordance with applicable
law and regulation.
Company law requires the Directors
to prepare financial statements for
each financial year. Under such laws,
the Directors have prepared the Group
financial statements in accordance with
International Financial Reporting Standards
(IFRSs) as adopted by the European Union
and the Company financial statements in
accordance with United Kingdom Generally
Accepted Accounting Practice (United
Kingdom Accounting Standards, comprising
FRS 101 ‘Reduced Disclosure Framework’, and
applicable law).
Under company law, the Directors must not
approve the financial statements unless they
are satisfied that they give a true and fair
view of the state of affairs and profit or loss
of the Group and Company for that period.
In preparing the Group financial statements,
the Directors are required to:

- select suitable accounting policies and
then apply them consistently;

- make judgements and accounting
estimates that are reasonable and
prudent;

- state whether applicable IFRSs as
adopted by the European Union have
been followed, subject to any material
departures disclosed and explained in the
financial statements; and
- prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the Group
will continue in business.
In preparing the Company financial
statements, the Directors are required to:

- select suitable accounting policies and
then apply them consistently;

- make judgements and accounting
estimates that are reasonable and
prudent;

- state whether applicable UK Accounting
Standards, comprising FSR 101, have
been followed, subject to any material
departures disclosed and explained in the
financial statements; and
- prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the
Company will continue in business.
The Directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the Group
and Company’s transactions and disclose
with reasonable accuracy at any time
the financial position of the Group and
Company and enable them to ensure
that the financial statements comply
with the Companies Act 2006. They are
also responsible for safeguarding the
assets of the Group and Company and
hence for taking reasonable steps for the
prevention and detection of fraud and
other irregularities. The Directors are further
responsible for ensuring that the Annual
Report is made available on the Company’s
website and for the maintenance and
integrity of the Company’s website.
Legislation in the United Kingdom governing
the preparation and dissemination of
financial statements may differ from
legislation in other jurisdictions.
Each Director in office at the date of
approval of the Directors’ Report confirms
that:

- so far as they are aware, there is no
relevant audit information of which
the Group and Company’s auditors are
unaware; and
- they have taken all the steps that they
ought to have taken as a Director in order
to make themselves aware of any relevant
audit information and to establish that
the Group and Company’s auditors are
aware of that information.
To the best of their knowledge, each Director
in office at the date of approval of the
Directors’ Report further confirms that:

- the Group financial statements, prepared
in accordance with IFRSs as adopted by
the European Union, give a true and fair
view of the assets, liabilities, financial
position and profit or loss of the Company
and the undertakings included in the
consolidation taken as a whole; and
- the Strategic Report and Directors’ Report
include a fair review of the development
and performance of the business and
the position of the Company and the
undertakings included in the consolidation
taken as a whole, together with a
description of the principal risks and
uncertainties that they face.
The Directors’ Responsibilities Statement
was approved by the Board on 26 June 2020
and signed on its behalf by:
Ben Wilkinson
Chief Financial Officer
26 June 2020
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Financials
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Independent Auditors’ Report
to the Members of Draper Esprit plc
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Report on the audit of the financial statements
Opinion
In our opinion:

· Draper Esprit plc’s Group financial statements and Company financial statements (the “financial statements”) give a true and fair view
of the state of the Group’s and of the Company’s affairs as at 31 March 2020 and of the Group’s profit and cash flows for the year then
ended;

·
the Group financial statements have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as
adopted by the European Union;

·
the Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, comprising FRS 101 “Reduced Disclosure Framework”, and applicable law); and

·
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report, which comprise: the Consolidated and Company Statements
of Financial Position as at 31 March 2020; the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Cash
Flows, and the Consolidated and Company Statements of Changes in Equity for the year then ended; and the notes to the financial
statements, which include a description of the significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
Our audit approach
Overview

· Overall group materiality: £13,192,000 (2019: £12,371,000), based on 2% of net assets.

· Overall company materiality: £12,704,000 (2019: £11,765,000), based on 2% of net assets.

· We tailored the scope of our audit to ensure that we performed enough work to be able to give
an opinion on the financial statements as a whole. The Group financial statements are prepared
on a consolidated basis, and the audit team carries out an audit over the consolidated Group
balances in support of the Group audit opinion.

· Valuation of unquoted investments (Group and Company).

· COVID-19 (Group and Company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In
particular, we looked at where the directors made subjective judgements, for example in respect of significant accounting estimates that
involved making assumptions and considering future events that are inherently uncertain. As in all of our audits we also addressed the risk of
management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of
material misstatement due to fraud.
Materiality
Audit scope
Key audit
matters
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Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures
thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. This is not a complete list of all risks identified by our audit.
Key audit matter
How our audit addressed the key audit matter
Valuation of unquoted investments (Group and
Company)
Refer to page 66 (Audit, Risk and Valuations
Committee Report), Note 3 (Significant accounting
policies), Note 4 (Critical accounting estimates and
judgements), Note 16 (Financial assets held at fair
value through profit and loss), Note 28 (Fair Value
Measurements).
The fair value of unquoted investments is £657m
(Group) and £631m (Company) as at 31 March 2020.
This is an area of focus due to the fact that unquoted
investments (“portfolio company” or “investment”)
do not have readily determinable prices and involve
a number of estimates and unobservable inputs.
As detailed in Note 28 to financial statements the
estimation uncertainty as at 31 March 2020 has
increased due to the COVID-19 pandemic.
The fair value of investments is established in
accordance with IFRS and with reference to the
International Private Equity and Venture Capital
Valuation Guidelines as well as the IPEV Board, Special
Valuation Guidance issued on 31 March 2020 in
response to the COVID-19 crisis (“IPEV Guidelines”).
The valuation methodologies primarily used by the
Group are the ‘calibration to the recent transaction
price’, ‘revenue multiple’ and ‘net asset value’
approaches as detailed in Note 4 and 28 to financial
statements.
Whilst the underlying investments are held within
funds or other investment entities such as Draper
Esprit (Ireland) Limited, which are valued by the
Group at Net Asset Value, management look through
these vehicles to value the underlying investments.
We understood and evaluated the valuation methodologies applied, by reference to
industry practice, guidelines and applicable accounting standards, and tested the
techniques used by management in determining the fair value of the investments. For a
sample of investments, we performed the following:

· Agreed the recent transaction price to supporting documentation such as purchase
agreements, funding drawdown requests or bank statements;

· Obtained management’s calibration analysis to evaluate post transaction
performance against relevant milestones, including the potential impact of COVID-19
and also its cash runway, which determined the level of adjustment, if any, made to
the recent transaction price;

· Obtained management information, board reports and external market data to
validate management’s calibration analysis and adjustments made, if any, to the
recent transaction price and challenged assumptions made, where appropriate;

· For the revenue multiple approach we held discussions with management to
understand the performance of the portfolio company, the potential impact
of COVID-19, including its cash runway and challenged estimates used in the
valuations of the investments. These included but were not restricted to review of the
comparable companies, rationale and consistency of discounts or premiums applied
and basis for budgeted revenue figures used;

· We evaluated the range of comparable companies used in the valuation and verified
revenue multiples to independent sources, including the impact of averaging revenue
multiples; and

· Agreed inputs into the valuation model to financial information and board papers
from the portfolio companies and publicly available information.
Where the Group has invested capital into a separately managed fund (“a Fund”), the
engagement team:

· Confirmed the commitments and capital drawn down with the Fund;

· Reviewed the latest investor reports of the Fund; and

· Reviewed the look-through valuation performed by management on individually
material investments to the Group held in the Fund and any subsequent adjustments
made.
Furthermore, for a sample of investments, we confirmed the capital structure with the
portfolio company and reviewed the allocation of value between the capital structure to
ensure the amount attributable to the Group entities was appropriate.
We considered the appropriateness and adequacy of the disclosures around the
increased uncertainty due to COVID-19 and sensitivities on the accounting estimates.
Overall, based on our procedures, we found that management’s valuation of
investments and the assumptions used were supported by the audit evidence obtained
and appropriately disclosed in the financial statements.
Independent Auditors’ Report
to the Members of Draper Esprit plc continued
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Key audit matter
How our audit addressed the key audit matter
COVID-19 (Group and Company)
Refer to page 6 (CEO’s Statement), page 52 (Principal Risks), page 66
(Audit, Risk and Valuations Committee Report), Note 28 (Fair Value
Measurements)
The outbreak of the novel coronavirus (known as COVID-19) in
many countries is rapidly evolving and the socio-economic impact is
unprecedented. It has been declared as a global pandemic and is having
a major impact on economies and financial markets. The efficacy of
government measures will materially influence the length of economic
disruption, but it is probable there will be a recession in the United
Kingdom.
In order to assess the impact of COVID-19 on the business,
management have updated their risk assessment and prepared an
analysis of the potential impact on the cash flows, operations and
liquidity position of the Group for at least 12 months from date of
signing.
The most significant impact to the financial statements has been in
relation to the valuation of unquoted investments. This is described in
the key audit matter above.
In making their assessment management have also taken into account
the covenant headroom on the Group’s loan facilities. After considering
all of these factors, management have concluded that preparing the
financial statements on a going concern basis remains appropriate.
We evaluated the Group’s updated risk assessment and analysis
and considered whether it addresses the relevant threats posed
by COVID-19. We also evaluated management’s assessment and
corroborated evidence of the operational impacts, considering their
consistency with other available information and our understanding of
the business.
Our procedures in respect of the valuation of unquoted investments
are set out in the respective key audit matter above.
We assessed the disclosures presented in the Annual Report in relation
to COVID-19 by reading the other information, including the Principal
risks set out in the Strategic Report, and assessing its consistency with
the financial statements and the evidence we obtained in our audit.
In respect of going concern, we assessed management’s going
concern analysis in light of COVID-19 and obtained evidence to
support the key assumptions used in preparing the going concern
model, including assessing covenant headroom within a downside
case scenario. We challenged the key assumptions and the
reasonableness of the mitigating actions used in preparing the
analysis.
Our conclusions relating to going concern and other information are
set out in the ‘Conclusions related to going concern’ and ‘Reporting on
other information’ sections of our report, respectively, below.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a
whole, taking into account the structure of the Group and the Company, the accounting processes and controls, and the industry in which
they operate.
In establishing the overall approach to our audit, we assessed the risk of material misstatement, taking into account the nature, likelihood
and potential magnitude of any misstatement. Following this assessment, we applied professional judgment to determine the extent of
testing required over each balance in the financial statements.
The financial statements are produced using a single consolidation spreadsheet that takes information from the general ledger. The Group
audit team performed all audit procedures over the consolidation for the purposes of the Group audit.
This allowed us to adequately address the key audit matters for the audit and, together with procedures performed over the consolidation,
gave us sufficient appropriate audit evidence for our opinion on the Group financial statements as a whole.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These,
together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit
procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually
and in aggregate on the financial statements as a whole.
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Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements
Company financial statements
Overall materiality
£13,192,000 (2019: £12,371,000).
£12,704,000 (2019: £11,765,000).
How we determined it
2% of net assets.
2% of net assets.
Rationale for benchmark applied
Net assets is the primary measure used
by the shareholders in assessing the
performance of the Group, and is a
generally accepted auditing benchmark for
a business such as the Group, which invests
in other businesses for capital appreciation.
Net assets is the primary measure used
by the shareholders in assessing the
performance of the Company, and is a
generally accepted auditing benchmark
for a business such as the Company, which
invests in other businesses for capital
appreciation.
We agreed with the Audit, Risk and Valuations Committee that we would report to them misstatements identified during our audit above
£659,000 (Group audit) (2019: £618,000) and £635,000 (Company audit) (2019: £588,000) as well as misstatements below those amounts
that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which ISAs (UK) require us to report to you where:

·
the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

·
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about
the Group’s and Company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months
from the date when the financial statements are authorised for issue.
However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Group’s and Company’s
ability to continue as a going concern.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’
report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form
of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform
procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic Report and Directors’ Report, we also considered whether the disclosures required by the UK Companies Act
2006 have been included.
Based on the responsibilities described above and our work undertaken in the course of the audit, ISAs (UK) require us also to report certain
opinions and matters as described below.
Independent Auditors’ Report
to the Members of Draper Esprit plc continued
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Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and Directors’ Report
for the year ended 31 March 2020 is consistent with the financial statements and has been prepared in accordance with applicable legal
requirements.
In light of the knowledge and understanding of the Group and Company and their environment obtained in the course of the audit, we did
not identify any material misstatements in the Strategic Report and Directors’ Report.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Directors’ Responsibilities Statement set out on page 74, the directors are responsible for the preparation
of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The
directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter 3 of
Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior
consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:

· we have not received all the information and explanations we require for our audit; or

· adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from
branches not visited by us; or

· certain disclosures of directors’ remuneration specified by law are not made; or

·
the Company financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
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Other voluntary reporting
Directors’ remuneration
The Company voluntarily prepares a Directors’ Remuneration Report in accordance with the provisions of the Companies Act 2006. The
directors requested that we audit the part of the Directors’ Remuneration Report specified by the Companies Act 2006 to be audited as if
the Company were a quoted company.
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies
Act 2006.
Richard McGuire (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
26 June 2020
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2020
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Note
Year ended
31 Mar 2020
£’000s
Year ended
31 Mar 2019
£’000s
Change in unrealised gains on investments held at fair value through the profit and loss
5
40,755
114,715
Fee income
6
11,255
6,101
Total investment income
52,010
120,816
Operating expenses
General administrative expenses
7
(9,810)
(7,774)
Depreciation and amortisation
14, 17, 20, 23
(520)
(163)
Share based payments – resulting from company share option scheme
13
(990)
(1,100)
Share based payments – resulting from acquisition of subsidiary
–
(1,989)
Investments and acquisition costs
(239)
(207)
Exceptional items
–
(34)
Total operating costs
(11,559)
(11,267)
Profit from operations
40,451
109,549
Finance (expense)/income
Net finance (expense)/income
10
(68)
1,601
Operating profit before tax
40,383
111,150
Income taxes
11, 23
(17)
11
Profit for the year
40,366
111,161
Other comprehensive income/(expense)
–
–
Total comprehensive income for the year
40,366
111,161
Profit attributable to:
Owners of the parent
39,707
110,579
Non-controlling interest^
18
659
582
Earnings per share attributable to owners of the Parent:
Basic earnings per weighted average shares (pence)
12
34
115
Diluted earnings per weighted average shares (pence)
12
33
110
^ On 10 March 2020, the Group acquired the remaining interest in Encore Ventures LLP and as such no profit after 10 March 2020 is
attributable to the non-controlling interest – see Note 18 for further details.
The Notes on pages 88 to 116 are an integral part of these consolidated financial statements.

Consolidated Statement of Financial Position
As at 31 March 2020
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Note
31 Mar 2020
£’000s
31 Mar 2019
£’000s
Non-current assets
Intangible assets
14
10,028
10,130
Investments in associates
15
258
258
Financial assets held at fair value through the profit or loss
16
657,333
562,061
Property, plant and equipment
17, 20
1,760
209
Total non-current assets
669,379
572,658
Current assets
Trade and other receivables
19
7,719
1,140
Cash and cash equivalents
32,255
50,358
Restricted cash
21
1,883
–
Total current assets
41,857
51,498
Current liabilities
Trade and other payables
22
(5,038)
(4,959)
Lease liabilities
20
(358)
–
Total current liabilities
(5,396)
(4,959)
Non-current liabilities
Deferred tax
23
(611)
(631)
Loans and borrowings
21
(44,636)
–
Lease liabilities
20
(975)
–
Total non-current liabilities
(46,222)
(631)
Net assets
659,618
618,566
Equity
Share capital
24
1,189
1,179
Share premium account
24
400,726
395,783
Merger relief reserve
25
13,097
13,097
Share-based payments reserve – resulting from company share option scheme
2,339
1,713
Share-based payments reserve – resulting from acquisition of subsidiary
10,823
10,823
Retained earnings
231,444
195,737
Equity attributable to owners of parent
659,618
618,332
Non-controlling interests
18
-
234
Total equity
659,618
618,566
Net assets per share (pence)
12
555
524
The financial statements on pages 84 to 116 were approved by the Board of Directors on 26 June 2020 and signed on its behalf by
B.D. Wilkinson
Chief Financial Officer
The Notes on pages 88 to 116 are an integral part of these consolidated financial statements.

Consolidated Statement of Cash Flows
for the year ended 31 March 2020
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Note
Year ended
31 Mar 2020
£’000s
Year ended
31 Mar 2019
£’000s
Cash flows from operating activities
Profit after tax
40,366
111,161
Adjustments to reconcile operating profit to net cash flows used in operating activities:
Revaluation of investments held at fair value through the profit and loss
5
(40,755)
(114,715)
Depreciation and amortisation
520
163
Share-based payments – resulting from company share option scheme
13
990
1,100
Share-based payments – resulting from acquisition of subsidiary
-
1,989
Net finance expense/(income)
10
68
(1,481)
(Increase)/decrease in trade and other receivables and other working capital movements
(2,886)
189
Increase in trade and other payables
79
2,011
Purchase of investments
16
(89,935)
(226,432)
Proceeds from disposals in underlying investment vehicles
16
39,533
15,984
Net loans made to underlying investment vehicles and Group companies
16, 31
(8,541)
(4,679)
Net cash used in operating activities
(60,561)
(214,710)
Tax paid
(3)
(32)
Net cash outflow from operating activities
(60,564)
(214,742)
Cash flows from investing activities
Purchase of property, plant and equipment
(368)
(58)
Interest received
289
120
Net cash (outflow)/inflow from investing activities
(79)
62
Cash flows from financing activities
Cash paid to non-controlling interests
(893)
(638)
Proceeds from loan (net of repayments)
21
45,000
-
Fees paid on issuance of loan
21
(525)
-
Interest payments
(887)
-
Repayments of leasing liabilities
20
(166)
-
Gross proceeds from issue of share capital
24
993
215,035
Equity issuance costs
24
(40)
(7,481)
Cash paid out for share options exercised
(293)
-
Net cash inflow from financing activities
43,189
206,916
Net (decrease)/increase in cash & cash equivalents
(17,454)
(7,764)
Cash and cash equivalents at beginning of year
50,358
56,641
Exchange differences on cash and cash equivalents
10
1,234
1,481
Cash and cash equivalents at end of year
32,255
50,358
Restricted cash at year end
1,883
-
Total cash and cash equivalents and restricted cash at year end
34,138
50,358
The Notes on pages 88 to 116 are an integral part of these consolidated financial statements.

Consolidated Statement of Changes in Equity
for the year ended 31 March 2020
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Year ended 31 March 2020
Attributable to equity holders of the parent (£’000s)
(£’000s)
(£’000s)
Share
capital
Share
premium
Merger
relief
reserve
Share-based payments
reserve resulting from:
Retained
earnings
Total
Attributable
to non-
controlling
interests
Total
equity
Company
share option
scheme
Acquisition
of
subsidiary
Brought forward at 1 April 2019
1,179
395,783
13,097
1,713
10,823 195,737 618,332
234 618,566
Comprehensive income/(expense) for the year
Profit for the year
–
–
–
–
–
39,707
39,707
659
40,366
Acquired reserves from non-controlling interest
–
–
–
–
–
–
–
-
-
Amounts withdrawn by non-controlling interest
–
–
–
–
–
–
–
(893)
(893)
Total comprehensive income/(expense) for the year
–
–
–
–
–
39,707
39,707
(234)
39,473
Contributions by and distributions to the owners:
Adjustment for Encore Ventures acquisition (Note 18)
-
-
-
-
- (4,000) (4,000)
-
(4,000)
Issue of share capital (Note 24)
10
–
–
–
–
–
10
–
10
Share premium (Note 24)
–
4,943
–
–
–
–
4,943
–
4,943
Share based payment (Note 13)
–
–
–
990
–
–
990
–
990
Share based payment – exercised during the year
(Note 13)
–
–
–
(364)
–
–
(364)
–
(364)
Total contributions by and distributions to the
owners
10
4,943
-
626
- (4,000)
1,579
-
1,579
Balance at 31 March 2020
1,189 400,726
13,097
2,339
10,823 231,444 659,618
- 659,618
Year ended 31 March 2019
Attributable to equity holders of the parent (£’000s)
(£’000s)
(£’000s)
Share
capital
Share
premium
Merger
relief
reserve
Share-based payments
reserve resulting from:
Retained
earnings
Total
Attributable
to non-
controlling
interests
Total
equity
Company
share option
scheme
Acquisition
of
subsidiary
Brought forward at 1 April 2018
716
188,229
13,097
613
8,834
86,230 297,719
2,792 300,511
Comprehensive income/(expense) for the year
Adjustments for transitioning to IFRS 15 (Note 2ii)
–
–
–
–
–
(1,072)
(1,072)
(2,502)
(3,574)
Profit for the year
–
–
–
–
–
110,579
110,579
582
111,161
Amounts withdrawn by non-controlling interest
–
–
–
–
–
–
–
(638)
(638)
Total comprehensive income/(expense) for the year
–
–
–
–
– 109,507 109,507
(2,558) 106,949
Contributions by and distributions to the owners:
Issue of share capital (Note 24)
463
–
–
–
–
–
463
–
463
Share premium (Note 24)
–
207,554
–
–
–
– 207,554
– 207,554
Share based payment (Note 13)
–
–
–
1,100
–
–
1,100
–
1,100
Share based payment resulting from acquisition of
Subsidiary
–
–
–
–
1,989
–
1,989
–
1,989
Total contributions by and distributions to the
owners
463
207,554
–
1,100
1,989
–
211,106
–
211,106
Balance at 31 March 2019
1,179
395,783
13,097
1,713
10,823 195,737 618,332
234 618,566
The Notes on pages 88 to 116 are an integral part of these consolidated financial statements.

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Notes to the Consolidated Financial Statements
1. General information
Draper Esprit plc (the “Company”) is a public company limited by shares incorporated and domiciled in England and Wales. The Company is
listed on the London Stock Exchange’s AIM market and Euronext Dublin’s Euronext Growth market.
The Company is the ultimate parent company into which the results of all subsidiaries are consolidated. The consolidated financial statements
for the years ended 31 March 2020 and 31 March 2019 comprise the financial statements of the Company and its subsidiaries (together,
“the Group”).
The consolidated financial statements are presented in Pounds Sterling (£), which is the currency of the primary economic environment the
Group operates in. All amounts are rounded to the nearest thousand, unless otherwise stated.
2. Adoption of new and revised standards
In the current year, the new Standard below has been adopted, which has affected the amounts reported in these consolidated financial
statements:
i.
IFRS 16 Leases - From 1 April 2019, the Group has adopted IFRS 16 Leases, which became effective for annual periods beginning on or
after 1 January 2019. The Group has applied IFRS 16 using the modified retrospective approach and therefore the comparative information
has not been restated and continues to be reported under IAS 17 and IFRIC 4. The details of accounting policies under IAS 17 and IFRIC 4
are disclosed in the Draper Esprit plc annual report for the year ended 31 March 2019. See further details in significant accounting policies
below – note 3.
In the prior year, the following new standards were adopted:
ii.
IFRS 15 Revenue from Contracts with Customers was a new standard in the prior year, effective from 1 January 2018. IFRS 15
establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty
of revenue and cash flows arising from an entity’s contracts with customers. The core principal of IFRS 15 is that an entity should
recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration, which
the entity expects to be entitled in exchange for those goods, or services. The only material impact from the adoption of this standard
relates to the recognition of certain performance fees, which under IFRS 15 will no longer be recognised following analysis in line with the
Standard’s higher threshold for recognition. The underlying status of the fees has not changed. The impact on the consolidated statement
of financial position and consolidated statement of changes in equity can be seen in the table below:
Previously
reported
£000’s
IFRS 15
reclassification
£000’s
PY reported
under IFRS 15
£000’s
Performance fee revenue (recognised in year ending 31 March 2018)
3,574
(3,574)
0
Performance fees attributable to the Group
1,072
(1,072)
0
Performance fees attributable to non-controlling interest
2,502
(2,502)
0
Accrued Revenue
3,574
(3,574)
0

The Group elected not to restate comparative information from prior periods upon adoption of IFRS 15 and has applied the practical expedient
under which contracts that began and were completed prior to 1 April 2018 were not restated. For ongoing contracts, any changes required
were taken straight to the condensed consolidated interim statement of changes in equity in the year ending 31 March 2019.
iii.
IFRS 9 Financial Instruments (as revised in July 2014) - IFRS 9 introduces new requirements for the 1) classification and measurement
of financial assets and financial liabilities, 2) impairment for financial assets and 3) general hedge accounting. There is no material
impact on the Group in relation of the implementation of IFRS 9. The Standard has been adopted from 1 April 2018 with no restatement
of prior periods required.
· Classification and measurement
– On 1 April 2018, the Group classified its financial instruments in the appropriate IFRS 9 categories; there were no changes.
·
Impairment of financial assets
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– The Group has one type of financial asset that is subject to IFRS 9’s new expected credit loss model:
– Trade and other receivables (See Note 19)

— On 1 April 2018, there was no material impact on the trade and receivables balance resulting from the expected credit loss model.
· General Hedge Accounting
– The Group does not use hedge accounting. Therefore, there was no impact on the financial statements from this change to IFRS 9.
No upcoming changes under IFRS are likely to have a material effect on the reported results or financial position. Management will continue
to monitor upcoming changes.
3. Significant accounting policies
a) Basis of preparation
The consolidated financial statements have been prepared and approved by the Directors in accordance with all relevant IFRSs as issued by
the International Accounting Standards Board (“IASB”), and interpretations issued by the IFRS Interpretations Committee and endorsed by
the European Union (“EU”) and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial
reporting framework that has been applied in the preparation of the Company financial statements is applicable law and United Kingdom
Accounting Standards (United Kingdom Generally Accepted Accounting Practice). The Company has taken advantage of disclosure
exemptions available under FRS 101 as explained further in Note 1 of the Company’s financial statements. The financial statements are
prepared on a going concern basis as disclosed in the Audit, Risk & Valuations Committee Report (p.66) and in the Directors’ Report (p.73).
The consolidated financial statements have been prepared under the historical cost convention as modified for the revaluation of financial
assets and financial liabilities held at fair value.
A summary of the Group’s principal accounting policies, which have been applied consistently across the Group, is set out below.
b) Basis of consolidation
The consolidated financial statements comprise the Company (Draper Esprit plc, 20 Garrick Street, London, England, EC2E 9BT) and the
results, cash flows and changes in equity of the following subsidiary undertakings:
Name of undertaking
Nature of business
Country of
incorporation
%
ownership
Esprit Capital Partners LLP^
Investment Management
England
100%
Draper Esprit (Nominee) Limited^
Dormant
England
100%
Encore Ventures LLP^
Investment Management
England
*100%
Esprit Capital I (GP) Limited^
General Partner
England
100%
Esprit Capital I General Partner^
General Partner
England
100%
Esprit Capital II GP Limited^^^
General Partner
Cayman
100%
Esprit Capital III Founder GP Limited^^ General Partner
Scotland
100%
Esprit Capital III GP LP^^
General Partner
Scotland
100%
Encore I GP Limited^^^
General Partner
Cayman
100%
Encore I Founder GP Limited^^^
General Partner
Cayman
100%
Esprit Capital Management Limited^ Admin company – in a Members Voluntary Liquidation
England
100%
Esprit Capital Holdings Limited^
Dormant
England
100%
Esprit Nominees Limited^
Dormant
England
100%
Esprit Capital I (CIP) Limited^
Dormant
England
100%
Esprit Capital III MLP LLP^
Dormant
England
100%
Esprit Capital III GP Limited^
Dormant
England
100%
Registered addresses
^
20 Garrick Street, London, England, WC2E 9BT
^^ 50 Lothian Road, Festival Square, Edinburgh, Scotland, EH3 9WJ
^^^ c/o Maples Corporate Services Limited at PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands
*
This has moved from 71% to 100% during the year – please see note 18 for further details.
Notes to the Consolidated Financial Statements continued
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Subsidiaries
Subsidiaries are entities controlled by the Group. Control, as defined by IFRS 10, is achieved when the Group is exposed, or has rights, to
variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
Subsidiaries are fully consolidated from the date on which the Group effectively obtains control. They are deconsolidated from the date
that control ceases. Control is reassessed whenever circumstances indicate that there may be a change in any of these elements of control.
Refer to Note 4(c) for further information. The Group has accounted for the acquisition of the remaining interest in Encore Ventures LLP
on 10 March 2020 as a change in ownership interest under IFRS 10 having assessed the substance of the transaction, including control and
changes in ownership (see note 18). All transactions and balances between Group subsidiaries are eliminated on consolidation, including
unrealised gains and losses on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on
consolidation, the underlying asset is also tested for impairment from a Group perspective. Amounts reported in the financial statements of
subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group. Profit or loss and
other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition,
or up to the effective date of disposal, as applicable. The Group attributes total comprehensive income or loss of subsidiaries between the
owners of the parent and the non-controlling interests based on their respective ownership interests.
Associates
Associates are all entities over which the Group has significant influence, but not control or joint control. This is generally the case where
the Group holds between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of
accounting, after initially being recognised at cost. Under the equity method of accounting, the investments are initially recognised at
cost and adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses of the investee in profit or loss, and
the Group’s share of movements in other comprehensive income. Dividends received or receivable from associates and joint ventures are
recognised as a reduction in the carrying amount of the investment. When the Group’s share of losses in an equity-accounted investment
equals or exceeds its interest in the entity, including any other unsecured long-term receivables, the Group does not recognise further losses,
unless it has incurred obligations or made payments on behalf of the other entity. The carrying amount of equity-accounted investments
is tested for impairment where there are indications that the carrying value may no longer be recoverable. For further details, please see
investment in associate Note 15.
Investment company
In accordance with the provisions of IFRS 10, Draper Esprit plc considers itself to be an investment entity as it obtains funds from investors to
invest funds for returns from capital appreciation and the performance of substantially all of its investments are held at Fair Value through
Profit and Loss. It considers its wholly owned subsidiary, Draper Esprit (Ireland) Limited, as well as the limited partnerships listed below to
be investment companies, as their sole purpose is to hold investments on behalf of the Group. Consequently, Draper Esprit (Ireland) Limited
and the limited partnerships listed below are not consolidated in accordance with IFRS10; instead they are recognised as investments held
at fair value through profit and loss on the consolidated balance sheet. Loans to investment vehicles are treated as net investments at fair
value through the profit and loss.
The below is a list of entities that are controlled and not consolidated but held as investments at fair value through the profit and loss on the
consolidated balance sheet.
Name of undertaking
Principal activity
Country of
incorporation
% ownership
Draper Esprit (Ireland) Limited^^
Investment company
Ireland
100%
Esprit Capital III LP^
Limited partnership
England
100%
Esprit Capital IV LP^
Limited partnership
England
100%
Esprit Investments (1) LP^
Limited partnership
England
100%
Esprit Investments (2) LP^
Limited partnership
England
100%
Esprit Investments (1)(B) LP^
Limited partnership
England
100%
Seedcamp Holdings LLP^
Limited liability partnership
England
100%
Seedcamp Investments LLP^^^
Limited liability partnership
England
100%
Seedcamp Investments II LLP^^^
Limited liability partnership
England
100%
Esprit Investments (2)(B) LP^
Limited partnership
England
100%
^
20 Garrick Street, London, England, WC2E 9BT
^^ 32 Molesworth Street, Dublin 2, Ireland, D02 Y512
^^^ 727-729 High Road, London, England, N12 0BP
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Limited partnerships (co-investment)
The following limited partnerships that the Group’s General Partners are members of are not considered to be controlled and, therefore,
they are not consolidated in these financial statements:
Name of undertaking
Principal activity
Country of
incorporation
Encore I GP LP^
General partner
Cayman
Esprit Capital II Founder LP^
Co–investment limited partnership
Cayman
Esprit Capital II Founder 2 LP^
Co–investment limited partnership
Cayman
Encore I Founder LP^
Co–investment limited partnership
Cayman
Encore I Founder 2014 LP^
Co–investment limited partnership
Cayman
Encore I Founder 2014-A LP^
Co–investment limited partnership
Cayman
Esprit Capital III Founder LP^^
Co–investment limited partnership
Scotland
^
c/o Maples Corporate Services Limited at PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands
^^ 50 Lothian Road, Festival Square, Edinburgh, EH3 9WJ
The Group’s management does not consider there to be a material exposure to these entities.
c) Operating segment
The Group’s management considers the Group’s investment portfolio represents a coherent and diversified portfolio with similar economic
characteristics and as a result these individual investments have been aggregated into a single operating segment. In the view of the
Directors, there is accordingly one reportable segment under the provisions of IFRS 8.
d) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in
the normal course of business, net of discounts, VAT and other sales-related taxes. All revenue from services is generated within the UK and
is stated exclusive of value added tax.
Revenue from services comprises:
i.
Fund management services
Fund management fees are either earned at a fixed annual rate or are set at a fixed percentage of funds under management, measured
by commitments or invested cost, depending on the stage of the fund being managed. Revenues are recognised as the related services
are provided.
ii.
Portfolio Directors’ fees
Portfolio Directors’ fees are annual fees charged to an investee company. Directors’ fees are only charged on a limited number of the
investee companies. Revenues are recognised as services are provided.
iii.
Performance fees
Performance fees are earned on a percentage basis on returns over a hurdle rate in the statement of comprehensive income. Amounts
are recognised as revenue when it can be reliably measured and is highly probable funds will flow to the Group.
e) Deferred income
The Group’s management fees are typically billed quarterly or half-yearly in advance. Where fees have been billed for an advance period, the
amounts are credited to deferred income, and then subsequently released through the profit and loss during the period to which the fees
relate. Certain performance fees and portfolio directors’ fees are also billed in advance and these amounts are credited to deferred income,
and then subsequently released through the profit and loss accounting during the period to which the fees relate.
f) Business combinations
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain
control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity
interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement.
Notes to the Consolidated Financial Statements continued
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Acquisition costs are expensed as incurred. Assets acquired and liabilities assumed are generally measured at their acquisition-date
fair values.
The Group recognises identifiable assets acquired and liabilities assumed in a business combination, regardless of whether they have been
previously recognised in the acquiree’s financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally
measured at their acquisition-date fair values. Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated
as the excess of the sum of: a) fair value of consideration transferred; b) the recognised amount of any non-controlling interest in the
acquiree; and c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable
net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain purchase)
is recognised in profit or loss immediately.
g) Goodwill and other intangible assets
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree,
and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of
the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net acquisition-date amounts of the identifiable
assets acquired and liabilities assumed exceed the sum of the consideration transferred, the amount of any non-controlling interests in the
acquiree and the fair value of the acquirer’s previously held interest in the acquiree (if any), the excess is recognised immediately in profit or
loss as a bargain purchase gain.
When the consideration transferred by the Group in a business combination includes an asset or liability resulting from a contingent
consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the
consideration transferred in a business combination. Changes in fair value of the contingent consideration that qualify as measurement
period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments
are adjustments that arise from additional information obtained during the “measurement period” (which cannot exceed 1 year from the
acquisition date) about facts and circumstances that existed at the acquisition date.
Other intangible assets
Certain previously unrecognised assets acquired in a business combination that qualify for separate recognition are recognised as intangible
assets at their fair values, e.g. brand names, customer contracts and lists (see Note 14). All finite-lived intangible assets are accounted for
using the cost model whereby capitalised costs are amortised on a straight-line basis over their estimated useful lives. Residual values and
useful lives are reviewed at each reporting date. In addition, they are subject to impairment testing as described below. Customer contracts
are amortised on a straight-line basis over their useful economic lives, typically the duration of the underlying contracts. The following useful
economic lives are applied:
i.
Customer contracts: 8 years.
h) Impairment
For the purposes of assessing impairment, assets are grouped at the lowest level for which there are largely independent cash inflows (“cash
generating units” or “CGU”). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit
level. Goodwill is allocated to those cash-generating units that are expected to benefit from synergies of the related business combination
and represent the lowest level within the Group at which management monitors goodwill. All other individual assets or cash-generating units
are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised in the consolidated statement of total comprehensive income for the amount by which the assets or
cash generating units carrying amount exceeds its recoverable amount that is the higher of fair value less costs to sell and value-in-use.
To determine value-in-use, management estimates expected future cash flows over 5 years from each cash-generating unit and determine
a suitable discount rate in order to calculate the present value of those cash flows. Discount factors are determined individually for each
cash-generating unit and reflect their respective risk profile as assessed by management. Impairment losses for cash generating units
reduce first the carrying amount of any goodwill allocated to that cash-generating unit. Any remaining impairment loss is charged pro-rata
to the other assets in the cash-generating unit with the exception of goodwill, and all assets are subsequently reassessed for indications that
an impairment loss previously recognised may no longer exist. An impairment charge is reversed if the cash-generating units recoverable
amount exceeds its carrying amount.
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i)
Foreign currency
Transactions entered into by Group entities in a currency other than the functional currency in which they operate are recorded at the rates
prevailing when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates prevailing at the reporting
date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in the profit
and loss.
The individual financial statements of the Group’s subsidiary undertakings are presented in their functional currency. For the purpose of
these consolidated financial statements, the results and financial position of each subsidiary undertaking are expressed in Pounds Sterling,
which is the presentation currency for these consolidated financial statements.
The assets and liabilities of the Group’s undertakings, whose functional currency is not Pounds Sterling, are translated at exchange rates
prevailing on the reporting date. Income and expense items are translated at the average exchange rates for the period.
j) Financial assets
All financial assets are recognised and derecognised on a trade date where the purchase or sale of a financial asset is under a contract
whose terms require delivery of the financial asset within the timeframe established by the market concerned and are initially measured at
fair value, plus transaction costs, except for those financial assets classified at fair value through profit or loss, which are initially measured
at fair value.
Financial assets are classified by the Group into the following specified categories: financial assets ‘at fair value through profit or loss’
(FVTPL) and ‘amortised cost’. The classification depends on the nature and purpose of the financial assets and is determined at the time
of initial recognition.
Fair value through profit or loss
A financial asset may be designated as at FVTPL upon initial recognition if:
(a) such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or
(b) the financial asset forms part of a group of financial assets or financial liabilities, or both, which is managed and its performance is
evaluated on a fair value basis, in accordance with the Draper Esprit Group’s documented risk management or investment strategy,
and information about the grouping is provided internally on that basis; or
(c) it forms part of a contract containing one or more embedded derivatives, and IFRS 9 Financial Instruments permits the entire combined
contract (asset or liability) to be designated as at FVTPL.
The Group considers that the investment interests it holds in Esprit Capital III LP, Esprit Capital III Founder LP, Esprit Capital II Founder LP,
Esprit Capital IV LP, Esprit Investments(I) LP, Esprit Investments (1)(B) LP, Esprit Investments (2) LP, and Esprit Investments (2)(B) LP are
appropriately designated as at FVTPL as they meet criteria (b) above.
Amortised cost
A financial asset is held at amortised cost under IFRS 9 where it is held for the collection of cash flows representing solely payments of
principal and interest. These assets are measured at amortised cost using the effective interest method, less any expected losses.
The Group’s financial assets held at amortised cost comprise trade and most other receivables, and cash and cash equivalents in the
consolidated statement of financial position.
k) Financial liabilities
The Group’s financial liabilities may include borrowings and trade, and other payables.
Trade and other payables
Trade and other payables are recognised and derecognised on a trade date where the purchase or sale of a financial asset is under a
contract whose terms require delivery of the financial asset within the timeframe established by the market concerned and are initially
measured at fair value, plus transaction costs.
Notes to the Consolidated Financial Statements continued
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Financial liabilities are measured subsequently at amortised cost using the effective interest method. All interest-related charges and,
if applicable, changes in an instrument’s fair value that are reported in profit or loss are included within finance costs or finance income.
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost
using the effective interest rate method. All interest-related charges are reported in profit or loss are included within finance costs or finance
income.
l) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the
outflow of resources embodying the economic benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation.
m) Share capital
Financial instruments issued by the Group are classified as equity only to the extent that they do not meet the definition of a financial
liability or financial asset.
The Group’s ordinary shares are classified as equity instruments. Equity instruments are recorded at the proceeds received, net of direct
issue costs.
n) Defined contribution schemes
Contributions to defined contribution pension schemes are charged to the consolidated statement of comprehensive income in the year to
which they relate.
o) Share-based payments
Where equity-settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the
consolidated statement of comprehensive income over the vesting period. Non-market vesting conditions are taken into account by
adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised
over the vesting period is based on the number of options that eventually vest. Non-vesting conditions and market vesting conditions are
factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of
whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition
or where a non-vesting condition is not satisfied.
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately
before and after the modification, is also charged to the consolidated statement of comprehensive income over the remaining vesting
period. Where equity instruments are granted to persons other than employees, the consolidated statement of comprehensive income is
charged with the fair value of goods and services received.
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p) Leased assets
Policy applicable from 1 April 2019 (for impact analysis, please see Note 20)
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset, the Group assesses whether:
–
The contract involves the use of an identified asset – this may be specified, explicitly or implicitly, and should be physically distinct or
represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset
is not identified;
–
The Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
–
The Group has the right to direct the use of the asset. The Group has this right when it has the decision-making rights that are most
relevant to changing how and for what purpose the asset is used. In rare cases where the decision about how and for what purpose the
asset is used is predetermined, the Group has the right to direct the use of the asset if either:
–
The Group has the right to operate the asset; or
–
The Group designed the asset in a way that predetermines how and for what purpose it will be used.
This policy is applied to contracts entered into, or changed, on or after 1 April 2019. The policy is applied taking into account transitional
provisions within IFRS 16 for the existing operating lease as at 1 April 2019.
At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to
each lease component on the basis of their relative stand-alone prices.
Lessee
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured
at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement
date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying
asset, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end of the lease term.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted
using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. The lease
liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments.
When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded
in the profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group presents right-of-use assets that do not meet the definition of investment property in ‘property, plant and equipment’ and lease
liabilities in ‘lease liabilities’ in the statement of financial position.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or
less and leases of low-value assets, including IT equipment. The Group would recognise the lease payments associated with these leases as
an expense on a straight-line basis over the lease term.
Under IAS 17
For treatment under IAS 17, see the accounting standards notes within the Draper Esprit plc annual report for the year ending 31 March 2019.
Notes to the Consolidated Financial Statements continued
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q) Dividends
Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is when the dividend
is paid. In the case of final dividends, this is when the dividend is approved by the shareholders at the AGM.
r) Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement
because it excludes items of income or expense that are taxable or deductible in other years, and it further excludes items that are never
taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by
the balance sheet date.
s) Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance
sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be
utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the
initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit
nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests
in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such
investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to
utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is realised based
on tax laws and rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is charged or credited in the
income statement, except when it relates to items charged or credited in other comprehensive income, in which case the deferred tax is also
dealt with in other comprehensive income.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group
expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and
liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities, and when they relate
to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
t) Property, plant and equipment
Fixtures and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Depreciation is recognised to
write off the cost or valuation of assets less their residual values over their useful lives, using the straight-line method, on the following basis:
Leasehold improvements – over the term of the lease
Fixtures and equipment – 33% p.a. straight line
Computer equipment – 33% p.a. straight line
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any
changes in estimate accounted for on a prospective basis.
See 3p above for PPE relating to right-of-use assets resulting from leases.
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u) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, deposits at bank and highly liquid investments with a term of no more than 90 days that
are readily convertible into known amounts of cash and that are subject to an insignificant risk of changes in value. No cash equivalents are
held as at 31 March 2020 (31 March 2019: nil).
v) Segmental reporting
IFRS 8, “Operating Segments”, defines operating segments as those activities of an entity about which separate financial information is
available and which are evaluated by the Chief Operating Decision Maker to assess performance and determine the allocation of resource.
The Chief Operating Decision Maker has been identified by the Board of Directors as the Chief Executive Officer.
w) Financial instruments
Financial assets and financial liabilities are recognised in the consolidated balance sheet when the Group becomes a party to the contractual
provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition
or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are
added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.
x) Exceptional items
The Group classifies items of income and expenditure as exceptional when the nature of the item or its size is likely to be material, to assist
the reader of the financial statements to better understand the results of the operations of the Group. Such items by their nature are not
expected to recur and are shown separately on the face of the consolidated statement of comprehensive income.
y) Interest income
Interest income earned on cash and deposits and short-term liquidity investments is recognised when it is probable that the economic
benefits will flow to the Group and the amount of income recognised can be measured reliably. Interest income is accrued on a time basis,
with reference to the principal outstanding and at the effective interest rate applicable.
z) Carried interest
The Company has established carried interest plans for the Executive Directors (see below), other members of the investment team and
certain other employees (together the “Plan Participants”) in respect of any investments and follow-on investments made from Admission.
To 31 March 2020 each carried interest plan operates in respect of investments made during a 24-month period and related follow-on
investments made for a further 36-month period. From 1 April 2020 the carried interest plan will operate for a five year period in respect of
any investments.
Subject to certain exceptions, Plan Participants will receive, in aggregate, 15% of the net realised cash profits from the investments and
follow-on investments made over the relevant period once the Company has received an aggregate annualised 10% realised return on
investments and follow-on investments made during the relevant period. The carried interest plan from 1 April 2020 has an aggregate
annualised 8% realised return on investments and follow-on investments made during the relevant period, to bring the plans more in
line with market. The Plan Participants’ return is subject to a “catch-up” in their favour. Plan Participants’ carried interests vest over five
years for each carried interest plan and are subject to good and bad leaver provisions. Any unvested carried interest resulting from a Plan
Participant becoming a leaver can be reallocated by the Remuneration and Nomination Committee. From 2021/22 onwards, the Executive
Directors will not be eligible to participate in new carried interest plans, and instead will participate in the Long-Term Incentive Plan.
The Group’s interest in carried interest is measured at fair value through the profit and loss (FVTPL) with reference to the performance
conditions described above and is deducted from the valuation of investments measured at FVTPL.
Fair value measurement
Management uses valuation techniques to determine the fair value of financial assets. This involves developing estimates and assumptions
consistent with how market participants would price the assets. Management bases its assumptions on observable data as far as possible,
but this is not always available, in that case management uses the best information available. Estimated fair values may vary from the
actual prices that would be achieved in an arm’s length transaction at the reporting date (See Note 4(a)).
Notes to the Consolidated Financial Statements continued
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4. Critical accounting estimates and judgements
The Directors have made the following judgements and estimates that have had the most significant effect on the carrying amounts of
the assets and liabilities in the consolidated financial statement. The estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period,
or in the period of the revision and future periods if the revision affects both current and future periods. Actual results may differ from
estimates. The key estimates, (4)(a) and (4)(b), and judgements, (4)(c) and (4)(d), are discussed below. There have been no changes to
the accounting estimates and judgements in the financial year ended 31 March 2020.
a) Valuation of unquoted equity investments at fair value through the profit and loss
The Group invests into Limited Companies and Limited Partnerships which are considered to be investment companies that invest in
unquoted equity for the benefit of the Group. These investment companies are measured at fair value through the profit or loss based on
their NAV at the year end. The Group controls these entities and is responsible for preparing their NAV which is based on the valuation of
their unquoted investments. The Group’s valuation of investments measured at fair value through profit or loss is therefore dependent upon
estimations of the valuation of the underlying portfolio companies.
The Group, through its controlled investment companies also invests in investment companies which primarily focus on German or seed
investments. These investments are considered to be ‘Fund of Fund investments’ for the Group and are recognised at their NAV at the year-
end date. These Fund of Fund investments are not controlled by the Group and some do not have coterminous year ends with the Group.
To value these investments, management obtain the latest audited financial statements or partner reports of the investments and discuss
further movements with the management of the companies. Where the Fund of Funds hold investments that are individually material to the
Group, management perform further procedures to determine that the valuation of these investments has been prepared in accordance
with the Group’s valuation policies for portfolio companies outlined below and these valuations will be adjusted by the Group where
necessary based on the Group valuation policy for valuing portfolio companies.
The estimates required to determine the appropriate valuation methodology of unquoted equity investments means there is a risk of
material adjustment to the carrying amounts of assets and liabilities. These estimates include whether to increase or decrease investment
valuations and require the use of assumptions about the carrying amounts of assets and liabilities that are not readily available
or observable.
The fair value of unlisted securities is established with reference to the International Private Equity and Venture Capital Valuation Guidelines
as well as the IPEV Board, Special Valuation Guidance issued on 31 March 2020 in response to the COVID-19 crisis (“IPEV Guidelines”). An
assessment will be made at each measurement date as to the most appropriate valuation methodology.
The Group invests in early-stage and growth technology companies, through predominantly unlisted securities. Given the nature of these
investments, there are often no current or short-term future earnings or positive cash flows. Consequently, although not considered to
be the default valuation technique, the appropriate approach to determine fair value may be based on a methodology with reference to
observable market data, being the price of the most recent transaction. Fair value estimates that are based on observable market data will
be of greater reliability than those based on estimates and assumptions and accordingly where there have been recent investments by third
parties, the price of that investment will generally provide a basis of the valuation.
If this methodology is used, its initial use and the length of period for which it remains appropriate to use the price of recent investment
depends on the specific circumstances of the investment, and the Group will consider whether this basis remains appropriate each time
valuations are reviewed. In addition, the inputs to the valuation model (e.g. revenue, comparable peer group, product roadmap) will be
recalibrated to assess the appropriateness of the methodology used in relation to the market performance and technical/product milestones
since the round and the company’s trading performance relative to the expectations of the round.
The Group considers alternative methodologies in the IPEV Guidelines, being principally price-revenue or price-earnings multiples, depending
upon the stage of the asset, requiring management to make assumptions over the timing and nature of future revenues and earnings when
calculating fair value. We stress tested management’s assumptions regarding revenue using a number of scenarios - base case, downside
case, and upside case. We flexed the companies’ budget assumptions under the above scenarios as part of our valuations process.
The Group also reviewed cash runway, supply chain risk, sector risk, average length of customer contract, amongst other things.
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Where a fair value cannot be estimated reliably, the investment is reported at the carrying value at the previous reporting date unless there
is evidence that the investment has since been impaired.
In all cases, valuations are based on the judgement of the Directors after consideration of the above and upon available information
believed to be reliable, which may be affected by conditions in the financial markets. Due to the inherent uncertainty of the investment
valuations, the estimated values may differ significantly from the values that would have been used had a ready market for the investments
existed, and the differences could be material. Due to this uncertainty, the Group may not be able to sell its investments at the carrying
value in these financial statements when it desires to do so or to realise what it perceives to be fair value in the event of a sale. See Notes 28
and 29 for information on unobservable inputs used and sensitivity analysis on investments held at fair value through the profit and loss.
b) Carrying amount of goodwill
Determining whether goodwill is impaired requires an estimation of the recoverable amount of the cash-generating units to which goodwill
is allocated. An impairment review is performed on an annual basis unless there is a trigger event during the period. The recoverable amount
is based on “value in use” calculations, which requires estimates of future cash flows expected from the cash generation unit (CGU) and a
suitable discount rate in order to calculate present value. The key assumptions for the value in use calculations are the discount rate using
pre-tax rates that reflect the current market assessments of the time value of money and risks specific to the CGU. The internal rate of
return (“IRR”) used was based on past performance and experience. The carrying amount of the goodwill as at the statement of financial
position date was £9.7 million. The Group has conducted a sensitivity analysis on the impairment test of the CGU and the carrying value.
A higher discount rate in the range of 15%-20% does not reduce the carrying value of goodwill to less than its recoverable amount.
The CGU was determined to be the fund managers. This is a critical management judgement, as they are responsible for generating deal
flow and working with investee companies creating value and maximising returns for the Group.
c) Control assessment
The Group has a number of entities within its corporate structure and a judgement has been made of which should be consolidated in
accordance with IFRS 10, and which should not. The Group consolidates all entities where it has control over the following: power over the
investee to significantly direct the activities; exposure, or rights, to variable returns from its involvement with the investee, and the ability
to use its power over the investee to affect the amount of the investor’s returns. The Company does not consolidate qualifying investment
companies it controls in accordance with IFRS 10 and instead recognises them as investments held at fair value through the profit and loss.
See Note 3(b) for further details.
d) Business combinations
The Directors have undertaken a detailed assessment of the substance of the transaction through which the Company acquired the
underlying investment vehicles and Esprit Capital Partners LLP and its subsidiaries with reference to the requirements of IFRS 10 and IFRS 3.
Following that assessment based on the judgement of Directors, it has been determined that this transaction is appropriately accounted for
as an acquisition.
The Group acquired the remaining membership interest in Encore Ventures LLP on 10 March 2020. Prior to this, the Group held a membership
interest of 71% and had determined based on its control assessment (see (4)(c) above) that the Group had control over Encore Ventures LLP
and consolidated this entity in accordance with IFRS 10. As a result, the acquisition of the remaining membership interest has been assessed
to be a change in ownership interest and is accounted for as such under IFRS 10. This is not deemed to be a business combination.
5. Change in unrealised gains on investments held at fair value through the profit and loss
Year ended
31 Mar 2020
£’000s
Year ended
31 Mar 2019
£’000s
Change in unrealised gains on investments held at fair value through the profit and loss (Note 16)
40,755
114,715
Notes to the Consolidated Financial Statements continued
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6. Fee income
Revenue is derived solely within the UK, from continuing operations for all years. An analysis of the Group’s revenue is as follows:
Year ended
31 Mar 2020
£’000s
Year ended
31 Mar 2019
£’000s
Management fees
11,213
6,052
Portfolio directors’ fees
42
49
11,255
6,101
7. General administrative expenses
Administrative expenses comprise:
Year ended
31 Mar 2020
£’000s
Year ended
31 Mar 2019
£’000s
General employee and employee related expenses (Note 9)
6,074
4,401
Operating lease rentals (Note 20)
-
246
Legal and professional
1,827
1,241
Travel expenses
349
333
Marketing expenses
741
472
IT expenses
85
127
Other administrative costs
734
954
9,810
7,774
8. Profit from operations
The profit for the year has been arrived at after charging:
Year ended
31 Mar 2020
£’000s
Year ended
31 Mar 2019
£’000s
Audit fees for the consolidated financial statements
146
87
Audit of the accounts of any related undertakings of the Company
75
47
Audit-related assurance services
26
20
Other assurance services
17
16
Total fees payable to the Company’s auditors
264
170
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9. Employee and employee related expenses
Employee benefit expenses (including Directors) comprise:
Year ended
31 Mar 2020
£’000s
Year ended
31 Mar 2019
£’000s
Wages and salaries
4,595
3,447
Defined contribution pension costs
278
354
Benefits (healthcare and life assurance)
127
74
Recruitment costs
473
67
Social security contributions and similar taxes
601
459
General employee and employee related expenses
6,074
4,401
Share-based payment expense arising from company share option scheme
990
1,100
Total employee benefit expenses
7,064
5,501
The monthly average number of persons (including Executive and Non-executive Directors) employed by the Group during the year was:
Year ended
31 Mar 2020
Number
Year ended
31 Mar 2019
Number
Technology Investment
14
14
Corporate functions
19
13
33
27
Corporate functions comprise non-executive directors, finance, marketing, human resources, legal, IT, and administration.
Key management personnel compensation
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the
Group, and are considered to be the Directors of the Company listed on pages 58 to 60. This includes Martin Davis who joined as CEO during
the year, as announced on 4 November 2019.
Year ended
31 Mar 2020
£’000s
Year ended
31 Mar 2019
£’000s
Wages and salaries
2,019
1,317
Short-term non-monetary benefits
9
10
Defined contribution pension costs
163
108
Share-based payment expense
466
631
Social security contributions and similar taxes
287
133
2,944
2,199
The details of individual Directors’ remuneration and pension benefits, as set out in the tables contained in the Remuneration and
Nomination Committee Report on pages 67 to 71, form part of these consolidated financial statements.
Notes to the Consolidated Financial Statements continued
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10. Net finance (expense)/income
Year ended
31 Mar 2020
£’000s
Year ended
31 Mar 2019
£’000s
Interest on leases (Note 20)
(94)
–
Interest and expenses on loans and borrowings (Note 21)
(1,497)
–
Finance costs
(1,591)
–
Net foreign exchange gain
1,234
1,481
Interest income on cash and cash equivalents
289
120
Finance income
1,523
1,601
Net finance (expense)/income
(68)
1,601
11. Income taxes
The charge to tax, which arises in the Group and the corporate subsidiaries included within these financial statements, is:
Year ended
31 Mar 2020
£’000s
Year ended
31 Mar 2019
£’000s
Current tax expense
Current tax on profits for the year
2
–
Adjustments for under/(over) provision in prior years
35
–
Total current tax
37
–
Deferred tax expense
Arising on business combinations (Note 23)
(20)
(11)
Reversal of amounts previously recognised
-
–
Total deferred tax
17
(11)
The UK standard rate of corporation tax is 19% (for the year ending 31 March 2019: 19%). The current tax charge in the year is £37k
(2019: £nil).
The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom
applied to profits for the year are as follows:
Year ended
31 Mar 2020
£’000s
Year ended
31 Mar 2019
£’000s
Profit/(loss) for the year before tax
40,383
111,150
Profit/(loss) on ordinary activities of Group companies before tax
Tax using the Company’s domestic tax rate of 19% (2019: 19%)
7,673
21,119
Expenses not deductible for tax purposes
-
–
Unrealised gains on investments
(7,743)
(21,796)
Other timing differences
87
666
Total tax (credit)/charge for the year
17
(11)
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12. Earnings per share and net asset value
The calculation of basic earnings per share is based on the profit attributable to shareholders and the weighted average number of shares.
When calculating the diluted earnings per share, the weighted average number of shares in issue is adjusted for the effect of all dilutive
share options and awards.
Basic earnings per ordinary share
Profit after tax
£’000s
Weighted
average no. of
shares ‘000
Pence
per share
For the year ended 31 March 2020
39,707
118,013
34
For the year ended 31 March 2019
110,579
96,051
115
Diluted earnings per ordinary share
Profit after tax
£’000s
Weighted
average no. of
shares ‘000
Pence
per share
For the year ended 31 March 2020
39,707
120,961
33
For the year ended 31 March 2019
110,579
100,055
110
Net asset value (“NAV”) per share is based on the net asset attributable to shareholders and the number of shares as at the balance sheet
date. When calculating the diluted earnings per share, the number of shares in issue at balance sheet date is adjusted for the effect of all
dilutive share options and awards.
Net asset value per ordinary share
Net assets
£’000s
No. of shares at
balance sheet
date ‘000
Pence per
share
31 March 2020
659,618
118,918
555
31 March 2019
618,332
117,925
524
Diluted net asset value per ordinary share
Net assets
£’000s
No. of shares at
balance sheet
date ‘000
Pence per
share
31 March 2020
659,618
121,609
542
31 March 2019
618,332
123,325
501
Dividends: There were no Dividends paid out in the year to 31 March 2020 (2019: nil).
13. Share-based payments
Date of Grant
Number of
CSOP options 1
April 2019
Number
of Options
granted in
the period
Number
of Options
(lapsed) in
the year
Number
of Options
(exercised) in
the year
Number
of CSOP
options 31
March 2020
Number of
approved
Options Vesting period
Exercise Price
(pence)
Fair value
per granted
instrument
(pence)
Draper
Esprit
plc 2016
Company
Share
Option
Scheme
(CSOP)
28–Nov–16
1,361,033
(195,842)
1,165,191
84,500
3 Years
355
64.1
28–Nov–16
152,528
152,528
–
3 Years
355
89.3
11–Nov–17
180,000
(20,000)
160,000
25,068
3 Years
354
89.8
28–Nov–17
1,180,364
(25,000)
1,155,364
15,502
3 Years
387
70.9
28–Nov–17
116,016
116,016
–
3 Years
387
97.9
30–Jul–18
1,205,000
(177,500)
1,027,500
–
3 Years
492
152.9
30–Jul–18
102,750
102,750
–
3 Years
492
186.4
12–Feb–19
876,868
(80,000)
796,868
–
3 Years
530
67.8
12–Feb–19
75,000
75,000
–
3 Years
530
95.2
26–Nov–19
-
200,000
200,000
6,424
3 Years
467
71.5
Notes to the Consolidated Financial Statements continued
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On 26 November 2019, 200,000 shares under option were granted to employees of the Group, Directors and Trusts. The exercise price of the
issued options was 467p. 302,500 options lapsed which had exercise prices of 354 pence, 387 pence, 492 pence, 530 pence. 195,842 options
were exercised during the year.
The Black Scholes Option Pricing Model has been used for valuation purposes. All options are settled in shares and volatility is expected to be
in the range of 20-30% based on an analysis of the Company’s and peer groups’ share price. The risk-free rate used was 0.75% and 0.84%
and was taken from zero coupon United Kingdom government bonds on a term consistent with the vesting period.
The share-based payment charge for the year is £990k (year ended 31 March 2019: £1.1 million).
14. Intangible assets
31 March 2020
Goodwill1
£’000s
Customer
contracts2
£’000s
Total
£’000s
Cost
Cost carried forward as at 1 April 2019
9,653
818
10,471
Additions during the year
–
–
–
Cost as at 31 March 2020
9,653
818
10,471
Accumulated amortisation
Amortisation carried forward as at 1 April 2019
–
(341)
(341)
Charge for the year
–
(102)
(102)
Accumulated amortisation as at 31 March 2020
–
(443)
(443)
Net book value:
As at 31 March 2020
9,653
375
10,028
As at 31 March 2019
9,653
477
10,130
31 March 2019
Goodwill1
£’000s
Customer
contracts2
£’000s
Total
£’000s
Cost
Cost carried forward as at 1 April 2018
9,653
818
10,471
Additions during the year
–
–
–
Cost as at 31 March 2019
9,653
818
10,471
Accumulated amortisation
Amortisation carried forward as at 1 April 2018
–
(239)
(239)
Charge for the year
–
(102)
(102)
Accumulated amortisation as at 31 March 2019
–
(341)
(341)
Net book value:
As at 31 March 2019
9,653
477
10,130
As at 31 March 2018
9,653
579
10,232
1
Goodwill of £9.7 million arose on the acquisition of all the capital interests in Esprit Capital Partners LLP, a Venture Capital manager based in the UK, on 15 June 2016
and represents the value of the acquired expertise and knowledge of the fund managers. The Directors have identified the fund managers as the cash-generating
unit (“CGU”) being the smallest group of assets that generates cash inflows independent of cash flows from other assets or groups of assets. The fund managers
are responsible for generating deal flow and working closely with investee companies to create value and maximising returns for the Group. The Group tests goodwill
annually for impairment comparing the recoverable amount using value-in-use calculations and the carrying amount. Value-in-use calculations are based on future
expected cash flows generated by the CGU fee income from management fees over the next 5 years with reference to the most recent financial budget and forecasts.
A 5-year cash flow period was deemed appropriate for the value in use calculation given the patient capital model adopted by the Group. The key assumptions for
the value in use calculations are the discount rate using pre-tax rates that reflect the current market assessments of the time value of money and risks specific to the
CGU. The internal rate of return (“IRR”) used was based on past performance and experience. The discount rate used was 10% and the IRR used was 20%.
2
An intangible asset of £0.8 million was also recognised in respect of the anticipated profit from the participation in Encore Ventures LLP as a consequence of the
acquisition of Esprit Capital Partners LLP.
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15. Investments in associates and related undertakings
Investments in associates
On 24 November 2016, Draper Esprit acquired a 30.77% stake in Elderstreet Holdings Limited (registered office: 20 Garrick Street, London,
United Kingdom, WC2E 9BT), the holding company of Elderstreet Investments Limited with an option to acquire the balance of the
Elderstreet Holdings Limited shares. The initial consideration of £0.26 million has been satisfied by the issue of 73,667 new ordinary shares
of 1 pence each in the capital of the Company. The Group’s share of profits in the year was not material and there were no indications of
impairment at balance sheet date.
Related undertakings
Please see below details of investments held by the Group’s investment companies, where the ownership percentage or partnership interest
exceeds 20%:
Name
Address
Type of share holding
Interest FD category*
at reporting date /
partnership interest
SportPursuit Limited
Unit 1.18, Canterbury Court, Kennington Park, 1-3 Brixton
Road, London, England, SW9 6DE
Ordinary shares
Preference shares
E
Bright Computing Holding B.V.
Kingsfordweg 151, 1043 GR Amsterdam, the Netherlands Ordinary shares
Preference shares
E
Ravenpack Holding AG
Churerstrasse 135, CH-8808 Pfäffikon, Switzerland
Ordinary shares
Preference shares
D
Earlybird IV
c/o Earlybird Venture Capital, Maximilianstr.
14, 80539, München
Partnership interest
27%
Earlybird VI
c/o Earlybird Venture Capital, Maximilianstr.
14, 80539, München
Partnership interest
56.5%
*
Fully diluted interest categorised as follows: Cat A: 0-5%, Cat B: 6-10%, Cat C: 11-15%, Cat D: 16-25%, Cat E: >25%.
Details of the FV of the 16 core companies are detailed as part of the Gross Portfolio Progression table on page 32.
16. Financial assets held at fair value through profit and loss
The Group holds investments through investment vehicles it manages. The investments are predominantly in unlisted securities and are
carried at fair value through the profit and loss. The Group’s valuation policies are set out in Note 4(a) and Note 28. The table below sets out
the movement in the balance sheet value of investments from the start to the end of the year, showing investments made, cash receipts
and fair value movements.
Year ended
31 Mar 2020
£’000s
Year ended
31 Mar 2019
£’000s
As at 1 April
562,061
231,910
Investments made in the year1/2
89,935
226,432
Investments settled in shares1/2
-
309
Loans repaid from underlying investment vehicles
(39,533)
(15,984)
Loans made to underlying investment vehicles1
4,115
4,679
Unrealised gains on the revaluation of investments
40,755
114,715
As at 31 March
657,333
562,061
1
Investments and loans made in the year are amounts the Company has invested in underlying investment vehicles. This is not the equivalent to the total


amount invested in portfolio companies as existing cash balances from the investment vehicles are reinvested.
2
Investments made in the year ended 31 March 2019 include non-cash consideration of £0.3 million. See separate line.
Notes to the Consolidated Financial Statements continued
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17. Property, plant and equipment
31 March 2020
Right of use
assets
£’000s
Leasehold
improvements
£’000s
Computer
equipment
£’000s
Total
£’000s
Cost
Cost carried forward as at 1 April 20191
835
327
57
1,219
Additions during the year
779
353
15
1,147
Cost as at 31 March 2020
1,614
680
72
2,366
Accumulated depreciation
Depreciation carried forward as at 1 April 2019
-
(147)
(28)
(175)
Charge for the year
(306)
(114)
(11)
(431)
Accumulated depreciation as at 31 March 2020
(306)
(261)
(39)
(606)
Net book value:
As at 31 March 2020
1,308
419
33
1,760
As at 31 March 2019
-
180
29
209
31 March 2019
Right of use
assets
£’000s
Leasehold
improvements
£’000s
Computer
equipment
£’000s
Total
£’000s
Cost
Cost carried forward as at 1 April 2018
–
285
41
326
Additions during the year
–
42
16
58
Cost as at 31 March 2019
–
327
57
384
Accumulated depreciation
Depreciation carried forward as at 1 April 2018
–
(80)
(17)
(97)
Charge for the year
–
(67)
(11)
(78)
Accumulated depreciation as at 31 March 2019
–
(147)
(28)
(175)
Net book value:
As at 31 March 2019
–
180
29
209
As at 31 March 2018
–
205
24
229
For depreciation and further information on right-of-use assets, please see the leases note – Note 20.
1
1 April 2019 figure includes adjustment for IFRS 16 conversion under right of use assets - please see note 20 for further details.
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18. Acquisition of subsidiaries
Encore Ventures LLP
The Group acquired the remaining economic and beneficial membership interest in Encore Ventures LLP on 10 March 2020. Prior to this, the
Group held a membership interest of 71%. This resulted in a change in ownership interest which did not result in a loss of control and has
been accounted for in accordance with IFRS 10.
Consideration for the remaining interest in Encore Ventures was cash to the amount of £4.0 million. Pursuant to the Acquisition Agreement
relating to the sale and purchase of certain membership interests in Encore Ventures LLP as well as the associated Subscription Agreements
also dated 10 March 2020, Draper Esprit Plc issued 796,812 1p ordinary shares immediately subscribed to by those partners selling their
interest in Encore Ventures LLP. The fair value of the equity shares issued was based on the market value of Draper Esprit plc’s traded shares
on the 10 March 2020 and amounted to £4.0 million.
As a result of this transaction, the balance of the non-controlling interest reported in the consolidated statement of financial position as at
31 March 2020 is nil (31 March 2019: £0.2 million). The profit attributable to non-controlling interest for the period to 10 March 2020 is £0.7
million and is reflected in the consolidated statement of comprehensive income for the year ended 31 March 2020 (year to 31 March 2019:
£0.6 million).
19. Trade and other receivables
31 Mar 2020
£’000s
31 Mar 2019
£’000s
Trade receivables^
2,669
424
Other receivables and prepayments
1,358
716
Loans made to related investment vehicles (Note 31)
3,692
-
7,719
1,140
^
£2.2 million of increase relates to accrued management fee.
The ageing of trade receivables at reporting date is as follows:
31 Mar 2020
£’000s
31 Mar 2019
£’000s
Not past due
242
268
Past due 1-30 days
45
5
Past due 31-60 days
34
9
More than 60 days
2,348
142
2,669
424
The maximum exposure to credit risk of the receivables at the reporting date is the fair value of each class of receivable mentioned above.
The Group does not hold any collateral as security.
20. Leases
Lessee – Real Estate Leases
The Group leases office buildings in London for use by its staff. The Group also has offices in Cambridge and in Dublin, however these
contracts are classified as service contracts and not leases. Information about leases for which the Group is a lessee is presented below. The
Group has applied IFRS 16 using the modified retrospective approach and therefore the comparative information has not been restated and
continues to be reported under IAS 17 and IFRIC 4. One office building lease was identified as an operating lease previously and disclosed in
the notes to the financial statements in the Draper Esprit plc annual report dated 31 March 2019. A new lease commenced during the current
period, relating to the 3rd floor of 20 Garrick Street, WC2E 9BT.
The Group leases IT equipment such as printers for use by staff. The Group has elected to apply the recognition exemption for leases of low
value to these leases.
Notes to the Consolidated Financial Statements continued
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Right-of-use assets
Property
£’000s
Total
£’000s
Balance at 31 March 2019
–
–
Transition to IFRS 16 – recognition of right-of-use asset in respect of existing leases
835
835
Balance at 1 April 2019
835
835
Additions during the period
779
779
Depreciation charge for the period
(306)
(306)
Balance at 31 March 2020
1,308
1,308
Lease liabilities
Property
£’000s
Total
£’000s
Maturity analysis – contractual undiscounted cash flows
Less than one year
404
404
One to five years
1,110
1,110
More than five years
–
–
Total undiscounted lease liabilities at 31 March 2020
1,514
1,514
Property
£’000s
Total
£’000s
Lease liabilities included in the consolidated statement of financial position
Current
358
358
Non-current
975
975
Total lease liabilities at 31 March 2020
1,333
1,333
As at 31 March 2019, no lease liabilities were recognised on the consolidated statement of financial position. As noted above, the Group
recognised one operating lease under IAS 17. See note 23 to the annual report for Draper Esprit plc as at 31 March 2019 for further details.
As at 1 April 2019, in accordance with the transition to IFRS 16, lease liabilities of £0.8 million were recognised in respect of this lease. A
further lease commenced during the period relating to the 3rd floor of 20 Garrick Street, London. Lease liabilities in respect of this lease were
recognised in accordance with IFRS 16 in the period.
Amounts recognised in the consolidated statement of comprehensive income
Year ended
31 March 2020
£’000s
Year ended
31 March 2019
£’000s
Interest on lease liabilities
94
–
Depreciation charge for the period on right-of-use assets
306
–
Expenses relating to short-term leases
–
–
Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets
5
–
Payments of £330k in respect of rental payments paying down the lease liability have been recognised in the consolidated statement of cash
flows. A contribution for a rent-free period on the 3rd floor of 20 Garrick Street of £164k has been recognised in the consolidated statement
of cash flows for the year ending 31 March 2020. These appear net in the consolidated statement of cash flows for the year ending 31 March
2020.
Under IAS 17, one lease in respect of the 2nd floor of 20 Garrick Street was recognised as an operating lease – please see the notes to the
Draper Esprit plc annual report dated 31 March 2019 for further information. This lease was the only lease identified at the beginning of this
period. A further lease commenced during the period in respect of the 3rd floor of 20 Garrick Street and can be seen in the additions to
right-to-use assets above. Under IAS 17, expenses of £0.2 million were recognised in the consolidated statement of comprehensive income in
respect of operating lease rentals in the year ending 31 March 2019.
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21. Loans and borrowings
In June 2019 the Company entered into a revolving credit facility agreement with Silicon Valley Bank and Investec (together the “Financiers”)
of £50.0 million over a 3-year term to provide financial flexibility and to fund the future growth plans of investee companies. The Company
incurred costs of £0.5 million with respect to this facility which are presented within loans and borrowings on the statement of financial
position and are amortised over the life of the facility (3 years). All interest-related charges are reported in profit or loss are included within
finance costs or finance income. The bank loans are secured on agreed assets of the Group within the asset class of investments, updated
as agreed with the Financiers from time to time, and are subject to customary financial and non-financial conditions with which the Group
must comply.
The new facility agreement introduced financial and non-financial covenants.
a.
There must be a minimum of 10 core investments at all times (core investments are not defined in the same way as in this report as it is
more broadly defined);
b.
The ratio of the NAV of all investments (as defined in the agreement) to original investment cost should not be less than 1.1:1.0 at any
time; and
c.
The ratio of the NAV (as defined in the agreement) plus amounts in the collateral account to financial indebtedness (as defined in the
agreement) should not be less than 10:1 at any time.
In addition, the borrowing base (as defined in the agreement) must exceed the facility amount.
As collateral for interest payments, an amount equal to the aggregate amount of interest costs due for the coming 6 months, all being
equal, must be held in an Interest Reserve Account at all times. The balance of this at 31 March 2020 was £1.9 million and is reflected on the
consolidated statement of financial position as restricted cash.
The debt facility is repayable on maturity (June 2022) but may become repayable earlier if certain conditions are not met. An increase of the
revolving credit facility by £10.0 million to £60.0 million was agreed post year-end. Following this, the debt facility is repayable on maturity in
June 2023.
As at 31 March 2020, the Company has drawn down £45.0 million of the £50.0 million facility. The drawn down amount of the £45.0 million
is recognised in the consolidated statement of financial position under non-current liabilities net of the arrangement and agent fee balance
of £0.4 million.
31 Mar 2020
£’000s
31 Mar 2019
£’000s
Bank loan senior facility amount
50,000
–
Interest rate
BOE base rate + 6.75% / 7.50% floor
–
Drawn at balance sheet date
45,000
–
Arrangement fees
(364)
–
Loan liability balance
44,636
–
Undrawn facilities at balance sheet date
5,000
–
22. Trade and other payables
31 Mar 2020
£’000s
31 Mar 2019
£’000s
Trade payables
(739)
(239)
Other taxation and social security
(280)
(290)
Other payables
(164)
(481)
Accruals and deferred income
(3,855)
(3,949)
(5,038)
(4,959)
All trade and other payables are short-term.
Notes to the Consolidated Financial Statements continued
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23. Deferred tax
Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 19% (2019: 19%). The movement on
the deferred tax account is shown below:
31 Mar 2020
£’000s
31 Mar 2019
£’000s
Arising on business combination
(75)
(89)
Arising on co-invest and carried interest
(414)
(599)
Other timing differences
(122)
57
At 31 March
(611)
(631)
Deferred tax arising on business combination is subject to amortisation within the consolidated statement of comprehensive income.
24. Share capital and share premium
Ordinary share capital
31 March 2020 – Allotted and fully paid
Number
Pence
£’000s
At the beginning of the year
117,925,470
1
1,179
Issue of share capital during the year1
195,842
1
2
Issue of share capital during the year2
796,812
1
8
At the end of the year
118,918,124
1
1,189
1
Between 24 December 2019 and 21 February 2020, 195,842 new 1p ordinary shares were issued in association with share options being exercised.
2
On 10 March 2020, as part of the acquisition agreement relating to the remaining interest in Encore Ventures LLP (see note 18) it was agreed that the Company would
issue 796,812 new ordinary shares at 502p.
31 March 2019 – Allotted and fully paid
Number
Pence
At the beginning of the year
71,611,773
1
Issue of share capital during the year for cash1/2
46,248,877
1
Issue of share capital during the year as consideration for investment purchase3
64,820
1
At the end of the year
117,925,470
1
1
On 14 June 2018, the Company raised gross proceeds of approximately £115.0 million at an issue price of 420 pence per share by way of the conditional placing of
20,238,095 new ordinary shares and a subscription of 7,142,857 new ordinary shares.
2
On 8 February 2019, the Company raised gross proceeds of approximately £100.0 million at an issue price of 530 pence per share by way of the conditional placing of
18,867,925 new ordinary shares.
3 On 4 July 2018, the Company raised gross proceeds of £0.3 million at an issue price of 478 pence per share by way of the placing of 64,820 new ordinary.
Share premium
Allotted and fully paid
Year ended
31 Mar 2020
£’000s
Year ended
31 Mar 2019
£’000s
At the beginning of the year
395,783
188,229
Premium arising on the issue of ordinary shares^
4,983
215,035
Equity issuance costs
(40)
(7,481)
At the end of the year
400,726
395,783
^
The movement on share premium during the year has arisen as a result of 195,842 ordinary shares issued in association with share options being exercised during the
year, and the issue of 796,812 shares of ordinary shares at 502 pence in association with the transaction to purchase the additional interest in Encore Ventures LLP
(see note 18).
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25. Merger relief reserve
In accordance with the Companies Act 2006, a Merger Relief Reserve of £13.1 million (net of the cost of share capital issued of £80k) was
created on the issue of 4,392,332 ordinary shares for 300 pence each in Draper Esprit plc as consideration for the acquisition of 100% of the
capital interests in Esprit Capital Partners LLP on 15 June 2016.
26. Retirement benefits
The Draper Esprit Group makes contributions to personal pension schemes set up to benefit its employees. The Group has no interest in
the assets of these schemes and there are no liabilities arising from them beyond the agreed monthly contribution for each employee or
member that is included in employment costs in the profit and loss account as appropriate.
27. Financial assets and liabilities
The description of each category of financial asset and financial liability and the related accounting policies are shown below. The carrying
amounts of financial assets and financial liabilities in each category are as follows:
Designated
FVTPL
£’000s
Amortised cost
£’000s
Total
£’000s
31 March 2020
Financial assets
657,333
-
657,333
Long-term financial assets
657,333
-
657,333
Trade and other receivables
-
4,027
4,027
Loans to related investment vehicles
-
3,692
3,692
Cash and cash equivalents
-
32,255
32,255
Restricted cash
-
1,883
1,883
Short-term financial assets
-
41,857
41,857
Total financial assets
657,333
41,857
699,190
Financial liabilities
Loans and borrowings
-
(44,636)
(44,636)
Lease liabilities
-
(975)
(975)
Long-term financial liabilities
-
(45,611)
(45,611)
Trade and other payables
-
(5,038)
(5,038)
Loans and borrowings
-
-
-
Lease liabilities
-
(358)
(358)
Short-term financial liabilities
-
(5,396)
(5,396)
Total financial liabilities
-
(51,007)
(51,007)
Designated
FVTPL
£’000s
Amortised cost
£’000s
Total
£’000s
31 March 2019
Financial assets
562,061
–
562,061
Long-term financial assets
562,061
–
562,061
Trade and other receivables
–
1,140
1,140
Cash and cash equivalents
–
50,358
50,358
Short-term financial assets
–
51,498
51,498
Total financial assets
562,061
51,498
613,559
Financial liabilities
Trade and other payables
–
(4,959)
(4,959)
Total financial liabilities
–
(4,959)
(4,959)
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Notes to the Consolidated Financial Statements continued
28. Fair value measurements
This section should be read with reference to Note 4(a) and Note 16. The Group classifies financial instruments measured at fair value
through profit or loss according to the following fair value hierarchy:
(a) Level 1: inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date;
(b) Level 2: inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or
indirectly; and
(c) Level 3: inputs are unobservable inputs for the asset or liability.
All investments are held at fair value through profit or loss are classified as Level 3 in the fair value hierarchy. There were no transfers
between levels 1, 2, and 3 during the period.
Significant unobservable inputs for Level 3 valuations
The fair value of unlisted securities is established with reference to the International Private Equity and Venture Capital Valuation
Guidelines (“IPEV Guidelines”). In line with the IPEV Guidelines, the Group may base valuations on earnings or revenues where applicable,
market comparables, price of recent investments in the investee companies, or on net asset values. An assessment will be made at each
measurement date as to the most appropriate valuation methodology.
See Note 4(a) where valuation policies are discussed in more detail.
Financial instruments, measured at fair value, categorised as Level 3 within the fair value hierarchy can be split into 3 main valuation
techniques. Valuation techniques can be categorised as based on last round price (calibrated with reference to market performance and
technical/product milestones since the round and the companies trading performance relative to the expectations of the round), revenue-
multiple or at NAV of the underlying fund (adjusted where relevant). As at 31 March 2020, financial instruments measured using last round
price valuation methodology were £231.7 million (including those at a discount) (as at 31 March 2019: £295.0 million). As at 31 March 2020,
financial instruments measured using revenue-multiple valuation methodology were £401.3 million (as at 31 March 2019: £217.8 million). As
at 31 March 2020, financial instruments measured at NAV of the underlying fund (adjusted where relevant) were £68.1 million (31 March
2019: £79.2 million).
Each portfolio company will be subject to individual assessment. Where the Group invests in fund of fund investments, the value of the
portfolio will be reported by the fund to the Group. The Group will ensure that the valuations comply with the Group policy.
The valuation multiple is the main assumption applied to valuation based on a revenue-multiple methodology. The multiple is derived
from comparable listed companies or relevant market transaction multiples. Companies in the same industry and geography, and, where
possible, with a similar business model and profile are selected and then adjusted for factors including liquidity risk, growth potential and
relative performance. They are also adjusted to represent our longer-term view of performance through the cycle or our existing assumption.
The portfolio we have is diversified across sectors and geographies and the companies within our core portfolio holdings which have
valuations based on revenue-multiples have an average multiple of 3.2x.
If the multiple used to value each unquoted investment valued on a revenue-multiples basis as at 31 March 2020 were to decrease by 10%,
the investment portfolio would decrease by £40.1 million (31 March 2019: £21.8 million). If the multiple increases by 10% then the investment
portfolio would increase by £40.1 million (31 March 2019: £21.8 million).
If the multiple used to value each unquoted investment valued on a revenue-multiples basis as at 31 March 2020 were to decrease by
20% the investment portfolio would decrease by £80.3 million (31 March 2019: £43.6 million). If the multiple increases by 20% then the
investment portfolio would increase by £80.3 million (31 March 2019: £43.6 million).
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29. Financial instruments risk
Financial risk management
Financial risks are usually grouped by risk type: market, liquidity and credit risk. These risks are discussed in turn below.
Market risk – Foreign currency
A significant portion of the Group’s investments and cash deposits are denominated in a currency other than Pound Sterling. The principal
currency exposure risk is due to changes in the exchange rate between GBP and USD/EUR. Presented below is an analysis of the theoretical
impact of 10% volatility in the exchange rate on shareholder equity.
Theoretical impact of a change in the exchange rate of +/-10% between GBP and USD/EUR would be as follows:
Foreign currency exposures – Investments
31 March 2020
£’000s
31 March 2019
£’000s
Investments
557,567
412,146
10% decrease in GBP*
619,519
456,632
10% increase in GBP**
506,879
375,948
*
£376.5 million (2019: £305.0 million) denominated in USD and £242.9 million (2019: £151.0 million) denominated in EUR.
** £308.1 million (2019: £250.0 million) denominated in USD and £198.8 million (2019: £126.0 million) denominated in EUR.
Certain cash deposits held by the Group are denominated in Euros and US Dollars. The theoretical impact of a change in the exchange rate
of +/-10% between GBP and USD/EUR would be as follows:
Foreign currency exposures – Cash
31 March 2020
£’000s
31 March 2019
£’000s
Cash denominated in EUR
6,976
10,522
10% decrease in EUR:GBP
6,278
9,470
10% increase in EUR:GBP
7,673
11,574
Cash denominated in USD
3,627
9,746
10% decrease in USD:GBP
3,264
8,771
10% increase in USD:GBP
3,990
10,721
The combined theoretical impact on shareholders’ equity of the changes to revenues, investments and cash and cash equivalents
of a change in the exchange rate of +/-10% between GBP and USD/EUR would be as follows:
Foreign currency exposures – equity
31 March 2020
£’000s
31 March 2019
£’000s
Shareholders’ Equity
659,618
618,332
10% decrease in EUR:GBP/USD:GBP
593,656
556,499
10% increase in EUR:GBP/USD:GBP
725,580
680,166
Market risk – Price risk
Market price risk arises from the uncertainty about the future prices of financial instruments held in accordance with the Group’s investment
objectives. It represents the potential loss that the Group might suffer through holding market positions in the face of market movements,
which have been heightened due to COVID-19.
The Group is exposed to equity price risk in respect of equity rights and investments held by the Group and classified on the balance sheet as
financial assets at fair value through profit or loss(Note 27). These equity rights are held in unquoted high growth technology companies and
are valued by reference to revenue or earnings multiples of quoted comparable companies, last round price, or NAV of underlying fund - as
discussed more fully in Note 4(a). These valuations are subject to market movements.
Notes to the Consolidated Financial Statements continued
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The Group seeks to manage this risk by routinely monitoring the performance of these investments, employing stringent investment
appraisal processes.
Theoretical impact of a fluctuation of +/-10% would have the following impact:
£’000s
Revenue-
multiple
NAV of
underlying fund
Last round price
As at 31 March 2020
40,131
6,810
23,169
As at 31 March 2019
21,781
7,921
29,496
We further flexed by 20% given the volatility resulting from the COVID-19 pandemic. Theoretical impact of a fluctuation of +/- 20% would
have the following impact:
£’000s
Revenue-
multiple
NAV of
underlying fund
Last round price
As at 31 March 2020
80,263
13,621
46,338
As at 31 March 2019
43,562
15,842
58,993
Liquidity risk
Cash and cash equivalents comprise cash and short-term bank deposits with an original maturity of 3 months or less held in readily accessible
bank accounts. The carrying amount of these assets is approximately equal to their fair value. Responsibility for liquidity risk management
rests with the Board of Draper Esprit plc, which has established a framework for the management of the Group’s funding and liquidity
management requirements. The Group manages liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and
actual cash flows. The utilisation of the loan facility and requirement for utilisation requests is monitored as part of this process.
Lease liabilities fall due over the term of the lease – see Note 20 for further details. The debt facility has a term of 3 years – for further details,
see Note 20. All other Group payable balances at balance sheet date and prior periods fall due for payment within 1 year.
As part of our seed fund of funds strategy, we make commitments to funds to be drawn down over the life of the fund. Projected drawdowns
are monitored as part of the monitoring process above. For further details see Note 32.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss. The Group is exposed
to this risk for various financial instruments; for example, by granting receivables to customers and placing deposits. The Group’s trade
receivables are amounts due from the investment funds under management, or underlying portfolio companies. The Group’s maximum
exposure to credit risk is limited to the carrying amount of trade receivables and cash at bank and in hand at 31 March, as summarised below;
Classes of financial assets impacted by credit risk, carrying amounts
31 March 2020
£’000s
31 March 2019
£’000s
Trade receivables
2,669
424
Loan to related investment vehicle
3,692
-
Cash at bank and in hand
32,255
50,358
Restricted cash
1,883
40,499
50,782
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The Directors consider that all the above financial assets, which are not impaired for each of the reporting dates under review, are of good
credit quality. In respect of trade and other receivables, the Group is not exposed to significant risk as the principal customers are the
investment funds managed by the Group, and in these the Group has control of the banking as part of its management responsibilities.
Investments in unlisted securities are held within limited partnerships for which the Group acts as manager, and consequently the Group
has responsibility itself for collecting and distributing cash associated with these investments. The credit risk of amounts held on deposit
is limited by the use of reputable banks with high quality external credit ratings and as such is considered negligible. The majority of cash is
held with institution with an A rating at year ended 31 March 2020.
Capital management
The Group’s objectives when managing capital are to:
(a) safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for
other stakeholders, and
(b) maintain an optimal capital structure.
The Group is funded through equity and debt at the balance sheet date. Please refer to Note 21 for further information on the revolving
credit facility.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares or sell assets to manage cash.
Interest rate risk
The Group’s interest rate risk arises from borrowings on the £50.0 million loan facility with Silicon Valley Bank and Investec, which was
entered into in June 2019. Prior to the year ending 31 March 2020, the Group did not have any borrowings. The Group’s borrowings are
denominated in GBP and are carried at amortised cost. Six drawdowns totalling £50.0 million were made on the facility during the year
at an interest rate of 7.5% (£5.0 million of which has been repaid). Future drawdowns may be subject to a different interest rate. The facility
agreement has an interest rate calculated with reference to the Bank of England base rate (currently 0.10%) with a Margin of 6.75%. The
agreement has an interest rate floor of 7.5%. As such, if the base rate increases, the interest charged on future drawdowns will increase.
If the Bank of England base rate had been 1.0% higher during the year to 31 March 2020 the difference to the consolidated statement of
comprehensive income would have been an increase in finance costs of £0.1 million. If the Bank of England base rate had been 1.0% higher
during the year to 31 March 2020 the difference to the consolidated statement of cash flows would have been an increase in expenditure of
£0.1 million.
30. Alternative Performance Measures (“APM”)
The Group has included the APMs listed below in this Annual Report as they highlight key value drivers for the Group and, as such, have
been deemed by the Group’s management to provide useful additional information to readers of the Annual Report. These measures are not
defined by IFRS and should be considered in addition to IFRS measures.
Gross Portfolio Value
The Gross Portfolio Value is the gross fair value of the Group’s investment holdings before deductions for the fair value of carry liabilities and
any deferred tax. The Gross Portfolio Value is subject to deductions for the fair value of carry liabilities and deferred tax to generate the net
investment value, which is reflected on the consolidated statement of financial position as financial assets held at fair value through profit
or loss. Please see page 43 for a reconciliation to the net investment balance.
Notes to the Consolidated Financial Statements continued

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31. Related party transactions
The Group may require that one of its members be appointed to the board of a portfolio company in a non-executive role. In certain cases,
an administration fee is charged to the portfolio company for the provision of Director services. Fees of £44,000 (2019: £26,957) have been
invoiced during the current year. At year-end, there was a balance of £6,000 outstanding (2019: £16,357). Draper Esprit does not exercise
control or management through any of these non-executive positions.
During the year, £1,200,000 (2019: £840,000) was invoiced from Draper Esprit plc to Encore Ventures LLP for overheads, at year-end a
balance of £100,000 (2019: £70,000) remained outstanding.
During the year £368,332 (2019: £53,737) was invoiced and received from Draper Esprit VCT for overheads.
During the period, the Company loaned £3.7 million to Esprit Capital Fund No 1 & No 2 LP on an arm’s length basis. The loan is repayable on
demand and interest is charged at 10% per annum. Interest of £187,152 has been accrued on the loan to 31 March 2020.
During the year, the Group purchased the remaining interest in Encore Ventures LLP – see note 18 for further details.
Unconsolidated structured entities
The Group has exposure to a number of unconsolidated structured entities as a result of its venture capital investment activities.
The Group invests funds via a number of limited partnerships. These are controlled by the Group and not consolidated, but they are held as
investments at fair value through the profit and loss on the consolidated balance sheet in line with IFRS 10 (See Note 3b for further details).
The list of these investment companies and limited partnerships can also be seen in Note 3b. Within these limited partnerships, there
are commitments made to fund of funds investments that are disclosed in Note 32 below. The material assets and liabilities within these
investment companies are the investments, which are held at FVTPL in the consolidated accounts.
A Strategic Partnership Agreement was entered into in the previous financial year with Earlybird. Total exposure to the Group is £187.3 million
of NAV (2019: £144.6 million) and further commitments of £28.5 million (2019: £44.8 million). Following the year-end a further drawdown of
£3.3 million was called reducing the undrawn commitment to £25.2 million.
The Group also co-invests or historically co-invested with a number of limited partnerships (See Note 3b for further details). The exposure to
these entities is immaterial.
32. Capital commitments
At 31 March 2020, the Group was committed to £39.1 million in relation to investments in fund of funds vehicles (31 March 2019: £33.9
million). As at 31 March 2020, £13.3 million of this has been drawn. In the summer of 2018, the Company entered into a Strategic Partnership
Agreement with Earlybird to share deal flow and resources to co-invest in high growth technology companies across Europe. The first stage
of this partnership included a 50% commitment in EB VI of £76.0 million to 2022, of which £56.4 million has been deployed to date (31
March 2019: £31.2 million).
33. Ultimate controlling party
The Directors of Draper Esprit plc do not consider there to be a single ultimate controlling party of the Group.
34. Post balance sheet events

· Extended the term of the revolving credit facility with Silicon Valley Bank and Investec by 1 year to 2023 and increased its size by £10.0
million to £60.0 million.

· Zynga Inc. announced their agreement to acquire Peak Games for $1.8bn, which will, subject to closing, indicate a fair value holding
for Draper Esprit of approximately £80.0 million via Earlybird IV (actual returns are subject to completion conditions, including FX
movements, and acquirer share price movement with respect to the stock component).

· Simon Cook will be stepping down from the Board from 1 July 2020. Simon will remain with the Company as founding partner and focus
on generating new deals and will continue as a board member for a number of portfolio companies.
Company Statement of Financial Position
as at 31 March 2020
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Assets
Note
Year ended
31 Mar 2020
£’000s
Year ended
31 Mar 2019
£’000s
Non-current assets
Financial assets held at fair value through the profit and loss
6
631,403
532,897
Investments in subsidiary undertaking
7
13,177
13,177
Investments in associates
7
258
258
Property, plant and equipment
8, 10
1,760
209
Total non-current assets
646,598
546,541
Current assets
Trade and other receivables
9
5,445
993
Cash and cash equivalents
31,165
48,568
Restricted cash
11
1,883
–
Total current assets
38,493
49,561
Current liabilities
Trade and other payables
12
(3,898)
(7,851)
Loans and borrowings
11
-
–
Lease liabilities
10
(358)
–
Total current liabilities
(4,256)
(7,851)
Non-current liabilities
Loans and borrowings
11
(44,636)
–
Lease liabilities
10
(975)
–
Total non-current liabilities
(45,611)
–
Total liabilities
(49,867)
(7,851)
Net assets
635,224
588,251
Equity
Share capital
13
1,189
1,179
Share premium account
13
400,726
395,783
Merger relief reserve
13
13,097
13,097
Share-based payments reserve arising from company options scheme
14
2,339
1,713
Share-based payments reserve arising from acquisition of subsidiary
10,823
10,823
Retained earnings
207,050
165,656
Total equity
635,224
588,251
The Directors have taken advantage of the exemption available under Section 408 of the Companies Act 2006 and have not presented a
statement of comprehensive income for the Company. The Company’s profit for the year ended 31 March 2020 was £41.4 million (31 March
2019: £97.2 million).
These financial statements on pages 117 to 125 were approved by the Board of Directors on 26 June 2020 and signed on its behalf by
B.D. Wilkinson
Chief Financial Officer
Company registration number: 09799594
Company Statement of Changes in Equity
for the year ended 31 March 2020
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Share capital
£’000s
Share
premium
£’000s
Merger relief
reserve
£’000s
Share-based
payments
reserve
resulting
from
company
share option
scheme
£’000s
Share-based
payments
resulting
from
acquisition
of subsidiary
£’000s
Retained
earnings
£’000s
Total equity
£’000s
Balance as at 31 March 2018 and at 1 April 2018
716
188,229
13,097
613
8,834
68,442
279,931
Comprehensive income for the year
Profit for the year
–
–
–
–
–
97,214
97,214
Total comprehensive income for the year
Contributions by and distributions to the owners:
Issue of share capital (Note 13)
463
–
–
–
–
–
463
Share premium (Note 13)
–
207,554
–
–
–
–
207,554
Share-based payment arising from acquisition of
subsidiary
–
–
–
–
1,989
–
1,989
Share-based payment (Note 14)
–
–
–
1,100
–
–
1,100
Balance as at 31 March 2019 and at 1 April 2019
1,179
395,783
13,097
1,713
10,823
165,656
588,251
Comprehensive income for the year
Profit for the year
–
–
–
–
–
41,394
41,394
Total comprehensive income for the year
Contributions by and distributions to the owners:
Issue of share capital (Note 13)
10
–
–
–
–
–
10
Share premium (Note 13)
–
4,943
–
–
–
–
4,943
Share-based payment (Note 14)
–
–
–
990
–
–
990
Share-based payment – exercised
during the year (Note 14)
-
-
-
(364)
-
-
(364)
Balance at 31 March 2020
1,189
400,726
13,097
2,339
10,823
207,050
635,224
Notes to the Company Financial Statements
for the year ended 31 March 2020
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1. Basis of preparation
These financial statements have been prepared in accordance with Financial Reporting Standard 101, Reduced Disclosure Framework,
and the Companies Act 2006 as applicable to companies using FRS 101. FRS 101 sets out a reduced disclosure framework for a “qualifying
entity” as defined in the standard which addresses the financial reporting requirements and disclosure exemptions in the individual financial
statements of qualifying entities that otherwise apply the recognition, measurement and disclosure requirements of EU-adopted IFRS.
The financial statements have been prepared on a going concern basis and under the historical cost convention modified by revaluation of
financial assets and financial liabilities held at fair value through profit and loss. A summary of the more important Company accounting
policies, which have been consistently applied except where noted, is set out below.
The following exemptions from the requirements of IFRS have been applied in the preparation of these financial statements, in accordance
with FRS 101:

· paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based Payment (details of the number and weighted average exercise prices of share
options, and how the fair value of goods or services received was determined);

·
IAS 7 Statement of Cash Flows;

·
the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into and between two or more
members of a group;

·
IAS 1 Presentation of Financial Statements and the following paragraphs of IAS 1: (d) (statement of cash flows), 16 (statement of
compliance with all IFRS), 111 (cash flow statement information), and 134-136 (capital management disclosures).
In the current year, the new Standard below has been adopted, which has affected the amounts reported in these financial statements:
i.
IFRS 16 Leases – From 1 April 2019, the Company has adopted IFRS 16 Leases, which became effective for annual periods beginning on
or after 1 January 2019. The Company has applied IFRS 16 using the modified retrospective approach and therefore the comparative
information has not been restated and continues to be reported under IAS 17 and IFRIC 4. The details of accounting policies under IAS
17 and IFRIC 4 are disclosed in the Draper Esprit plc annual report for the year ended 31 March 2019. See further details in significant
accounting policies of the consolidation financial statements above – Note 3.
2.
Investments in subsidiary undertakings
Unlisted investments are held at cost less any provision for impairment.
3. Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments
maturing within 90 days from the date of acquisition that are readily convertible into known amounts of cash and which are subject to an
insignificant risk of changes in value. No cash equivalents are held in the current or prior years.
As collateral for interest payments on the credit facility, an amount equal to the aggregate amount of interest costs due for the coming six
months, all being equal, must be held in an Interest Reserve Account at all times. The balance of this at 31 March 2020 was £1.9 million and
is reflected on the statement of financial position as restricted cash. See note 21 of the consolidated financial statements for further details.
4. Property, plant and equipment
Fixtures and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Depreciation is recognised to
write off the cost or valuation of assets less their residual values over their useful lives, using the straight-line method, on the following basis:
Leasehold improvements
– over the term of the lease
Fixtures and equipment
– 33% p.a. straight line
Computer equipment
– 33% p.a. straight line
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting year, with the effect of any
changes in estimate accounted for on a prospective basis.
Notes to the Company Financial Statements continued
for the year ended 31 March 2020
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5. Results for the Parent Company
The auditors’ remuneration for audit services and other services is disclosed in Note 8 to the consolidated financial statements.
6. Investments held at fair value through the profit and loss
Name of subsidiary undertaking
Registered office
Activity
Holding
Country
31 March 2020
Fair value
£’000
31 March 2019
Fair value
£’000
Draper Esprit (Ireland) Limited
32 Molesworth Street, Dublin 2, Ireland.
Investment company
100%
Ireland
553,254
451,556
Esprit Investments (1) (B) LP
20 Garrick Street, London, WC2E 9BT
Limited Partnership
100%
England
16,537
37,699
Esprit Investments (2) (B) LP
20 Garrick Street, London, WC2E 9BT
Limited Partnership
100%
England
61,612
43,642
Totals
631,403
532,897
31 March 2020
£’000s
31 March 2019
£’000s
As at 1 April
532,897
213,625
Investments made in the year1/2
89,935
226,432
Investments settled in shares2
-
309
Loans repaid from underlying investment vehicles1
(35,418)
(11,305)
Unrealised gains on the revaluation of investments
43,989
103,836
As at 31 March
631,403
532,897
1
Investments and loans made in the year are amounts the Company has invested in underlying investment vehicles. This is not the equivalent to the total amount

invested in portfolio companies, as existing cash balances from the investment vehicles are reinvested
2
Investments made in the year ending 31 March 2019 include non-cash consideration of £0.3 million. See separate line above for “Investments settled in shares”.

See Notes 3 and 4 in the consolidated financial statements for the accounting policies in respect of investments held at fair value through
the profit and loss.
7.
Investments in subsidiary undertakings and associates
On 15 June 2016, the Company acquired the entire capital interests of Esprit Capital Partners LLP for £13.2 million, which was satisfied in
shares as explained in Note 18 of the consolidated financial statements and is held at cost on the Company’s balance sheet.
On 26 of November 2016, the Company acquired 30.77% of the capital interests in Draper Esprit VCT for £0.26 million as explained in Note 15
of the consolidated financial statements, which is held at cost on the Company’s balance sheet.
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8. Property, plant and equipment
31 March 2020
Right of use
assets
£’000s
Leasehold
improvements
£’000s
Computer
equipment
£’000s
Total
£’000s
Cost
Cost carried forward as at 1 April 2019^
835
327
49
1,211
Additions during the year
779
353
23
1,155
Cost as at 31 March 2020
1,614
680
72
2,366
Accumulated depreciation
Depreciation carried forward as at 1 April 2019
-
(147)
(20)
(167)
Charge for the year
(306)
(114)
(19)
(439)
Accumulated depreciation as at 31 March 2020
(306)
(261)
(39)
(606)
Net book value
As at 31 March 2020
1,308
419
33
1,760
As at 31 March 2019
-
180
29
209
31 March 2019
Right of use
assets
£’000s
Leasehold
improvements
£’000s
Computer
equipment
£’000s
Total
£’000s
Cost
Cost carried forward as at 1 April 2018
-
285
31
316
Additions during the year
-
42
18
60
Cost as at 31 March 2019
-
327
49
376
Accumulated depreciation
Depreciation carried forward as at 1 April 2018
-
(80)
(9)
(89)
Charge for the year
-
(67)
(11)
(78)
Accumulated depreciation as at 31 March 2019
-
(147)
(20)
(167)
Net book value
As at 31 March 2019
-
180
29
209
As at 31 March 2018
-
205
22
227
^
1 April 2019 figure includes adjustment for IFRS 16 conversion under right of use assets - please see note 10 below for further details.
No ‘fixtures and equipment’ are held by the Company.
9. Trade and other receivables due within one year
31 Mar 2020
£’000s
31 Mar 2019
£’000s
Trade receivables
292
175
Other debtors
1,345
702
Loans made to Group companies
3,692
-
Intercompany debtors
116
116
Total
5,445
993
All amounts are short-term. The net carrying value of all financial assets is considered a reasonable approximation of fair value.
10. Leases
The Group applied IFRS 16 leases in the current year ending 31 March 2020. Refer to Note 20 of the consolidated financial statements.
11. Loans and Borrowings
In June 2019 the Company entered into a revolving credit facility agreement with Silicon Valley Bank and Investec (together the “Financiers”)
of £50.0 million over a 3-year term to fund the future growth plans of investee companies. Refer to Note 21 of the consolidated financial
statements.
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Notes to the Company Financial Statements continued
for the year ended 31 March 2020
12. Trade and other payables due within one year
31 Mar 2020
£’000s
31 Mar 2019
£’000s
Trade payables
(594)
(148)
Other taxation and social security
(280)
(290)
Intragroup creditors
(1)
(5,294)
Other payables
(8)
(331)
Accruals and deferred income
(3,015)
(1,788)
Total
(3,898)
(7,851)
All trade and other payables amounts are short-term. The net carrying value of all financial liabilities is considered a reasonable
approximation of fair value.
13. Share capital and other reserves
31 March 2020 – Allotted and fully paid
Number
Pence
At the beginning of the year
117,925,470
1
Issue of share capital during the year1
195,842
1
Issue of share capital during the year2
796,812
1
At the end of the year
118,918,124
1
1
Between the 24 December 2019 and the 21 February 2020, 195,842 new 1p ordinary shares were issued in association with share options being exercised.
2
On 10 March 2020, as part of the acquisition agreement relating to the remaining interest in Encore Ventures LLP (see Note 18 of the consolidated


financial statements) it was agreed that the Company would issue 796,812 new ordinary shares at 502p.
31 March 2019 – Allotted and fully paid
Number
Pence
At the beginning of the year
71,611,773
1
Issue of share capital during the year for cash1/2
46,248,877
1
Issue of share capital during the year as consideration for investment purchase3
64,820
1
At the end of the year
117,925,470
1
1
On 14 June 2018, the Company raised gross proceeds of approximately £115.0 million at an issue price of 420 pence per share by way of the conditional placing of
20,238,095 new ordinary shares and a subscription of 7,142,857 new ordinary shares.
2
On 8 February 2019, the Company raised gross proceeds of approximately £100.0 million at an issue price of 530 pence per share by way of the conditional placing of
18,867,925 new ordinary shares.
3
On 4 July 2018, the Company raised gross proceeds of £0.3 million at an issue price of 478 pence per share by way of the placing of 64,820 new ordinary.
Movements in share capital and other reserves are explained in Note 24 of the consolidated financial statements.
14. Share-based payments
The Company operates a share option scheme that is explained in Note 13 of the consolidated financial statements. The Company operates
the share option scheme within the Group, therefore the details provided in Note 13 are also applicable to the Company.
15. Directors’ emoluments and employee information
Employee benefit expenses (including Directors) comprise:
Year ended
31 Mar 2020
£’000s
Year ended
31 Mar 2019
£’000s
Wages and salaries
4,595
3,447
Defined contribution pension costs
278
354
Benefits (healthcare and life assurance)
127
74
Recruitment costs
473
67
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Social security contributions and similar taxes
601
459
General employee and employee related expenses
6,074
4,401
Share-based payment expense arising from company share option scheme
990
1,100
Total employee benefit expenses
7,064
5,501
The monthly average number of persons (including Executive and Non-executive Directors) employed by the Group during the year was:
Year ended
31 Mar 2020
Number
Year ended
31 Mar 2019
Number
Technology investment
14
14
Corporate functions
19
13
33
27
Corporate functions comprise non-executive directors, finance, marketing, human resources, legal, IT, and administration.
Key management personnel compensation
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the
Group, and are considered to be the Directors of the Company listed on pages 58 to 60. This includes Martin Davis who joined as CEO during
the year, as announced on 4 November 2019.
Year ended
31 Mar 2020
£’000s
Year ended
31 Mar 2019
£’000s
Wages and salaries
2,019
1,317
Short-term non-monetary benefits
9
10
Defined contribution pension costs
163
108
Share-based payment expense
466
631
Social security contributions and similar taxes
287
133
2,944
2,199
The details of individual Directors’ remuneration and pension benefits, as set out in the tables contained in the Remuneration and
Nomination Committee Report on pages 67 to 71, form part of these financial statements.
16. Subsidiary undertakings
Name of subsidiary undertaking
Activity
Holding
Registered office
Draper Esprit (Ireland) Limited
Investment company
100%
32 Molesworth Street, Dublin 2, Ireland
(Note 6)
Esprit Capital Partners LLP
Investment management
100%
20 Garrick Street, London WC2E 9BT, United Kingdom
(Note 7)
Encore Ventures LLP
Investment management
100%2
20 Garrick Street, London WC2E 9BT, United Kingdom —
Esprit Investments (1) (B) LP
Limited partnership
100%
20 Garrick Street, London WC2E 9BT, United Kingdom
(Note 6)
Seedcamp Holdings LLP
Limited liability partnership
100%
20 Garrick Street, London WC2E 9BT, United Kingdom
(Note 6)
Seedcamp Investments LLP
Limited liability partnership
100%
727-729 High Road, London, England, N12 0BP
(Note 6)
Seedcamp Investments II LLP
Limited liability partnership
100%
727-729 High Road, London, England, N12 0BP
(Note 6)
Esprit Investments (2) (B) LP
Limited partnership
100%
20 Garrick Street, London WC2E 9BT, United Kingdom
(Note 6)
Draper Esprit (Nominee) Limited1
Dormant
100%
20 Garrick Street, London WC2E 9BT, United Kingdom —
1
Draper Esprit Nominee Limited is held at cost £nil (2019: £nil) on the Company’s balance sheet.
2
The remaining interest in Encore Ventures LLP was purchased by the Group on 10 March 2020. For further details, see Note 18 of the consolidated financial statements.
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Refer to Group Note 3 for a full list of the Company’s related undertaking.
17. Critical accounting estimates and judgements
The Directors have made judgements and estimates with respect to those items that have made the most significant effect on the carrying
amounts of the assets and liabilities in the financial statements. The Directors have concluded that the judgements and estimates in the
Company financial statements are consistent with those applied in the consolidated financial statements, further details of which can be
found in Note 4.
18. Financial assets and liabilities
The description of each category of financial asset and financial liability and the related accounting policies are shown below. The carrying
amounts of financial assets and financial liabilities in each category are as follows:
31 March 2020
Designated
FVTPL
£’000s
Amortised
cost
£’000s
Total
£’000s
Financial assets
Investments
631,403
-
631,403
Long-term financial assets
631,403
-
631,403
Trade and other receivables
-
1,753
1,753
Loans to Group companies
-
3,692
3,692
Cash and cash equivalents
-
31,165
31,165
Restricted cash
-
1,883
1,883
Short-term financial assets
-
38,493
38,493
Total financial assets
631,403
38,493
669,896
Financial liabilities
Loans and borrowings
-
(44,636)
(44,636)
Lease liabilities
-
(975)
(975)
Long-term financial liabilities
-
(45,611)
(45,611)
Trade and other payables
-
(3,898)
(3,898)
Loans and borrowings
-
-
-
Lease liabilities
-
(358)
(358)
Short-term financial liabilities
-
(4,256)
(4,256)
Total financial liabilities
-
(49,867)
(49,867)
31 March 2019
Designated
FVTPL
£’000s
Amortised
cost
£’000s
Total
£’000s
Financial assets
Investments
532,897
–
532,897
Long-term financial assets
532,897
–
532,897
Trade and other receivables
–
993
993
Cash and cash equivalents
–
48,568
48,568
Short-term financial assets
–
49,561
49,561
Total financial assets
532,897
49,561
582,458
Financial liabilities
–
(7,851)
(7,851)
Total financial liabilities
–
(7,851)
(7,851)
Notes to the Company Financial Statements continued
for the year ended 31 March 2020
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19. Fair value measurements
The Company holds investments at fair value through the profit and loss. Refer to Note 28 for the Group’s policies with respect to fair value
measurements and Note 6 of the Company financial statements.
20. Financial instruments risk
In the normal course of business, the Company uses certain financial instruments including cash, trade and other receivables and
investments. The Company is exposed to a number of risks through the performance of its normal operations. Refer to Note 29 of the
consolidated financial statements.
21. Related party transactions
The Company may require that one of its members be appointed to the board of a portfolio company in a non-executive role. In certain
cases, an administration fee is charged to the portfolio company for the provision of Director services. Fees of £17,000 (2019: £17,000) have
been invoiced during the current year. At year-end, there was no balance outstanding (2019:nil). Draper Esprit does not exercise control or
management through any of these non-executive positions.
During the year, £1,200,000 (2019: £840,000) was invoiced from Draper Esprit plc to Encore Ventures LLP for overheads. At year-end a
balance of £100,000 remained outstanding (2019: £70,000).
During the year, £368,332 (2019: £53,737) was invoiced and received from Draper Esprit VCT for overheads.
During the period, the Company loaned £3.7 million to Esprit Capital Fund No 1 & No 2 LP on an arm’s length basis. The loan is repayable on
demand and interest is charged at 10% per annum. Interest of £187,152 has been accrued on the loan to 31 March 2020.
During the year, the Group purchased the remaining interest in Encore Ventures LLP – see note 18 for further details.
22. Post balance sheet events

· Extended the term of the revolving credit facility with Silicon Valley Bank and Investec by 1 year to 2023 and increased its size by £10.0
million to £60.0 million.

· Zynga Inc. announced their agreement to acquire Peak Games for $1.8bn, which will, subject to closing, indicate a fair value holding
for Draper Esprit of approximately £80.0 million via Earlybird IV (actual returns are subject to completion conditions, including FX
movements, and acquirer share price movement with respect to the stock component).

· Simon Cook will be stepping down from the Board from 1 July 2020. Simon will remain with the Company as founding partner and focus
on generating new deals and will continue as a board member for a number of portfolio companies.
Directors, Secretary and Advisers
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Directors
Karen Slatford (Non-executive Chair)
Martin Davis (Chief Executive Officer)
– appointed on 4 November 2019
Simon Cook (Founding Partner) – with effect until 1 July 2020
Stuart Chapman (Chief Portfolio Officer)
Grahame Cook (Non-executive Director)
Richard Pelly (Non-executive Director)
Ben Wilkinson (Chief Financial Officer)
– appointed with effect from 4 June 2019
Registered office
20 Garrick Street, London, England, WC2E 9BT
Website
www.draperesprit.com
Broker and Nominated Adviser
Numis Securities Limited
10 Paternoster Row
London EC2M 7LT
United Kingdom
Broker and Euronext Growth Adviser
Goodbody Stockbrokers
Ballsbridge Park
Ballsbridge
Dublin 4
Ireland
Legal Advisers to the Company
(as to English law)
Gowling WLG (UK) LLP
4 More London Riverside
London SE1 2AU
United Kingdom
Legal Advisers to the Company
(as to Irish law)
Maples and Calder
75 St. Stephen’s Green
Dublin 2
Ireland
Independent auditor
PricewaterhouseCoopers LLP
7 More London Riverside
London
SE1 2RT
United Kingdom
Public relations adviser
Powerscourt Limited
1 Tudor Street
London,
EC48 0AH
United Kingdom
Principal Bankers
Barclays Bank Plc,
9-11 St Andrews St,
Cambridge, CB2 3AA
United Kingdom
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
United Kingdom
Company Secretary
Prism Cosec Limited
Elder House
St Georges Business Park
207 Brooklands Road
Weybridge
Surrey
KT13 0TS
Data Provider
Dealroom.co B.V. (“Dealroom”)
Cornelis Dirkszstraat 27-2
1056 TP Amsterdam
the Netherlands
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Notice of Annual General Meeting
Draper Esprit plc
(Incorporated and registered in England and Wales under number 9799594)
Notice is hereby given that the annual general meeting (“AGM”) of Draper Esprit plc (the “Company”) will be held at 20 Garrick Street,
London WC2E 9BT on Monday 27 July 2020 at 11.00 a.m.
Due to the ongoing COVID-19 pandemic, and the stay at home measures put in place by the UK Government, the Board has decided to
run the 2020 AGM as a closed meeting. As a result, members will not be permitted to attend the meeting in person and access will be
refused. Quorum will be achieved through the attendance of two Company director shareholders and/or employee shareholders. Under the
circumstances, members are encouraged to submit their proxy form to ensure that their votes are registered. The Board strongly advises
members to appoint the chairman of the meeting as proxy for all votes.
The AGM will be held for the purpose of considering and, if thought fit, passing the following resolutions (which will be proposed in the case
of resolutions 1 to 10 as ordinary resolutions and resolutions 11 to 13 as special resolutions):
Ordinary business
ORDINARY RESOLUTIONS
1
To receive and adopt the Annual Report and Accounts of the Company for the financial year ended 31 March 2020 together with the
Directors’ Report and Auditors’ Report thereon.
2
To approve the Remuneration and Nomination Committee Report for the financial year ended 31 March 2020, which, inter alia, sets out
the remuneration policy and remuneration paid to Directors during the year.
3
That Martin Davis be elected as a Director of the Company with effect from the end of the AGM.
4
That Stuart Chapman be re-elected as a Director of the Company with effect from the end of the AGM.
5
That Karen Slatford be re-elected as a Director of the Company with effect from the end of the AGM.
6
That Grahame Cook be re-elected as a Director of the Company with effect from the end of the AGM.
7
That Richard Pelly be re-elected as a Director of the Company with effect from the end of the AGM.
8
That Ben Wilkinson be re-elected as a Director of the Company with effect from the end of the AGM.
9
To re-appoint PricewaterhouseCoopers LLP as auditors of the Company to hold office from the conclusion of the AGM until the
conclusion of the next annual general meeting of the Company at which the Company’s accounts are laid and to authorise the Audit
Committee to determine the amount of the auditors’ remuneration.
Special business
ORDINARY RESOLUTION
10
That the Directors be and are hereby generally and unconditionally authorised pursuant to section 551 of the Companies Act 2006 (the
“Act”) to exercise all powers of the Company to allot shares in the Company and to grant rights to subscribe for or convert any security
into shares in the Company up to an aggregate maximum nominal amount of £392,429.81, provided that this authority shall expire
(unless renewed, varied or revoked by the Company in general meeting) on the earlier of the conclusion of the next annual general
meeting of the Company and 30 September 2021 save that the Company shall be entitled to make, prior to the expiry of such authority,
any offer or agreement which would or might require shares to be allotted or rights to subscribe for or convert any security into shares
to be granted after the expiry of such authority and the Directors may allot shares or grant rights to subscribe for or convert securities
into shares in pursuance of such offer or agreement as if the authority conferred hereby had not expired. The authority granted by this
resolution shall replace all existing authorities to allot any shares in the Company and to grant rights to subscribe for or convert any
security into shares in the Company previously granted to the Directors pursuant to section 551 of the Act.
Notice of Annual General Meeting continued
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SPECIAL RESOLUTIONS
11
That, subject to the passing of resolution 10, the Directors be and are hereby empowered pursuant to sections 570 and 573 of the Act to
allot equity securities (as defined in section 560 of the Act) for cash either pursuant to the authority conferred by resolution 10 above or
by way of sale of treasury shares as if section 561(1) of the Act did not apply to such allotment, provided that this power shall be limited
to the allotment and/or sale of equity securities up to an aggregate nominal amount of £59,459.06 and provided that this authority
shall expire (unless renewed, varied or revoked by the Company in general meeting) on the earlier of the conclusion of the next annual
general meeting of the Company and 30 September 2021 save that the Company shall be entitled to make, prior to the expiry of such
authority, offers or arrangements which would or might require equity securities to be allotted and/or sold after such expiry, and the
Directors may allot and/or sell equity securities in pursuance of any such offer or agreement as if the power conferred by this resolution
had not expired. The authority granted by this resolution shall replace all existing authorities previously granted to the Directors to allot
equity securities for cash or by way of a sale of treasury shares as if section 561(1) of the Act did not apply.
12
That, subject to the passing of resolution 10, the Directors be and are hereby empowered, in addition to any authority granted under
resolution 11, pursuant to sections 570 and 573 of the Act to allot equity securities (as defined in section 560 of the Act) for cash
either pursuant to the authority conferred by resolution 10 above or by way of sale of treasury shares as if section 561(1) of the Act did
not apply to such allotment, provided that this power shall be limited to the allotment and/or transfer of equity securities up to an
aggregate nominal amount of £59,459.06, provided that this authority shall expire (unless renewed, varied or revoked by the Company
in general meeting) on the earlier of the conclusion of the next annual general meeting of the Company and 30 September 2021 save
that the Company shall be entitled to make, prior to the expiry of such authority, offers or arrangements which would or might require
equity securities to be allotted and/or transferred after such expiry, and the Directors may allot and/or transfer equity securities in
pursuance of any such offer or agreement as if the power conferred by this resolution had not expired. The authority granted by this
resolution shall replace all existing authorities previously granted to the Directors to allot equity securities for cash or by way of a sale of
treasury shares as if section 561(1) of the Act did not apply.
13
That the Company be authorised generally and unconditionally, in accordance with section 701 of the Act, to make market purchases
(within the meaning of section 693(4) of the Act) of Ordinary Shares provided that:
(a) the maximum number of Ordinary Shares that may be purchased is 11,891,812;
(b) the minimum price which may be paid for an Ordinary Share is one penny; and
(c) the maximum price which may be paid for an Ordinary Share is the higher of: (i) five per cent. above the average of the mid- market

value of the Ordinary Shares for the five business days before the purchase is made; and (ii) the higher of the last independent trade

and the highest current independent bid for any number of Ordinary Shares on the trading venue where the purchase is carried out.
The authority conferred by this resolution will expire on the earlier of the conclusion of the next annual general meeting of the Company
and 30 September 2021 save that the Company may, before the expiry of the authority granted by this resolution, enter into a contract to
purchase Ordinary Shares which will or may be executed wholly or partly after the expiry of such authority.
By order of the Board of Directors
Prism Cosec Limited
Company Secretary of Draper Esprit plc
26 June 2020
Registered Office: 20 Garrick Street, London WC2E 9BT
Notes:
The following notes explain your general rights as a member and your right to vote at the 2020 AGM or to appoint someone else to vote on your
behalf. Given the restrictions in place during the COVID-19 pandemic, members are encouraged to submit their proxy form to ensure that their
votes are registered and the Board strongly advises shareholders to appoint the chairman of the meeting as proxy for all votes. Please note that
appointing a proxy who cannot attend the AGM will effectively void your vote.
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1
The Company, pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001 (as amended), specifies that only those members
registered in the register of members of the Company at 6.30 p.m. on 23 July 2020 (or if the AGM is adjourned, members entered on the
register of members of the Company no later than 48 hours before the time fixed for the adjourned AGM) shall be entitled to vote at the AGM
in respect of the number of Ordinary Shares registered in his or her name at that time. Changes to entries on the register of members of the
Company after 6.30 p.m. on 23 July 2020 shall be disregarded in determining the rights of any person to vote at the AGM.
2
A member is entitled to appoint one or more proxies to exercise all or any of the member’s rights to attend, speak and vote at the AGM. A
proxy need not be a member of the Company and a member may appoint more than one proxy in relation to a meeting to attend, speak
and vote on the same occasion provided that each proxy is appointed to exercise the rights attached to a different share or shares held by
a member. To appoint more than one proxy, the proxy form should be photocopied and the name of the proxy to be appointed indicated on
each form together with the number of shares that such proxy is appointed in respect of (which, in aggregate, should not exceed the number
of shares held by you). Please also indicate if the proxy instruction is one of multiple instructions being given. All forms must be signed and
should be returned together in the same envelope. Under the current circumstances, the Board strongly advises shareholders to appoint the
chairman of the meeting as proxy for all votes. Please note that appointing a proxy who cannot attend the AGM will effectively void your vote.
3
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the
most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s
register of members in respect of the joint holding (the first named being the most senior).
4
A form of proxy is enclosed with this notice. Forms of proxy may also be obtained on request from the Company’s registered office.In order
to be valid any proxy form or other instrument appointing a proxy must be returned duly completed by one of the following methods no later
than 48 hours before the time of the AGM (excluding non-working days), in hard copy form by post, by courier, or by hand to the Company’s
registrar, Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA. Submission of a proxy appointment will not preclude
a member from attending and voting at the AGM should they wish to do so. To direct your proxy on how to vote on the resolutions, mark the
appropriate box on your proxy form with an ‘X’. To abstain from voting on a resolution, select the relevant “Vote withheld” box. A vote withheld
is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. If no voting
indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she
thinks fit in relation to any other matter which is put before the AGM.
5
Any power of attorney or other authority under which your proxy form is signed (or a duly certified copy of such power or authority) must be
returned to the Company’s registrar with your proxy form.
6 Electronic proxy appointment through CREST

CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so for the AGM
to be held on 27 July 2020 and any adjournment(s) thereof by utilising the procedures described in the CREST Manual (available via www.
euroclear.com). CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a voting
service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their
behalf.

In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (CREST Proxy Instruction) must be
properly authenticated in accordance with Euroclear UK & Ireland Limited’s specifications and must contain the information required for
such instructions, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or as an
amendment to the instruction given to a previously appointed proxy, must, in order to be valid, be transmitted so as to be received by the
issuer’s agent (ID RA19) by the latest time(s) for receipt of proxy appointments specified in the Notice. For this purpose, the time of receipt
will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the issuer’s
agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to
proxies appointed through CREST should be communicated to the appointees by other means.

CREST members and, where applicable, their CREST sponsor(s) or voting service provider(s) should note that Euroclear UK & Ireland Limited
does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply
in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is
a CREST Personal Member or sponsored member or has appointed a voting service provider(s), to procure that his or her CREST sponsor(s) or
voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system
by any particular time. In this connection, CREST members and, where applicable, their CREST sponsor(s) or voting service provider(s) are
referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertified Securities
Regulations 2001.
7
To be passed, ordinary resolutions require a majority in favour of the votes cast and special resolutions require a majority of not less than 75
per cent. of members who vote in person or by proxy at the meeting. Voting on all resolutions will be conducted by way of a poll as the AGM
will be a closed meeting and shareholders will not be permitted to attend the AGM in person, with the exception of those permitted to form a
quorum.
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8
A corporation which is a member can appoint one or more corporate representatives who may exercise, on its behalf, all its powers as a
member provided that no more than one corporate representative exercises powers over the same share. As the AGM will be held as a ‘closed
meeting’, corporate members are strongly encouraged to complete and return a form of proxy appointing the Chairman of the meeting to
ensure their votes are included in the poll.
9
As at 24 June 2020, being the latest practicable date before the publication of this notice of AGM (the “Latest Practicable Date”), the
Company’s issued share capital consisted of 118,918,124 Ordinary Shares, each carrying one vote. Therefore, the total voting rights in the
Company as at the Latest Practicable Date is 118,918,124.
10
Copies of the Directors’ service contracts and letters of appointment are available on request.
11
Members who have general queries about the AGM should write to the Company Secretary at the Company’s Registered Office; 20 Garrick
Street, London WC2E 9BT, or by email at info@draperesprit.com.
Explanation of the resolutions
Resolution 1 – annual accounts – the Directors are required to present the Accounts, Directors’ Report and Auditors’ Report to the AGM. These are
contained in the Company’s Annual Report and Financial Statements 2020.
Resolution 2 – Remuneration and Nomination Committee Report – shareholders are asked to approve the Remuneration and Nomination
Committee Report, which sets out the remuneration policy and remuneration paid to Directors for the financial year.
Resolutions 3 to 8 – re-appointed and appointment of Directors – in accordance with good corporate governance, each Director shall retire and
submit themselves for re-election by shareholders at each AGM. The Board, led by the Chairman, has considered the performance of each of the
Directors and has concluded that each of them makes positive and effective contributions to the meetings of the Board and the committees on
which they sit, and that they demonstrate commitment to their roles. The Board is satisfied that each independent Non-executive Director offering
themselves for re-election is independent in character and there are no relationships or circumstances likely to affect their character or judgement.
Biographies of each of the Directors are provided on pages 58 to 60 of the Annual Report and Financial Statements 2020 and are also available
from the Company’s website: https://draperesprit.com/investors /plc/leadership. The Board unanimously recommends the election of Martin Davis
and the re-election of each of the other Directors.
Resolution 9 – auditor re-appointment and remuneration – at each meeting at which the Company’s accounts are presented to its shareholders,
the Company is required to appoint an auditor to serve until the next such meeting and seek shareholder consent for the Directors to set the
remuneration of the auditors.
Resolution 10 – general authority to allot – this resolution, to be proposed as an ordinary resolution, relates to the grant to the Directors of authority
to allot unissued Ordinary Shares until the earlier of the conclusion of the annual general meeting to be held in 2021 and 30 September 2021 (being
six months after the financial year end of the Company), unless the authority is renewed or revoked prior to such time. This authority is limited to a
maximum nominal amount of £ 392,429.81 (representing approximately one-third of the issued Ordinary Share capital of the Company as at the
Latest Practicable Date). This percentage is in line with corporate governance guidelines.
Resolutions 11 and 12 – disapplication of statutory pre-emption rights – the passing of these resolutions, which are to be proposed as special
resolutions, would allow Directors to allot Ordinary Shares (or sell any Ordinary Shares which the Company may purchase and hold in treasury)
without first offering them to existing holders in proportion to their existing holdings. The authority set out in resolution 11 is limited to up to an
aggregate nominal amount of £59,459.06 (representing 5,945,906 Ordinary Shares), being five per cent. of the issued ordinary share capital of the
Company (excluding treasury shares) as at the Latest Practicable Date. The authority set out in resolution 12 is limited to allotments or sales of up
to an aggregate nominal amount of £59,459.06 (representing 5,945,906 Ordinary Shares), being five per cent. of the issued ordinary share capital
of the Company (excluding treasury shares) as at the Latest Practicable Date. This authority will expire at the conclusion of the next AGM of the
Company or, if earlier, at the close of business on 30 September 2021.
Resolution 13 – market purchases – the Directors are requesting authority by way of special resolution for the Company to make market purchases
of Ordinary Shares up to a maximum of 11,891,812 Ordinary Shares (representing ten per cent. of the issued Ordinary Share capital of the Company
as at the Latest Practicable Date). There is no present intention to exercise such general authority. Any repurchase of Ordinary Shares will be made
subject to the Act and within guidelines established from time to time by the Directors (which will take into account the income and cash flow
requirements of the Company) and will be at the absolute discretion of the Directors, and not at the option of shareholders. Subject to shareholder
authority for the proposed repurchases, general purchases of the Ordinary Shares in issue will only be made through the market. Such purchases
may only be made provided the price to be paid is not more than the higher of: (i) five per cent. above the average of the middle market
quotations for the Ordinary Shares for the five Business Days before the purchase is made; or (ii) the higher of the price of the last independent
trade and the highest current independent bid at the time of purchase.
Glossary

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In this document, where the context permits, the terms and expressions set out below shall have the meanings assigned thereto:
“Admission” or “IPO”
the Admission of the enlarged share capital to trading on AIM and Euronext Growth (formerly ESM) on
15 June 2016 and such admission becoming effective in accordance with the AIM Rules and the Euronext
Growth Rules respectively. The IPO included the acquisition of Esprit Capital Partners LLP and Draper Esprit
(Ireland) Limited.
“Act”
the UK Companies Act 2006.
“AIM”
AIM, the market of that name operated by the London Stock Exchange.
“Audit, Risk and Valuations
Committee”
the Audit, Risk and Valuations Committee of the Board.
“BoE”
Bank of England
“Company” or “Draper
Esprit” or “plc”
Draper Esprit plc, a company incorporated in England and Wales with registration number 09799594 and
having its registered office at 20 Garrick Street, London, England, WC2E 9BT.
“Core Portfolio Companies”
“COVID”/”COVID-
19”/”Coronavirus”/”CV19”
the top companies by value that represent approximately 70% of the overall portfolio value.
Coronavirus disease, the infectious disease caused by a new strain of coronavirus in 2019/20.
“DEF” / “Digital East Fund” Digital East Fund 2013 SCA SICAR
“Directors” or “Board”
the Directors of the Company from time to time
“Draper Esprit Funds”
the Esprit Funds and the Encore Funds
“Draper Venture Network”
the self–governed network of 24 independent growth and venture funds, of which Esprit Capital is a member.
“EB IV” / “Earlybird Fund IV” Earlybird GmbH & Co. Beteiligungs-KG IV
“EB VI” / “Earlybird Fund VI” Earlybird DWES Fund VI GmbH & Co. KG
“EIS”
the EIS funds managed by Encore Ventures LLP. EIS funds being Enterprise Investment Scheme under the
provisions of Part 5 of the Income Tax Act 2007.
“Encore Funds” / “Draper
Esprit’s EIS funds”
DFJ Esprit Angels’ EIS Co–Investment Fund, DFJ Esprit Angels’ EIS Co–Investment II, DFJ Esprit EIS III, DFJ Esprit
EIS IV, Draper Esprit EIS 5, and Draper Esprit EIS, each an “Encore Fund”.
“Encore Ventures”
Encore Ventures LLP, a limited liability partnership incorporated in England and Wales under the registration
number OC347590 with its registered office at 20 Garrick Street, London, WC2E 9BT.
“Esprit Capital”
Esprit Capital Partners LLP (previously Draper Esprit LLP), a limited liability partnership incorporated in
England and Wales under the registration number OC318087 with its registered office at 20 Garrick Street,
London, WC2E 9BT, the holding vehicle of the Group immediately prior to Admission.
“Euronext Dublin”
The trading name of the Irish Stock Exchange Plc.
Glossary continued
132
Financial Statements
Annual Report 2020
draperesprit.com
“Euronext Growth”
the Euronext Growth securities market (formerly the Enterprise Securities Market) operated and regulated
by the Irish Stock Exchange plc (trading as “Euronext Dublin”).
“FCA”
the UK Financial Conduct Authority.
“FOF” or “FoF”
Fund of Funds.
“Gross Portfolio Value”
Gross Portfolio Value is the value of the portfolio of investee companies held by funds controlled by the
Company before accounting for deferred tax, external carried interest and amounts co–invested.
“Group”
The Company and its subsidiaries from time to time and, for the purposes of this document, including Esprit
Capital Partners LLP and its subsidiaries and subsidiary undertakings.
“HMRC”
HM Revenue & Customs.
“IFRS” or “IFRSs”
International Financial Reporting Standards, as adopted for use in the European Union.
“IPO”
the Company’s listing on the London Stock Exchange’s AIM market and the Irish Stock Exchange’s (trading
as Euronext Dublin) Euronext Growth Dublin market on 15 June 2016.
“IRR”
the internal rate of return.
“NAV”
the value, as at any date, of the assets of the Company and/or Group after deduction of all liabilities
determined in accordance with the accounting policies adopted by the Company and/or Group from time
to time.
“Ordinary Shares”
ordinary shares of £0.01 pence each in the capital of the Company.
“PwC”
PricewaterhouseCoopers LLP, a limited liability partnership registered in England and Wales under the
registration number OC303525 and having its registered office at 1 Embankment Place, London, WC2N
6RH.
“International Private
Equity and Venture Capital
Valuation Guidelines”
the International Private Equity and Venture Capital Valuation Guidelines, as amended from time to time.
“VC”
venture capital.
“VCT”
The VCT funds managed by Draper Esprit VCT. VCT (venture capital trust) funds being UK closed–ended
collective investment schemes.
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Draper Esprit London HQ
20 Garrick Street
London, WC2E 9BT
Tel: +44 (0)20 7931 8800
draperesprit.com