What was the deal? 

It’s the £1.5m growth capital investment by Pembroke VCT in womenswear brand Ro&Zo. CEO Rachel Heather and her co-founders Rosie Bowden and Zoe de Abreu were filling a gap in the market left by the closures of a series of major high street brands, by producing their own womenswear collection. Despite the brand only launching in 2021, their products are being sold in Next and John Lewis stores across the country.  

The investment was in newly issued VCT-compliant shares and gave Pembroke a 21% stake in the business. 

How were you introduced to the deal? 

FinnCap Cavendish has a really good reputation within the consumer sector and Rachel had been introduced to my M&A colleague Rebecca McCredie through her network. Rebecca had previously sold Orlebar Brown to Chanel.  

What were the timescales? 

We completed in October 2022. In total, the deal took about six months. The bulk of our work was done at the beginning – we spent the first few months getting to know the team, understanding and refining their business plan and objectives, and discussing options.  

Once they’d decided they wanted to go down the venture capital route, we knew who the right investors were straight away – Pembroke is perfect for Ro&Zo – and it took six weeks to completion.  

Who were the advisers? 

We were the sole financial adviser to Ro&Zo and its shareholders. An impressive all-female team from Memery Crystal, led by its chairwoman, Lesley Gregory, provided the legal advice.   

What were the challenges? 

The founders are outstanding entrepreneurs and this wasn’t their first business, but they had never raised growth capital before – they had always owned 100% of their businesses. So we had to make sure we got the right solution for them, which was a little nerve-racking.  

Another worry was raising money for a company in a sector that is completely out of favour in the current market. You really have to back the team and the product. But it paid off because we knew how amazing the company was and the incredible women behind it.  

I have a great relationship with all of the investors we spoke to and it was about ensuring we’d done enough prep work to truly understand the fundamentals of the business before speaking to them. The more you get to know a great company, the more compelling reasons you find to back the business.  

We really understood that they were uniquely positioned in terms of industry knowledge, manufacturing and design, so the investors couldn’t say: “It’s just another fashion business.” 

What were the lessons learned? 

What was really interesting about the business was that the founders did not have a traditional VC founder mentality. What they did have was unrivalled experience in their industry, so we encouraged them to be themselves rather than try to fit the mould and talk in the same lingo as other founders looking for growth capital. That really paid off because they were clearly so passionate and knowledgeable about their products and customers – all of that came across to the investors.