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When an fund manager jumps into a new area, its always tempting to ask why. Blackfinch Ventures has launched a fund focussing on the energy transition, we asked Head of Ventures Reuben Wilcock back on the podcast to discuss it.
In a wide ranging discussion we talk about:
what the energy transition is and why he thinks its attractivehow he chose the themes to look atwhether the pace of change in the economy is fast enoughwhether there are enough investmentsthe role of strategic investors and their commitmentprioritising returns over impactapplications in industry and storagetranslating science into a good businessthe challenge of sequencingfinding appropriate metricsinvestor interest in environmental investmentsAlthough this is a known area, it is interesting to get the perspective of a new entrant who has analysed the market and found it attractive. There's lots of insights as usual from Reuben - enjoy!
01:00 Reuben introduces himself
03:00 introduction to Blackfinch Investments
04:45 what is energy transition and why chosen
08:10 choosing the themes within that
09:00 whether the pace of change is fast enough?
11:50 are there adequate investments in the sector
15:30 commitment of strategic investors
17:45 concern over prioritising impact over returns
21:20 what other themes he is seeing
25:30 science that makes a good business
27:10 prevalence of secondaries
29:20 technology dependence and sequencing
34:00 energy storage
40:40 appropriate metrics
42:00 investor interest and demand in environmental areas
47:10 favourite questions
Links
Blackfinch - https://www.blackfinch.com/
Blackfinch Ventures - https://blackfinch.ventures/
Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen
Suggested books and media
Working Backwards by Colin Bryar & Bill Carr
Bio
Reuben Wilcock
Head of Ventures, Blackfinch Ventures
Reuben’s expertise in advising early stage companies has developed through a background spanning academia, technology start-ups and start-up acceleration. He has founded or co-founded four technology start-ups including Joulo, a smart home energy spinout which won the 2013 British Gas Connected Homes award and was acquired by Quby in 2014, and Bar Analytics, an IoT start-up that enables global brands to monitor beer quality and sales.
With a PhD in Electronics, Reuben has extensive product design experience with deep technical knowledge of hardware, software and manufacturing. He is an inventor on five patents and named author on over 45 peer reviewed publications ranging from integrated circuit design to genetic algorithms. Before joining Blackfinch, Reuben was a leading figure in entrepreneurship at the University of Southampton where he sat on its IP Panel for five years, guiding...
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We all have idea of what impact investing means, but how do you measure and systematise it? Conduit Connect is an impact venture capital investor and we have asked Senior Investment Manager Gabby Morgan onto to discuss this. She was hands on in developing their own impact framework and reporting so understands the issues and can talk about how Conduit Connect solved them.
In a wide ranging discussion we talk about:
approaches to measuring impactdeveloping a theory of changehow to make impact robust in a companyscaling impactbeing intentional about diversitynegative externalities and avoiding themhow to treat items that can't be measuredgreenwashing in the venture industrythe challenges of comparing frameworksWith the new SDR Regulations coming in, this is a very timely discussion. Gabby has thought deeply about many of the issues and applied them in practice, so has some great insights.
01:20 Gabby introduces herself
03:30 What is Conduit Connect?
09:00 How do we approach measuring impact?
11:50 The four buckets of impact in Conduit Connect's framework
26:00 The need for fund managers to be intentional about diversity
28:30 What are negative externalities and avoiding them
32:00 Taking account of what can't be measured
35:00 How lockstep works to keep companies impact orientated
39:40 Greenwashing in the venture industry
41:40 How do investors compare manager frameworks
49:00 Prospects for the impact industry in next couple of years
54:50 Favourite questions
LinksConduit Connect website - https://www.theconduitconnect.com/
Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen
Suggested books and mediaRange by Daniel Epstein
Ministry of Time by Kallane Bradley
BioGabby Morgan
Senior Investment Manager, Conduit Connect
Gabby is a Senior Investment Manager at the Conduit Connect, responsible for screening and performing due diligence on opportunities for the Conduit EIS Impact Fund. She is also responsible for fundraising and investor relations for the Fund. She is an investor mentor at Carbon13, a leading climate-focussed accelerator, and a Board Advisor at Thalamos, one of the Conduit Fund’s portfolio companies. She has advised early-stage impact ventures through the Huckletree Alpha programme, Village Capital and Founders Intelligence.
Prior to joining the Conduit Connect in November...
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The Seedrs Portfolio Report gives an insight into how equity crowdfunding in the UK has progressed over the past decade from an idea to a firm part of the venture capital market. Jeff Lynn was a co-founder of Seedrs and has been President since its purchase by Republic. He's ideally placed to give a myriad of insights into what lies behind the data and the report.
In a wide ranging discussion we talk about:
what the aim of the report ishow the report shows venture is an outlier asset classwhy food & beverage is the most popular sectorhow the variety of crowdfunding companies has improved over timewhy crowdfunding does better than the industry on diversityhow long should investors expect to hold investmentsthe development of Seedrs secondary markethow people use the platform and how that affects their portfolio diversificationthe future for Republic Europe and areas it is looking to expand intoIts clear that crowdfunding will continue to be a meaningful element in the the startup and venture capital market in the UK. That makes this interview with Jeff a must listen for anyone involved in the market.
00:50 Jeff introduces himself
04:20 Seedrs is now Republic Europe
06:20 the motivation behind creating the Portfolio report
10:30 the role of outliers
13:00 funding food & beverage companies
16:15 do some companies work better for crowdfunding?
19:10 Why Seedrs has had more female founders than the market
25:50 How long is an investment for?
28:45 what has made the secondary market successful
31:30 investor diversification and the different use cases for platform
37:00 how angels and sophisticated investors use the platform
39:10 The future for crowdfunding: international opportunities, funds and blockchain
44:50 Favourite questions
Links
Republic Europe (formerly Seedrs) website - https://europe.republic.com/
Seedrs Portfolio Report Winter 2023 - https://europe.republic.com/insights/blog/seedrs-2023-portfolio-report
Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen
Suggested books and media
The Young Wilhelm by John C.G. Röhl
Going Infinite by Michael Lewis
Bio
Jeff...
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The Enterprise Investment Scheme (EIS) is now 30 years old! To celebrate, we asked Christiana Stewart-Lockhart, Director General of the EIS Association, onto the podcast to discuss the past, present and future of the scheme.
In a wide ranging discussion we talk about:
the founding of EISthe progress it has madewhat has made it so successfulrenewal of the scheme and the efforts underpinning itwhy EIS is still not as well known as it should behow awareness could be increasedthe progress with improving diversity and regional investingthe effects of the recent changes to SEIS limitsChristiana brings together both the big picture on the importance of the tax advantaged schemes and the small scale that each company and investor represents. Its a great discussion - enjoy!
PS This was recorded before the recent Treasury announcement that the EU has approved the extension of EIS.
00:50 Christiana introduces herself and the EIS Association
04:00 The founding of EIS and how it has progressed
07:25 Why has EIS been successful
12:15 How the Patient Capital Review changed the schemes
14:00 Lobbying for the scheme extension
18:50 Why EIS is not as well known as we would like
26:50 How do we increase awareness
30:15 Role of financial advisers
34:45 Progress with diversity of founders and expanding into regions
41:00 Effect of changes to SEIS limits
43:00 Looking forward
46:10 Favourite questions
Links
EIS Association website - https://eisa.og.uk/
HMRC 2023 EIS Statistics - https://www.gov.uk/government/statistics/enterprise-investment-scheme-seed-enterprise-investment-scheme-and-social-investment-tax-relief-may-2024
30th Anniversary of EIS event - https://eisa.org.uk/30th-anniversary-of-eis/
Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen
Suggested books and media
Alchemy by Rory Sutherland
Bio
Christiana Stewart-Lockhart
Director General, EIS Association
Christiana Stewart-Lockhart is the Director General of the Enterprise Investment Scheme Association (EISA). She previously spent more than a decade working in Westminster including ten years at the Institute of Economic Affairs. She also founded EPICENTER, a Brussels based network of some of the most respected think tanks from across Europe. Christiana holds a BA in Politics from the University of York. She is a member of TISA’s Children’s Financial Education Policy Council and also sits on the Advisory Board for the All Party Parliamentary Group for Entrepreneurship.
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While fintech has perhaps fallen out of the spotlight in venture capital, it remains a significant part of the UK venture capital scene. It is one of Love Ventures three specialist areas, and in this episode co-founders Marcus Love and Adrian Love give their views on how the sector has developed and what matters now.
In a great discussion, Marcus and Adrian talk about:
the difference between v1 and v2 of fintechwhy financial services is so attractive for innovatorshow business models have developedmatching founders to the right producthow incumbents are responding to new entrants and the advantages the latter havewhy the UK is doing well in supporting fintechhow AI fits into their investment thesiswhat areas are attractive for investment todayAlthough Love Ventures is a relatively new manager, both Marcus and Adrian have strong backgrounds in entrepreneurship and investing. This experience allows them to being some great insights into how the world of fintech is progressing today.
PS This was recorded while travelling, so apologies for the echoes in the background for the host.
00:55 Marcus and Adrian introduce themselves
02:55 Love Ventures
05:15 versions 1 & 2 of fintech
08:50 why financial services is so ripe for innovation
11:25 blockages to blockchain in the real world yet
14:00 finding the correct business models going forward
17:00 importance of product/founder fit
19:40 Incumbents vs new entrants
22:00 report on corporate venture capital
25:10 the UK regulatory sandbox
27:10 UK as a model for other countries
28:45 how the need for capital hasn't changed
33:30 looking for right scale of problem to invest in
35:20 role of AI - specialist / small models
40:45 data confidentiality - importance of specialist data
43:40 prime areas for investing now
45:30 Favourite questions
Links
Love Ventures website - https://loveventures.co.uk/
Love Ventures on LinkedIn - https://www.linkedin.com/company/love-ventures/
Report on corporate venture capital - https://loveventures.co.uk/navigating-cvc/
Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen
Suggested books and media
The Power Law by Sebastian Mallaby
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Eos Advisory are rapidly building a solid reputation in science-based venture capital investing. In this episode, Partner Mark Beaumont discusses their roots, philosophy and how that translates into practice, with lots of real-life examples.
In an in-depth discussion, Mark talks about:
how the Eos investment philosophy developedthe strengths of the Scottish venture capital eco-systemwhat makes good founders and how he assesses thatgetting alignment between managers/investors and foundersdetermining whether there is a big enough markethow to give a company an international outlook as early as possiblethe mistakes founders makechanging management mindsets as a company progressesMark's background gives him a very different perspective, both individually and as part of a team that brings very diverse experiences. His insights into the people side in particular are tremendous. There is much for any founder or investor to learn here.
01:00 Mark introduces himself
04:50 where Eos is now
07:20 how their investment philosophy developed
10:30 lack of competition for deals in Scotland
11:50 Scottish eco-system - current strengths
16:20 what they are looking for in founders
20:30 separating people from company
24:20 alignment between founders, investors and managers
27:40 how do you determine a market
32:15 internationalising - when and how
36:15 how to line up international investors
38:40 what mistakes founders make
41:00 challenges of funding
44:50 changing mindsets in companies as they progress
49:25 favourite questions
Links
Eos Advisory website - https://eos-advisory.com/
Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen
Suggested books and media
Coffee First, then the World by Jenny Graham
Bio
Mark Beaumont,
Partner, Eos Advisory
Mark Beaumont became a Partner at Eos Advisory in 2019 and has helped lead the business through a period of significant growth, investing in predominantly Scottish science and technology companies addressing key global issues in healthcare and environmental health. Mark Beaumont spent the first chapter his career building teams around sporting success and is publicly known as an athlete and BBC broadcaster. He still holds the 18,000-mile circumnavigation cycling record in a time of 78 days. Mark’s degree education was in Economics & Politics, and for a decade and a half worked with a leading UK mid-market private equity firm. Mark is Patron for Entrepreneurial Scotland, Honorary President for Scottish Student Sport, Fellow of the Royal Society of Edinburgh and was honoured in the Queens New Year’s honours for services to sport and charity.
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In this episode of the EIS Navigator we get a great founder story. Despite not having a medical background, Clare Brenner founded Myogenes which specialises in pharmocogenetic testing. She has a very personal story about her motivation for initially focusing on mental health to begin with, as well as her experiences in starting in a new area.
In the discussion, Clare talks about:
how she found a good area to work onthe initial focus on clozapinewhy she seeks out the best people to work withthe challenges of getting initial fundinghow patient advocacy is playing a rolemaking a business case to convince the NHSmoving into the US marketwhere we are in developing personalised medicineClare's story is both inspiring and insightful, as well as being a great follow-on to the previous episode about female founders.
00:45 Clare introduces Myogenes
04:55 establishing proof of concept
06:40 how she found a test
08:30 how does the test work and the importance of working with doctors
11:50 finding the top people
15:00 why she focused on clozapine
18:00 how they developed the test
19:00 founding the company
21:00 marketing into the NHS: establishing cost/benefit and business impact models
25:00 progress with individual health trusts
28:00 the role of patient/family lobbying
29:00 getting funding for preventative medicine
32:30 moving into the US
37:10 where are we in personalised medicine
41:00 prospects for Myogenes
43:45 Favourite questions
Links
Myogenes website - https://www.myogenes.com/
Telephone - 020 8387 1266
Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen
Suggested books and media
The Diary of a CEO by Steven Bartlett
Bio
Clare Brenner,
Founder & CEO, Myogenes
Clare Brenner, CEO & Co-founder Clare began her working career at the BBC, moving from radio to television and then to writing and producing.
Her interest in genetics started in 2010 working for a private hospital and launching their DNA testing programme. She started on her own in 2016 and has dedicated the last six years to becoming expert in the field of genetics and forming her own company Myogenes.
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Nick Dimmock founded 350PPM as an incubator for various environmental businesses, but has followed a different path from many incubators. In this episode, he discusses how he developed the 350PPM business model, developing companies more generally and the state of environmental investing.
Amongst other items, Nick discusses:
how he developed 350PPM's business modelthe importance of the right systembalancing doing things for a company versus developing internal capabilitieshandling areas that are capital intensivewhere we are in the demand cycle for environmental investmentshow we generate more interest in themthe need for political support and changeNick is naturally forthright and brings some strong opinions which make for a very interesting conversation.
01:50 Nick introduces himself
05:00 what 350PPM is and does
07:40 how did the business model develop - developing a system
13:00 doing stuff for a company vs developing internal capability
18:35 what sorts of companies are of interest and why
22:35 capital intensity
27:30 demand for environmental investments
31:45 how do we sustain interest in environmental investments
33:00 need for removal of subsidies
39:40 next steps
41:15 Favourite questions
Links
350PPM website - https://350ppm.co.uk/
Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen
Suggested books and media
What You See is What You Get by Alan Sugar
Billionaire: The Life and Times of Sir James Goldsmith by Ivan Fallon
The Fifth Risk: Undoing Democracy by Michael Lewis
Bio
Nick Dimmock,
Founder & CEO, 350PPM
Nick has worked in the environmental sector since 2007 and has so far been involved in over 50 environmental projects from Municipal Solid Waste Composting in India, to 1500 MW Hydroelectric projects in Ecuador. Overall, the projects Nick has been involved in have created on-going emission reductions over 9 Million tons of CO2e per annum. From 2017, Nick has been involved with incubating, accelerating and venture...
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Software-as-a-Service (SaaS) founders rightly focus on their product and market, but sound finances underpin any success. Anthony Nitsos founded fractional CFO business SaaS Gurus after working in a couple of successful exits. He has seen the inside of many SaaS businesses so has lots of experience in developing good practice and seeing the mistakes that founders make. In this episode, we tap into that knowledge.
Amongst other topics, Anthony discusses:
balancing different financial metricssensible gross margin targets and when companies should be hitting themchanges in SaaS valuation multiplesthe value of market expertise in generating successsales cycles and how they differ in B2B and B2Cfinding the right first sales person and who the next recruits should bewhen to bring in a CFO (and its earlier than most think)the value of benchmarkingthe difference between finance and accounting in companieshow to prepare for an exitIts a great conversation, with Anthony bringing lots of insights from his vast expertise for founders and investors alike.
00:50 Anthony introduces himself
04:45 what financial metrics matter and the difference between venture-backed and bootstrapped businesses
09:45 gross margin - good targets and when you should be hitting them
13:30 how valuation multiples have changed in SaaS
15:45 patterns in CAC and trends in software purchasers
18:05 how to you know you have product/market fit
20:00 difference in sales cycles between B2B and B2C
23:30 the value of market knowledge and how startups are not for on the job training
24:30 why its easier to move from enterprise to SME than vice versa
25:45 how finding the right first sales person is the biggest challenge
31:45 building a sales team
37:00 when to bring in a CFO
39:30 the merits of building finance function when its pre-revenue
42:20 the value of benchmarking
43:15 most companies have problems
45:00 the difference between accounting and finance
49:20 preparing for exits - how acquirers look at finances
56:00 why founders should know what short of exit they want
60:00 favourite questions
Links
SaaS Gurus website - https://saasgurus.io/
Free ebook on "SaaS Secrets for Financial Triumph" - https://saasgurus.io/lab
SaaS Gurus contact page - https://saasgurus.io/contact/
Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen
Suggested books and media
Measure What Matters by John Doerr
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How we fit EIS funds and VCTs in an advice process is something that the tax advantaged industry has got many different answers for. Rob Bell of Finova Money has been using these for clients for many years. In this episode we discuss their place in a financial plan, how he chooses between different products and investor perceptions of the industry.
Amongst other topics, Rob discusses:
how he chooses the right scheme for his clientshow he uses what might go wrong in framing discussions and diversificationthe use of a panelassessing track records and their depththe true term of EIS investmentsthe value of managers having several capital poolswhere SEIS fits into the advice processdifferent uses of generalist and specialist managersthe current state of ESG and impact managersimproving investor perception of venture capitalIts a great conversation with lots of insights from Rob for investors, advisers and fund managers.
01:15 Rob introduces himself
02:15 what is Finova Money
03:00 how he chooses between EIS and VCT for a client
06:50 loss relief and how discussing what might go wrong helps
07:50 thinking about diversification
12:15 product selection and producing a panel
13:20 assessing manager track records
16:50 thoughts on the depth of track records
19:30 the real term of EIS investments
22:50 value of managers having several capital pools
25:30 how SEIS fits into the advice process
28:45 specialist vs generalist managers
31:00 ESG and impact investments
36:10 challenges of recommending new managers
38:35 investor perception of venture capital
44:10 how do we improve investor perception of financial advice
48:15 favourite questions
Links
Finova Money website - http://www.finovamoney.co.uk
Rob Bell on LinkedIn - https://www.linkedin.com/in/robertbell-financialplanner/
Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen
Suggested books and media
They Ask, You Answer by Marcus Sheridan
Bio
Rob Bell,
Founder & Chartered Financial Planner, Finova Money
Rob is a Chartered Financial Planner and one of the founding directors at Finova Money, an independent financial advice business based in London.
Rob is passionate about helping his clients take control of their finances so they can live with confidence knowing they have a solid financial plan for the future in place. Rob’s clients include business owners and professionals with more complex tax positions who can benefit from looking at a broader range of financial planning options. Outside of work Rob’s interest are getting out into the countryside, Munro bagging and scuba diving.
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Manufacturing and operations is an area that has been much neglected by venture capital, but has plenty of issues that can be address. Renan Devillieres of venture builder OSS Ventures focuses on this space, with distinct methods and successful results. In this episode we discuss how he goes about creating successful new businesses, with very good results to date.
In a wide ranging discussion, Renan discusses:
what is venture buildingthe process for finding pain points in factorieshow Renan characterises different operations why there is still so much low hanging fruit in this areawhat sorts of manufacturers are open to changehow to make sure there is enough initial customers and how to work with themworking with different tech stackshow to make sure that companies don't customise for specific clientsmaking the OSS fire itself from each companythe different markets and sales processes he seesfinding the right founders and the skill sets they needthe effect of AIhow the global manufacturing model of the past 30 years is changing nowIts a great conversation with lots of insights from Renan and a must listen for investors and founders who want to build successful businesses.
01:30 Renan introduces himself
02:45 introduction to OSS
04:00 what is venture building?
09:00 finding pain points in factories
13:15 how the regulatory environment can affect go-to-market strategies
17:30 why is there so much low hanging fruit
21:00 how different manufacturers are stuck or open to change
25:30 finding the first customers
29:00 working with clients to build viable solutions without customising too much
32:00 how the OSS team fires itself
37:00 how different software has different sales and decision making processes
41:20 the necessary founder skills
44:15 how AI is affecting manufacturing
49:10 trends in manufacturing and how its all changing now
55:30 favourite questions
Links
OSS Ventures website - https://www.oss.ventures/
Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen
Suggested books and media
The Subtle Art of Not Giving a F*ck by Mark Manson
Empty Planet by Darrell Bricker & John Ibbitson
Bio
Renan Devillières,
CEO OSS Ventures
A graduate of the Ecole Normale Supérieure and the Ecole Polytechnique Fédérale de Lausanne, Renan began his career as a consultant at McKinsey, before becoming an economist at the OECD and then strategic project manager for the Richemont Group. After his various experiences, Renan launched into...
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Governance is all too often seen in startup companies as a chore, or necessary evil when it can be a positive and enable success. Dermot Campbell, founder of CEEIO, is trying bring more of the latter to the venture world. In this episode, he discusses how startups can enable good governance without spending too much time on it and make it a means to the right end rather than an end in itself.
Dermot covers a lot of areas, including:
what is governancethe importance of maintaining stakeholder relationshipswhen startups should start introducing governance structureshow governance should lead growthwho should take the lead on board creationthe role of fund managersgood preparation for board meetingsbuilding effective board agendasthe value in identifying riskssetting up risk assessments and how these can lead to key objectiveshow to generate relevant KPIshow to translate a business plan into something usefulgenerating the right boardthe commons mistakes made by foundersthe rise of ESG and how its different in startups from quoted companiesWhether you are a founder looking to put governance into place or an investor helping or wanting a company to do it, this is an essential discussion.
01:00 Dermot introduces himself
02:00 What is SEEIO
03:10 What is governance
04:20 the importance of maintaining stakeholder relationships
05:40 importance of creating a governance framework
06:15 how should new startups approach governance
08:40 when to create the board
09:45 who takes the lead
11:30 role of fund managers
12:30 the work in preparing for board meetings
15:00 don't just sell - value in identify risks
16:30 setting up appropriate risk assessment
20:30 how to use a business plan and use it to generate objectives
22:10 working on KPIs
24:00 building effective board agendas
27:20 generating the right board and founder relationship with them
30:30 role of independent NEDs in startups
32:10 what mistakes do founders make
33:30 value of governance in improving odds for fundraising
35:50 rise of ESG and how investors care about G - G facilitates E & S
42:20 favourite questions
Links
SEEIO website - https://seeio.co.uk/
Dermot on LinkedIn - https://www.linkedin.com/in/dermot-campbell-3178a326/
Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen
Suggested books and media
The Go To Market Handbook for B2B SaaS Leaders by Richard Blunder
MEDDICC: The ultimate guide to staying one step ahead in the complex sale by Andy Whyte
Bio
Dermot Campbell
CEO, SEEIO
Dermot Campbell is an experienced fintech leader,...
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Getting big returns in venture capital can involve stepping away from the mainstream and investing in opportunities that others won't. Will Gibbs of Octopus Ventures has a reputation for investing in areas others see as taboo. We ask him about being a contrarian investor, how to do it well and what needs to change to create a successful investment.
In a discussion filled with numerous examples, Will discusses:
getting big enough markets when the market is somewhat hiddenbalancing new technology and new marketswhen specialist investors are neededjudging whether a company will be ripe for follow-on investmenthow taboo investments can interact with social changesequencing market expansionwhat a company needs to internationalisewhat problems that internationalising doesn't solvebuilding deal flow in taboo areashow the venture capital industry is creating some of the problemsthe value of team diversity in looking away from consensus areaswhether valuations are different in taboo areas.In a wide ranging conversation, Will brings a great perspective on how to bring mainstream venture capital skills to genuinely new areas. Its a great discussion for investors and companies who dare to be different. Enjoy!
01:00 Will introduces himself
03:40 Who Octopus Ventures are
06:30 Contrarian and tabooo investing
07:45 Example: Elvie - silent breast pump
09:50 Example: Pelago - substance use disorder
13:20 the size of taboo markets, challenges in assessing true market size
16:00 new tech and new markets - need for specialists
17:30 Example Overture - improving and automating IVF
19:20 market meets social movements - will someone follow-on?
22:05 assessing the pace of social change - risk of too early
25:30 sequencing the right national / international markets
25:45 Example Skin & Me - getting expansion right and not too quick
29:30 Time and capital to internationalise
31:00 when is the right or wrong time to internationalise
33:30 building deal flow in taboo areas
35:15 to what extent is the venture capital industry part of the problem - value of diversity
38:05 is the industry going in the right direction?
40:00 are valuations different in taboo areas?
42:35 creating communities supporting companies
47:45 prospects
50:20 Favourite questions
Links
Octopus Investments: https://octopusinvestments.com/
Octopus Ventures website: https://octopusventures.com/
Companies mentioned:
Pelago https://www.pelagohealth.com/
Overture https://www.overture.life/
Vira https://www.vira.health/
Elvie https://www.elvie.com/en-gb
Skin and me https://www.skinandme.com/
Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen
Suggested books and media
Essentialism by
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Valuations are always a popular topic. With much discussion about whether we are at the bottom of the current cycle, it seems a good time to revisit and we invited back someone who has experienced several market cycles: John Glencross, co-founder of Calculus Capital.
We had a great discussion on how the current market, how this compares with recent times and how a fund manager handles them. Topics discussed include:
how companies are accepting lower valuationsthe danger of growth at any pricewhere there are still bubbles and what the consequences of these might behow to manage investing when valuations are highthe psychology of down rounds preferential return structures and what John is seeing in the marketreal unicorns versus valuation aberrationshow valuation matters for investinghow Calculus values existing portfolioJohn's sense of valuations in the EIS & VCT market and where he thinks the discrepancies arehow close we are to the bottom of the valuation cycleTalking with someone who has seen several downturns gave a great perspective on all these topics and there's lots for all advisers and investors. Enjoy!
01:00 John introduces himself
04:30 recent exit patterns
06:00 companies accepting lower valuations attraction of investment vs exits
07:30 avoiding growth at any price - US vs UK
10:15 where there is still bubbles
13:15 investing when valuations are high - changed pace of investments in recent years
16:45 the psychology of down rounds
18:45 preferential return structures and the general tightening of terms in market
26:00 when are unicorns a market aberration?
28:30 how valuation matters for investing
31:10 portfolio valuation - lags, being realistic and getting a good process
35:00 how EIS managers are using unrealised performance as marketing, but its not similar to exits
41:00 what is an acceptable band of uncertainty? How exits matter
44:15 are we at the bottom of the valuation cycle?
48:45 favourite questions
Links
Calculus Capital website: https://www.calculuscapital.com/
Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen
Suggested books and media
Sunshine & Shadows
The Four Agreements by Don Miguel Ruiz
Sing as We Go by Simon Heffer
Bio
John Glencross
Chief Executive and Cofounder, Calculus Capital
John co-founded Calculus with Susan McDonald in 1999, creating one of the UK’s most successful,...
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When we last spoke with Harry Heartfield of Edition, the leisure sector was all about recovering the pandemic. Fortunately, we have moved on so we thought it was time to get him back to discuss where we are now, how his investment philosophy has evolved and what the prospects for exits are now.
We covered a lot areas in our discussion, including:
the unevenness of the current recoverythe difference that geography and target market makesthe need to rebalance portfolio risk nowhow live entertainment and hospitality are doinghow to run live events professionally and Edition's role in supporting thatprospects for exitshow the landscape of purchasers looksthe challenges of making rollups workwhy profitability matters more than everhow and why to set up EIS deals six months in advanceIts another great discussion - Harry is both erudite and insightful, and the lessons are not just about the leisure sector . Enjoy!
00:50 Harry introduces himself
03:00 Why Edition is more than a fund manager
05:00 How does the leisure sector feel now?
08:00 the unevenness of the recovery
10:00 where is recovering and where isn't - geographic and demographic differences
13:40 rebalancing risk in portfolio
15:30 how live entertainment and events are doing
19:30 the return after pandemic
20:30 how to get professionalism in live events
25:30 the prospects for exits returning
28:10 political games amongst the big players in live entertainment and the structure of purchasers
31:20 making rollups work - the danger of multiple arbitrage and focus on synergies
35:45 how long to build a company?
40:15 the importance of profitability in the current market and when there is a trade off vs growth
44:30 messaging around doing something different
47:30 why Edition is lining companies up for investment 6mths in advance
50:20 the challenges of agreeing deals 6 mths in advance
54:00 favourite questions
Links
Edition Capital - https://www.editioncapital.co.uk/
Harry on LinkedIn - https://www.linkedin.com/in/harry-heartfield-2275983a/
Email [email protected]
Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen
Suggested book and media
If This is a Man by Primo Levi
The Body: A Guide for Occupants by Bill Bryson
Bio
Harry Heartfield
Senior Partner, Edition Capital
Harry has over 15 years’ experience in the leisure sector. In 2011, he joined boutique asset manager Ingenious becoming a Senior Investment Manager in their Live Entertainment Team. At Ingenious, he was responsible for working across several investment funds including several Venture Capital Trusts with a focus on leisure assets. During his time at Ingenious, he also developed and launched several investment products aimed at...
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Assessing companies for venture capital investment is often more of an art than a science. Richard Blakesley is trying to change that with Venture Cubed. Its rating system aims to objectively assess how investible new companies are. We asked him to talk about how they built their rating system, what it tells us about the venture industry and how it might change it going forward.
This is the second part of our excellent discussion. In the previous episode, we spoke about his rating system and what matters when assessing companies for investment. In this one, we discuss scaling the UK venture capital industry, indexation and investing at scale. In particular, we talk about:
the proportion of companies that should be getting investmentthe challenge of getting more investment into different companies instead of boosting valuationswhether support and investment should come from the same organisationcreating a index for venture capital and benchmarkinghow to make that index investibledata and creating systems for intermediate valuationsbuying and selling a venture capital indexdifferent investment models that might be usedwhy bigger funds would expect to outperform smaller fundsAs you can see, we covered a lot of ground. This is a really important discussion for the venture capital industry: there could be an opportunity for it to scale up dramatically in the near future, but how it does that really matters. This discussion may not produce all the answers, but at least it asks the questions. And don't forget part 1!
00:45 How many companies get funding that deserve it and what's the shortfall in companies not being funded that should?
05:00 inflating valuations versus broadening the range companies getting investment - need new channels for pension funds
08:00 why the industry needs to change - case for passive management
10:00 the challenges of indexing venture capital
11:00 separating investment and support - how passive managers might arrange that
14:30 the real role of a fund manager
21:00 issue of intermediate valuation (before exit) - data collection on private countries
26:20 data protection & confidentiality
27:40 how to make index investible / expand coverage - without diluting quality
33:00 buying & selling index - fund types, physical vs derivative
35:00 creating funds where industry can write a big cheque
35:45 bigger diversified funds outperform
37:00 the power law and reversion to mean
42:00 co-investment model and role of BBB - public plus private models
45:30 favourite questions
Links
Venture Cubed website - https://www.venturecubed.com/
Richard's email: [email protected]
British Business Bank venture capital reviews: https://www.british-business-bank.co.uk/uk-venture-capital-financial-returns-2023/
Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen
Suggested books and media
Superforecasting by Philip Tetlock
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Assessing companies for venture capital investment is often more of an art than a science. Richard Blakesley is trying to change that with Venture Cubed. Its rating system aims to objectively assess how investible new companies are. We asked him to talk about how they built their rating system, what it tells us about the venture industry and how it might change it going forward.
We had such a good discussion that we have split it into two parts. In this episode, we discuss how he measures companies. In the second part, we talk more about the wider industry. Here we discuss:
what their rating system aims to measurehow they assess how good the ratings arewhat are the important factors in the ratingthe weights that are given to those factorshow they quantify factors that are more qualitativethe challenges in analysing financial modelswhere founders don't understand what investors wanthow founders can get good advice on fundraisingthe process of giving feedback to founders and how receptive they arethe mistakes that founders often makethe proportion of companies that are really investiblewhat investible really meanswhere funding gaps areAs you can see, we covered a lot of ground. Whether you are an investor thinking about how to assess companies or a founder considering fundraising, there's a lot for you here. And don't miss part 2!
01:00 Richard Blakesley introduces himself
02:20 What Venture Cubed does
03:45 What are Venture Cubed scoring? - investibility
06:00 How he measures the success of ratings
09:25 What are the most important factors
12:20 How they quantify qualitative factors
14:20 Issues are around bias in interviews
18:10 Assessing companies without interviewing management
19:00 How founders often don't understand the desires of investors
22:00 Getting good advice on how to fundraise
26:30 How founders get feedback from the rating process
30:20 The receptiveness of founders to feedback
32:45 What mistakes do founders often make?
38:50 How does Venture Cubed weight the factors?
42:40 What proportion of companies are investible?
45:15 How many companies get funding that deserve it and what's the shortfall in companies not being funded that should?
Links
Venture Cubed website - https://www.venturecubed.com/
Richard's email: [email protected]
Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen
Bio
Richard Blakesley
Founder & CEO, Venture Cubed
**tbc
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Investing in companies that are starting out presents different challenges from when they are more established. Oxford Technology has probably been investing in new science and technology companies for longer than than anyone else in the (S)EIS/UK VC world. We get Director Andrea Mica to discuss how to go about it.
In a discussion that is full of examples, both successful and unsuccessful, we cover a wider range of areas:
how to validate the science / technology when there is no saleshow to invest without specialist knowledgebuilding appropriate experimentslooking beyond the first experimentthe importance of testing commercialityavoiding solutions looking for a problemdeveloping founder skills and encouraging them to try salesthe value of contrarianismWith lots of experience, Andrea gives lots of great insights into how they approach the challenge and there is plenty for investors and founders to learn from. Hope you enjoy it!
00:45 Intro to Andrea
06:00 History of Oxford Technology
09:40 Geographically close companies versus distant
12:30 Validating the science / product at the early stage
16:00 Example - viral pathway
21:00 The usefulness of specialist knowledge
26:30 How to building experiments - appropriate size and looking to future experiments
28:30 Testing commerciality: balancing exploration vs definitive answers
33:00 Example - value of testing hand strength vs recovering hand functionality
36:00 Solutions looking for a problem
40:00 Challenge of products that reduce pay of those buying. example - technology to discriminate moles
43:00 Founder skills
46:00 Importance of sales and persuading founders to learn to like it
50:00 Recent trends and the value of contrarianism
55:30 Favourite questions
Links
Oxford Technology website - https://www.oxfordtechnology.com/
Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen
Suggested book and media
Thinking, Fast and Slow by Daniel Kahneman
Bio
Andrea Mica
Director, Oxford Technology
Investment Career
Oxford Technology Management Ltd – OT(S)EIS Fund Director. Responsible for souring selecting and supporting companies in the fund. The Fund now has invested £11m.
2009 - Royal Society Enterprise Fund at the Royal Society.
Short term role to help structure the investment evaluation process, train an incoming analyst and help carry out due diligence on the first investments.
2005 IP Group Plc - Responsible for selecting investment opportunities in the partner universities, conducting technology and market due diligence , building startup up team and presenting the investment case to the investment board.
This was followed by a period as director of the companies formed
1999: CFB Technology, Flintstone Plc - Responsible for investigating the technologies in which the group invested and then in helping the teams/companies get started.
Other
Oxford Creativity Trainer and Problem Solver
Cleansteel Ltd – (Business developing and running a recycling process) Co- Founder
Oxford University Begbroke Business Development Fellow
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Yet again, the EIS navigator team has got its all-star panel to discuss what happened in 2023 and how 2024 is shaping up. Christiana Stewart-Lockhart, Director General of EIS Association, Neil Cole, Head of Private Markets Distribution, UBS Wealth Management, and Kealan Doyle, Director, Symvan Capital join Brian to pick through the events of the past year and the prospects for 2024.
We chat through many areas of interest:
how has fundraising gonewhether some VCTs are sitting on too much cashhow easy is it for companies to raise moneythe need for discipline when making follow-on investmentswhether valuations have bottomedhow UK venture capital compares with the US and Silicon Valleythe renewal of the tax advantaged schemes (EIS, VCT and SEIS)whether the increase in SEIS limits is having an effect yeteffect of the new Consumer Duty ruleswhether some risk warnings are flawedAnd, as usual, we get our guests to look forward to 2024 and make some predictions.
Links:
EIS Assocation - https://eisa.org.uk/
Symvan Capital - https://www.symvancapital.com/
UBS Wealth Management - https://www.ubs.com/uk/en/wealth-management/home.html
Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen
Bios
Neil Cole
Neil Cole is the Head of Private Markets Distribution at UBS Wealth Management. He has responsibility for the Private Markets product range offered to UBS clients in UK and Jersey, which includes all of the tax efficient investment world including EIS, VCTs, inheritance tax, ISAs, and other relevant product types.
Kealan Doyle
Kealan is CEO and co-founder of Symvan Capital. He has worked with venture capital companies for 15 years, both in a corporate finance advisory capacity as well as a fund manager. He prefers to invest in a wide range of technology companies, but is also very interested in finding synergies within the Symvan portfolio of companies. Company interests include big data analytics, fintech, SaaS, 3D printing and network security. Before his involvement in venture capital investing, Kealan previously lead a structured equity products team at HSBC, and has worked at Deutsche Bank, Merrill Lynch and UBS. Together with Nicholas, he has since founded his own entrepreneurial businesses to focus on VC investing. Kealan holds degrees from the London School of Economics and the University of Toronto.
Christiana Stewart-Lockhart
Christiana Stewart-Lockhart is the Director General of the Enterprise Investment Scheme Association (EISA). She previously spent more than a decade working in Westminster including ten years at the Institute of Economic Affairs. She also founded EPICENTER, a Brussels based network of some of the most respected think tanks from across Europe. Christiana holds a BA in Politics from the University of York. She is a member of TISA’s Children’s Financial Education Policy Council and also sits on the Advisory Board for the All Party Parliamentary Group for Entrepreneurship.
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In this episode we take another look at debt funding for high growth companies. Juice has a novel approach using marketing data and its CEO, Katherine Chan, comes on to discuss their approach and the wider funding market.
We cover a lot topics., including:
why alternative funders have arisen in the marketthe pros and cons of using revenue based fundingwhen debt finance is appropriate in high growth companieshow Juice uses marketing data in its approachwhat makes reliable marketing datahow to navigate the risk of rising CAC/CPAhow lenders can give support to companiesthe concerns that borrowers have and how these can be addressedWe finish off by discussing some recent market trends, including the change in availability of funding. Its a great discussion!
Links
Juice website - https://velocity-group.com/
Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listen
Suggested books / media
Clara and the Sun by Kazuo Ishiguro
Atomic Habits by James Clear
Bio
Katherine Chan
Chief Executive Officer, Velocity Juice
Katherine serves as the Chief Executive Officer of Juice, a forward-thinking financial services company dedicated to providing growth capital for digital-first businesses. Katherine's journey in the financial sector spans over 19 years, marked by roles in banking and risk management at institutions including Commerzbank AG, HSBC, and Deutsche Bank.
Transitioning from banking to the startup world, Katherine joined Juice in 2019 as the Chief Financial Officer and has played a pivotal role in the company's development and rebranding from Velocity Juice to Juice. Her expertise in finance and risk management has been a key driver in Juice's evolution, leading to her recent advancement to the position of CEO.
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