Charlie Mortimer

Do not debtonate? Banks are the main targets here. But private lending, which has blossomed recently and is expected to account for around a third of the leveraged loan market, is also coming under fire. The next wave of refinancing and the potential resurgence of deal activity will mean even closer scrutiny? LPs' appetite for this asset class appears to remain positive 

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Please show me your raw usage metrics... 🫢 Had a great time at the LawtechUK investor event and truly appreciate those who reached out to share which parts of my waffling they found useful! Actually, the helpful bits I said apply to any early-stage software company. Reality is, many early-stage companies don’t have blow-your-mind traction yet. So, what can you show us instead? 🔍 Usage metrics. At this stage, you’re in the perfect position to dive deep into how your customers are interacting with your product. Think along the lines of: ▪️ DAU/MAU (Daily/Monthly Active Users) ▪️ Unique users ▪️ Session length ▪️ Queries processed through the platform ▪️ Product activation rate Etc. Etc. And yes, we want to see the raw data! Why? Because it helps us, as investors, to: ▪️ Understand if you're a data-driven founder and how you're thinking about growth and success. ▪️ How customers are engaging with your product (or not) —and how well you’re iterating to improve that engagement. Thanks to Harveer Singh Bharaj, Kim Simmonds and Calum Roberts for a laaaavely panel discussion, and to the LegalGeek team.

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🔥 VNXD Private Equity 🔥 If I had a pound for every time someone suggested this (included many of the M&A Advisers we deal with), I'd have.... a lot of pounds! But seriously, in the last 5 years, we've amassed 20,000+ board advisers, many of whom have built and exited their own companies. Nearly 5,000 members have also indicated they're open to investing in companies, whether actively as Board Advisers or passively, if the right opportunity arises. So.... We’ve got 20,000+ highly connected members, advising tens of thousands of boardrooms, with over 80% of our members telling us they were appointed specifically to help with strategic and exit planning strategies. Hmm... And let's talk about the level of funds – those indicated investment sums are now in excess of £450,000,000. Imagine if we decided to do something.... The potential impact is enormous. We could drive significant strategic growth, create more successful exits, and provide substantial investment opportunities. The possibilities are truly limitless. 🚀💼 But that's not in our plans and we are not a regulated vehicle so this post, as they say, is pure parody. Or is it? 😜 #StrategicGrowth #BoardAdvisers #InvestmentOpportunity #BusinessPotential #NextLevel #InnovateToGrow #ecosystem

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Pricing is moving from 'Ins' to 'Outs' Don't believe me! ▶️ Palle Broe, Steven Forth, George Boretos, Sarah Tavel...and a bunch of other VCs are all championing this new way of thinking. And now, The Deputy To The Deputy CFO, is also talking about this monetization growth hack 🤑 Well, think about it. When SAAS first arrived, everybody priced based on heads. Or seats, as they called it. Then Cloud became popular. SAAS now tries to price for use.  Some call it 'Usage Based Pricing'. Now Ai is all the rage. And people are talking about 'Outcome Based Pricing'. And 'Pricing the Work'. Which is 'Output Based Pricing' So, you can say that pricing has moved from 'Ins' to 'Outs'. Seats and use are inputs. 'Ins'. Work and results are outputs. 'Outs'. But isn't affiliate an outcome model? That's been around for ages. Yes! And what about Google Ads.  Aren't they output or work based, as they did the work to get someone to click? Yes. This 'Outs' pricing model isn't new. But it is just becoming more popular with Ai. Why is that? Ai cost structure, I think. But that's a chat for another day! #Pricing #AiPricing #AiMonetization

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🎉 Exciting News! ThirdRetail has secured SEIS advance assurance within 24 hours of self-application! 🚀 🔍 What is SEIS? The Seed Enterprise Investment Scheme (SEIS) is a UK government initiative designed to encourage investment in early-stage startups. It offers tax reliefs to investors, making it easier for young companies like ours to raise capital. 👋 Who are we? ThirdRetail is revolutionizing offline distribution for D2C brands! 🏪 We're the Airbnb of retail shelves, making it affordable and accessible for direct-to-consumer brands to scale their physical presence. Our AI-powered platform removes cross-channel blindspots, providing seamless integration between online and offline retail. 💡 Our mission: - Empower D2C brands to expand offline - Optimize retail space utilization - Bridge the gap between digital and physical retail 🤝 Calling SEIS Funds! Are you interested in being part of the third channel of retail sales? We're currently raising our pre-seed round and would love to chat with SEIS funds looking for exciting investment opportunities. Let's connect and explore how we can shape the future of retail together! 📈 Anil Junagal #RetailTech #SEIS #SEISFUNDS #Startup #D2C #Retail #Marketplace #B2B #SaaS

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Useful and timely analysis Overall: could have been worse

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Starling Bank's SaaS platform Engine could generate hundreds of millions of pounds a year for the UK digital bank, propelling it towards a £10 billion valuation, predicts investor Chrysalis. Engine is an API-based, cloud native platform initially built by Starling’s own in-house tech team to run the UK bank. In 2022, Starling began offering Engine to other lenders, promising to help them quickly launch new digital services or to replace legacy systems. The platform has so far only secured two clients, Salt Bank in Romania and AMP Bank in Australia. However, Starling's second largest shareholder, investment trust Chrysalis, is expecting Engine to become a significant source of revenue. The core banking transformation market is heating up. Starling is not the only bank spinning off its technology. It joins other dedicated vendors such as Mambu and Thought Machine as small and medium banks undergo rapid transformation programs. #digital #corebanking #transformation

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Sounds like a good business model.

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Should Canadian startups adopt this advice too?

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Thank you Funds Europe for including my voice in the new UK Budget coverage. VC industry was expecting the tax on carried interest - private equity managers’ share of profits on successful deals - to increase. However many of my fellow Venture Capitalists raised a concern about removing the right incentives for taking risks. These incentives are even more important for the founders creating strategic technology assets in the UK than for their investors. "Carried interest rewards fund managers who take long-term risks, which frees the capital needed to support early-stage innovation, particularly in R&D-intensive fields like quantum computing and AI. These sectors require sustained, high-stakes investment, where tremendous strategic asset value can be created, but the journey involves a great deal of risk-taking and patience." Thank you to everyone who led a dialog on this topic in the past few months and made sure that incentives are largely not removed for the founders and capital to stay in the UK. OpenOcean, British Private Equity & Venture Capital Association (BVCA), Michael Moore, Daniel Harrington

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Every tech founder want cash (nothing new here) 😂 Cash comes in many ways: - Revenues - the best form - Equity finance - Debt - Grants I (https://deallite.uk) sit on investor data with relationships built over a long time. Whilst I (Deal Lite) share this data through monthly subscriptions, I avoid investor introductions at all cost due to a number of reasons. I'm currently evaluating a light weight approach of investor introductions for Techcelerate members. Deal Lite also has the ability to include live fundraisers. Just wondering whether there is sufficient demand for us to create a product related service. It could look like below (not finalised - very early research): Product: - Listing on https://deallite.uk (company needs to keep us up to date so the data remain live) - Pitch deck sent to us for a quick review and inclusion with above. Service: For personal introductions, you would need to follow additional process: - Join Techcelerate as a Member. - Build credibility and trust within our community - Sign an agreement on light weight fundraising - Make introductions Of course, I would chat with Stuart Scott-Goldstone to understand legal ramifications. Whatever decided, it has to be a very light weight product related solution to ensure a decent quality of service. No decision has been taken. Just researching at present. I bet David John William Bailey might have some views on this. #fundraising #investment #DealLite

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What's your SER ratio? Last week I posted my blog on measuring your Salary Efficiency Ratio.... https://lnkd.in/eTcdVxvC I came up with the following for what good looks like: 👍 Good SER (< 0.5) the company is spending less than 50% of its Annual Recurring Revenue (ARR) on employee compensation. Good for established businesses. 👌 Acceptable SER (0.5 to 0.8) Established scale-ups need to be towards the bottom end, but in fast-growing tech companies could be at the top for a while (just don't stay there)! 👎 Poor SER (>0.8): You're spending more than 80% of ARR on employee salaries: way too much whatever the stage. I would love to know whether you think I've got these ranges right? #salaryefficiencyratio, #venturecapital, #CFO

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Today, we look after the financial futures of over 200 GTM pros and their families. In the UK, there are more than 150,000 people working in software sales, across all functions of GTM. (Source: Sales Nav search, experience at least 10 years, GTM functions etc). What % are actively working to a financial plan? In our experience, most aren’t. The impact? More tax, less saved. Having to work longer. Retire with less income. Or both. Looking forward to the getting back into it after a much needed break. Our mission - to become the #1 financial advice provider for GTM pros in the UK. Ps - lovely par this. Total score not important.

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Many founders know the pain of the HMRC SEIS/EIS advance assurance process, but few know that something even more painful awaits. But first, a reminder that FounderCatalyst takes the pain of an advance assurance away - we produce advance assurance submissions for founders for free when they commit to a funding round. So...more painful than advance assurance? It's the SEIS/EIS Compliance and Certificate (AKA (S)EIS1 to (S)EIS3) process required whenever you issue shares under the SEIS or EIS schemes.  The process is painful in and of itself, but each submission can only cover one scheme (SEIS/EIS), one share class (hopefully you are only issuing Ordinary shares anyway) and, crucially, one day of issue. So, you may find yourself undertaking this process several times for just one funding round. Ouch. Great news though - FounderCatalyst has you covered: we'll support you in undertaking the compliance process and we'll issue each investor a fully completed SEIS / EIS for ⭐️FREE⭐️. This is a service that our competitors charge £490+VAT for 🤷‍♂️ Try FounderCatalyst today - we are sure you'll love it as much as James Tanner from Last Fan Standing did 🎉

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The DB alarm bells have been sounding for decades "If it sounds too good to be true it usually is" A stark outlier of an example I'm sure but we've learned very little about phasing out DB schemes and are busy pretending these are still viable over the coming decades for the public and some of the private sector. The teachers' pension scheme available to independent school teachers this year raises the employer contribution to 29.5% which is up from 16.75% less than 10 years ago. Based on what's happened to interest rates and investment in that period it makes no sense apart from the suggestion that the initial "teaser rate" was exactly that. If you transferred those numbers to the public sector it would explain a bit about pay gulfs if pension contributions were effectively quadrupled. For some reason there is nearly no appetite for this conversation at all in spite of the trillions of pounds of future taxpayer payments involved. Political weakness of the highest order. ‘I was on a comfortable £66k-a-year pension – then it plummeted to less than £18k’ https://lnkd.in/euZNcnjQ

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"Britain also suffers from a dearth of 'true risk capital and there’s not a lot of managers who are comfortable taking the risk that is required to manage that capital. In the City of London there’s a lot of capital but it tends to be focused on low risk, low reward asset classes like gilts.'" And most of the rest of Europe is even more risk averse when it comes to investing. Value created by European innovation, technology, and entrepreneurship routinely flows out of Europe. The hard reality is that Europe is simply an extension of US capital and financial markets. European countries should lean into it and finally structure their systems accordingly. “Private equity has been the biggest driver of returns for our portfolio. I don’t think there’s extra risk — what you do give up is liquidity. Private markets work well when you have pooled assets with a long-term time horizon.” - John Graham European investors should take note. 📝 https://lnkd.in/eaDYkjig

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💼 Top 10 UK Venture Capital Firms by Deal Count - Plus the Power of NEDs 💼 The UK's venture capital firms are leading the charge in backing high-growth companies, but think abut this..... if each deal also added a non-executive director (and they invariably do) to bring experienced governance and strategy into play, let’s look at the numbers: Let's start with the top 10 most active VCs in the UK in 2024, and the potential impact: 1. SFC Capital - 99 deals   2. Access EIS - 65 deals   3. Octopus Ventures - 54 deals   4. BGF Growth Capital - 47 deals   5. Ascension - 34 deals   6. Fuel Ventures 🚀 Ventures - 31 deals   7. Seedcamp - 28 deals   8. LocalGlobe - 26 deals   9. Par Equity - 25 deals   10. Amadeus Capital Partners - 24 deals If each deal added a NED, and each fund paid an average recruitment fee of £25,000 per hire, the total cost across these deals would be: 😳 SFC Capital: £2.475m   😳 Access EIS: £1.625m   😳 Octopus Ventures: £1.35m   😳 BGF Growth Capital: £1.175m   😳 Ascension: £850k   😳 Fuel Ventures: £775k   😳 Seedcamp: £700k   😳 LocalGlobe: £650k   😳 Par Equity: £625k   😳 Amadeus Capital Partners: £600k  👉 Total cost: £10.825 million 💸 Ps. Many recruitment fees are in excess of double the "average" fee of £25k. At Virtualnonexecs.com, we work with VCs to flatten the cost of recruitment across their portfolios. The VNXD Operator Network is available on a flat annual subscription - for less than the cost of a single hire. You get access to 22,000 non-executive directors, supported by internal headhunters and there's no "per hire" fee. This means ongoing access to the best talent with no extra costs for every deal. If you are interested in accessing this level of support, let’s discuss. You can book a demo with me here: https://lnkd.in/d3na7CEC or simply drop me a DM. 👉 #VentureCapital #Startups #NEDs #Leadership #BusinessGrowth #Investment #UKTech

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With all the doom & gloom surrounding capital gains tax, here’s why I am now more bullish on the future of the UK 🇬🇧 tech scene (especially in AI): 1. 20VC's Fundraise:    This fundraise is bringing more eyeballs and the people towards the UK. It’s about time someone starts challenges the traditional approach to entrepreneurship here, and I’m confident that 20VC will become the gold standard for tech investing. 2. Growing AI Ecosystem:   There is already a substantial base brewing locally, with over 1,300 AI companies in London—more than New York and Berlin combined. The network effect is only set to grow, with amazing companies like Synthesia, Metaview, and Robin AI. 3. 10-Year AI National Strategy:  The UK has a 10-year AI national strategy aimed at making the country a world leader in AI. This government support could become a real driver for economic growth and job creation. The UK has all the foundations to become an amazing place to build a business.

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Well done to Alex Chalmers for publishing a really well researched look at EIS/VCT funds. These themes have been bothering a lot of us for years: the fees, the mediocre performance, the misalignment of incentives. I thought I'd add some broader context. 👉 EIS funds :: like everything in VC, it's about the manager. There are some EIS funds that I'd choose to work with over GP/LP funds. I think Fuel Ventures 🚀 (🚀 Mark Pearson, Oli Hammond) are great, real energy and value. Same with MMC Ventures - a firm thesis and very professional approach. These are 2 great examples of funds with an identity & direction. They act like VCs, not 'fund managers'. Generalist funds are difficult to operate in any model, tax efficient or otherwise - it's hard for founders to get value add beyond capital when their investors don't have the specific expertise in a sector or model. The EIS/VCT industry has always been heavy on fees, but 'deal' & 'board' fees have also been common with GP/LPs too for a long time. That doesn't make it good practice, but it's not unique to EIS funds. One of the good things about EIS funds are the access they give to retail investors to a portfolio of tech companies - and that's been incredible for the industry over the last decade. The downside is that some fund managers are clueless, at best, malicious at worst. I've seen atrocious terms from EIS funds (5% exit warrant on entire share capital of a business + mega fees + participating prefs) - but that's a case of buyer beware - and maybe more of a stand from the BVCA. (BTW, the funds that take this approach have the worst fund performance.) It's easy to look at EIS funds after years of LPs backing new funds galore, but don't forget that these operators have been around for years, some (inc. Oxford Technology Management) were pioneer investors for a long time before 'deeptech' became fashionable again. 👉 When it comes to VCT, there's a context. The 'VC' bit has been a misnomer for the past 20 years. VCTs were launched in 1995 when venture capital looked completely different. Before 2015, managers could invest in MBOs through the scheme, for businesses of any age - it was the more edgy end of private equity, but nowhere near what we now consider as VC. A few classic PE managers like NVM & LivingBridge moved of the market, but for those who have stayed, the PE culture often remains and VC as we know it is sometimes an anathema. My own experience of VCTs has been largely poor. £100k+ in external DD, general misunderstanding of the venture model and finicky compliance with VCT rules that can hamper a company's flexibility. Since 2017, money has poured into VCTs via IFAs. I've wondered if the retail investors understand the industry, or even care. But again, as always, it's buyer beware. TLDR; EIS funds just need to shape up. VCTs need some innovation. WDYT? -- 📍 I advise scale-ups on fundraising M&A and often help their investors, too. 🤝 📧 [email protected]

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