Laura Wathen

"Funding Collapse sends investment in start-ups to six year low" The Times today covering the shocking stats that VenturePath uncovered, with our partner Beauhurst. Great quotes from supporters Michael Moore CEO, BVCA and Julian David CEO, techUK. * UK VC funding at Series A is -44% from last year, and worsening * Q3 24 is down a staggering 57% from Q2, itself down from Q1 * 9 in 10 seed funded startups cannot access Series A VC funding, the next 'rung on the funding ladder' * Just 32 future scaleup companies across the whole of the UK were able to access their first VC funding round in Q3...a 6 year low * Half a billion less capital is going in to UK scaleups at Series A, than just 2 years ago! As the UK scaleup funding gap widens, we are losing ground against other countries, at both startup stage (a position the UK worked hard to achieve, since 2011), and for scaleup support. OECD data: 13th in the world for scaleup support, and that's before Series A funding access dried up. I get that its confusing. Another report (BBB, Nations & Regions) released this week spoke of positive trends in private investment, stating "The data for Q2 2024 shows that investment value has continued to grow". Great, I love to see optimistic data. But under analysis that bundles venture with private equity (later stage), where a few megadeals skew the numbers. Otherwise the exact opposite is true. Our independent research here, for the UK ScaleUp Investment Mission, is laser beam focussed on Series A. The funding round where companies move from the c.1m startups launched each year, through the 2,179 that access seed funding, into the rarefied category of being recognised as future scaleups, attracting Series A funding (£2-10m). The UK venture landscape is currently funding just 248 pa of these companies, and declining. We've been sharing this urgent call for support with the new Government since the day after the election. I've personally met with several Ministers, and spoke to all the relevant Government departments. I will shamelessly repeat loudly what is at stake. UK scaleup funding at Series A has nearly halved in a year, and continues to decline steeply, more than halving in the last quarter. VenturePath developed The UK ScaleUp Investment Mission to convene the scaleup support ecosystem and £7bn of funders to help address this problem, to improve nationwide access to VC investment, and create more venture-backed successes. We have clear support, clear recommendations to reverse this decline in UK scaleup investment, and have made a clear ask of Government for participation in this, to ensure immediate action is taken to create the conditions for success for UK scaleups, ensuring the focus on growth isn't undermined by lack of capital, or equitable access to it. Government decision makers, we'd love your interest, to progress to action. HM Treasury: Rt Hon Rachel Reeves Spencer Livermore James Murray & CC Poppy Gustafsson (welcome to the debate).

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A few weeks ago, Openseed VC, in partnership with Dentons and PKF Littlejohn, hosted a webinar on Launching a First-Time Fund for first time managers - if you missed it 👇🏾 The recording is now available: See link in comments 🔗 I often get lots of messages from people looking to set up their first fund, and there’s been interest not only from first-time fund managers but also principals from potential corporates and family offices. With this in mind, I’ve decided to create a small, intimate community of up to ten people to support in their journey to launching a #FirstFund in 2025. Together, we’ll work out how I can best support your process to a first fund in a way that’s valuable to you—while respecting my bandwidth. If this sounds interesting, share more about yourself - link in comments 👇🏾: You should hear back in the new year. Let’s see where this takes us 🌍 #VentureCapital #FirstTimeFund #Entrepreneurship #FundManagers #Innovation #VC

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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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Investors must be back from holidays…content has taken a termsheet negotiation lean. — Going to be lots of people putting their opinions out to influence deal terms. Founders need good advice from service providers to seperate BS from Inspo. Two Legals POV’s I’d recommend: Patricia Wing’s SuLe for UK. OR Kristina’s Lawlace for US. Startup specific advice, specialised by geography. Generalists can be good but specialists are best. #fundraising #season #GoGetEm #femalefounders #startuplegals

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Maternity in VC in the spotlight. Well done Rachel Drapper, Sophie Winwood & the WVC:E team on getting this important report out there. In VC we’re dealing often with small firms, network & event heavy schedules and FOMO of being left behind if we take time out (I refuse to use the word off as anyone who’s had a child knows that’s the furthest from how it feels). If you’re thinking about having a child or in the throes of the early-stages, navigating how to even try and get some semblance or balance, then hopefully this report can provide some useful tips. Most importantly showcasing that you’re not alone.

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As a non-executive director, if you're not networking with PE, you're missing a huge trick! Here's a guide to some of the prominent UK PE funds and their areas of focus: Large UK Private Equity Funds aka "The BIG boys!": 1. CVC Capital Partners - Generalist fund with a strong focus on consumer goods, healthcare, and financial services. 2. Apax Partners - Invests in technology, telecommunications, healthcare, and consumer services. 3. Permira - Targets consumer, healthcare, technology, and financial services sectors. 4. 3i Group plc - Focuses on mid-market investments across a variety of industries including technology, industrials, and consumer goods. 5. EQT Group - Specialises in technology, healthcare, and industrials. Mid-Sized UK Private Equity Funds: 1. Hg - Invests primarily in software and service-oriented businesses. 2. Ardian - Covers a broad spectrum including energy, technology, and financial services. 3. IK INVESTMENT PARTNERS LIMITED - Focuses on industrial technology, healthcare, and consumer products. 4. Cinven - Targets healthcare, financial services, and technology sectors. 5. Bain Capital Ventures Capital - Invests in a range of sectors including retail, healthcare, and industrials. Venture Capital & Growth Funds: 1. Balderton Capital - Focuses on early-stage technology and consumer investments. 2. Index Ventures - Invests in technology, life sciences, and consumer sectors. 3. Octopus Ventures - Specialises in early-stage investments in technology, healthcare, and fintech. 4. Accel - Targets growth-stage investments in technology and consumer sectors. 5. Seedcamp - Focuses on early-stage tech startups and scale-ups. Sector-Specific Funds: - Healthcare: Syncona Limited , Viatris Ventures - Invest in healthcare innovation and biotech. - Technology: Notion Capital , DN Capital - Specialises in tech-driven ventures and growth-stage tech companies. - Energy & Sustainability: Energy Impact Partners, Chrysalix Venture Capital - Focus on sustainable energy and clean tech. What Virtualnonexecs.com does is help you Identify the right fund for your skills and this involves understanding their focus areas, helping you align. We work with numerous PE, VC and Family Offices to identify talent in minutes! Check out: https://lnkd.in/d3na7CEC 🚀 To join Virtualnonexecs: https://lnkd.in/eXBj687 🔥 #nonexecutive #chair #pe #vc

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🌱 Looking to Connect with Leading VCs and Early-Stage Investors? 🌱 At Virtualnonexecs, we don;t only work with PE firms - we are also proud to be working with some of the UK’s most active early-stage investors to help them find the top board advisors and chairs who can drive impact. If you're a non-executive or chair looking to connect with the heart of the startup ecosystem, take note of the names below. Here are 10 of the UK's most active early-stage investors and the incredible numbers that back them: 1. Octopus Ventures - Backed 100+ startups, with a portfolio value of over £1.3 billion. 2. Seedcamp - Over 400 startups funded, including unicorns like Revolut and TransferWise 3. LocalGlobe - Invested in 300+ startups across deep tech and fintech. 4. Playfair - Early backer of companies like Stripe and Anduril. 5. Passion Capital - Early investor in Monzo Bank, managing £100M+ in assets. 6. Ascension - Over 100 startups backed with a focus on social impact and fintech. 7. Frontline Ventures - Backed 80+ startups across Europe with a key focus on B2B. 8. MMC Ventures - £500M+ under management, supporting 60+ innovative growth companies. 9. Balderton Capital - Invested in 220+ startups with notable exits like THG. 10. Entrepreneur First - 500+ startups built, including companies now worth over $10 billion collectively. ✅ To join Virtualnonexecs: https://lnkd.in/eXBj687 ✅ If you are a VC or company looking to hire: https://lnkd.in/d3na7CEC #NonExecutiveDirectors #Chairs #VentureCapital #Startups #Virtualnonexecs #BoardRoles #Leadership #BusinessGrowth

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Very proud to see the WVC:E dream team - Anisah Osman Britton MBE & Rachel Drapper - alongside long time friend and rockstar Ekaterina Gianelli on stage at TechBBQ discussing "Fixing the Talent Exodus in VC". Key Takeaways: 💰Impact of Consolidation on Culture and Talent: The ongoing consolidation in the VC industry is reshaping company culture, affecting morale, and influencing talent. 🚀Emerging Managers Aren’t Diversifying VC: Despite the rise of emerging managers, the industry remains largely homogenous, with many new managers still coming from the same traditional, non-diverse backgrounds. ⚠️Perceptions of Diversity as High Risk: Many in the VC industry continue to view diverse hires, investments, and business models as "high risk," "too time-consuming," or "too costly," perpetuating a cycle of exclusion. 🚼 Parental Leave Inequality: Inequities in parental leave policies are disproportionately affecting women in venture, creating additional barriers to progression. But there are funds, investors, LPs and organisations (like us!) that are trying to change this!

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Thinking 🤔 out loud - one of the biggest beneficiaries of GenAI in the enterprise and agentic worfklows will be software PE firms There are so many beaten down SaaS 🦄 they can buy on the cheap and with a GenAI playbook can now reduce costs even more dramatically And as the AI gets better and moves from just the easy stuff like support and code to more complex workflows, the profitability created is going to be 📈 We are going to see a ton of PE buyouts in the months ahead...

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Part Two (of Five) of the highlights of yesterday's PepTalks conference with over 200 CEOs of PE-backed businesses. My friend, Giles Derry, shared his deep experience in M&A. The stats around the success rates for M&A are usually frighteningly low – one stat is that only 1/3 of acquisitions deliver expected value. However, Giles suggested that in the PE world, it’s higher than that partly because PE can be very skilled at helping porticos with their M&A activities. Here are some of the points Giles made, as well as insights from the CEOs in the room: ·     The starting point for buying a business is clearly explaining to yourself and other stakeholders why you are doing it. What is the strategic reason? Is it to acquire new capabilities? Expand to a new geography or acquire new types of customers? Maybe it’s to eliminate a competitor or build a bundle of products (which gives you cross-selling opportunities). ·     Be clear and open with the target’s leadership team about what you plan to do with their business and people. And then do what you say! If you don’t keep to your promises, you will alienate the target’s people from the get-go ·     Draft the integration plan before the acquisition – you don’t need to do everything on Day 1. For example, you might integrate the financial systems but leave the brand for 12 months. Set and get agreement on the integration milestones ·     Cost synergies are much easier to make a reality compared to revenue synergies ·     Cross-selling is hard in reality, but as Giles (humbly!) pointed out, it is possible Sam Smith and Giles Derry will bring together all of the insights on the M&A session for community members, so contact PepTalks if you want to see it. Part 3 is coming up… #privateequity #leadership #M&A

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A few reflections on last week's Budget, from me, and a bunch of our fabulous FieldHouse Associates' clients. https://lnkd.in/exrefrpt #tech #innovation #investment #venturecapital #startups #scaleups #regulation #government #PR #publicaffairs #consultancy

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I couldn’t be prouder to be a Venture Partner at Isomer Capital (aka the best European FoF - at least for me) as we just announced the launch of our pioneering £100m secondaries fund. This fund is dedicated to acquiring stakes from LPs in various VC funds, tapping into a massive and largely unexplored market. 🌟 Key Highlights: - Focused Investment: Primarily targeting stakes in VC funds, with selective investments in private companies. - Robust Funding: Already over 20% funded, thanks to strong support from Nordic family offices and a German foundation. - Market Potential: With a growing number of private tech companies and a VC liquidity crunch, Europe's VC secondaries market is poised for rapid growth. - Track Record: This isn’t Isomer’s first foray into the secondaries market. As a firm we’ve done several secondaries deals with portfolio companies and VC firms, including early-stage VC Seedcamp (in 2021) and mobility giant Bolt (in 2023). - Expert Team: Welcoming the amazing Omolade (Rachel) A., formerly of Coller Capital, as a principal to lead this initiative. 💡 Investment Strategy: - 65-75% of the fund will buy "LP interest" stakes in VC funds. - 15-25% will be directed towards stakes in companies. - Up to 15% reserved for flexible investment opportunities. 📈 Looking Ahead: We're targeting returns of 2-3x, with significant distributions expected in the next 4-7 years. As one of the few players in this space, we're not just participating in the market—we're driving it forward. Read all about it here: https://lnkd.in/dc7sbC3G #VentureCapital #SecondariesFund #EuropeanVC

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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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Taavet Hinrikus and I made the Financial Times Due Diligence email. https://lnkd.in/ez2AuGQx One 'unintended consequence' is that if there is a 45% tax on carry and CGT (raising £40m per year, remember) it for all intents and purposes closes the door on new VCs in the UK. Especially started by teams from non-traditional backgrounds. To meet the GP commit, you need to be already part of the 'wealthy' as you cannot rely on the value you create - nearly half of it will disappear - to fund it. We have both had extremely successful startups which are few and far between. The smaller number of new VCs will therefore more likely increasingly be for people who have inherited the capital or can draw it from their already rich family. Probably not want they have in mind with this policy.

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Useful and timely analysis Overall: could have been worse

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Episode 10 of DualSource Discourse is live! 🎙️ This week, we explore the rise of Private Equity (PE) in the ProcureTech sector 💰. Sarah Scudder - Sales Leader Turned CMO and I discuss the shift from venture capital (VC) firms as the primary funding source to the current landscape where PE plays a significant role. It is important to understand the difference in these funding changes because the motivations for each are vastly different and often changes the behavior of the company and composition of the executive team and employees ⚖️. Additionally, we delve into risk tools and the evolving role of PE, especially in light of the recent Versed AI acquisition by Exiger 😏. Check it out now! 🎧 YouTube: https://lnkd.in/gKvkN7QB Kearney Lance Younger Shakil Nathoo ❤️ Amanda Prochaska ❤️ Shachi Rai Gupta S. Michael Cadieux Mark Raffan Jon W. Hansen #DualSourceDiscourse #procurement #makingprocurementcool #supplychain #PrivateEquity #ProcureTech #Investments #PodcastEpisode

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This month marks my 10 year anniversary in Venture, and what a ten years it has been 🎉 🤩 First stop: JamJar Investments Rewind 10 years and you’ll find me sitting at my desk at JamJar, operating under the alias of “Bread”, working my way through an inbox full of 1000 cold inbound pitch decks, reviewing and replying to every single one. Highlights included a hand drawn picture of a new ketchup sachet design with “target market: Nandos” written below it, and a concept for a drink that tasted like the leftover milk at the bottom of a cereal bowl. But there were also some diamonds in the rough, and it was here that I got my first experience of that lightbulb moment when you meet an exceptional founder that you want to back, making my first investment a few months in. JamJar was the best training ground I could have hoped for, and I'm so grateful to Katie Marrache and Adam Balon, Richard Reed & Jonathan Wright for welcoming me into the team. Second stop: Venrex In 2015, I joined Mark & Tom at Venrex alongside Pooja Patel. We clicked as a team immediately, and over the ensuing years launched 7 new funds, grew the portfolio to 180+ companies, built a brilliant team, moved from a small attic in West London to panoramic views in Fitzrovia, and had a lot of fun along the way. As well as the buzz of discovering new founders to back, I also discovered my love for supporting founders post-investment. With 11 board roles and a further 16 portfolio companies to support, the ex-strategy consultant in me had just enough to get my teeth into. Venrex’s people-centric and pragmatic approach to investing chimed with my own instincts about the type of investor I wanted to be. They gave me the most incredible platform to grow as an investor and roll up my sleeves with all of the operational sides of running a venture fund. To the entire Venrex team, new and old, thank you for an amazing chapter. Third stop: Circle & Co In June, I left Venrex to launch my own Venture fund, Circle & Co, which is on track for its first close next month. It's by total chance that this milestone falls on my 10th anniversary in venture, but what an incredible way to kick off the next decade. More details on the fund to follow, but for the moment I want to thank the amazing network of friends, fellow VCs, founders, LPs and family who have got me this far. You are the original Circle, and have been the inspiration & driving force behind this next step. Let's make it a good one.

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Recent M&A market performance is showing significant signs of recovery from the lows of H2 2023, with the growth in PE and PE-backed deals leading the charge.

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As a pre-seed startup in the UK, my experience mirrors this new strong data. I was lucky enough to find some fantastic first round investors who were willing to go on a capital-intensive journey to innovate, but an astonishingly few VCs in the UK - and the EU - were excited to take outsized risks for our outsized returns. Instead, many were looking for revenue at pre-seed on a tech-centric build: low risk, medium reward. (There were of course other reasons that some people passed, some excellent concerns & feedback, and some stellar funds in the UK, but I am 90% sure that my round as a whole would have been much easier in the USA.) Given my experience, the fact that I'm a US citizen as well, and the experience of nearly every other founder, I strongly predict that my next raise will be skewed to the USA. I will definitely be putting more energy there in the beginning. The UK has amazing SEIS and EIS, which moves money from the wealthy individuals into innovation, but the industry as a whole isn't there yet. (And those of you with SEIS and EIS with us, don't worry - if I do a flip, I'll do it correctly to protect you!)

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