Simon Murphy

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.

32

2 Comments

"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).

738

195 Comments

How do you drive value when fundraising? In the absence of a clear guide, many founders and their boards will chart a steady and linear progression in value, supported by revenue or profit growth, starting at the implied valuation of the initial investment and heading towards a target valuation with valuation reference points to validate this approach. In determining the target value it is worth remembering that business values for scaling growing businesses are typically derived by considering three different methodologies - find out more in this article. https://lnkd.in/e4CH-HH7 #fundraising #valuecreation #investments

3

Scale-up business guide to getting investor-ready: THE FINANCIALS (2/7) Before approaching investors, you need to get your management accounts and everything associated with how you make money and spend money in order. This article explains the essentials of your business’ financials. #Business #investorready #financials

1

Congratulations 👏 to all founders named in the Founders Forum Group 100 Women Founders to Watch 🏆. Ascension reviewed many of the deals on this list, typically at pre-seed, and is lucky to have invested in 8% of the UK businesses named - super pleased to be on your journey Abbie Morris Compare Ethics, Brittany Harris FICE Qualis Flow (Qflow), Fifth Dimension AI Dr. Kate Jarvis 🚀 If you're a pre-Series A biz looking for funding, please get in touch. The report lays out "5 Steps to Increase Funding for Women-Led Startups", read full Report here: https://lnkd.in/e8ySwm2k 20% of our portfolio has at least 1 female co-founder and here are some tips to how we've pro-actively increased our funnel / investments over the years, though there's still room for improvement: 1. Expand Networks and Sourcing 2. Partner with organisations supporting female founders 3. Encourage warm introductions from a diverse set of sources 4. Address Unconscious Bias 5. Standardise pitch evaluation criteria to focus on business fundamentals 6. Include diverse perspectives in ICs 7. Diversify Investment Teams and aim for gender balance across whole biz 8. Focus on the founder's potential and vision, not just past track records 9. Recognise that female founders may present different growth trajectories 10. Track and report on the gender diversity of pitch meetings and investments As research shows, female-led companies often outperform in terms of revenue and job creation, making this approach not just equitable, but also financially sound. Emma Steele Iulia Tudor Romha Berhane Sonia Powar Freya Wordsworth Keir Wright-Whyte Rakesh Murria Bill Bousfield Remy Minute Toyosi Ogedengbe Chris Wheatcroft Alex Heerema

53

4 Comments

Not all venture firms are created equal - at Playfair Associates & Principals write cheques and lead deals 💰 Why? Because they have the ability, drive and passion to do so And what we care about most is building optimal partnerships with founders that deliver results This means matching them with the right investor who then continually leverages the diverse experiences of our entire team I spend a lot of my time nowdays supporting these investments as well as leading my own I love doing both Founders: don't assume only partners lead deals and don't be afraid to ask how decision making works during your pitch call #venturecapital #startups #fundraising #founder #entrepreneur #entrepreneurship #technology #innovation #business #ceo

187

24 Comments

Global gender parity on Managing Director Level in Private Equity investing roles may take 62 years to achieve....🤯 The pipeline is there BUT....: globally, men in investing roles are about 50% more likely, on average, to be promoted than their female colleagues, a trend that persists across all levels in investing roles...😟 Women in PE cannot just sit and wait for the situation to improve - we need to act now! The opportunity is there: 🎤 Speak up, deliver, and don't be shy to talk about your achievements and successes 🤚 Actively ask for that (long overdue) promotion and be persistent (!) - support and coach other women and pave the way for them 💰 Negotiate your salary (everybody else does...) 🗣️ Be visible - speak at conferences and take a seat on panels - you have a lot to say 👩 Don't only be involved in womens' networks - get out of your comfort zone and actively involve yourselves in networks that are (still) predominantly male. Take a seat at these tables and involve yourselves in these discussions. Empower other women to do the same and facilitate access for them 🤝 Look for male allies and mentors (they are there - we all need to work together to drive change) 🚀 Diverse-owned PE firms outperform benchmarks - build your own diverse team and found your own firm! Be a catalyst for change! Sources: McKinsey & Company: The state of diversity in global private markets 2023 Examining the Returns 2023 - Further Evidence of Diverse-Owned Private Equity Firm Outperformance (National Association of Investment Companies, NAIC)

33

2 Comments

Did you know that a number of private equity firms request their incoming non-executive or chair to commit some capital as a show of commitment, often referred to as having "skin in the game"? At Virtualnonexecs.com, we make sure to understand the appetite and ability of our chairs and non-executives to co-invest, should the need arise. 📈 To date, over 4,700 of our members have indicated they can and will invest, with the aggregate total reaching an astonishing £400,000,000! In June alone, this figure increased by £12,000,000. 💼 This collective firepower and the vast sums of indicated funds highlight the strength and commitment of our network. 👼 💸 Are we the largest Angel Network in the UK by accident? #Virtualnonexecs #AngelInvestors #PrivateEquity #Investment #NonExecutiveDirectors #Leadership #SkinInTheGame #BusinessGrowth

27

2 Comments

The British Business Bank produced a great report last week on the performance of UK VC funds (link in comments) over the last 20+ years. As with all reports like this, it's really important to dig into the detail and not just rely on the headlines. In particular, I was keen to compare the performance of the best UK funds to those in the US. While accepting the limitations of the data (all performance data on VC is based on a very low sample size), it's still interesting to see how the UK funds in the BBB report compare to the Cambridge Associates US VC benchmarks. As you can see from the chart below, the top quartile benchmark for UK funds exceeded the US funds for the period 2002-2007. But the sample size for UK funds in this period is particularly low (eg just five funds for the 2004/05 period). Since 2008, the top quartile UK funds have underperformed the US benchmark, and since 2010 are much closer to the US median return than the upper quartile. There are some outstanding founders and companies in the UK and some strong-performing VC funds. But the reality of VC is that performance is driven by a small number of outlier investments. Without these, it's almost impossible to deliver 3x net returns to LPs. For the UK to really become competitive with the US, we need to see more UK-based companies able to scale and exit at valuations in excess of $5bn. Unfortunately, there are no easy solutions to achieving this. We consistently hear from our VC managers that there is no shortage of capital for the best UK companies. Where there is a shortage is in the number of world-class founders looking to build in the UK. Get this right and the capital (and returns) will follow.

36

3 Comments

Corporate Venture Capital is becoming a vital tool for large company innovation - but it needs encouragement from the C Suite. Investors interested in seeing their large company investees innovate more effectively should make this a key topic for senior management discussions. Global Corporate Venturing's June 2024 Symposium in London included many important, encouraging insights: “Corporate venturing units are increasingly focused on helping their portfolio companies work with business units at the parent company …” “But you do need a push from the C-suite to make this happen, investors told us in more informal talks over drinks. Without business units being given specific performance targets by the leadership to work with startups, it is hard to get the startups any meetings in the first place.” James Mawson, Maija Palmer and the team at Global Corporate Venturing’s summary of their symposium and the posted videos are a fantastic resource for anyone wanting to understand CVC's fundamental transformation of innovation investment and venture capital.

9

1 Comment

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

22

2 Comments

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

23

1 Comment

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

13

3 Comments

Hey Founders out there, have you ever applied for Grants? How was your experience with it? Its usually a perception of "IT HAS TO BE SOME SORT OF MEDICAL , SCIENTIFIC ONLY PROJECT...." THE FACT: The innovation is key... !!! - Is there a major societal problem which needs a solution? - Do YOU have a unique solution for that issue? - Does your solution have it all to become commercial? - Is your team committed to it, like really COMMITTED!? You have to think about it this way: That's tax payer money. Would you want THIS to be funded to become reality?? IF YES, GO FOR IT. We are doing it with Grantify. Those guys seem to have the edge for it. Especially in Tech smart Grants. ITS NOT EASY to become their client, but once you do, your chances to be accepted go from 4.4% to 40-70% so more than 10X. Investors also say it makes you 10X MORE INVESTABLE! The £5k +VAT is worth it. Check it out and apply if you want to get to the next stage LINK BELOW https://lnkd.in/epBkaSke

4

2 Comments

There are many untold success stories where PE has transformed undervalued and underperforming companies, generating substantial returns. In the UK, PE supported nearly 1,500 businesses in 2023, empowering management teams with long-term strategies and access to new markets. Unlike traditional public companies burdened by short-term profit pressures and regulatory demands, PE-backed firms focus on growth and operational improvements. This approach allows for streamlined decision-making and reinvestment in core strategies, fostering a culture of purpose and entrepreneurial innovation. PE's success lies in strategic clarity, operational focus, and a supportive partnership with management, contrasting with the constraints often faced by publicly traded companies. Read More Here: https://lnkd.in/eEnYudDj The Times Richard Harpin Branded Hospitality Ventures #hospitality #restaurants #technology #finance Noah Stern Matthew Lerner Kim Karmitz Derrek Ross Tarek M.

2

Bolt's crazy #investmentterms seem to be all over the news today. More details were just sourced from The Information and Erin Woo. Any #investor that signs up for this set of terms, and valuation, should have their heads examined! What do you think? #management #venturcapital #privatequity #capitalmarkets #fintech

1

📣 We’ve got a big ESG_VC event planned for Tuesday next week – featuring the latest updates to our measurement framework, news of our 2025 benchmarking with the British Private Equity & Venture Capital Association (BVCA), and an introduction to our new platform partners… 📣 On the afternoon of Tuesday 26 November, we’ll be gathering 200+ VCs for the latest update on the ESG_VC Measurement Framework – from what it covers to how it informs industry-leading research, and how you can now work with our accredited data collection partners. This will be our first event delivered in partnership with our cohort of platform partners: Apiday, Novata, and PortF. I’m excited to share with our members how these partners can support a big step up in your ESG initiatives. Join us for a jam-packed event that will feature: 🟢 An update from Suzi Gillespie of the BVCA on how you can take part in our 2025 research – we analysed ESG performance in c.600 VC-backed companies in 2024 and we’re looking to deliver an even more ambitious piece of research next year… 🟢 Insights from Emily Havers of Fidelity International Strategic Ventures on the updates that have been made to the framework and what it means for our members, their portfolio companies, and the broader ecosystem. 🟢 Perspectives from Emily Matthews of Oxford Science Enterprises and Nina Foote of Volution on how the ESG_VC Measurement Framework has supported their work on ESG. 🟢 Presentations from our platform partners: Edouard Audi of Apiday, Conor O'Laoire’Laoire of Novata, and Alex Lu of PortF. It’s going to be a good one so do register. Link to sign up in the comments! #ESG_VC #sustainability #venturecapital

47

1 Comment

Major Barloworld shareholder rejects R120 offer, demands R130! Silchester says consortium’s offer is undervalued. UK-based SILCHESTER INTERNATIONAL INVESTORS LLP, a major investor in JSE-listed Barloworld, does not believe the offer from the consortium that is proposing to buy out all the ordinary shares in the JSE-listed group is “compelling”. A firm offer by the consortium last week values Barloworld at R23 billion and comprises a cash offer of R120 per share that will not be reduced by the R3.10 per share dividend already declared by Barloworld on 22 November. However, Silchester director Tim Linehan said the firm is unwilling to tender its Barloworld shares unless the consortium offers at least R130 per share. Linehan said a full privatisation of Barloworld is unlikely to succeed without the support of the group’s primary shareholders, including Silchester. Silchester owns 33 531 795 ordinary shares in Barloworld, which represents 17.7% of Barloworld’s issued share capital. The consortium comprises Entsha and Gulf Falcon Holding Limited, a wholly-owned subsidiary of the Zahid Group, a multidisciplinary conglomerate headquartered in Saudi Arabia and an effective 18.9% shareholder in Barloworld. Entsha is a newly incorporated company that is ultimately owned by The Katlego Le Masego Trust, an inter vivos trust established for the benefit of Barloworld CEO Dominic Sewela and his family. The scheme of arrangement requires the support of 75% of eligible voters who participate in the meeting – in their own capacity or by proxy – for it to succeed. The holders of about 22.92% or 43 367 048 of Barloworld’s shares are not eligible to vote on the proposed transaction. These excluded shares are those held by the Zahid Group (35 834 624), Barloworld Foundation (6 578 121), Dominic Sewela (653 207) and Katkego Le Masego Trust (401 096). Lineham said Silchester intends to exercise all rights available to shareholders in South Africa to protect the financial interests of Silchester’s clients. https://lnkd.in/dfqbFvix

5