Tahir Farooqui

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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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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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

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To achieve outsized returns in a maturing and increasingly crowded private markets space, investors should start leveraging all dimensions of diversification when building their portfolios! That comes with building the right teams to unlock differentiated sources of dealflow 🔔

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Great insights from Adam Agius on what to consider when raising debt for a search fund buyout. Most relevant to the UK market, but a worthwhile read for all searchers. There's more debt capital keen to support search acquisitions than ever before, but approaching it naively can be very costly...

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12 reasons why LPs should consider investing in Emerging Managers (by Benedikt Langer)

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"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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📊 Investing in Innovation: With the UK gearing up for the July 2024 general election, the investment landscape is evolving rapidly. In today’s discussion, Edward from West Hill Capital and I delve into the types of companies ready for investment beyond just tech. We explore the importance of innovation and unique selling points in attracting equity funding. If you’re looking to raise investment or need support within your business, book time with me: https://lnkd.in/e8Wf2TTa #StartupInvesting #Innovation #UKPolitics #Entrepreneurship

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Value creation is based on developing and applying value drivers (sometimes called ‘value builders’) that help articulate commercial development and also support higher transaction values. By not drawing on the experience of best practices successfully applied by other businesses, founders can risk leaving money on the table. Find out more about value creation in our blog. https://lnkd.in/exBvk87n #sellyourbusiness #value #money

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✨ What founders and VCs should know about term sheets in 2024 🤝 We had a great chat with Sifted about our HSBC Innovation Banking Term Sheet report, which highlights market standards and how term sheets have changed in the past year. Sophie Winwood (WVC:E), Natasha Jones (Metris Energy) and I discussed: 🌎 International investors 💰 Secondaries (Big topic at the WVC:E Summit 2024!) 💃 Focus on DEI Link in the comments! Mat Lauren

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Most recently, we wrote about the #MiddleEast and #markets’ reaction, the elections in #India, and the PBOC’s #Renminbi strategy. Read ⬇️ 🌍 Market Insights or the Talion law 📈 The recent conflict in the Middle East is driving market pessimism, leading to a flight-to-safety and shorter investment horizons. This is reflected in the "W-shaped" volatility patterns we are witnessing. Investors are constantly adjusting to the shifts between geopolitical escalation and relaxation, resembling the principle of Talion law - an "eye for an eye" approach. Current oil prices, at USD90, include a geopolitical risk premium of USD5 to USD10. Additionally, the current geopolitical scenario is likely to prompt a slightly dovish stance from central banks. Expect significant intraday volatility in equity markets influenced by technical and fundamental factors, regardless of the news source.   🇮🇳 Indian Elections 🗳️ India is set to conduct parliamentary elections from 19th April to 1st June, with results expected on 4th June. Narendra Modi and his Bharatiya Janata Party are poised for a third term, leading the coalition government. Continuity in reforms is crucial, with a focus on regulations, infrastructure, the labor market, and the manufacturing sector to sustain rapid growth and position India as an attractive destination for foreign investment. The government aims to elevate India's infrastructure and trade logistics to rank among the top 25 countries globally by 2030. While India has the potential to become the second-largest economy in the Asia-Pacific region and the third largest globally by 2030, downside risks should be considered.   🇨🇳 PBOC's Renminbi Strategy 💰 Despite global pressure, the onshore Chinese yuan (CNY) has exhibited remarkable stability, with a slight depreciation of just -0.1% this month. The People's Bank of China (PBOC) aims to control this depreciation by accepting modest and controlled depreciation, while keeping the USDCNY onshore rate below 7.34. Policy measures to support the economy, such as potential cuts in the reserve requirement ratio and the one-year loan prime rate, may still be expected, although implementation could be delayed. The controlled depreciation of the renminbi may positively impact other Asia-Pacific currencies strongly correlated to it. https://lnkd.in/ecXB_Ueu #ludonomics #allianztrade #allianz

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"Platform" in VCs often feels undefined, and different at every firm. But one thing is clear: firms with dedicated platform teams are seeing higher investment returns. What is 'Platform' in VC? Think of it as a support engine for portfolio companies. Platform teams accelerate growth by providing: 1) Strategy & Growth 2) Talent Partner 3) Marketing & Brand Partner 4) Business Development & Partnerships Lead 5) Community Manager 6) Operations & Scaling Partner 7) Fundraising & Capital Advisor Platform in Venture Studios vs. VC Funds: The big difference? Timeframe. Venture Studio Platform: Involved from concept to exit, guiding startups from the very first spark of an idea. VC Platform: Steps in after the startup is funded, focusing on scaling and growth but not the initial concept phase. Both play critical roles—but understanding these distinctions helps founders and investors make the most of their platform relationships.

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Recently I have become aware of some VC's and "Angels" attempting to bypass the sophisticated investor wealth test by running internal "education" programs for retail investors and then allowing them to bypass their licensee (whether they are aware or not) and s761GA by claiming the investment is under the company's 20/12/2 rule for retail investors. To be clear, this is called "arranging" and technically illegal under s766C(2) which states "arranging is dealing" and will likely put their AFS license in jeopardy. The 20/12/2 rule only applies to the Company where they directly pitch to investors. Where an intermediary is involved (even just hosting a pitch event) then they are technically running an unregistered Business Introductory Service. The issue is that s761GA requires a subjective determination to be made by a licensee and its at the licensees discretion to accept a retail investor. Most Licensees fear the wrath of ASIC if they get it wrong and it's also almost impossible for them to get insurance. ASIC currently refuses to provide guidance or formally recognise any "educational programs" under s761GA. This is the problem that desperately needs to be solved. ASIC needs to provide Licensees with clear objective guidelines on the use of s761GA. It's just not worth putting your Licensee at risk by trying to bypass them. #angelinvesting

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Survival of the Fittest in a Shifting Funding Landscape Founders are adopting a low-key approach, focusing their energy on internal growth. Armed with capital secured in 2021, many are strategically revitalising their businesses. But the big question remains: What will the dealmaking landscape look like in 2024? "Overall, capital infusion will be concentrated on a narrower spectrum of companies than in all. The private capital raising landscape is anticipated to be robust, showcasing significant improvement from 2022. However, the capital infusion will be concentrated on a narrower spectrum of companies compared to the prolific scene of 2021." Read More: https://lnkd.in/d3536qvA In the meantime, share your thoughts! Are you a founder facing a funding crunch? How are you adapting your strategy? #StartupFunding #Founders #Growth #DealMaking #SibaPanda

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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.

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The last 2 years have been unreal for AI startups. It won't be a hyperbole to say we are living in the #AI age. Global investors have poured billions into AI startups. Many of us think it's a bubble that will eventually burst. AI evangelists consider AI sceptics fools. Y Combinator, popularly known as YC, is betting the house on AI startups. The share of AI-powered #startups in the last 3 YC batches has doubled. Winter 24 cohort – 70% Summer 24 cohort – 57% Winter 23 cohort – 32% Non-AI #founders are bewildered about how pre-revenue or even pre-product AI startups are raising millions of dollars at astronomical valuations while they are struggling to get $5M valuations at $1M annual revenue. The truth is AI startups represent a moonshot opportunity for early-stage investors. There's a tiny chance that an AI investment will become 500x or 1,000x. All VCs are trying to find and invest in such startups. You might be running a decently successful early-stage agri, logistics, or consumer brand startup in #India with an annual revenue of $1–2 M. You are also trying to keep your burn as low as possible. By all means, you are doing a commendable job. However, there will be an expectation mismatch between you and the investors when you go out in the #venturecapital market to raise money. You might think you deserve a $20M–30M valuation considering how these AI brats are getting $10–20M even when their product is not ready. Unfortunately for you, the reality is different. If a few VCs like your business, they might want to invest $2M at a $8M valuation. You would secretly curse them and complain that life is unfair. But take their money. It's better than getting zero at a $20M valuation. The key difference between you and the AI startups is the potential payoffs. In rare cases, AI investors will get a 1,000x return on their capital. It won't happen when investing in consumer brands, agri-techs, or logistics companies. This lack of 500x possible upside limits your valuation and VC interest. This is the state of the venture capital industry in 2024. It will change, but we don't know when. However, a new #technology will surpass AI. Finally, here is an old-school thought. "In behavioural finance, herd mentality bias refers to investors' tendency to follow and copy what other investors are doing. They are largely influenced by emotion and instinct, rather than by their independent analysis." Corporate Finance Instititute I conduct workshops teaching founders how to raise capital. The next one (a 9-hour Boot Camp) is this weekend (5th & 6th of October). Email me at [email protected] if you would like to join it.

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