AN UNUSUAL APPROACH TO VC

Working Style

Personal, not committee 

Reading slides and forecasts beforehand, and coming to meetings with questions and thoughts. Fast responses. Showing up on time. Non-hierarchical. Walks in the park.

Thinking like a startup 

 Informal clothes. Using tools like Slack, not internal email. Trello, not GANTT. Drive, not Windows. Skype, not dial-ins. Data-driven decisions.

Actively helping 

Helping you with objective-setting, accounting and budgeting, hiring, introductions to partners, marketing and PR, and raising for the next round. That often means finding the perfect person to sit on your board.

Supportive relationships 

Aiming to play therapist, not headteacher. Proactive questions and challenges. Knowing your product, company and team. Making lots of mistakes, but being ready to say sorry.

Criteria

Here’s some clues to how we approach investment decision-making,
and what we look for in our portfolio companies.

Team

Honest, hardworking, fast-moving people. One founder good, two founders better (but not always). Rarely four. Love scholars and dyslexics. Growth, not fixed, mindset. People who want to hire others smarter than themselves.

Traction

Getting as far as you can on limited resources gives clues to what you can achieve with the money we put in. Concrete, measurable achievements preferred. Actives over signups, sales over pipeline. MVPs, not prototypes.

Market

Nine-figure opportunities. Likes: global not national, broad not sectoral, virtual, not physical (all with exceptions). Love creating new markets. Prefer boring to fashionable, and clients who are early adopters, not laggards.

Barriers

Lots of competitors means margin pressure, so convince us how you’ll keep them out. Network effects best, IP next, then regulation. We don’t rate speed, brand and agility as more than temporary sources of advantage.

Business Models, Geography, Stage & Size

Business Models

We like SAAS, platforms, marketplaces and tools, but we’re open to other (and particularly new) models. Easy scaling to huge size is great. We prefer businesses whose users pay for their service, rather than eg through advertising.

Geography

For your location, we prefer (in order): UK; rest of EU; EEA with willingness to flip into a UK shell; Israel and East Coast US; West Coast US; rest of world. Addressable markets: anywhere is fine; Africa is cool.

Stage

We aim to be first institutional money in. You should have a live product or MVP; core team (in-house tech and sales/marketing); active users or pilot customers; three months of data. You should know your unit economics.

Size

Our target investment is £500K/€600K out of a £1m/€1.2m round, where we lead the financing, set the terms, find and bring in coinvestors, and take a board seat. But we’re willing to do less or more as the opportunity demands.

Investment Process
Elevator pitch
10%
Day 0: Take four minutes to complete our elevator pitch. No need to upload any files or spend time preparing. This will help us figure out whether we’re looking for your kind of company — if not, it’ll save us both time to find that out early. We’ll acknowledge it immediately we get it, with an email address you can chase if we don’t respond in a week.

Warm intro
20%
Day 1: If you know someone who knows us (check on social media against our team members), mention them in the pitch and ask them to send us a follow-up email the next day to confirm that they recommend you. (Note: elevator pitches help our workflow, and we still love it when even close friends use them.)

Slides and stuff
30%
Day 7: If you meet our criteria on team, traction, market and barriers, we’ll ask you to upload a slide deck into our workflow, plus some other stuff. Unlike many VCs, we promise to read it and come up with some questions and thoughts. Feel free to connect with us on LinkedIn at this point.

Hangout
40%
Day 14: We love videocalls. If we think we can make an investment, we’ll invite you a videocall to go through our questions — less hassle for you than trekking across town for a meeting (especially if you’re not in town in the first place).

Walking meeting
60%
We sometimes invite founders to take a walk in the park. It’s a chance to hear the backstory, and to understand the people behind the idea. No agenda, no presentation, just a discussion to see how we connect. And we won’t be checking Facebook while you’re talking.

Term sheet
80%
Day 21: Many European entrepreneurs have spent dozens of hours answering questions from investors who then either never make them an offer, or make one that’s unrealistic. Before putting you (and us) to the trouble of detailed due diligence, We believe in making sure we’re both on the same page about valuation and terms. Our term sheet is industry standard.

Due diligence
90%
Day 35: It typically takes us two weeks to do the commercial due diligence — reference checks, customer calls, market analysis, code review, you know the kind of stuff. You can speed things up by having all your legal docs in a Drive folder, knowing and tracking your key metrics, and keeping your accounts in Xero rather than in a brown paper bag.

Deal documentation
100%
Day 49: Once we have a green light, it’s over to the lawyers and the fee meters start running. It typically takes 2-4 weeks to get an investment agreement and set of articles agreed between the two sides, but it can be faster (or slower) depending on your lawyers. Tip: it’s a good idea to work with lawyers who have done lots of venture-capital transactions before
.

What We Avoid

There’s some businesses that we’re not excited by. They can still be great opportunities, but your time will probably best be spent pitching them to other investors.

Gaming

We’re not expert enough in gambling, social or console games to predict winners early. And though people love them, they don’t always pass our test of making the world a better place:)

Social Media

Many aspire to be the next Facebook, Twitter or WhatsApp; few are called. Pitch us when you have three months of data showing engagement, retention and viral growth.

Ecommerce

Ecommerce rarely has entry barriers, and is highly sensitive to scale. Approach us when you have 25% monthly growth, CPA below first basket, and detailed analysis of your returns and customer service costs.

Outsourced tech

We love remote teams, but haven’t had happy experiences with startups that use agencies to build their product. Hire a great CTO, give them equity, then call us.

Service businesses

Agencies and development shops can be great and highly profitable, but they rarely scale fast enough. We’re likely to invest only if you can do 10x the business with 2x the people.

Licensed IP

We love patents, but if you need to license key IP from another company, then it’s not a deal for us. If you own the IP owner, merge the businesses before seeking funding from us.