What kind of value-add most helps founders and their companies? Or if you prefer what sun, what rain and what compost makes founders trees fruit better and faster? It’s a vital topic for the economy. QED Investors is a leading VC firm focused on investing in early stage – hence their knowledge of growing seedlings – in the U.S., U.K. and Latin America. They have made around 140 investments including an astonishing hit-rate of some 19 eventual unicorns. Notable investments include Credit Karma, ClearScore and SoFi.
Yusuf leads QED’s investments in the UK & Europe with a focus on payments, lending, financial infrastructure and Proptech.
Way back in the day LFP002 was with matchi.biz who were creating a marketplace to connect innovative firms with incumbents who needed that innovation so the idea of a connection function or market has been around for some time. As matchi.biz were acquired by KPMG in 2017 they were clearly not only successful at creating such a marketplace but did it so well that like a hoover hoovering itself up they got sucked thru their own portal too.
Can these concepts apply to enabling and empowering entrepreneurs? After all the most useful attributes for a founder are acquiring funders, good board members, advisors and/or mentors.
Markets sound like a good idea, albeit one that crony capitalism is forgetting. Markets operate best when what they trade is fungible – eg US$ or gold bullion of a certain quality. However as every marriage broker knows people aren’t exactly fungible – indeed they are perhaps the least fungible thing going. But all these swipe left and right apps seem to make a living for themselves and entertainment for the swipers with some success in the dating and mating game.
Roei and Connectd have set out to make a digital marketplace to add liquidity to the world of startups, investors and the hard-to-name yet super-valuable NED/Advisor/Mentor sector. This has naturally only been amplified massively in the world of lockdown. Historically the “well-connected” have had a head-start in life – can this change in the modern world and everyone be leveled-up?
Venture Capital is nigh-on essential for many ambitious, big-build, fast-scaling Fintechs and Techs in general. Fund raising is essential. Thus how the VC market is evolving is of the utmost importance to ambitious firms and founders.
In this episode Josh Bell one of the founding partners of leading London-based European-wide VCs Dawn Capital who have raised over a billion to invest in growing businesses joins us to look back, look around now and look into the future. How can you best raise funds? Plenty of learn…
Capital-raising is an absolutely core-skill for entrepreneurs and their growing businesses – and every tech business de facto needs to grow (margins low and intense competition).
Peter Keenan, CEO and co-founder of merchants-payments provider Apexx Global, has raised capital in a total of five companies and thus talks to us from a position of considerable personal experience.
Most capital raisings most of the time for most companies are challenging processes. Thus all can benefit from hearing experiences and case studies – whether one has never done it, or whether one has done it many times.
In a world ever-more focused on transactions and digitisation what place is there for relationship-banking? Apparently not a lot, yet the market-leader – SVB – wholly embraces this approach over the whole journey from Startup to FTSE. In this show we discuss what relationship banking means in the 21stC for one of the hottest sectors in the market.
SVB is the commercial bank for high growth companies and the biggest banker for PE/VC firms. In the UK they have 4,000 clients, over one thousand of which are pre-series A. As we heard in LFP163 SVB are also the world leaders in Venture Debt.
Tom Butterworth is the Head of Early Stage at SVB in London and joins us today to talk about the importance of relationship-banking, of looking after the customer and of viewing the financial aspect of the relationship across the whole life cycle of high growth companies.
We discuss how serving a vertical can enhance the clients in many ways as well as produce the deal flow to make the approach commercially viable – knowing a single sector in great depth leading to, inter alia, a much deeper understanding of credit-risk than simply putting numbers in a spreadsheet.
What is called Venture Capital is most of the time actually Venture Equity – the predominant funding model for Startups/ScaleUps. But in many sectors, Fintech included, some UnlistedCos are Very large – valuations in the billions. These are no small companies. Traditional corporate finance theory says (correctly) that equity is expensive and should always be geared with debt. After all it’s what most people do when they buy a house. So for larger Fintechs and other fast-growth sector Venture Debt may well be an important tool.
Alex Baluta is CEO of Flowcap a listed Canadian provider of Venture Debt and with nigh-on thirty years of experience in investment banking as a whole is well placed to contextualise the use and abuse of both equity and debt.
My simple takeaway is withe “small companies” getting ever larger that the equity:debt mix for their capital is a must-consider for their Boards – just as it is on BigCos, next to none of which fund with 100% equity. In terms of debt solutions for the growing firm Venture Debt is an avenue which must be investigated at a certain point/stage.
As we have repeatedly heard profitability is a major challenge in Fintech. In this episode Tim Nicolle CEO of Trade Finance Fintech Primadollar describes his journey to working out the necessary building blocks to profitability. As someone who has had his own businesses for some 30yrs he has had more experience than most with these challenges.
Despite only being founded in 2015 Primadollar already has an astonishing 12 offices around the world so is well placed to also talk to the globalising of Fintech in this Brexiting year (albeit temporarily (?!) on hold due to a well-know virus of course).
Staff numbers are around 50, one-third in the UK and around two-thirds abroad.
Today the LFP has Dan Kiernan as guest host and instead I am in the guest seat to discuss my long in the making recently released book on the Unlisted Board The Realpolitik Of The Unlisted Company Board – Making Your Board An Engine Of Growth. This is a behind the scenes account based on interviews with some 80 SmallCo Boarders – mostly founders but including Chairmen, NEDs, VCs, Angels and other SmallCo Boarding surround.
Done well the Board can turbocharge the SmallCo’s success – done badly it can end up in company failure or the sacking of the founder who created the company in the first place.
Company Boards are a mysterious and remote thing for most people – only a tiny percentage of any company serves on the topmost, legal Board. If you are in MegaCo they will generally be so remote as to be irrelevant to your day job. Even in a SmallCo you may know little of what they do other than matters such as signing off on fund raisings, certain large expenditures et al. You will have read about the obsession of recent decades Corporate Governance and think that Boards are just paper pushing.
However no matter how inexperienced and naive all founders sooner or later find out that it is the Board that governs the Company not the founder. For some time the founder might have voting control on the Board but as bigger and bigger raises come and go the founders control slips away which creates a whole new dynamic.
In this show we discuss the background leading to the book, the motivation and some key takeaways as well as the thing that serial entrepreneurs know about the Board that the first time founder does not. Topics discussed on the show include: Continue reading →
So far Fintech has lionised technologies – APIs, Open Banking, AI/ML and so forth. But from a different perspective these are just glues to connect things that haven’t been connected before to make new propositions not previously possible. Although this has been touched on so far – marketplaces aren’t the best example – after all marketplaces are tens of thousands of years old.
In this episode we are joined by serial entrepreneur Sam O’Connor, CEO of Coconut to discuss convergence – the gluing together of components which were previously seen as different things.
Our smartphones glue together things we would have historically done in different places using different devices – camera, mp3 player, and emails for example, In the same way Coconut are focusing on micro-businesses into which all of us indies seem to need to fold ourselves these days and combining banking, accounting and tax in one place – items which historically would have been seen as different propositions.
Michael conducts the most in-depth analysis of Companies House data on UK Fintechs that I am aware of. That earlier this year he partnered with KPMG and Google on his Fintech Funding and Financing study says a lot. So what can we learn from a decades’s data on UK Fintechs?
Well first that only five are making a profit!
Michael recently updated his study which includes nearly one hundred Fintechs.
In this episode we focus on trends in profitability – which are not all as you might expect – although the report covers many more parameters especially around fund-raisings.
After a decade for the longest running Fintechs we should be able to start to draw conclusions. What are they?