Andrew Sheffield

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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Balderton's €1.3bn raise for European startups sparks debate: Does a bigger VC fund lead to better outcomes? First, consider: 💲 Larger rounds demand bigger funds, but returns get harder at scale 💲 $100M fund needs $1bn exit at 10% ownership for a single 1x return 💲 Most early-stage VCs target 3x returns, investing in 30+ companies 💲Management fees (typically 2%) grow with fund size Plus, the current landscape: Giants like Balderton, Index, and Accel are raising massive funds, while smaller firms stick to sub-$200M and focus on early-stage startups. Many VCs have maintained their previous fund sizes, while others are downsizing or struggling to raise new funds (or even returning un-invested capital to investors, as CRV recently announced they will do). Thus, weigh up the trade-offs: Larger funds (≥$500M): 📈 More firepower, full-cycle support 📉 Risk: Pressure to deploy capital, potentially lower returns Smaller funds (≤$200M): 🔍Agility, focused support, higher potential multiples ❌ Limited late-stage participation The future of European VC may not be one-size-fits-all. As the ecosystem matures, perhaps there's room for both Davids and Goliaths. What's your take? Would you bet on a nimble $150M fund or the muscle of a €1B+ vehicle? Source: Sifted #EuropeanVC #FundStrategy #StartupInvesting PS 🔔 Follow me for strategies and resources for startups and VCs! There's a better, streamlined way to raise capital: 💸https://foundersuite.com/ for startups 💸https://fundingstack.com/ for VCs and investors

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TLDR: EIS should be scrapped as a fund structure but retained for Angel investments by individuals. Alex Chalmers has done all the work which in 10 years I've never got around to doing: why 95% of EIS/VCT funds are bad for our tech ecosystem, rip #startups off, and why as a Founder you should push back against their stupid fees or not take their money. https://lnkd.in/dnq9ZScS

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HNY! Hope everyone had a great break. Quiet on here as head down. Such a lot of exciting things coming up: - More Tools for all scaleups to improve their growth trajectory - More Founders using VenturePath to secure their Series A-B investment rounds - More VCs joining VenturePath's VC Network - More Events (including a VC dinner for 50 on the 22nd and SuperScalers female founders event on the 30th) - More Partners joining our scaleup support ecosystem - More Data to publish on 2024 VC trends for the UK ScaleUp Investment Mission Busy January! We'll share more on these when we have a minute... If you can play a part, as a founder, VC, investor, partner, sponsor, data provider etc., there's still room for a conversation or coffee with you though 😉

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South Coast Startups: This is your moment!! I’ve got an incredible opportunity for startups on the South Coast of England. We’re talking intros to top-tier mentors and serious cash for growth—whether that’s through equity or loans. I’m on the lookout for standout startups to match with angel investors, CCs, and Ultra High Net Worth individuals who are ready to back the next big thing. If this sounds like you—or someone you know—tag them, DM me, or drop me an email at [email protected]. Let’s take your startup to the next level! #StartupLife #Entrepreneurship #Fundraising #VentureCapital #AngelInvestors #GrowthHacking #BusinessGrowth #Innovation #SeedFunding #ScalingUp #StartupJourney #EquityFunding #Disruptors #FounderLife #StartupCommunity #BusinessFunding #StartupMentorship #InvestorReady #PitchToInvestors #DreamBig

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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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🎉 20VC Closes Fund III at $400M to Back Next-Gen Startups London-based venture capital firm 20VC, led by Founder and Managing Partner Harry Stebbings, has closed its third fund at a remarkable $400 million. Known for combining venture capital expertise with a powerful media platform, the firm continues to solidify its position at the forefront of the startup ecosystem. 💰 The Fund Breakdown: - $125M allocated for Seed investments, ranging from $100K to $3M. - $275M dedicated to Series A investments, ranging from $5M to $15M. Backers of the fund include renowned institutions such as MIT Investment Management Company, Horsley Bridge Partners, and RIT Capital Partners plc. 🚀 The 20VC Difference 20VC operates three sub-funds: 20Sales, 20Growth, and 20Product—each supported by top-tier experts from global tech giants. These specialists actively assist portfolio companies in scaling and achieving their full potential. The firm's innovative approach extends beyond traditional VC, leveraging its media platform, which features in-depth conversations with prominent figures from the business and venture capital worlds, fostering a unique blend of investment and insight. 🌟 Key Team Members Harry Stebbings – Founder & Managing Partner Kieran Hill – Partner, Pre-Seed & Seed Paul Bonnet – General Partner, Series A & Growth This latest fund positions 20VC to further support transformative startups, enabling them to grow from the earliest stages to impactful global players. ✅ Looking to raise capital for your #VCfund?   🤝 Need warm #LP introductions?   📝 Selling #secondaries to increase liquidity?   🧐 Looking for co-investments (Series A/Series B)?   ▶ Please use G+QUANT's link for inquiries and fund decks, or send your inquiry directly to [email protected] #VentureCapital #20VC #StartupFunding #SeedStage #SeriesA #VCNews #Innovation #TechInvestments #StartupEcosystem #Founders

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Delighted to share news that Bizumi has just received SEIS Advance Assurance! This is great news for private investors looking to offset the inherent risks when investing in startup companies in search of great returns. In summary, the Seed Enterprise Investment Scheme (SEIS) provides: Income tax relief of up to 50%: A £100,000 investment could provide a £50,000 saving on that year’s income tax bill.  Up to 50% capital gains reinvestment relief: You could reduce the CGT on gains made elsewhere by up to 50%.  Loss relief: If things don’t go to plan, you can choose to offset any loss, less the income tax relief received, against your income tax bill.  Now don't get me wrong, I have every confidence that Bizumi is a fantastic opportunity, but de-risking your investment through SEIS is a no-brainer! Get in touch to explore how we can become successful together.

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In 2019, I led a £9m Seed Round. It was the largest Seed Round in the UK that year. Now... You would expect the usual reasons why we invested so much: 1. A clear story 2. Special founders 3. A large opportunity But there was also something else that was a big reason for why we invested. What was it? The founders were able to hire in some of the best people we had seen. They had already built exactly what this company needed to. They had extreme amounts of success doing it. And now were willing to risk everything to join this tiny little start-up. Funnily enough one of those exceptional hires ended up being the CEO! That’s how good their hiring was. At the end of the day, investors invest into teams. And those teams are the people who are going to be the difference between a successful company or not. So as a founder you have to show investors that you can, will and have hired the best of the best. Because second-rate hires will never cut it. -- P.S. What do you think about team-building and its importance? ♻️ Repost to help a founder in your network

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✨ Breaking: Core Fund V and Opportunity Fund V Announces New Fund.- Core Fund V and Opportunity Fund V VC Airtree has launched a new venture capital investment fund, targeting $650 million. It consists of Core Fund V for early-stage startups at the Seed stage and Opportunity Fund V for backing Airtree's portfolio companies in later-stage, scale-up phases. They plan to invest in a dozen emerging startups annually. https://www.airtree.vc/ Please share to let other #Founders know For the ❤️ of Startups #Fusion42 #Startups#Venturecapital

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We have just posted a blog about 'SDR fund labels – what are we hearing?' It is too long to reproduce in full here, so I am sharing the first few paragraphs. (The full text is freely available via https://lnkd.in/erxVuefP ) === The adoption of #sustainable fund labels is big news at the moment, particularly as we approach the 2 December ‘Naming and Marketing’ deadline, which require additional caution when fund managers make sustainability related comments and claims. (See full #SDR rules) Much is changing, but a key driver of current activity is that unlabelled funds will no longer be able to use the words ‘sustainable, sustainability or impact’ (or similar) in their names – although the FCA announced temporary ‘flexibility‘ in September (essentially a four month extension) for relevant funds that had submitted an application to them amending disclosures in line with ESG 5.3.2R by 1 October 2024. Evidence that we have gathered from fund mangers suggests however that we are now in a period of immense activity and change. We have sought to capture this via a range of ‘SDR labelling’ filter options on our (open and free to access) Fund EcoMarket database. Some of the current key numbers (to date) are as follows: - 103 fund managers have told us they are working towards adopting labels for named funds (we view this as a likely underestimate). - 176 funds have told us they are ‘not eligible’. (It is important for financial advisers and others to understand that many funds are not yet able to use the new labels, for example because they are offshore). - The managers of 13 funds have told us they are ‘intentionally unlabelled’ – in other words, their funds are probably ‘in scope’ – and may well be appropriate for those seeking funds that take sustainability seriously – but the manager has decided not to pursuing a label at present. (This may relate to approval process concerns.) - Fund EcoMarket shows 2 labelled funds (we expect this to increase soon). (The funds are searchable on our database here https://lnkd.in/eEn9q5pA) What else are we hearing? We understand that around 11 funds have achieved labels. 2 of these are labelled as such on our database. Some funds have asked us to hold back their labelling status until they ‘go live’ (eg aligned literature / ready to press ‘go’.) Many strong funds are in the labelling process (which starts, in many cases, with the need to amend the fund prospectus) but are struggling to gain labels because of what we view as (sometimes rather extreme) teething issues. ‘Broad based’ (comprehensive, complex) sustainable funds appear to be the most affected. The FCA has listened to feedback and sought to ease these with a recent notice giving disclosure examples, however we believe there is more to be done in this regard if we are to maximize the potential benefits of SDR.

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An underappreciated factor in UK VC right now, is the number of firms *only* investing in portfolio companies. ** The effect of funds, particularly the larger/later-stage funds, concentrating their funds on portfolio companies has a dramatic effect on the market. Because the new deals to later-stage funds, are likely the portfolio companies of earlier stage funds. And if the former falls/reduces/stops; the earlier stage funds have to devote more capital to their portfolio than was originally modelled. And it gums up the entire system. And it’s currently affecting all levels of funding, from growth down to seed stage funds. #founders #vcfunding #startups ** I’ve used ‘only’ as a catch all for 100% allocation to portfolio (as some funds are) through to significantly increased levels of portfolio funding (as the majority are).

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With Jamie Pearson: We talked about all sorts of things, including Jamie and his friends starting PitchBook! We also talked about the Premier League, Sheffield United, Sir Alex Ferguson, startups, supply chains and industrial transformation etc etc etc. ====== I arrived in Washington DC last night. I’ll be here till Saturday. My schedule is full but perhaps we can meet when I visit next time. I’d love to bring a small group of Industrial Transformation & Supply Chain Tech folks together for an impromptu meetup to try and get The DMV Supply Chain Meetup in the early stages of formation. I’d particularly love to meet someone who wants to build the local community with help from The Worldwide Supply Chain Federation. Also, if you’re a pre-seed or seed stage startup founder, I’d love to hear about what you’re building. My schedule is full. But DM me. Let’s chat via Zoom. Also, what #DCTechWeek events should I plan to attend? Our Investment Thesis: REFASHIOND Ventures: The Industrial Transformation Fund invests in early stage startups refashioning legacy industries through Data & AI, Advanced Materials, Advanced Manufacturing, & Next Generation Supply Chains; Defensible through economic moats. At most venture capital firms, Industrial Transformation & Supply Chain Technology is a tiny, emerging “area of interest” . . . At REFASHIOND Ventures: The Industrial Transformation Fund, it’s our entire world. Join us. #IndustrialTransformation #SupplyChain #Innovation #Technology #Startups #VentureCapital

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What ‘VC’ means to me: I’ve had people compare our approach at Tin Men Capital to private equity. Largely because we: -Construct a very focused portfolio -Look keenly at positive unit economics/ pathway to profitability -Keenly involved with supporting our founders scale -Are not reliant on unicorns to deliver returns for the fund Which some consider to be radically different from how most VC funds operate. The reason we take this approach is because we have high conviction. That Southeast Asia needs it’s own investing approach. That what’s worked in the US might not work here. In light of all this, our portfolios have delivered above benchmark returns. We expect that to continue. ‘VC’ to me means calculated risks and being flexible to adapt approaches ‘VC’ to me means doing right by the ecosystem for its longevity ‘VC’ to me is delivering returns ethically with a nett positive for everyone ‘VC’ to me means giving back when we’ve succeeded There are many general partners I respect and consistently test our ideas with. I believe we’ve found gems in a class of startups in the region. What people label us is not important to us. Our mission remains the same: -Seed the next generation of regional and global champions -Deliver strong returns/ DPIs -Collectively build a strong and unique venture ecosystem in Southeast Asia. What does a ‘VC’ mean to you?

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New data shows UK VC funds raised significantly less in Q1 2024 compared to last year, causing a decrease in “dry powder”. VC funds raised £700m across 10 vehicles from January to March, on track for £2.8bn this year, down from £7.4bn in 2023. Smaller firms are taking more LP capital, and dry powder decreased as deal activity stayed robust but fundraising struggled. Despite this, Dealroom reports $25bn raised over three years, indicating some dry powder remains. VC investments totaled £2.3bn in Q1, a decrease amid a challenging macroeconomic environment. UK private equity funds raised half of 2023's total in Q1, with notable closes from Permira and Apax. London led with £87.7bn in VC investment from 2014-2024, followed by Cambridge (£6.8bn) and Oxford (£4.4bn). #UKTech #StartupFunding #Innovation #TechNews #HealthTech #Fintech #ClimateTech #Cybersecurity #EdTech #EnergyTech #Startup #Fundraising #uk

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Are you into high multipliers? Our campaign is still trending on Crowdcube. I'm receiving raving feedback from the community ❤️. We've gone past the objective. Allocations are now on a first come, first served basis until the over subscription quota expires. 👀👀 https://lnkd.in/eQTnKAqE 𝘋𝘰𝘯’𝘵 𝘪𝘯𝘷𝘦𝘴𝘵 𝘶𝘯𝘭𝘦𝘴𝘴 𝘺𝘰𝘶’𝘳𝘦 𝘱𝘳𝘦𝘱𝘢𝘳𝘦𝘥 𝘵𝘰 𝘭𝘰𝘴𝘦 𝘢𝘭𝘭 𝘵𝘩𝘦 𝘮𝘰𝘯𝘦𝘺 𝘺𝘰𝘶 𝘪𝘯𝘷𝘦𝘴𝘵. 𝘛𝘩𝘪𝘴 𝘪𝘴 𝘢 𝘩𝘪𝘨𝘩-𝘳𝘪𝘴𝘬 𝘪𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵.

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Yesterday I had the pleasure of appearing on CNBC to talk about the state of tech in the UK and Europe, touching on the state of IPOs vs PE acquisitions, sectors to watch and where the opportunity lies. Thanks for a great discussion Arabile Gumede! Some thoughts from the interview: Signs of Success: The acquisition of UK tech companies by prestigious private equity firms like Thoma Bravo is a testament to the strength and success of the UK tech sector. It's a clear indicator that UK companies are building substantial value and attracting significant international interest. Vibrant Ecosystem: Despite challenges, the UK and Europe boast a vibrant tech ecosystem, particularly in AI, cybersecurity, and fintech. The market has now stabilised post-pandemic, offering a fertile ground for emerging companies to thrive. Opportunity for scale-up investment: Looking at investment into SaaS companies, Europe is on par with the US in the early stages. It is at the scale-up stage that a divide appears – support and more investment into Europe and the UK’s growth companies will further strengthen the region’s tech scene. Watch a clip from CNBC here: https://lnkd.in/d7J8_FNP #Oxx #UKtech #VC #growth

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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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Numbers & insights from a deep tech venture studio that launched 11 companies (all are active) in the last 7 years, reaching £85M valuation across the portfolio: 1. Post Urban, initially bootstrapped by Luke Robinson, an academic with a PhD in physics from Cambridge, now operates with external funding from a UK-based fund. 2. Launched 5 companies during the first 5 years and 6 companies during the last 2 years. 3. All 11 completed pre-seed rounds; 1 of them got Series A, 2 of them are approaching their Series A. 4. The startups have collectively raised ~£25M in venture capital, in addition to receiving grants. The total valuation of the 11 companies is ~£85M, half of which have not yet undergone subsequent funding rounds. 5. Initial equity splits: the venture builder 20%, CEOs of startups 35% (vests over 4 years), CTOs – 20-25%, employees 10-15%. 6. The initial valuation of startups was £2 million, with £300K invested by the venture builder. The last 2 startups were at £3.5-4M initial valuation. 7. Building deep tech ventures requires significantly higher initial funding because these projects need more time to develop demonstrable products. Two portfolio companies hit £1M in ARR. 8. The venture builder has increased the capital for the last 2 startups to ensure they reach meaningful milestones. The CEOs of the startups were able to secure additional funding through their networks, £350K and £450K, respectively. 9. The deep tech investor pool is smaller than that for sectors like SaaS, which requires a stronger proof of concept and market readiness to attract funding. 10. 3-4 times, potential customers became investors in Post Urban Ventures. This is a great approach because it secures investment and validates the concept by gauging whether these potential customers truly believe in the solution and its market necessity. 11. They don't start with a technology or an idea; instead, they integrate insights about global problems and, by actively engaging with advisory boards, founders, and industry experts, identify pain points and align them with technological solutions. 12. They do not bring universities in as co-founders but source scientists or professors to contribute to research and development. This involves leveraging academic expertise to support the technical aspects of startup projects until a prototype is developed. 13. The studio maintains strong connections with major academic institutions, including Cambridge, Oxford, Imperial College, and UCL, supporting its deep tech focus and facilitating access to new technologies and potential founders. 14. Areas of focus in deep tech: AI (Knowledge Graphs, NLP, DNNs, Computer Vision, Edge AI, Active Learning), Quantum Technologies, Biotech, AgTech, Enterprise SaaS. Watch the full interview to gain insights into the portfolio companies, handling IP collaborations with universities, key challenges, and team construction: https://lnkd.in/dCi7fZ7G

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