The EIS Navigator

Manufacturing and operations is an area that has been much neglected by venture capital, but has plenty of issues that can be address. Renan Devillieres of venture builder OSS Ventures focuses on this space, with distinct methods and successful results. In this episode we discuss how he goes about creating successful new businesses, with very good results to date.In a wide ranging discussion, Renan discusses:what is venture buildingthe process for finding pain points in factorieshow Renan characterises different operations why there is still so much low hanging fruit in this areawhat sorts of manufacturers are open to changehow to make sure there is enough initial customers and how to work with themworking with different tech stackshow to make sure that companies don't customise for specific clientsmaking the OSS fire itself from each companythe different markets and sales processes he seesfinding the right founders and the skill sets they needthe effect of AIhow the global manufacturing model of the past 30 years is changing nowIts a great conversation with lots of insights from Renan and a must listen for investors and founders who want to build successful businesses.01:30 Renan introduces himself02:45 introduction to OSS04:00 what is venture building?09:00 finding pain points in factories13:15 how the regulatory environment can affect go-to-market strategies17:30 why is there so much low hanging fruit21:00 how different manufacturers are stuck or open to change 25:30 finding the first customers 29:00 working with clients to build viable solutions without customising too much32:00 how the OSS team fires itself37:00 how different software has different sales and decision making processes41:20 the necessary founder skills44:15 how AI is affecting manufacturing49:10 trends in manufacturing and how its all changing now55:30 favourite questionsLinksOSS Ventures website - https://www.oss.ventures/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested books and mediaThe Subtle Art of Not Giving a F*ck by Mark MansonEmpty Planet by Darrell Bricker & John IbbitsonBioRenan Devillières, CEO OSS VenturesA graduate of the Ecole Normale Supérieure and the Ecole Polytechnique Fédérale de Lausanne, Renan began his career as a consultant at McKinsey, before becoming an economist at the OECD and then strategic project manager for the Richemont Group. After his various experiences, Renan launched into entrepreneurship by founding a start-up, which he later sold. Having always been attracted to tech and industry, Renan co-founded OSS Ventures in 2019 with the mission of supporting French industry in its technological, environmental, social and societal transition from industry 2.0 to industry 4.0.

Governance is all too often seen in startup companies as a chore, or necessary evil when it can be a positive and enable success. Dermot Campbell, founder of CEEIO, is trying bring more of the latter to the venture world. In this episode, he discusses how startups can enable good governance without spending too much time on it and make it a means to the right end rather than an end in itself.Dermot covers a lot of areas, including:what is governancethe importance of maintaining stakeholder relationshipswhen startups should start introducing governance structureshow governance should lead growthwho should take the lead on board creationthe role of fund managersgood preparation for board meetingsbuilding effective board agendasthe value in identifying riskssetting up risk assessments and how these can lead to key objectiveshow to generate relevant KPIshow to translate a business plan into something usefulgenerating the right boardthe commons mistakes made by foundersthe rise of ESG and how its different in startups from quoted companiesWhether you are a founder looking to put governance into place or an investor helping or wanting a company to do it, this is an essential discussion.01:00 Dermot introduces himself02:00 What is SEEIO03:10 What is governance04:20 the importance of maintaining stakeholder relationships05:40 importance of creating a governance framework06:15 how should new startups approach governance08:40 when to create the board09:45 who takes the lead11:30 role of fund managers12:30 the work in preparing for board meetings15:00 don't just sell - value in identify risks16:30 setting up appropriate risk assessment 20:30 how to use a business plan and use it to generate objectives22:10 working on KPIs24:00 building effective board agendas27:20 generating the right board and founder relationship with them30:30 role of independent NEDs in startups32:10 what mistakes do founders make33:30 value of governance in improving odds for fundraising35:50 rise of ESG and how investors care about G - G facilitates E & S42:20 favourite questionsLinksSEEIO website - https://seeio.co.uk/Dermot on LinkedIn - https://www.linkedin.com/in/dermot-campbell-3178a326/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested books and mediaThe Go To Market Handbook for B2B SaaS Leaders by Richard BlunderMEDDICC: The ultimate guide to staying one step ahead in the complex sale by Andy WhyteBioDermot CampbellCEO, SEEIODermot Campbell is an experienced fintech leader, known for founding Kuber Ventures and building it up to be a key player in the alternative investment platform sector. As CEO of SEEIO, he's transforming corporate governance for startup and scaleup SMEs. His expertise spans wealth management, financial planning, and navigating regulatory environments.   Prior to becoming a startup founder, Dermot was a Chartered Wealth Manager and in his early career he was an airline pilot.

Getting big returns in venture capital can involve stepping away from the mainstream and investing in opportunities that others won't. Will Gibbs of Octopus Ventures has a reputation for investing in areas others see as taboo. We ask him about being a contrarian investor, how to do it well and what needs to change to create a successful investment.In a discussion filled with numerous examples, Will discusses:getting big enough markets when the market is somewhat hiddenbalancing new technology and new marketswhen specialist investors are neededjudging whether a company will be ripe for follow-on investmenthow taboo investments can interact with social changesequencing market expansionwhat a company needs to internationalisewhat problems that internationalising doesn't solvebuilding deal flow in taboo areashow the venture capital industry is creating some of the problemsthe value of team diversity in looking away from consensus areaswhether valuations are different in taboo areas.In a wide ranging conversation, Will brings a great perspective on how to bring mainstream venture capital skills to genuinely new areas. Its a great discussion for investors and companies who dare to be different. Enjoy!01:00 Will introduces himself03:40 Who Octopus Ventures are06:30 Contrarian and tabooo investing 07:45 Example: Elvie - silent breast pump09:50 Example: Pelago - substance use disorder13:20 the size of taboo markets, challenges in assessing true market size16:00 new tech and new markets - need for specialists17:30 Example Overture - improving and automating IVF19:20 market meets social movements - will someone follow-on?22:05 assessing the pace of social change - risk of too early25:30 sequencing the right national / international markets25:45 Example Skin & Me - getting expansion right and not too quick29:30 Time and capital to internationalise31:00 when is the right or wrong time to internationalise33:30 building deal flow in taboo areas35:15 to what extent is the venture capital industry part of the problem - value of diversity 38:05 is the industry going in the right direction?40:00 are valuations different in taboo areas?42:35 creating communities supporting companies47:45 prospects50:20 Favourite questionsLinksOctopus Investments: https://octopusinvestments.com/Octopus Ventures website: https://octopusventures.com/Companies mentioned:Pelago https://www.pelagohealth.com/Overture https://www.overture.life/Vira https://www.vira.health/Elvie https://www.elvie.com/en-gbSkin and me https://www.skinandme.com/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested books and mediaEssentialism by Greg McKeownIn the Company of Givers and Takers by Adam Grant (article) https://hbr.org/2013/04/in-the-company-of-givers-and-takersBioWill GibbsHealthtech Partmer, Octopus VenturesWill joined Octopus in 2013 and sits in its Health team. He works with portfolio companies from consumer to enterprise, with a strong bias towards businesses making the biggest impacts on health.In recent years he has explored taboo areas within health, resulting in multiple new investments around this theme, from substance addiction to LGBT sexual health. He’s also passionate about the potential for digital therapeutics to deliver superior outcomes for some conditions, US expansion, the future of cannabinoids and novel business models within health.Will was based in Octopus' US office in New York during 2016, and continues to support portfolio companies looking to expand into the US health market. Many of his portfolio companies are based in the US, and he invests alongside big global investors like SoftBank Group, Kinnevik, Atomico and EQT Partners.Will is also a vocal champion of diversity and LGBT issues and is happily married to his husband Christopher.He founded multiple startups before joining Octopus Ventures, including a rare-breed pig farm and an organic spirits company.Will holds a degree in ancient history and classical archaeology from the University of Oxford. https://www.linkedin.com/in/willgibbs1/

Valuations are always a popular topic. With much discussion about whether we are at the bottom of the current cycle, it seems a good time to revisit and we invited back someone who has experienced several market cycles: John Glencross, co-founder of Calculus Capital. We had a great discussion on how the current market, how this compares with recent times and how a fund manager handles them. Topics discussed include:how companies are accepting lower valuationsthe danger of growth at any pricewhere there are still bubbles and what the consequences of these might behow to manage investing when valuations are highthe psychology of down rounds preferential return structures and what John is seeing in the marketreal unicorns versus valuation aberrationshow valuation matters for investinghow Calculus values existing portfolioJohn's sense of valuations in the EIS & VCT market and where he thinks the discrepancies arehow close we are to the bottom of the valuation cycleTalking with someone who has seen several downturns gave a great perspective on all these topics and there's lots for all advisers and investors. Enjoy!01:00 John introduces himself04:30 recent exit patterns06:00 companies accepting lower valuations attraction of investment vs exits07:30 avoiding growth at any price - US vs UK10:15 where there is still bubbles 13:15 investing when valuations are high - changed pace of investments in recent years16:45 the psychology of down rounds18:45 preferential return structures and the general tightening of terms in market26:00 when are unicorns a market aberration?28:30 how valuation matters for investing31:10 portfolio valuation - lags, being realistic and getting a good process35:00 how EIS managers are using unrealised performance as marketing, but its not similar to exits41:00 what is an acceptable band of uncertainty? How exits matter 44:15 are we at the bottom of the valuation cycle? 48:45 favourite questionsLinksCalculus Capital website: https://www.calculuscapital.com/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested books and mediaSunshine & ShadowsThe Four Agreements by Don Miguel RuizSing as We Go by Simon HefferBioJohn GlencrossChief Executive and Cofounder, Calculus CapitalJohn co-founded Calculus with Susan McDonald in 1999, creating one of the UK’s most successful, independent private equity firms focused on investing in entrepreneurial young British companies. John has over 30 years’ experience in private equity, corporate finance, and operational management. During that time, he has invested in, advised on or negotiated more than 100 transactions and served on publicly quoted and private corporate boards. Before co-founding Calculus, John served as a European Corporate Finance Director at UBS and, prior to this he was Head of Mergers and Acquisitions at Phillips and Drew, a 100-year-old London-based financial institution. At the start of his career, John qualified as a Chartered Accountant with Peat Marwick (subsequently KPMG), where he then went on to be recruited as a founder member of Deloitte’s newly established consultancy practice in the Gulf Region and then Corporate Finance practice in London. John graduated from Oxford University with an MA (Hons) in Philosophy, Politics and Economics.

When we last spoke with Harry Heartfield of Edition, the leisure sector was all about recovering the pandemic. Fortunately, we have moved on so we thought it was time to get him back to discuss where we are now, how his investment philosophy has evolved and what the prospects for exits are now.We covered a lot areas in our discussion, including:the unevenness of the current recoverythe difference that geography and target market makesthe need to rebalance portfolio risk nowhow live entertainment and hospitality are doinghow to run live events professionally and Edition's role in supporting thatprospects for exitshow the landscape of purchasers looksthe challenges of making rollups workwhy profitability matters more than everhow and why to set up EIS deals six months in advanceIts another great discussion - Harry is both erudite and insightful, and the lessons are not just about the leisure sector . Enjoy!00:50 Harry introduces himself03:00 Why Edition is more than a fund manager05:00 How does the leisure sector feel now?08:00 the unevenness of the recovery10:00 where is recovering and where isn't - geographic and demographic differences 13:40 rebalancing risk in portfolio 15:30 how live entertainment and events are doing19:30 the return after pandemic20:30 how to get professionalism in live events 25:30 the prospects for exits returning28:10 political games amongst the big players in live entertainment and the structure of purchasers31:20 making rollups work - the danger of multiple arbitrage and focus on synergies35:45 how long to build a company?40:15 the importance of profitability in the current market and when there is a trade off vs growth44:30 messaging around doing something different47:30 why Edition is lining companies up for investment 6mths in advance50:20 the challenges of agreeing deals 6 mths in advance54:00 favourite questionsLinksEdition Capital - https://www.editioncapital.co.uk/Harry on LinkedIn - https://www.linkedin.com/in/harry-heartfield-2275983a/Email harry.heartfield@editioncapital.co.ukSubscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested book and mediaIf This is a Man by Primo LeviThe Body: A Guide for Occupants by Bill BrysonBioHarry HeartfieldSenior Partner, Edition CapitalHarry has over 15 years’ experience in the leisure sector. In 2011, he joined boutique asset manager Ingenious becoming a Senior Investment Manager in their Live Entertainment Team. At Ingenious, he was responsible for working across several investment funds including several Venture Capital Trusts with a focus on leisure assets. During his time at Ingenious, he also developed and launched several investment products aimed at the retail market, including EIS products which raised more than £25m, and was Head of Investments and Acquisitions for Impresario Festivals plc until the sale of the business to media group Global for more than £28m.He set up Edition alongside the other Edition Partners in 2015. At Edition, he has overseen the development of Edition EIS and Edition Capital Projects, which have raised over £50m between them. He also was appointed as Strategic Advisor to Superstruct Entertainment (a Providence Equity backed company) from 2017 to 2020 as they made their first acquisitions including Sziget Cultural Management (Hungary) and elrow (Spain). In total, Harry has overseen deals in excess of £220m across the UK and Europe. He sits on the board of a number of Edition’s investee companies including WatchHouse Coffee, Borrow A Boat and Tailwise.

Assessing companies for venture capital investment is often more of an art than a science. Richard Blakesley is trying to change that with Venture Cubed. Its rating system aims to objectively assess how investible new companies are. We asked him to talk about how they built their rating system, what it tells us about the venture industry and how it might change it going forward.This is the second part of our excellent discussion. In the previous episode, we spoke about his rating system and what matters when assessing companies for investment. In this one, we discuss scaling the UK venture capital industry, indexation and investing at scale. In particular, we talk about:the proportion of companies that should be getting investmentthe challenge of getting more investment into different companies instead of boosting valuationswhether support and investment should come from the same organisationcreating a index for venture capital and benchmarkinghow to make that index investibledata and creating systems for intermediate valuationsbuying and selling a venture capital indexdifferent investment models that might be usedwhy bigger funds would expect to outperform smaller fundsAs you can see, we covered a lot of ground. This is a really important discussion for the venture capital industry: there could be an opportunity for it to scale up dramatically in the near future, but how it does that really matters. This discussion may not produce all the answers, but at least it asks the questions. And don't forget part 1!00:45 How many companies get funding that deserve it and what's the shortfall in companies not being funded that should?05:00 inflating valuations versus broadening the range companies getting investment - need new channels for pension funds08:00 why the industry needs to change - case for passive management10:00 the challenges of indexing venture capital11:00 separating investment and support - how passive managers might arrange that14:30 the real role of a fund manager 21:00 issue of intermediate valuation (before exit) - data collection on private countries26:20 data protection & confidentiality27:40 how to make index investible / expand coverage - without diluting quality33:00 buying & selling index - fund types, physical vs derivative35:00 creating funds where industry can write a big cheque 35:45 bigger diversified funds outperform 37:00 the power law and reversion to mean42:00 co-investment model and role of BBB - public plus private models45:30 favourite questionsLinksVenture Cubed website - https://www.venturecubed.com/Richard's email: richard@venturecubed.comBritish Business Bank venture capital reviews: https://www.british-business-bank.co.uk/uk-venture-capital-financial-returns-2023/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested books and mediaSuperforecasting by Philip TetlockWalking the Bones of Britain by Christopher SommervilleMentioned by BrianHigh Stakes, No Prisoners by Charles H FergusonBioRichard BlakesleyFounder & CEO, Venture Cubed

Assessing companies for venture capital investment is often more of an art than a science. Richard Blakesley is trying to change that with Venture Cubed. Its rating system aims to objectively assess how investible new companies are. We asked him to talk about how they built their rating system, what it tells us about the venture industry and how it might change it going forward.We had such a good discussion that we have split it into two parts. In this episode, we discuss how he measures companies. In the second part, we talk more about the wider industry. Here we discuss:what their rating system aims to measurehow they assess how good the ratings arewhat are the important factors in the ratingthe weights that are given to those factorshow they quantify factors that are more qualitativethe challenges in analysing financial modelswhere founders don't understand what investors wanthow founders can get good advice on fundraisingthe process of giving feedback to founders and how receptive they arethe mistakes that founders often makethe proportion of companies that are really investiblewhat investible really meanswhere funding gaps areAs you can see, we covered a lot of ground. Whether you are an investor thinking about how to assess companies or a founder considering fundraising, there's a lot for you here. And don't miss part 2!01:00 Richard Blakesley introduces himself02:20 What Venture Cubed does03:45 What are Venture Cubed scoring? - investibility06:00 How he measures the success of ratings09:25 What are the most important factors12:20 How they quantify qualitative factors14:20 Issues are around bias in interviews18:10 Assessing companies without interviewing management19:00 How founders often don't understand the desires of investors22:00 Getting good advice on how to fundraise26:30 How founders get feedback from the rating process30:20 The receptiveness of founders to feedback32:45 What mistakes do founders often make?38:50 How does Venture Cubed weight the factors?42:40 What proportion of companies are investible?45:15 How many companies get funding that deserve it and what's the shortfall in companies not being funded that should?LinksVenture Cubed website - https://www.venturecubed.com/Richard's email: richard@venturecubed.comSubscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenBioRichard BlakesleyFounder & CEO, Venture Cubed**tbc

Investing in companies that are starting out presents different challenges from when they are more established. Oxford Technology has probably been investing in new science and technology companies for longer than than anyone else in the (S)EIS/UK VC world. We get Director Andrea Mica to discuss how to go about it.In a discussion that is full of examples, both successful and unsuccessful, we cover a wider range of areas:how to validate the science / technology when there is no saleshow to invest without specialist knowledgebuilding appropriate experimentslooking beyond the first experimentthe importance of testing commercialityavoiding solutions looking for a problemdeveloping founder skills and encouraging them to try salesthe value of contrarianismWith lots of experience, Andrea gives lots of great insights into how they approach the challenge and there is plenty for investors and founders to learn from. Hope you enjoy it!00:45 Intro to Andrea 06:00 History of Oxford Technology09:40 Geographically close companies versus distant12:30 Validating the science / product at the early stage16:00 Example - viral pathway21:00 The usefulness of specialist knowledge26:30 How to building experiments - appropriate size and looking to future experiments28:30 Testing commerciality: balancing exploration vs definitive answers33:00 Example - value of testing hand strength vs recovering hand functionality36:00 Solutions looking for a problem40:00 Challenge of products that reduce pay of those buying. example - technology to discriminate moles43:00 Founder skills 46:00 Importance of sales and persuading founders to learn to like it50:00 Recent trends and the value of contrarianism55:30 Favourite questionsLinksOxford Technology website - https://www.oxfordtechnology.com/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested book and mediaThinking, Fast and Slow by Daniel KahnemanBioAndrea MicaDirector, Oxford TechnologyInvestment Career Oxford Technology Management Ltd – OT(S)EIS Fund Director. Responsible for souring selecting and supporting companies in the fund. The Fund now has invested £11m. 2009 - Royal Society Enterprise Fund at the Royal Society. Short term role to help structure the investment evaluation process, train an incoming analyst and help carry out due diligence on the first investments. 2005 IP Group Plc - Responsible for selecting investment opportunities in the partner universities, conducting technology and market due diligence , building startup up team and presenting the investment case to the investment board. This was followed by a period as director of the companies formed 1999: CFB Technology, Flintstone Plc - Responsible for investigating the technologies in which the group invested and then in helping the teams/companies get started. Other Oxford Creativity Trainer and Problem Solver Cleansteel Ltd – (Business developing and running a recycling process) Co- FounderOxford University Begbroke Business Development Fellow IntelliKraft Ltd. Oxford, UK Piezoceramic and Battery Technology Founding Director Sales & Marketing, Consultant JRA Technology Ltd, Marlow, UK, Technology Commercialisation Consultancy Senior Project Engineer D’Appolonia S.p.A, Genova, Italy, Engineering & Technology Commercialisation Consultancy Innovation Consultant, Leiden, Netherlands Study Masters Product Design – Delft University of TechnologyGraduate Study – Creativity and Innovation State University College Buffalo

Yet again, the EIS navigator team has got its all-star panel to discuss what happened in 2023 and how 2024 is shaping up. Christiana Stewart-Lockhart, Director General of EIS Association, Neil Cole, Head of Private Markets Distribution, UBS Wealth Management, and Kealan Doyle, Director, Symvan Capital join Brian to pick through the events of the past year and the prospects for 2024.We chat through many areas of interest:how has fundraising gonewhether some VCTs are sitting on too much cashhow easy is it for companies to raise moneythe need for discipline when making follow-on investmentswhether valuations have bottomedhow UK venture capital compares with the US and Silicon Valleythe renewal of the tax advantaged schemes (EIS, VCT and SEIS)whether the increase in SEIS limits is having an effect yeteffect of the new Consumer Duty ruleswhether some risk warnings are flawedAnd, as usual, we get our guests to look forward to 2024 and make some predictions.Links:EIS Assocation - https://eisa.org.uk/Symvan Capital - https://www.symvancapital.com/UBS Wealth Management - https://www.ubs.com/uk/en/wealth-management/home.htmlSubscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenBiosNeil ColeNeil Cole is the Head of Private Markets Distribution at UBS Wealth Management. He has responsibility for the Private Markets product range offered to UBS clients in UK and Jersey, which includes all of the tax efficient investment world including EIS, VCTs, inheritance tax, ISAs, and other relevant product types.Kealan DoyleKealan is CEO and co-founder of Symvan Capital. He has worked with venture capital companies for 15 years, both in a corporate finance advisory capacity as well as a fund manager. He prefers to invest in a wide range of technology companies, but is also very interested in finding synergies within the Symvan portfolio of companies. Company interests include big data analytics, fintech, SaaS, 3D printing and network security. Before his involvement in venture capital investing, Kealan previously lead a structured equity products team at HSBC, and has worked at Deutsche Bank, Merrill Lynch and UBS. Together with Nicholas, he has since founded his own entrepreneurial businesses to focus on VC investing. Kealan holds degrees from the London School of Economics and the University of Toronto.Christiana Stewart-LockhartChristiana Stewart-Lockhart is the Director General of the Enterprise Investment Scheme Association (EISA). She previously spent more than a decade working in Westminster including ten years at the Institute of Economic Affairs. She also founded EPICENTER, a Brussels based network of some of the most respected think tanks from across Europe. Christiana holds a BA in Politics from the University of York. She is a member of TISA’s Children’s Financial Education Policy Council and also sits on the Advisory Board for the All Party Parliamentary Group for Entrepreneurship.

In this episode we take another look at debt funding for high growth companies. Juice has a novel approach using marketing data and its CEO, Katherine Chan, comes on to discuss their approach and the wider funding market.We cover a lot topics., including:why alternative funders have arisen in the marketthe pros and cons of using revenue based fundingwhen debt finance is appropriate in high growth companieshow Juice uses marketing data in its approachwhat makes reliable marketing datahow to navigate the risk of rising CAC/CPAhow lenders can give support to companiesthe concerns that borrowers have and how these can be addressedWe finish off by discussing some recent market trends, including the change in availability of funding. Its a great discussion!LinksJuice website - https://velocity-group.com/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested books / mediaClara and the Sun by Kazuo IshiguroAtomic Habits by James ClearBioKatherine ChanChief Executive Officer, Velocity JuiceKatherine serves as the Chief Executive Officer of Juice, a forward-thinking financial services company dedicated to providing growth capital for digital-first businesses. Katherine's journey in the financial sector spans over 19 years, marked by roles in banking and risk management at institutions including Commerzbank AG, HSBC, and Deutsche Bank.Transitioning from banking to the startup world, Katherine joined Juice in 2019 as the Chief Financial Officer and has played a pivotal role in the company's development and rebranding from Velocity Juice to Juice. Her expertise in finance and risk management has been a key driver in Juice's evolution, leading to her recent advancement to the position of CEO.