The EIS Navigator

Amongst EIS funds and VCTs, consumer companies is less popular than B2B investments but still have their attractions. VGC Partners is one of the few managers that focus on this area and we get Investment Director, Phoebe Scriven to discuss it.In a fascinating discussion we cover many topics:why consumer is still attractive despite the economyhow the dynamics of returns in consumer venture capital investments is different from B2Bhow to understand the consumer when its not something that you would buy yourselfgetting conviction when data is limiteddeveloping investment thesesfinding quality within a group of companies within the same spacehow creative companies can find a formula for repeat successPhoebe brings lots of real life examples and really brings out her thought processes and approach to making investments. 01:00 how Phoebe became involved in venture capital02:40 what VGC does04:45 why is consumer attractive now07:00 consumer brands don't scale as quickly - don't need unicorns to get good returns13:00 B2C vs B2B investing - 14:00 understanding the consumer if you aren't the consumer19:00 how to get insights into consumers - qualitative insights23:15 quantitative insights26:45 thinness of data and using opinions: testing beliefs and getting conviction32:45 looking for differentiation when you see a lot of similar companies36:45 example of circular economy companies41:30 other areas of current interest - VR gaming, 46:45 creating formulas for repeated creative success49:50 favourite questionsLinksVGC website - https://vgc.partners/Phoebe's email - phobe@vgc.comLinkedIn - https://www.linkedin.com/in/phoebescriven/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested books Creativity Inc by Ed CatmullCulture Code by Daniel CoyleBioPhoebe ScrivenInvestment Director, VGC PartnersPhoebe leads early-stage EIS investing at VGC Partners.After reading English at Oxford, Phoebe began her career in product innovation and strategy, working with major FMCG companies and travelling across the globe to better understand different consumers. From there, she moved into consulting and development finance, while (outside of her day job) getting increasingly involved with the London start-up ecosystem via DevelopHer, a non-profit organsiation. In 2019, Phoebe made the move into venture capital, joining Supernode Global, where she made her first investments and exit. Phoebe joined VGC Partners at the beginning of 2023.

B2B SaaS is a very popular business model amongst venture capital and (S)EIS/VCT investors. Haatch Ventures specialise in investing in this sector and we get Partner Fred Soneya and Principal Jeremy Luzinda to talk about how they work and how they help the companies scale.We look at several topics about managing these companies:what B2B SaaS is and why it is attractive to investors. We discuss the merits of additional service revenue and when its a positive or a distraction.when a company should add new features or when it should expand its product range.what metrics are of interest, with Jeremy going deep into how they look at a couple of these.Haatch has a particular interest in supporting sales processes. Within this we talk about:how to develop the right channels and what factors to consider.how lead times on sales affects how companies operate.how investors can support companies in developing their sales.We also discuss some of the typical mistakes that founders make and the prospects for the future for B2B SaaS and venture capital investors in this area.00:45 Fred & Jeremy introduce themselves04:30 What Haatch does05:50 What is B2B SaaS08:00 Why is B2B SaaS attractive for investors12:00 Merits of recurring revenue versus service revenue15:00 adding features, roadmaps18:30 12 metrics of interest - net revenue retention21:30 how to develop the right channel23:00 lead times in sales cycles28:00 expanding from narrow to broad32:30 when to expand product ranges36:30 how managers can support companies in these processes40:45 typical mistakes founders make: 47:00 prospects for the future 51:20 Favourite questionsLinksHaatch website - https://www.haatch.com/Fred Soneya - fred@haatch.comJeremy Luzinda - jeremy@haatch.comSubscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested book and mediaMy Life and Work by Henry FordAshville Weekly by Daniel Ashville (Youtube)https://www.youtube.com/@thisisashvilleBiosFred Soneya, Co-founder & PartnerFred was responsible for a number of high-profile, large-scale innovation projects across Kiddicare.com and, post-acquisition, Morrisons. Fred created award-winning digital customer experiences by working with cutting-edge early-stage technology start-ups, bridging the online-offline gap at Morrisons. This included the launch of browse-and-order points, mobile payments and electronic shelf-edge labels.Having co-founded Haatch in 2013, Fred is responsible for the day-to-day running of the Haatch funds. He has led both the completion of over 150 investments into 70+ companies over the lat 10 years and the on-boarding of over 600 investors into the funds.Jeremy Luzinda, PrincipalJeremy began his career as Chief Operating Officer at a VC-backed start-up that raised from venture funds Forward Partners and Founders Factory, as well as esteemed angel investors such as Sir John Hegarty and Tom Teichman, amongst the first investors in the likes of lastminute.com, MADE.co and notonthehighstreet.com. It ultimately failed, but he learnt a lot in the process.He then became Managing Director at Surechill, a software-enabled cold-storage company co-founded by Peter Saunders OBE, which raised more than £10m. Following this experience, he joined Playfair Capital, an early-stage VC that has backed companies like Stripe, Thought Machine and Trouva. He worked on exciting companies like Omnipresent which he saw go from £0 to over £500m in value in under 18 months. He leans on this wealth of experience to offer hands-on support to our portfolio post-transaction, particularly on B2B SaaS sales.Alongside Haatch, he's a GTM consultant at Vencha, built by the early commercial team who built and sold MessageLabs for $700m, supporting B2B SaaS companies with GTM challenges.

While there is much discussion in the media of the macro-economy, its effect on startups is not always a obvious as it is for quoted companies. Ewan MacKinnon, a Partner at Maven, has been investing for almost a decade and half and draws on this experience to give us some insights.In the discussion we focus on three big areas:recruitment and wages: we talk about the tightness in the job market and how the effect on startups has changed over the past year. We also talk about hybrid working and how the balance of power in negotiating terms seems to be changing.inflation and pricing power: Ewan discusses the different ways that inflation and its various causes are affecting different companies. We also look at pricing power and how startups set prices and negotiate with customers.funding: interest rates and the money supply both affect the availability of funding for SMEs. We discuss the lending market and how that has evolved, particularly the difficulty of getting bank funding.Finally, we look forward to how the economy will develop over the next couple of years and whether founder optimism is justified.01:00 Ewan introduces himself04:00 what Maven does06:30 how the macro economy affects startups10:00 recruitment challenges13:00 knock on from big tech redundancies15:00 hybrid working and trends21:30 Inflation - differential effect, supply chains23:40 price setting and price raising - push back, 27:00 different client types - SME vs enterprise 32:40 Interest rates, money supply, ease of funding34:30 difficulty of bank funding40:25 Looking forward44:50 Favourite questionsLinksMaven website - https://www.mavencp.com/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested bookBad Blood by John Carreyou BioEwan MacKinnonPartner, MavenEwan joined Maven in September 2009 and is based in their Glasgow and Edinburgh offices. He is responsible for new Private Equity investments across Scotland and North East England and is a member of the Maven Investment Committee.Ewan has 25 years’ experience managing, advising and investing in SMEs.  He joined Maven in 2009, having previously worked in Johnston Carmichael’s corporate finance team. Ewan has extensive industry experience, having been managing director of MacKinnons of Dyce Limited, a specialist retail business which was sold to a FTSE 250 listed company in 2006. He has a first-class honours degree from the Aberdeen Business School and is a Fellow of the Association of Chartered Certified Accountants.Outside of work, Ewan enjoys keeping fit, following Manchester United and Aberdeen FC and has a keen passion for music.

Elliot Limb is co-founder and CEO of Cubed and spends his days supporting fintech companies scale. Having worked with many startups, he has a broad insight into their challenges and difficulties. He also has some strong views, which makes for a very interesting discussion!We covered a huge number of areas, including:- why fintech has a long way to go- what causes startup companies to fail: Elliot gives the two most essential metrics monitor- the relationship on boards between founders and VCs and how both sides often get it wrong- the importance of getting the right staff and board members - how to thrive with a weak board- the merits of generalist vs specialist investors- whether work/life balance is possible for founders- how founders can pull through when crisis hits- how keeping the wrong customers can ruin a business- generating a path companies in crisis to recovery- the importance of transparency between founders and investors.And this only scratches the surface! We planned to focus on fintech, but ended up with a much wider discussion which is essential listening for any founder, VC or investor.LinksCubed website - https://www.cubed.company/LinkedIn - https://www.linkedin.com/company/cubedcompany/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested booksThe Ride of a Lifetime: Lessons in Creative Leadership from 15 Years as CEO of the Walt Disney Company by Bob IgerRules For Revolutionaries: The Capitalist Manifesto for Creating and Marketing New Products and Services by Guy KawasakiFrom Brian:The Power Law by Sebastian MallabyLying for Money by Dan DaviesBioElliot LimbCo-founder and CEO, CubedIn a career spanning over 20 years, he has held multiple prestigious positions in the Banking and Fintech industry.Realising the depth of opportunities available as the finance industry reached an inflection point, he founded CoBa - where collaboration and agile (cross eco-systems) operating models have true alignment from strategy through to value realisation, digging deeper than technology, API and standard platform level. CoBa is his vision of how to build sustainable business models, based on collaboration between banks, fintech, regulators and corporates to maximise profitability on an individual and collective basis.His expertise in Banking & Fintech stems from the major challenges and opportunities he faced over his career, most notably as the technology head for Citibank’s transaction banking business in EMEA, overseeing the strategy, delivery and support of all of the transaction banking services across 53 countries. Post Citibank, he was the head of Corporate Banking for the world’s 3rd largest fintech company Finastra (formerly Misys) which also gave him the experience of how to grow a technology business. In addition, he has also held senior positions at Barclays, Travelex and a subsidiary of the Lloyds banking group, as well as running his own consulting business and Payments advisory. He has been involved in all aspects of the transaction banking business and provided thought leadership in various aspects of payments and transformational change, regularly speaking at industry events around the globe.Currently a Board Member at World Trade Board, he is a passionate leader and founder of multiple ventures that aim to foster a bridge between the financial sector with disruptive technology.Based in London, he is a musician at heart, a published author and an experienced keynote speaker offering industry insights, sharing his experiences gained across UK, EMEA, New York, Singapore, India and Australia.

Since its founding eight years ago, British Business Bank has established itself as an important participant in the funding markets for UK SMEs and startups. In this episode, its CEO Louis Taylor tells us what it is doing and how it is going about it.We start by discussing how the Bank fits into the UK ecosystem. Louis discusses the bank's mandate and how it goes about fulfilling it. It aims to change market failures through a variety of projects. Louis discusses several of these and how the Bank aims to catalyse others to fill the gaps.There are several specific areas that concern EIS and VCT investors and we look at some of those. The gap in regional equity funding is well known and BBB has some tailored programmes to address them. We also talk about the challenges of improving diversity and addressing issues in the green economy. LinksBritish Business Bank website - https://www.british-business-bank.co.uk/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested bookThe Entrepreneurial Myth: A manifesto for real business by Louise Nicolson BioLouis TaylorCEO, British Business BankLouis Taylor is CEO of the British Business Bank, the UK’s government owned economic development Bank. Prior to that, he was Chief Executive of UK Export Finance (UKEF), the UK’s export credit agency, for seven years. He also held roles as a Director General in the Department for International Trade, and a member of its Executive Committee and Management Board.Before joining UKEF, Louis held a range of senior roles at Standard Chartered Bank, including from 2013 to 2015 as Chief Operating Officer of Group Treasury, based in London. Before that, he spent three years as the bank’s CEO for Vietnam, Cambodia and Laos, based in Ho Chi Minh City. During this time he was also Vice Chairman of the European Chamber of Commerce in Vietnam (Eurocham). He joined Standard Chartered in London in 2004, working in Group Corporate Development, which undertakes the bank’s acquisitions, divestments and other inorganic growth initiatives.His earlier career included eight years working for JP Morgan in debt capital markets and mergers and acquisitions, and five years in corporate development and strategy with two industrial companies, Cookson Group plc and BTR plc.Louis is a trustee of the charity Sightsavers, which prevents sight loss and avoidable blindness, and promotes equal rights for the disabled. He is also a former chair of trustees of the charity Music in Prisons, which runs music education projects to help rehabilitate offenders, and a former chair of governors of the Royal Grammar School in Newcastle upon Tyne. He has an MA in Law from the University of Cambridge.

Hardware startups have often struggled to get funding, but Damon Bonser of British Design Fund is trying to change that. In this episode, he talks about his experiences and how hardware can be more attractive than many investors think.The first half of our discussion focusses on how companies can mitigate risk. Damon discusses how he avoids investing in a warehouse of unsold goods, focussing instead on more normal VC ideas of satisfying customer needs by getting the product into their hands early on.We discuss how and when companies should tool up and start production. We also talk about where, with Damon highlighting how reshoring into the UK is starting again, especially post-pandemic. We also talk about intellectual property and how to protect it.LinksBritish Design Fund website - https://www.britishdesignfund.co.uk/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested bookRebel Ideas by Matthew SyedBioDamon BonserCEO, British Design FundDamon Bonser is the Founder and CEO of the British Design Fund. A serial entrepreneur with over 20 years’ experience building and running product development and manufacturing businesses.

Anyone with a passing interest in technology or venture capital cannot have missed the rapid increase in interest in AI over the past few months. We are overdue talking about it on the podcast, so we got an expert in James Pringle. He used AI as a founder and it now impacts how he invests so he is the ideal guest to discuss the topic.We start off by covering some of the basics, drawing out what AI is currently capable of. We discuss broadly how AI works, how it has developed over the past few years and what has changed to bring it to such prominence now.James explains how AI affects startups and what he is investing in. He discusses how it can supercharge employees, enabling them to move faster with less resources and how management needs to handle that. He talks about how this leads to an investment approach that focuses on applications rather the fundamental building blocks of AI.Finally, we discuss some of the risks around AI, especially around the speed of change and how that affects James as an investor as well as workers and the wider economy.PS Encouraged by James, we used AI to generate the title for the podcast - hope you like it!LinksPortfolio Ventures website - https://portfolio.ventures/James on LinkedIn - https://www.linkedin.com/in/thejamespringle/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested book The Personal MBA by Josh KaufmanBioJames PringlePortfolio VenturesJames Pringle is a VC investor at UK venture capital fund Portfolio Ventures. James also co-hosts Riding Unicorns, one of Europe's top venture podcasts. Prior to investing, James founded a VC-backed SaaS company.

When planning this episode with Kealan Doyle of Symvan Capital, he told a story about a venture capital conference where the compere asked who had been through a downturn before and nobody raised their hands. So we decided to discuss the last couple of venture capital cycles and how previous downturns compare with the current one. We also talk about some of the secular changes that have taken place over this period.We start by looking back to the .com bubble at the turn of the century. We examine some of its main features, including how much of the action took place in quoted markets and the limited effects on the economy.Next we look at the Great Recession. Although driven by the collapse in housing, particularly in the US, it affected every asset market. We go through the main features, including how venture capital saw a big downturn and, initially, a long slow recovery. We then briefly go through what happened in the past decade and how the current downturn came about. We talk about valuations, supply of capital and the unevenness of the current market. We also take our lives in our hands and speculate about how the VC market will develop over the next couple of years. LinksSymvan website - https://www.symvancapital.com/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested book and filmTurn Every Page: The Adventures of Robert Caro and Robert GottliebThe Path to Power: The Years of Lyndon Johnson (Volume 1) by Robert CaroBioKealan 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.

There have been two recent changes that will affect how ESG is applied in practice by fund managers, advisers and, most importantly, investors. Lee Coates of ESG Accord has been advising on ethical investment for three decades, runs a consultancy to help others implement ESG and and is on a relevant FCA committee. We had such a great discussion that we are giving it to you in two parts: this is the second. You don't need to listen to the previous episode first, but it will help.In this part, we start by discussing the new Sustainable Disclosure Regulations that are coming. While there is a lot of focus on the labelling, and it is important, Lee believes the disclosures will have a deeper impact. We discuss what they are and how that will affect what managers do.Greenwashing is obviously a concern. Lee talks about some of the ways this is happening, not all of which are malicious. We also discuss measurement, some of its challenges and how that will fit in with the new labelling.Finally, Lee looks at how things are evolving and how we might get to a world where we don't talk about ESG because its implicit in what everyone is doing.LinksESG Accord website - https://esgaccord.co.uk/Accord Initiative - https://www.accordinitiative.com/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested booksShadow of the Wind by Carlos Ruiz ZafonNomad Century: How to Survive the Climate Upheaval by Gaia VinceBioLee CoatesDirector, ESG Accord1989 launched IFA firm Ethical Investors, which dealt exclusively in ethical and responsible investment advice. Retired from firm in 20201998 launched independent ethical research company Ethical Screening 2010 launched Australia’s first animal-friendly Superannuation fund - Cruelty Free Super. In 2011 awarded an OBE for ‘services to ethical business and finance’. In October 2020 co-founded ESG Accord, supporting advice firms implement robust compliance procedures to meet client investment preferences and objectives, including ESG and SustainabilityLee is part of the FCA’s Disclosures and Labels Advisory Group

There have been two recent changes that will affect how ESG is applied in practice to fund managers, advisers and, most importantly, investors. Lee Coates of ESG Accord has been advising on ethical investment for three decades, runs a consultancy to help others implement ESG and and is on a relevant FCA committee. We had such a great discussion that we are giving it to you in two parts: this is the first.We start by discussing the background and how sustainable issues have evolved. Lee has strong views on where things are going and sets out an interesting perspective on what this means.He follows this by discussing Consumer Duty and how it will affect ESG. We initially focus on advisers and the changes they will have to make. Lee outlines the new requirements and how they fit into what advisors are already doing. He also talks about how the changes will be good for advisors' businesses and lead to more involved clients.Fund managers and investors do not get ignored though and we discuss them all further in the second part, which will come out next week.LinksESG Accord website - http://esgaccord.co.uk/Subscribe to the EIS Navigator podcast on most services here: https://the-eis-navigator.captivate.fm/listenSuggested booksShadow of the Wind by Carlos Ruiz ZafonNomad Century: How to Survive the Climate Upheaval by Gaia VinceBrian also mentioned:Lying for Money by Dan DaviesBiosLee CoatesDirector, ESG Accord1989 launched IFA firm Ethical Investors, which dealt exclusively in ethical and responsible investment advice. Retired from firm in 20201998 launched independent ethical research company Ethical Screening 2010 launched Australia’s first animal-friendly Superannuation fund - Cruelty Free Super. In 2011 awarded an OBE for ‘services to ethical business and finance’. In October 2020 co-founded ESG Accord, supporting advice firms implement robust compliance procedures to meet client investment preferences and objectives, including ESG and SustainabilityLee is part of the FCA’s Disclosures and Labels Advisory Group