The EIS Navigator

Edtech is far from uncommon in EIS investing, but is still a little away from the mainstream. Today Matthew O'Kane from Nexus Investment Ventures discusses his experiences from investing in the area.We talk about the sector a little and why the target customers may not be who we think they are. However, the bulk of our discussion is a dive into the eight year journey with Boclips, a market place for providing licensed video clips for educational purposes. We dig into some of the bumps along the way, particularly what happened when a founder left and how the company and Nexus coped with that.Matthew contrasts this, ultimately, successful investment with a recent failure to draw out several lessons that can be taken from the difference between the two companies.Nexus Ventures website: https://www.nivl.co.uk/Scale-up Fund: https://www.scaleupfund.co.uk/ Suggested book:The Islander by Chris BlackwellBioMatthew O'KaneManaging Director, Nexus Investment VenturesMatthew left Deloitte to join Nexus in 2013. He devised and launched Nexus’s first EIS Fund, the Nexus Investments Scale-Up Fund, which was shortlisted for Best Generalist EIS Fund and Best Sector Specialist at the 2019 Investment Week Tax Efficiency Awards. He acts as an angel investor and active mentor to many of the UK’s brightest healthcare and education and food tech founders.

Foresight Group recently announced that it was buying most of Downing's venture business, including two VCTS and EIS funds. To talk about, this episode's guests are Matt Smith, a long-standing Partner at Foresight, and Jack Eadie, who moved across with the Downing business. After introducing the deal itself, we discuss some of the motivations for the transaction and where Foresight see complementarity with their existing business. We also talk about how the integration will work, what effect there will be on day-to-day management and how these will affect investors. Finally, we touch on current market conditions and outlook and how that may affect things going forward.Foresight website: https://www.foresightgroup.eu/Suggested books:Good to Great by Jim CollinsMoney Men: A Hot Startup, A Billion Dollar Fraud, A Fight for the Truth by Dan McCrumHarry Potter and the Philosophers Stone by J.K. RowlingBiosMatt SmithMatt is a Partner based in Foresight Group’s London office. Prior to Foresight, Matt worked at Rothschild.Matt holds a post graduate Diploma with distinction in Physiology and an MA in Biological Sciences, both from Oxford University.Jack EadieJack is a Managing Director based in Foresight Group’s London office. Prior to Foresight, Jack worked at Downing Ventures as a Partner, he also previously worked at venture funds Next 47 and Eight Roads Ventures.Jack holds a BSc in Economics from the University of Bath.

While we have touched on regional investing several times in the podcast, we have never discussed it directly. Michael Vassallo worked as in London before returning to the North East, where he set up Maven's regional office, so he is well placed to discuss the pros and challenges of investing there.We start by looking at the big picture and some of the reasons why the UK regions get less investment funding than south-east England. We talk about how this has evolved over time, with Micheal bringing insights from what has happened in north-east England over the past few years.Michael also goes into the valuation gap that persists in the regions, talking about where it applies and some of the possible reasons behind it. Finally, we discuss what needs to change and how and who may drive change in the regions and aid the "levelling up" agenda.Maven website: https://www.mavencp.com/Maven Durham: https://www.mavencp.com/maven-durham Suggested books:The Warren Buffet Way by Robert HagstromShogun by James ClavellBioMichael VassalloNorth East Investment Director, MavenMichael joined Maven in February 2017 and works in their Newcastle and Durham offices. Michael leads the North East investment team and his responsibilities include deal origination and execution and portfolio management across North East England.Prior to joining Maven, Michael worked at FW Capital for five years and was based in their Newcastle office. At FW Capital he was involved in executing and completing mezzanine finance transactions with SMEs across the region. Prior to that, Michael worked at Brewin Dolphin for nine years and was based in their Newcastle and London offices. At Brewin Dolphin he was involved in equity research and IPOs of listed companies across multiple sectors. Michael began his career as a Chartered Accountant at Ernst & Young, in the audit department.He has an MA Hons in Mathematics from the University of Oxford and is an ACA qualified chartered accountant.Outside of work Michael enjoys golf, gardening, and days out with the family.

ESG is an area that is work in progress at the moment. Andrew Noble is a partner at Par Equity, but is also on the Steering Committee of the ESG_VC initiative, which is trying to pull together a standard framework for venture capital.We cover a wider range of areas in our discussion. Andrew talks about ESG generally and gives a framework for how he thinks about different types of ESG. We discuss how the market looks at these things and outline some of the challenges.We dig into how ESG works in venture capital in particular. We talk about the challenge of setting goals in companies that have limited resources and how to think about when companies should look at these things. Referencing the ESG_VC report, we talk about how companies set priorities and how breaking down the data gives insight into when companies are progressing in different areas.Finally we talk about how these issues are presented in the market and how to avoid greenwashing.Par Equity website: https://www.parequity.com/ESG_VC website: https://www.esgvc.co.uk/ESG_VC report: https://www.esgvc.co.uk/wp-content/uploads/2022/03/ESG_VC_Report_2022.pdfAfter our recording, Andrew also suggested the following podcast episode for further perspective on ESG: https://thisweekinstartups.com/proof-of-impact-ceo-fleur-heyns-on-meaningful-metrics-for-measuring-environmental-impact-this-week-in-climate-startups-e1466/Suggested books:The Hard Thing about Hard Things by Ben HorowitzBioAndrew NoblePartner, Par EquityAndrew is a member of Par Equity's Investment Committee and sponsor partner to several Par portfolio companies. In addition, Andrew leads Par's distribution of its discretionary managed funds, takes an active role on improving Par’s operations and technology infrastructure and represents Par Equity on the Steering Committee of ESG_VC, a pan-European initiative aimed at improving the ESG credentials of VC backed companies.Andrew is a former management consultant with McKinsey & Co, specialising in sales optimisation for FTSE 100 clients, before rejoining Par Equity in May 2019. Andrew has broad experience across the early stage venture capital and private equity markets having personally invested in more than 50 innovative, high growth companies since 2008, as well as founding Transition Capital, a management buy-in vehicle, in 2017, where he was managing director, leading the deal sourcing, due diligence, and fundraising efforts. Andrew is a former athlete, having competed for TeamGB in Alpine Skiing at the 2010 Winter Olympics, and holds an MBA from INSEAD Business School.

Platforms are part of the essential plumbing for advisers and investors in most investment areas, but the tax-advantaged space has lagged mainstream markets. Dan Rodwell, CEO of GrowthInvest, comes on to discuss why that is and how they are looking change it.GrowthInvest has been on a journey itself, so we start by finding out how it has evolved and why. We chat about the tax advantaged market as whole, the additional complications that this space brings for platforms and what can be done about them. We also dig into the challenge of platforms getting to profitability, with Dan setting our clear benchmarks and how & when he thinks GrowthInvest will get there.With GrowthInvest announcing it is taking on Kuber's former clients, we explore the failure of the latter. We get Dan's perspective on what went wrong there and what lessons he takes away from it. We also discuss the recent transaction and what it means for Kuber's former clients, GrowthInvest and the market as a whole.GrowthInvest website: https://growthinvest.com/GrowthInvest email: enquiries@growthinvest.comSuggested books:Factfulness by Hans RoslingBioDan Rodwell: Chief Executive Officer, GrowthInvestDaniel is the founder and CEO of GrowthInvest, a market leading adviser platform specialising in tax efficient and alternative investments. Prior to this he managed institutional and private funds in equities and derivatives for nearly 20 years. Daniel managed the UK division of Van der Moolen Equities AG and founded the equity derivatives boutique Ten Derivatives LLP.Daniel has been an Angel Investor for over 15 years, and mentors a number of high growth businesses, focusing on digital transformation. He is passionate about increasing efficiency in the alternative investment sector, having been a driving force in the digitisation of Open Outcry traded products in the late 1990s.

Its rare for an IFA firm to be started from scratch, and even rarer for it to have a preference for tax advantaged or efficient business like EIS, VCTs, BR and SEIS products. Matthew Bugden cofounded One Four Nine, an IFA firm that does just that.We talk about why they started the firm and why they settled on the strategy they did. We discuss the challenges of getting a new firm off the ground, including developing a strategy that will satisfy funders and getting the right compliance in place. Matthew also gives his views on how to give best advice in this area and the challenges of doing that. We talk about the complexity of advice and the need to get investment and tax aspects right. We also explore issues in the market, such as reporting, transparency and platforms and how he sees the market developing in the future.One Four Nine Group website: https://www.onefourninegroup.co.uk/One Four Nine on LinkedIn: https://www.linkedin.com/company/one-four-nine-group/Suggested books:The Jam Retrospective: A Visual History by Agent ProvocateurBioMatthew BugdenChief Executive Officer, One Four Nine GroupHe leads One Four Nine in its pursuit to become one of the UK’s leading independent financial advice and fund management groups.With a career spanning over 35 years within the financial services industry, Matthew has enviable strategic management experience and a significant network of relationships with financial advisers, their support teams and professional connections. Previously working at one the UK’s leading alternative investment managers for 18 years, he and his large team was responsible for its direction and interaction with financial advisers and successfully built and maintained relationships across the entire advice sector, whilst raising in excess of £8 billion through tax efficient alternative investments. The first 16 years of his career were spent working across corporate and retail banking clients for a major bank prior to moving to a large corporate client.Matthew is perfectly placed to talk to owners of financial advice firms on how they can spend more time doing what they enjoy – delivering excellent service to and quality outcomes for One Four Nine clients.

Modwenna Rees-Mogg has been involved in the world of angel investing for a couple of decades. As the founder of AngelNews, a news service focus on this area, she had a wide perspective on the market and the trends within in.We spend the first half of our discussion talking about the angel market and its structure. She discusses the rise in "tourists", how experience investors have recently been cautious and what effect will have. We touch on syndicate structures and whether investors are getting value for money.In the second half we discuss the prospects for the market, and valuations in particular. Modwenna is quite bearish on the near future: we discuss why this might be and what is likely to happen.AngelNews website: https://www.angelnews.co.uk/Funding Index website: https://www.funding-index.com/Suggested books:The Art of War by Sun Tzu

In a slightly different episode, the EIS Navigator host, Brian Moretta, talks about diversification drawing strongly on excerpts from previous guests. Support is supplied by Tom Britton of SyndicateRoom, Sanjeev Gordhan who was then at Newable, Stephen Page of SFC Capital and Paul Tselentis of 24 Haymarket.We start by talking about how venture capital differs from quoted equities and how this leads to a slightly different approach to diversification. In particular, the number of investments required is a lot more than people usually think. We also discuss how to get there, highlighting the differences between VCTS and EIS funds, showing that choosing them is a more balance decision than might seem on first glance.Diversification by stage, sector and over time are also discussed. Each matters when building a portfolio and there isn't a short cut to choosing several investments.As this episode is a bit of experiment, please let us know whether you love it or hate by emailing us at enquiries@hardmanandco.com.Hardman & Co website: https://www.hardmanandco.com/Asset allocation white paper: https://www.hardmanandco.com/tes-white-paper-how-much-should-clients-invest-in-venture-capital/EIS Navigator episodes from which episodes taken:Tom Britton, SyndicateRoom: https://hardmanandco.com/18-systematic-venture-capital-investing-and-radical-diversification-tom-britton-of-syndicateroom/Sanjeev Gordhan, Newable: https://hardmanandco.com/11-how-much-to-invest-in-venture-capital-sanjeev-gordhan-of-newable/Stephen Page, SFC Capital: https://hardmanandco.com/37-state-of-seed-investing-stephen-page-of-sfc-capital/Paul Tselentis, 24Haymarket: https://hardmanandco.com/42-building-a-differentiated-angel-investment-network-paul-tselentis-of-24haymarket/SyndicateRoom Beating the Dragons white paper: https://www.syndicateroom.com/guides-and-reports/how-to-outperform-vcs Suggested book:High Stakes, No Prisoners by Charles H. FergusonBioBrian MorettaHead of Tax Enhanced Services, Hardman & CoBrian Moretta is Head of Tax Enhanced Services at Hardman & Co. He is an actuary turned fund manager, who then moved into equity research, and has analysed many EIS funds, VCTs and companies, both listed and unquoted. He also has academic credentials, being an Honorary Fellow at Heriot-Watt University, where he does some occasional teaching. This has included teaching MSc students about, inter alia, Modern Portfolio Theory.He has always had a strong interest in getting underneath companies and understanding how they really work, and he finds venture capital fascinating. Some of this is because transparency is hard, some because the industry is not well understood. He is doing his best to change both of these.Brian Moretta is also host of the EIS Navigator podcast, and received Highly Commended at the 2021 EISA awards for the category Best Journalist or Advocate.

One of the challenges that venture capital investors have to accept is that there probably won't be liquidity for their shares until the company exits. Several companies have been trying to change that, not entirely without success, with JP Jenkins one of the longest standing. Their Head of Corporate Development, Mason Doick, comes onto the podcast to discuss the state of play and prospects for things getting better.We talk about the challenges for improving matters. Mason gives good perspectives on the lack of liquidity, as we dig into why its so hard. He compares the UK and the US, which has been doing better, and we discuss what lessons we can learn here to improve matters.We also get into the challenges of getting appropriate information flows, how some private companies don't understand the long-term benefits of getting those flows right. Mason also talks about the typical companies that achieve successful secondary markets and how companies can start preparing facilities for their investors when the time is right.Email: md@jpjenkins.comJP Jenkins website: https://www.jpjenkins.com/Suggested books:Add then Multiply by David B. HorneBioMason DoickHead of Corporate Development, JP JenkinsHaving worked for a number of years in financial services, private equity and investment management, Mason has come across his fair share of deals. He is currently Head of Corporate Development at JP Jenkins, responsible for all new admissions on the matched bargain trading platform / secondary market. From public markets to private, Mason has raised capital for both SME’s and established private businesses, and latterly in providing liquidity and exits options for those locked in shareholders. He was educated at the University of Portsmouth and holds the CISI Investment Advice Diploma.

The venture capital industry has seen steady flow of new entrant over the past few years, whether EIS or GP/LP funds. Richard Hoskins of Kin Group speaks with almost all of them and discusses the challenges and pitfalls for those who want to start a new fund or invest in one.We start by discussing the current environment. We talk about the people who want to start funds, what their motivations are and what they usually bring the table. Richard talks about how these people are really building a new business and the challenges of differentiating themselves.We also talk about some of the specific areas that can be challenging. Raising funds is at the front of many people's minds and Richard has some insights into how the current environment means that its may come from unexpected directions. We also dig into the importance of high quality deal flow and how new managers might establish and improve it.Email: rhoskins@kin-group.co.ukLinkedIn: https://www.linkedin.com/in/hoskinsrichard/Kin Group website: https://www.kincapital.co.uk/Suggested books:Atomic Habits by James ClearBooks by Jim CollinsBioRichard HoskinsCo-Principal, Kin GroupRichard is Co-Principal and Co-Founder of Kin Group. Having worked in Venture Capital for 17 years, he has seen the Venture industry move from the niche sector it once was, to the booming asset class it is today. He has worked in a variety of VC roles, including; fundraising, fund management and fund administration.  He has been described as “one of the most knowledgeable commentators on the venture capital world” (Telegraph, 2017). In particular he has helped numerous aspiring VC asset managers setting up their first VC fund and assisted larger VC asset management firms grow to the next level.