The EIS Navigator

We've touched on angel investing several times on the podcast, so it was time we got a business angel on. Kirsten Connell is an unusual angel, in that she has a background in venture capital, but, like many angels, has strong experience in one area, which in her case is cybersecurity.We talk about how she got into angel investing and what her approach is. We talk about sourcing deals and diversification, particularly balancing her sector expertise against a desire to broaden her exposure. We also discuss what is the right diligence to do and who you can trust while doing it. She also gives some tips for those who want to start angel investing.LinkedIn profile - https://www.linkedin.com/in/kirstenconnell/Twitter - @kirstSuggested books:Delivering Happiness: A Path to Profits, Passion and Purpose by Tony HsiehBad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou

Generating sales in critical for any business, so its good to get someone on who has a playbook that works. Mads Jensen of Superseed focusses on B2B SaaS and helping his investee companies get those early sales and, when appropriate scale up.We talk about the challenges for startups: how to find those early customers, the difference between soliciting enough customer feedback and losing focus, when you know you have customer market fit and when to start scaling your sales up. We also talk about pricing and the role investors can play.Superseed - https://www.superseed.com/Suggested books:Good Strategy/Bad Strategy: The difference and why it matters by Richard Rumelt

While multi-stage venture capital management is common in the US, few firms have, so far, managed to develop it successfully here. Mercia is has probably developed the widest range of capital pools in the tax-advantaged world. We get Dr Paul Mattick on discuss their approach.While the benefits of multiple pools are clear, it does bring challenges to. We discuss how Mercia addresses these, building up strong processes and using its scale to its benefit.We also discuss Mercia's regional focus - the advantages and challenges, why the regions are underfunded and whether that can change. Paul also explains his idea of geographical arbitrage, to buy at low regional valuations and sell at a premium in the south east!Mercia Asset Management - https://www.mercia.co.uk/Paul.Mattick@mercia.co.ukSuggested books:The Time Traveler's Wife by Audrey Niffenegger

We all can see big ideas, but its often not clear how to translate them into investible ideas. Impact investment is one of the highest profile ideas just now, so we have Dan Somers of impact investors Boundary Capital to talk about this.He talks about how they drew investible themes out of the big idea, and how that works when it comes to looking at companies. Inevitably, this involves measuring impact. We discuss the Boundary approach, how the market looks at it and the challenge of comparability. We also give investors ideas about how to get started in this area.Boundary Capital - https://www.boundarycapital.com/Dan would love more book ideas, and to discuss anything we raised on the podcast, and can be contacted at dan@boundarycapital.com.Suggested books:Thinking, Fast and Slow by Daniel KahnemanDescartes' Error: Emotion, Reason and the Human Brain by Antonio Damasio

Corporate finance is an essential aspect of venture capital investing. Steve Harris is CEO of Committed Capital, with a strong corporate finance background and a long history of venture capital investing.In a widely ranging discussion, we cover many important areas, including company valuations, how to assess financial projections and plans for what happens when things go wrong. We also ask whether corporate financiers or former entrepreneurs make better venture capital investors!Committed Capital - https://www.committedcapital.co.uk/Suggested books:The Passion Of The Western Mind: Understanding the Ideas That Have Shaped Our World View by Richard TarnassThe Doctor and the Soul: From Psychotherapy to Logotherapy by Victor FranklA Man's Search for Meaning by Victor Frankl

Although consumer markets are a big part of quoted markets, they are something of a niche in EIS & VCTs. Pembroke specialise in consumer companies, with a portfolio including hospitality, food, fashion and wellness businesses.We talk about the philosophy for investing, how they can make venture scale businesses and the challenges of operating consumer-facing locations and online facilities simultaneously. COVID has loomed extra large for consumer businesses, and we discuss how the portfolio has responded and the importance of management teams in this process.Pembroke VCT - https://www.pembrokevct.com/Pembroke's Instagram - https://www.instagram.com/pembrokevct/Suggested books:The Compound Effect: Jumpstart Your Income, Your Life, Your Success by Darren HardyMindf*ck: Inside Cambridge Analytica’s Plot to Break the World by Christopher WylieHumble Pi: A Comedy of Maths Errors by Matt Parker

Product market fit is a much discussed, and much misunderstood topic, in venture capital. Matthew Cushen from Worth Capital recently wrote a great blog article on the topic, so we though we'd get him on to speak about it.We chat about what product market fit actually is and how you get it in practice. We also discuss how the company knows they have it and how an investor knows that too. Matthew brings lots of great examples from his portfolio, both good and bad. We also talk a little about coronavirus and distinguishing between short-term and long-term effects.Blog article on product-market fit - https://worthcapital.uk/obsessing-about-market-need/Worth Capital - https://www.worthcapital.uk/Suggested books:Nudge: Improving Decisions About Health, Wealth and Happiness by Richard H. Thaler and Cass R. SunsteinFactfulness: Ten Reasons We're Wrong About The World - And Why Things Are Better Than You Think by Hans RoslingAirhead: The Imperfect Art of Making News by Emily Maitlis

We love a good entrepreneurial story and Jasper Smith has a great one. We discuss how he started as an 18-year old building demonstrators for Sky, and how that developed into a series of television related jobs and businesses.As importantly, these experiences have strongly influenced his philosophy as an investor, giving him a holistic view of what founders need from their investors. We also touch on mental health for founders and investors, something that is often swept under the carpet but is particularly pertinent in current times.Vala Capital - https://www.valacap.com/Suggested books:Touching the Void by Joe SimpsonCourage at Sea: Tales of Heroic Voyages by Naomi JamesThe Marine Quarterly - https://www.themarinequarterly.com/

Although investing in drug development would seem to be ideal for EIS investment, it has been a somewhat niche area. Sunil Shah is hoping to change that, with o2h Ventures have recently launched the UK's first Knowledge Intensive Fund focused on this area.Sunil gives a great perspective on how investing in the industry has evolved over the last couple of decades, and how these changes work in the favour of early-stage investors. We also talk about the challenges of investing in this area, where specialist knowledge is needed and how the growth in private capital has affected the industry.Any discussion in this area can't ignore COVID and we also talk about how the industry has been rising to the challenge. o2h Ventures - https://o2hventures.com/o2h Chai Time webinars - https://www.youtube.com/channel/UC7YqoMJ566H7uau0E2WC3QwUK BioIndustry Association guide to investing in the UK biotech sector - https://www.bioindustry.org/policy/invest-in-biotech.html

Venture capital has long been dominated by idiosyncratic decision making, so SyndicateRoom's systematic data-driven approach is genuinely unique.This hasn't developed overnight, and we discuss SyndicateRoom's progression from a platform offering individual investments to the radical diversification approach that they use now. This is built on studying the whole of the UK market, which gives insights that will be useful to almost any investor.We discuss how many investments the data suggest, how SyndicateRoom selects angels to invest alongside, the challenges of following on and what they can't take account of.SyndicateRoom - https://www.syndicateroom.com/"A data driven approach to venture fund portfolio building" (white paper) - https://www.syndicateroom.com/data-driven-portfolioTom Britton - tom@syndicateroom.comSuggested books:Atomic Habits by James ClearThe Innovator's Dilemma: When New Technologies Cause Great Firms to Fail by Clayton M. ChristensenHow Will You Measure Your Life? by Clayton Christensen & James Allworth