Startup seed funding uk

Index

Introduction

Who are RLC Ventures?

RLC Ventures are an early-stage VC Fund headquartered in London, who invest across the UK in exciting technology & software companies. Founded back in 2016, we have backed over 40+ early-stage business through the EIS and SEIS schemes, which has provided significant returns for our early backers and investors.

If you want to apply for funding with us, please visit this page.

If you are interested in investing in one of our funds, then please visit this page.

What is defined as the 'early-stage' ecosystem

For the purpose of this article, we will define the early-stage ecosystem as anything prior to Series-A.

Some statistics on the early-stage ecosystem. An overview of the deals done last year shows that the amount invested in seed stage companies was £823m, a 1% decrease compared to 2018. 2019 saw the first decrease year on year in equity investment since 2011 but the annual total remains well above 2017 levels when the seed stage received £597m of funding. The number of seed stage deals was 746, a 1% increase compared to 2018, but consistent with the finding that the performance of early stage deals has been the weakest. Macroeconomic uncertainty in 2019/20 is likely to have contributed to these trends, as early stage deals have the greatest level of risk.

Number of deals per size of round per year

The data provided by Beauhurst suggests that the seed stage landscape has been growing exponentially over the last decade, especially at the earlier stage with companies raising up to 499k. The growth in the sector gives Early-Stage VCs such as RLC Ventures the ability to be at the heart of the growth, providing finance to exciting new tech companies that will shape the future of the global economy.

Whilst the UK seed funding landscape has been impressive over the last number of years, the coronavirus pandemic has let to a decline in the number of deals that are being done and amount of money being invested at an early-stage. CoVid-19 evidently has had impact on investor appetite based on the prolonged round closures and the rush (and abandoning) of certain business sectors. Deal activity is down marginally, but on the positive side for those looking to raise is that (i) valuations remain largely unchanged and (ii) investor confidence appears to be rebounding based on the number of Advance Assurance applications and deal signatures made is close to reaching pre-lockdown levels. Data provided by SeedLegals shows that the number of SEIS/EIS Advanced Assurances took a hit in the months of April and May but is on the journey to recovering to pre Covid-19 levels.

Provided by SeedLegals

Infographic of UK VC Funds

Overview of UK VC's and Seed Investment Landscape.

What are the types of funding available?

Accelerators and Incubators  

Accelerators and Incubators are organisations that are focused on helping your start-up grow from an idea or an early-stage business into an investment/VC ready business. They assist by providing mentorship, advice and in some cases, funding. They typically have large networks of investors to support the start-ups within the cohorts and have some have corporate partnerships to accelerate the growth of the start-up.

Whilst only some provide equity funding, some provide only office space and introductions. In general, accelerators and incubators are both great in helping formalise your idea and, depending on the reputation of the organisation, putting your start-ups name on the map.

Angels

Business Angels are typically high net-worth individuals, looking to invest in early-stage businesses. In the UK, angels will typically through the EIS/SEIS schemes which are government led initiatives providing investment relief for individuals. Some angels can provide debt through SAFE structures, although this is far more uncommon.

VC Funds  

Venture Capital funds will typically invest in particular sectors they feel they have the connections and knowledge to navigate a start-up to later-stage funding. A VC fund has it's a commitment to its LPs as well as its portfolio companies. This means a VC firm will typically draw up term sheets that vary with respect to setting liquidation preferences and anti-dilution terms.

Venture funding can be very beneficial if you find the right type of investor. Always ensure you have done background research on a VC before even considering them as a source of funding, in order to understand whether they're the correct fit for your start-up.

Crowdfunding

Crowdfunding is the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet. Crowdfunding can be a great option for a start-up, especially as it serves the dual purpose of being a marketing tool for early users. Although it is worth noting that some crowdfunding sites typically ask for about 70% of your target funding to be complete before posting to their site.

UK Venture Capital (VC) Funds

How do VC Funds operate?

Venture Capital or VC Funds are typically formed around a Limited Partner (LP) and General Partner (GP) structure. LP's deploy capital into a fund which is then pooled together. LP's vary greatly, but they can be institutional endowments, Fund of Funds, Sovereign Wealth Funds, Family Offices, HNWI's etc.

The GP's are typically entitled to 2% per year of the funds managed as a 'management fee' and 20% of the upside upon success, called 'carry'.

To earn their fees, the GP's and Investment Teams then deploy the capital into a basket or portfolio of companies, hoping to generate returns on the initial capital. Only ~5% of funds make a return over 3x, with the majority returning less than 1x.

The deployment process is typically undertaken over a 3 year period, with an additional 5-6 years on the fund lifetime where the GP's will support the companies and hopefully realise their returns through an exit.

Finally, it is worth understanding the portfolio approach, and how VC's make 'bets'. Let's assume a fund is $100m, and the GP's are targeting a 3x return to their LP's. The GP's will need to ensure they are backing companies that have the potential to return the entire fund.

Things to Consider When applying for VC Funding:

Average Ticket Size

At the 'early-stage' (pre-seed and seed) VC Funds will Typically invest anywhere from £50,000 up to £2,000,000 (and occasionally more). The range is extremely wide, and it completely depends on the fund, the round size and the wider economic conditions. On average, you can expect a VC fund leading your round at the seed and pre-seed stage to commit around £500,000.

From our own internal data, we typically see pre-seed rounds around the £150,000 - £500,000 size, but usually towards the middle of this range.

Seed round are typically a little larger, ranging from around £350,000 to £1.5 million. The average is around £750,000

Ultimately your round size should be determined by what milestones you wish to achieve with the funds raised. Overall, a good target is 12-18 months runway. Depending on a number of factors such as your industry vertical or business model, this number will be higher or lower.

Who is VC Funding for?

VC funding is historically reserved for highly scaleable and ambitious businesses. Unless you are a proven entrepreneur or highly experienced in your field, it will be difficult to convince investors to invest in your business without:

  • early traction,
  • revenue,
  • an MVP or product.

Top UK VC Funds to know:

                                             Read our list of the 25 UK VC Seed Funds

RLC Ventures

RLC Ventures Fund Logo

Sector Focus: B2B Software, Fintech, Entertainment

Ticket Size: £70,000 - £300,000

Notable Portfolio Companies: Organise, Labworks, Workscope,

Comments: RLC Ventures is an award-winning VC fund backing UK startups with emerging-markets DNA. They lead around 50% of their investments and usually co-investing alongside other early-stage funds and angels. Apply for funding here.

Ascension Ventures

Ascension Ventures - The UK Seed Fund
Ascension Ventures

Sector Focus: E-Commerce, Education, Software/SaaS

Ticket Size: £50,000 - £300,000

Notable Portfolio Companies: WeGift, WageStream

Comments: Ascension Ventures is one of the most active Seed investors in the UK. They have backed 100+ tech startups to date through the (S)EIS schemes. As well as their EIS/SEIS funds, they have two Institutional funds 'Fair by Design' and 'Good Food' tackling Poverty Premium and childhood obesity respectively.

Connect Ventures

Sector Focus: Software/SaaS, E-Commerce, Travel

Ticket Size: £400,000 - £1,500,000

Notable Portfolio Companies: Citymapper, Typeform

Comments: Connect Ventures specialise in investments at the seed and Series A stage. They are passionate about the power of product and they have created a VC firm that is singularly focused on Founders who are instinctive about product. They typically are low volume, high conviction, backing on average 9 new companies a year.

Episode 1

Sector Focus: B2B, Enterprise Software,

Ticket Size: £500,000 - £2,000,000

Notable Portfolio Companies: CarWow, SimplyCook

Comments: Episode 1 Ventures invests in seed and Series A rounds of up to £2m in software-driven businesses with the potential to transform industries. They predominantly focus on Deep Tech.

Force Over Mass

Investor Coffee Morning with Force Over Mass - TechHub

Sector Focus: Artificial Intelligence (AI), Enterprise Software, Fintech

Ticket Size: £100,000 - £2,500,000

Notable Portfolio Companies: Zencargo, What3Words

Comments: Force Over Mass is a B2B software-focused fund based in Victoria, London. They have both an early EIS fund and a larger institutional Series B fund to back their portfolio winners.

Frontline Ventures

Sector Focus: B2B, SaaS

Ticket Size: £100,000 - £1,000,000

Notable Portfolio Companies: Farewill, Evervault

Comments: Frontline Ventures invest in seed-stage B2B companies in Europe and Series B, C & D companies in the US expanding into Europe. At the Pre-seed and Seed stages, 50% of its investments are pre-product and 75% are pre-revenue. The companies listed above were backed at Seed. The team is half London half Dublin.

Kindred Capital

Kindred Capital - Crunchbase Investor Profile & Investments

Sector Focus: Generalist

Ticket Size: £500,000 - £1,000,000

Notable Portfolio Companies: Paddle, Farewill

Comments: Kindred is an early-stage venture capital fund that practices 'equitable venture'. What this means is that every single founder that the company backs becomes a co-owner of the fund. They are very much aligned with their founders and believe operational expertise from the partners can add tremendous value to the portfolio.

LocalGlobe

LocalGlobe

Sector Focus: Generalist

Ticket Size: £500,000 - £1,500,000

Notable Portfolio Companies: TransferWise, Citymapper, Figma, Zoopla, SecretEscape, Seedcamp and many more.

Comments: LocalGlobe says they have a very simple proposition for founders at pre-seed and seed stage: “The capital, time and support you need to get to a great Series A and build the most ambitious business possible”. They back companies at the pre-seed and seed stages, and are sector agnostic.

Playfair Capital

Playfair capital | Oradian

Sector Focus: Generalist

Ticket Size: £300,000 - £500,000+

Notable Portfolio Companies: Appear Here, Trouva

Comments: Playfair takes a sector-agnostic approach and investments span deep tech, SaaS, marketplaces and B2B companies. They've backed the founders of more than 50 companies.

PROfounders Capital

PROfounders Capital

Sector Focus: Generalist

Ticket Size: £1,000,000 - £3,000,000

Notable Portfolio Companies: Unity, onefinestay, Splash

Comments: PROfounders Capital is a London-based venture capital firm focused on investing in early-stage technology-enabled businesses across Europe. Backed by a group of experienced investment partners, they have collectively founded, built and exited some of Europe's most successful technology businesses. They invest across a number of sectors including Mobile, Travel, E-Commerce, FinTech, B2B SaaS any many more, but with a strict focus on companies that use technology to improve pain points for businesses or consumers.

Seedcamp

Seedcamp log

Sector Focus: Generalist

Ticket Size: £100,000 - £500,000

Notable Portfolio Companies: UIPath, Hopin, Revolut, Transferwise,

Comments: Seedcamp describes themselves as "Europe's Seed Fund". They invest early in world-class founders attacking large, global markets and solving real problems using technology. They lead your pre-seed round of investment with a cheque of between £150-180K, usually targeting 6.5% equity, in rounds up to £500K. We will co-invest in seed rounds of up to £2M as long as you have a lead investor.


Database of UK VC Funds:

Angels & Syndicates

What are Angels?

Not to be confused with the messengers from God, within the world of startups and Venture Capital, Angels are individuals, typically of high net worth (HNWI's), looking to invest their personal wealth into early-stage businesses. Their motivations for doing so can vary from having excess capital, the pursuit of superior returns or just being passionate about a sector/cause and the desire to make a positive impact.

Angels can also group together and form what are known as Angel Networks and Syndicates. These allow multiple Angels to invest alongside one another allowing startups to raise a larger amount and reduce administration process or time to raise. Both function in similar ways, with Syndicates tending to have more like minded Angels who follow a shared investment philosophy and Networks grouped by geographic region, Alumni etc.

How do Angels work?

Gaining the attention of the right Angels can be difficult without a warm intro. Networking goes a long way to making the connections that could lead to potential investment; attending industry events, pitching in front of investors and being active online are all avenues to pursue. However, don't be discouraged from a cold email, but do the work before sending the message.

Once you've got your foot in the door, each individual will have their own timelines so ensure you remain flexible. The level of domain expertise and sophistication can vary greatly amongst Angels, so being able to cater to the individual and present your startup clearly is important. Many will follow similar levels of due diligence as Venture Capital firms so prepare well as they will expect pitch decks and up to date financials.

Average Ticket Size

Investments at the early stage are usually £10,000 up to £100,000, but some Angels will have more cash to splash. Syndicates allow larger rounds to be raised. It should be noted investments typically are made on a one-off basis meaning follow on funding is unlikely, although of course there are exceptions.

Who is best suited?

Angel investments are good for those seeking capital in order to fuel growth or even get an idea off the ground. Particularly, startups that are too early or risky for venture capital funding will have better prospects seeking investment from Angels as they tend to have a higher threshold for risk. However, they will likely not provide the same level of support or platform as a fund or accelerator and expect many to be realtively hands off.

Great angels will add value to your startup if they have a network and deep domain expertise in your sector so doing your research and establishing what can be offered by a potential investor is important; the right mentorship from the right Angel can accelerate your growth drastically.

Some UK Angels Worth Knowing

                                   Read our list of the top-25 UK Angel Investors here

Laurel Bowden

Sector Focus: DevOps, B2B SaaS, Fintech

Number of Investments: 35+

Notable Portfolio Companies: Fizzback, Wix, FreeAgent, Secret Escapes

Comments: Considered as one of the most accomplished European venture investor, Laurel is a general partner at 83North, a global venture capital firm with over $800 million under management, focusing on Europe and Israel. She is based in London and holds current boards and investments in: Wolt, Ebury, Mirakl, Celonis, HungryPanda, MotorK, Lenses.io, BlueVine, Lendbuzz, Critizr, TIS and Workable. Previously on the Boards of Investec PLC Ltd.

Reece Chowdhry

Sector Focus: B2B Software, Fintech, Entertainment

Number of Investments: 50+

Notable Portfolio Companies: Calm, Monzo, Palantir, Reachdesk

Comments: Reece is an experienced founder and award-winning Venture Capitalist. He is the Founding Partner of RLC Ventures, an early-stage VC fund based in Victoria London.

Q&A with angel investor Chris Adelsbach | Business | The Sunday Times

Chris Adelsbach

Sector Focus: FinTech

Number of Investments: 110+

Notable Portfolio Companies: Atom Bank, Cuvva, Monese

Comments: Chris Adelsbach, named UKBAA Angel Investor of the year 2018/19, is one of the most established angels within the financial industry. Previously he spent 10+ years at Genreal Electric and co-founded Marlin Financial Group. He is currently co-founder and Managing Partner at Outrun Ventures and a Venture Partner at Techstars.

Professor Christopher Mairs CBE, FREng – Churchill College

Chris Mairs

Sector Focus: Deep Tech and AI

Number of Investments:  85+

Notable Portfolio Companies: Magic Pony, CloudNC, CreditKudos,

Comments: Chris Mairs co-founded telecoms software company Metaswitch Networks alongside 6 other former IBM employees. Since he has been chairman of Magic Pony Technology, acquired by Twitter,  and now is currently a Venture Partner at Entrepreneur First.

Profile photo of Nick Green

Nick Green

Sector Focus: Agnostic

Number of Investments: 15+

Notable Portfolio Companies: Lick, Obby, Weezy,

Comments: Previously Commercial Director at Zebra Fuel, Europe GM at MealPal and Head of Sales at Deliveroo, Nick is currently founding partner at GC Growth Partners and Advisor at Antler where he provides start-up consultancy services alongside angel investments.

Some Angel Syndicates to Know

24Haymarket                                                                                                                                  

24Haymarket Private Capital | UK Business Angels Association (UKBAA)

Sector Focus: Healthcare, Industrial, Consumer, Technology and Media

Ticket Size: Up to £5m

Notable Portfolio Companies: Privitar, Trackonomics, Sphere Fluidics

Comments: 24 Haymarket is an investment network of highly experienced investors and senior operators. Membership is referral only and they focus on driving the commercialisation of proven technologies and products to bring them to market.

Cambridge Capital Group

Cambridge Capital Group :: Private angel investment in Europe's leading  tech cluster

Sector Focus: B2B Technology

Ticket Size: £50k to £500k+

Notable Portfolio Companies: Swiftkey, Bango, Spectral Edge

Comments: Cambridge Capital Group a business angel network comprised of private investors, family offices, venture funds that have been investing in technology companies based on defensible intellectual property. They focus on startups based in "Golden Triangle" of Cambridge, London and Oxford with over 65 live portfolio companies to date.

Cambridge Angels

Welcome to the Cambridge Angels

Sector Focus: DeepTech, Internet, Software, Healthcare

Ticket Size: £50,000 – £500,000

Notable Portfolio Companies: Grapeshot, Cronto, Alert Me

Comments: Cambridge Angels is a group of 60+ High Net Worth Investors who have a wide range of experience and long track record in growing entrepreneurial businesses successfully. They have made over 90+ investments in over 15 years with multiple exits to show for it.

Angel Academe

Events — Angel Academe

Sector Focus:

Ticket Size: £50,000 to £350,000

Notable Portfolio Companies:

Comments: Angel Academe is a fast-growing and award-winning angel network who invest in startups with women founders.

Green Angel Syndicate

Green Angel Syndicate Ltd | UK Business Angels Association (UKBAA)

Sector Focus: Clean Tech, Sustainable Tech, Green Tech

Ticket Size: £150k to £500k

Notable Portfolio Companies: Thrift+, Naked Energy, Better Origin

Comments: Green Angel Syndicate specialises startups that can help in the fight against Climate Change and Global Warming. They even require their portfolio companies to operate sustainably.

UK Accelerators & Incubators

What is an Accelerator/Incubator?

Accelerators expedite growth of existing startups with a minimum viable product (MVP) while an incubator helps entrepreneurs flesh out business ideas. Incubators typically operate on a flexible time frame ending when a business has an idea or product to pitch to investors or consumers. The timeline for accelerators is a set few months during which the entrepreneur receives mentorship, funding, and networking help.

How do Accelerators/Incubators operate?

Accelerators usually begin with a rigorous application process. Top accelerators such as Techstars and Y Combinator are highly selective, accepting less than 2% of applicants into their programs.

Typically, the accepted companies have already demonstrated fast growth and a minimum viable product (MVP). They’re often given a small seed investment and paired with mentors from the accelerator’s vast network.

The benefit of the accelerator is primarily networking, mentorship, and resource allocation to skyrocket the success of proven business ideas. A business’ time at an accelerator typically ends with a presentation sharing the growth and development they’ve achieved during their weeks or months in the program. Accelerators can vary from being sector specific to generalist in their admission process.

Some incubators select candidates through an application process while others only work with companies or entrepreneurs passed along from within their network of advisors. Some incubators are focused on specific verticals. For example, Bethnal Green Ventures supports tech for good startups through their programs.

Incubators also tend to focus on startups or entrepreneurs from a certain geographic location -- or require participants to relocate to their co-working space or local community for indefinite periods of time.

Participants spend their time at the incubator networking with other entrepreneurs, fleshing out their ideas, determining product-market fit, and creating a business plan. Intellectual property issues are also vetted and dealt with at this stage as well.

The incubator process usually lasts a few months, but is often open-ended and concludes with a pitch or demo day where the entrepreneur presents their business idea to the incubator community and/or investors.

Things to Consider When Joining an Accelerator:

Is it the right time?

  • Make sure you’re joining an accelerator at the right time for your startup in order to get the most value out of it. If you’re still searching for a co-founder or your first few employees, you may be a better fit for an incubator.

How fast or slow are you growing?

  • If you’re a fast-growing company, an accelerator might be the right fit. A big benefit to accelerators is the introductions and growth potential, especially with strategic investors who could potentially help further your startup. If your growth plan is still developing, an incubator might be a better choice.

Will you relocate?

  • Many accelerators require you to relocate for the few months you’re participating in their program. They will likely offer office space alongside the whole cohort of startups.

Things to Consider When Joining an Incubator:

Do they have the right mentors?

  • Make sure your incubator can offer specific and experienced guidance for your business or idea. Understand where your business fits and what it could benefit from given the correct introductions and support system.

Do you need funding now?

  • Incubators focus on preparing the entrepreneur or founder with the business model, plan, and mentorship necessary to confidently pitch their finished business plan to investors. If you're at a stage where you need funding now, perhaps an accelerator is a better fit.

Top Accelerators/Incubators to know

Level 39

Type: Accelerator.

Sector Focus: Cyber Security, Fintech, Retail Tech

Funding: None

Equity Taken: None

Cost: Membership, £400-£700pm

Comments: Level 39 supports fast-growth tech companies in three clear ways – giving access to world-class customers, talent and infrastructure. Through expert mentors, access to Canary Wharf’s dynamic workspace, a packed events calendar and best-in-class facilities we help businesses achieve scale. Owned wholly by the Canary Wharf Group, Level39 launched in March 2013. Since then, Level39 has grown from a simple idea into a three-floor, 80,000 square foot community space occupying the 39th, 24th and 42nd floors of One Canada Square.

Wayra

Type: Accelerator

Sector Focus: Cybersecurity, Blockchain, AI, Edge Computing, Gaming

Funding: Up to £68,000 in cash and service

Equity Taken: 10-20%

Cost: None

Comments: Wayra is Telefónica's Open Innovation Hub with a presence in 10 countries. Wayra is the largest global Open Innovation Hub, run by entrepreneurs. Marry this with unparalleled access to networks, capital and corporations, Wayra turns start-ups into scale ups.

The Bakery

Type: Incubator/Accelerator

Sector Focus: Sector Agnostic

Funding: None

Equity Taken: None

Cost: None

Comments: The Bakery leverages its extensive list of corporate partners to help scale start-ups that are solve some of these corporate partners most pressing problems. They seek to accelerate the growth of start-ups that are looking to disrupt spaces where corporate innovation is lacking. The Bakery over the last four years has taken over 50 new products and services to market and have seen a marked shift in the way corporates need to think about innovation. In an increasingly networked world with an ever-growing start-up ecosystem, their programmes enable you to leverage this in very powerful and efficient ways

Bethnal Green Ventures

Type: Accelerator

Sector Focus: Technology for social and environmental challenges

Funding: £30,000

Equity Taken: 7%

Cost: None

Comments: We are Europe’s leading early-stage tech for good VC. We back ambitious founders using technology to tackle big social and environmental problems that aim to radically improve millions of lives. BVG provides ambitious early-stage founders with the investment, support, expertise and networks to launch and build a successful tech for good venture.

Pi Labs

Type: Accelerator

Sector Focus: PropTech

Funding: £50,000

Equity Taken: 7%

Cost: None

Comments: The profiles and needs for startups vary significantly year by year. In response, the Pi Labs programme is constantly evolving and adapting. At the end of the term, each startup has a valuable opportunity to pitch their project to a wide audience of potential clients and investors. Start-ups from this cohort have gone on to raise further financing more often than not.

Digital Health

Type: Accelerator

Sector Focus: Healthcare

Funding: None

Equity Taken: None

Cost: None

Comments: Now in its fifth consecutive year, the DigitalHealth.London Accelerator works with up to 20 high potential SMEs over a 12-month period, giving bespoke support and advice, a programme of expert-led workshops and events, and brokering meaningful connections between innovators and NHS organisations with specific challenges

Techstars London

Techstars | Crunchbase

Type: Accelerator

Sector Focus: Sector Agnostic

Funding: €15,000 with an optional convertible note of €70,000.

Equity Taken: 6%-10%

Cost: None

Comments: Techstars is a well known accelerator, backing some of the worlds most successful start-ups. It leverages its incredibly large network and partnerships to help accelerate the growth of start-ups. Applications open six times a year, and stay open typically for 12 weeks. After applications close, they review applications for about seven weeks, and spend time getting to know even more about your team, market, progress and idea.

L Marks

Type: Accelerator

Sector Focus: Sector Agnostic

Funding: £20,000-£100,000

Equity Taken: Flexible

Cost: None

Comments: L Marks has launched over 60 innovation programmes across the UK, Europe, Israel, Asia, and the US. Having developed its own “learn-by-doing” infrastructure and created the UK’s largest network of corporate innovation labs, L Marks is a recognised leader in making change happen. Through creating these relationships and experiences, we are establishing innovation as a key characteristic across our partners’ businesses, driving a dynamic culture and, ultimately, fuelling growth.

Boeing ATI

My first month at the ATI Boeing Accelerator | by Ksenia Kurileva | UK  Aerospace Accelerated | Medium

Type: Accelerator

Sector Focus: Aerospace, Supply Chain, Logistics, Robotics

Funding: £100,000 optional SAFE note from Boeing

Equity Taken: None

Cost: None

Comments: The ATI Boeing Accelerator invests in and accelerates up to 30 startups a year. While these businesses are all bolstering the growth and competitiveness of the UK aerospace industry, they come from a variety of sectors.The accelerator provides mentorship advice and growth opportunities through the various partners it has. In addition to offering optional debt, it has access to some of the top Angel and VC investors to enable a start up to find the right investor.

Venture Builders

A selection of UK Venture Builders

What is a venture builder?

Venture Builders (VBs), also called “company builders” offer long-term support for start-ups looking to grow. Through a comprehensive and hands-on process, VBs focus on nurturing the ideas and skillset of entrepreneurs to help build out their ideas.

How do Venture Builders work?

VBs are characterised by the 5 core activities they engage in:

  1. Identifying business ideas
  2. Building teams for each idea
  3. Finding capital
  4. Assisting in the governance or management of the venture
  5. Providing shared services

What’s the difference between Venture Builders, Venture Capital Funds, Incubators and Accelerators?

Venture Capital firms differ from VBs in their operational involvement. VCs stick to invest capital into promising teams and ideas that match their investment strategy and area of focus, while VBs invest significant effort into the growth of an idea and are involved with the day-to-day management of the company.

VBs do not take applications or run for a limited period of time, unlike incubators and accelerators. The business ideas which VBs focus on are those that have been cultivated from their own network of resources and their relationships with the teams assigned last over the long-term until the start-up exits.

Why work with a Venture Builder?

The primary advantage of VBs is in their long-term approach to supporting founders. VBs apply their domain expertise and use their extensive network and resources to invest in a team and help build their idea; offering long-term security and support which is not often associated with accelerators who are focused with quick scaling. This is especially an advantage in today’s climate of economic uncertainty which is likely to see entrepreneurs focus less so on this ‘quick scaling’ approach and more towards achieving long-term growth.

List of Venture Builders:

Blenheim Chalcot

Blenheim Chalcot Company Builder

Description: Founded in 1998, Blenheim Chalcot has since become the UK’s leading venture builder with portfolio sales of over £350m, more than 3,000 employees and a successful track record of over 40 companies. They aim to build profitable companies with sustainable business by leveraging their knowledge, network and experience.

Sectors: Technology & Services | EdTech | FinTech| Media | Property | Sports

Key Notes: entrepreneurs are expected to give up a higher share of their company earlier in the process – typically expecting to take the majority stake of any company they build.

Entrepreneur First

Entrepreneur First (@join_ef) | Twitter

Description: Entrepreneur First is the world’s leading talent investor. "We invest time and money in the world’s most talented and ambitious individuals, helping them to find a co-founder, develop an idea, and start a company. So far, we’ve helped 2,000+ people create 300+ companies, worth a combined $2bn".

Sectors: Technology and sector agnostic – most excited by applications of new and emerging technologies applied to hard or underserved problems

Notable companies: Tractable | Bloomsbury.ai | Magic Pony Technology | Kheiron

Key notes: Entrepreneur First cohorts run every six months in Europe and Asia, with between 50 and 100 people on each. The programme has two stages: Form is where you find a co-founder and develop your idea | Launch is where you get your team funded and begin building your company

Application process: Initial application to join | Interview | Form (first 14 weeks of the programme)|Launch (first investment in your company)

Antler

Description: Most of the companies that Antler have supported were started between 2018 and 2020 and span across Southeast Asia, Europe, Africa, North America and Australia; with their start-ups representing 60+ nationalities and 30 industries.

Sectors: PropTech | HealthTech | FinTech | Blockchain | AI/ML | Cybersecurity | E-commerce | Education | Environment/Sustainability | LegalTech | Entertainment/Media

Key Notes: Antler have two phases: the first phase is about helping the founding team develop and validate their business idea (ideally in person, but dependent on locations. Following this, they may invest in some companies who will continue into their second. This will see them focus on building your MVP, getting traction and getting ready for your next investment round

Application process: (1) Apply with LinkedIn (2) Online assessment (3) Interviews

Founders Factory

Description: Founders Factory partner with the world’s best founders and corporates to build, fund and scale ambitious start-ups worldwide. We’re live in London, New York, Paris and Johannesburg.

Sectors: Education, Media, Beauty, Travel, Finance, AI & Big Data, Retail, Home & Hygiene

Notable companies: Waylo, Fanbytes, Monolith, Finmo

Application process: (1) Apply with an existing idea or choose a concept they’re already working on (2) Unlock £100k to start building the business (3) Unlock an additional £150k (4) Join the accelerator programme when your start-up is ready to scale

Insurtech Gateway

Description: The only FCA authorised independent incubator + fund, the Insurtech Gateway is the fastest place to build and launch an Insurtech idea. They’re a one-stop shop for founders, where they can get underwriting paper, investment capital and advice on how to design and build their startup, all surrounded by great insurance partners. The Gateway fund supports the portfolio post incubation, to Series A and beyond.

Sectors: Insurance

Key notes: The Gateway is FCA authorised in it’s own right, which allows their insurtech start-ups to sell their products as an Appointed Representative of the Gateway, under their license.

Crowdfunding

UK Crowdfunding

What is Crowdfunding?

Crowdfunding is a method entrepreneurs can use to raise capital via small contributions made from large ‘crowds’ composed of many individuals i.e., individual investors, friends, family and the general public.

What are the advantages of Crowdfunding?

The traditional approach to raising capital involves seeking large sums of capital from a few wealthy investors (angel investors) or venture capital funds. This is generally a time-consuming process with the main issue being entrepreneurs are unable to share their pitch to a large investor audience; instead they have to go one-by-one and run the risk of missing out on funding if they don’t meet the right investor at the right time.

Crowdfunding platforms instead allow entrepreneurs to leverage the internet to reach a relatively wider audience of potential investors – streamlining their fundraising efforts by removing the need for the entrepreneur to spend time and money on finding and pitching the right investor. This also minimises the risk on the part of the investors by allowing them to invest smaller sums of money.

How does Crowdfunding work?

Read our full blog post on that here.

What are the different types of Crowdfunding?

  1. Donation-based: This involves donors making financial contributions of varying size, often to support not-for-profit or social causes
  2. Reward based: Reward-based crowdfunding allows individuals to invest in a start-up in exchange for a reward, which ranges from a form of the product or service the start-up is developing to acknowledgement. This form is popular among entrepreneurs given it incentivises investment from individuals without having to sacrifice ownership in exchange.
  3. Debt based: also known as peer-to-peer lending, debt-based crowdfunding involves investors lending money to entrepreneurs who are interesting in borrowing money to finance their business. The loan is then pad back to the investor over time with interest.
  4. Equity-based: this form of crowdfunding allows investors to become part-owners of your business by offering a small sum of capital in return for equity shares. Shareholders will receive a financial return on their investment as well as a share of the profits in the form of dividends or distribution.

What are the top crowdfunding platforms:

If we’ve piqued your interest in using crowdfunding to accelerate the growth of your business, we’ve listed 5 of the most popular crowdfunding platforms we recommend you explore if you’re looking to raise capital this way:

Crowdcube

Description: Equity-based platform who have seen 750+ successful raises since their launch and £500 million invested in pitches

Target/Audience: UK and Europe

Type: Equity-Mini Bonds Crowdfunding / Startups

Commission and fee: Success fee of 7% on the amount successfully raised and a completion fee between 0.75% - 1.25%

Seedrs

Description: Since originally focusing on UK based start-ups, Seedrs has now expanded to investors and entrepreneurs across Europe. For entrepreneurs, you only pay a tiered fee if your fundraising is successful. A key benefit of Seedrs is their operation of a nominee structure; holding shares on behalf of the investor to ensure they are protected and enable start-ups to raise follow-on funding.

Target/Audience: UK and Wider Europe

Type: Equity-based Crowdfunding / Startups

Commission and fee: For the first £150,000 raised= 6%, for next £300,000 = 4%, for over £500,000 = 2%

Syndicate Room

Description: Founded in 2013, Syndicate Room list companies that have already been backed by angel investors and venture capital funds. They have so far seen £260+m invested with a portfolio size of 220+ companies and are growing their membership base from their current 30,000+ members

Target/Audience: [XXXX]

Type: Equity-based

Commission and fee: 11.5% life-time management fee, 1% set-up fee, 1.5% portfolio management fee

Kickstarter

Description: A funding platform for creative projects extending throughout the films and games industries to music and technology. For business projects with clearly defined goals, Kickstarter usually extends financial assistance

Target/Audience: Ideal for tech and service-based businesses

Type: Reward-based with no upper or lower limit of how much can be raised

Commission and fee: 5% on every successful investment

AngelList

Description: AngelList are a platform for start-ups, angel investors and jobseekers dedicated to helping start-ups with their fundraising and talent searching challenges. They have so far successfully raised $700 million for start-ups since 2013, including Uber. They also help connect individuals seeking a job working for a start-up, with businesses looking to hire talent.

Target/Audience: Start-ups | angel investors | jobseekers

Type: Equity- and debt-based platform

Thank you

If any of the above information is incorrect, then please reach out to the RLC Ventures team at info@rlc.ventures and we will make  corrections in due course.