Off Balance #46

๐Ÿ‘‹๐Ÿพ Hi friends!

Well Iโ€™m back in Italy to take in some air, some sun and a fair amount of heat.

Itโ€™s been a tremendously trying 6 months on a lot of fronts and itโ€™s always worth remembering to give yourself time to reflect, regroup and recharge.

And, letโ€™s face it, with views like these, why wouldnโ€™t you?

Whatever youโ€™re doing this summer, whether watching the Olympics or building your business, I hope you get the opportunity to take a break and justโ€ฆ Breathe!

As you know, Iโ€™m well underway writing about all the things Iโ€™ve learned from the last couple of decades as founder, CFO and CEO, so sign up for early access to Off Balance – The Book and feel free to share with anyone else you think might enjoy it ๐Ÿ˜„. Iโ€™m setting myself the target of getting through a large portion of it whilst Iโ€™m away in Italy during August – wish me luck!

Now letโ€™s get down to businessโ€ฆ

๐—›๐—ผ๐˜„ ๐˜๐—ผ ๐˜€๐˜๐—ฟ๐—ฒ๐—ฎ๐—บ ๐˜๐—ผ ๐Ÿฑ๐Ÿฌ๐—บ ๐—ฑ๐—ผ๐—ด๐˜€ ๐—ฎ๐—ป๐—ฑ ๐—ฐ๐—ฎ๐˜๐˜€ ๐˜„๐—ต๐—ถ๐—น๐˜€๐˜ ๐˜€๐—ฝ๐—ฒ๐—ป๐—ฑ๐—ถ๐—ป๐—ด ๐—ญ๐—˜๐—ฅ๐—ข ๐—ผ๐—ป ๐—บ๐—ฎ๐—ฟ๐—ธ๐—ฒ๐˜๐—ถ๐—ป๐—ด

I’ve talked to a lot of VCs and venture backed founders on Nothing Ventured, but what about the success stories from folk who’ve taken a different path?

On our latest episode, I spoke to Amman Ahmed, founder of MusicForPets, a bootstrapped business producing relaxing music and TV for mans best friends to help with a range of anxiety issues, think of it as Netflix for your pets, or just Petflix!

MusicForPets exited to Create Music Group in 2023 and Amman remains as President for MusicForPets and VP Business Development.

Prior to founding MusicForPets, Amman founded rormix, an app to help you discover emerging music and roundwaves s network of YouTube channels that focus on making music to help you sleep, relax and concentrate.

What did his journey look like?

๐Ÿ’ฐ Took VC funding.
๐Ÿ˜ญ His team told him he was useless.
โš™๏ธ Quit and built side hustle of his side hustle, completely bootstrapped.
๐Ÿ• Streamed to 50m pets globally having spent only FIVE THOUSAND DOLLARS on marketing over 7 years.
๐Ÿคข Got courted by investment bankers who tried to sell him to pet food companies.
๐Ÿคฏ Found an email in his spam that led to an 8 figure exit to a globally renowned record label.

You. Could. Not. Make. This. S#it. Up.

โ“ Want to know what happened next…?

Check it out on YouTube!

Else listen on Spotify or Apple

If you have any feedback, or if thereโ€™s something youโ€™re desperate to see me include, just reply to this mail or ping me online – Iโ€™m very open to conversations.

If you like what Iโ€™m putting out, do give me a follow on LinkedIn, Twitter and Instagram.

(If you are trying to connect with me on LinkedIn, maybe read this post I wrote and make sure to start your request with โ€œOff Balanceโ€ and, more importantly, tell me why youโ€™d like to connect ๐Ÿ’ช๐Ÿพ)

Donโ€™t forget to like, rate and subscribe to Nothing Ventured on Apple, Spotify or YouTube, it really helps more people see what weโ€™re doing – you can find links to these (and more including my Office Hours) right here!

This edition of Nothing Ventured is brought to you by EmergeOne.

EmergeOne provides fractional CFO support to venture backed tech startups from Seed to Series B and beyond.

Join companies backed by Hoxton, Stride, Octopus, Founders Factory, Outlier, a16z and more, who trust us to help them get the most out of their capital, streamline financials, and manage investor relations so they can focus on scaling.

If youโ€™re a CFO working with venture backed startups and want to join a team of incredible fractional talent, drop us your details here.

If youโ€™re a growing startup that knows it needs that strategic financial knowhow, drop your details here to see how we can support you as you scale ๐Ÿš€

As always, my office hours are open, if youโ€™d like to chat about anything finance, tech or venture releated, just grab some time ๐Ÿ˜Š.

I hope you found Off Balance #46 valuable. As always, Iโ€™d love to get your feedback and understand the sort of topics you would love to hear about.

Just hit reply to this mail or drop me a line at hello@emergeone.co.uk and let me know ๐Ÿ˜Š

๐Ÿš€And thatโ€™s a wrap for this edition of Off Balance – Iโ€™d appreciate your feedback so just reply to this email if youโ€™ve got something youโ€™d like to say.

๐Ÿ“จ If you think someone else might love this, please forward it on to them,

๐ŸŽง Finally, if youโ€™re a fan of the Nothing Ventured podcast, please donโ€™t forget to like, rate and subscribe wherever you get your pods – it really helps us spread the word.

Thatโ€™s it from me so until next timeโ€ฆ

Stay liquid ๐Ÿ™‚

Aarish

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Off Balance #45

๐Ÿ‘‹๐Ÿพ Hi friends!

Weโ€™re coming up to the end of this season of Nothing Ventured, this week we have Nicola Sinclair, Founding Partner at Twin Track Ventures on the pod, but check out who weโ€™re bringing on for the last episode of the season in a few weeks ๐Ÿคฏ๐Ÿ‘‡๐Ÿพ

None other than Piers Linney – ex Dragon on the BBCs Dragons’ Den but more importantly massive advocate for SMEs, tech, startups and good governance from the government all the way down.

Be sure to subscribe so you donโ€™t miss out on this absolute banger of an episode ๐Ÿ’ช๐Ÿพ

Iโ€™m taking my annual trip down to Italy later this week, keep your fingers crossed that the olโ€™ Tesla doesnโ€™t conk out on me – I already had to replace 2 of the tyres this last week which wasnโ€™t a particularly pleasant thing to have had to do.

But for now, letโ€™s settle in for another dive into the world of venture capital โœจ

Iโ€™m well underway writing about all the things Iโ€™ve learned from the last couple of decades as founder, CFO and CEO, so sign up for early access to Off Balance – The Book and feel free to share with anyone else you think might enjoy it ๐Ÿ˜„.

Now letโ€™s get down to businessโ€ฆ

In this weeks Off Balance:

๐ŸŽ™๏ธ Nicola Sinclair, Founder of Twin Track Ventures on Nothing Ventured
๐Ÿ“‘ HSBC Innovation Banking’s 2024 Venture Capital Term Sheet Guide: Key Insights for Founders and Investors

๐™ƒ๐™–๐™ซ๐™š ๐™ฌ๐™š ๐™ง๐™š๐™–๐™˜๐™๐™š๐™™ ๐™ฅ๐™š๐™–๐™  ๐™™๐™ง๐™ค๐™ฃ๐™š?

In the latest episode of Nothing Ventured, I sat down with Nicola Sinclair – Founder and General Partner of Twin Track Ventures, a dual use venture capital firm based in London backing founders raising pre-seed and seed rounds with a focus on teams building deeptech solutions for critical challenges.

Prior to Twin Track, Nicola was fund manager of the Air Innovation Fund having spent close to two decades as an officer in the Royal Air Force.

My top takes:

โžก๏ธ ๐—ง๐—ต๐—ฒ ๐—˜๐˜ƒ๐—ผ๐—น๐˜‚๐˜๐—ถ๐—ผ๐—ป ๐—ผ๐—ณ ๐— ๐—ถ๐—น๐—ถ๐˜๐—ฎ๐—ฟ๐˜† ๐—œ๐—ป๐—ป๐—ผ๐˜ƒ๐—ฎ๐˜๐—ถ๐—ผ๐—ป

Nicola shared her firsthand experience of the transformation in military technology from the dark ages of defense services to the present day. She highlighted the shift from outdated communication methods, like pen and paper, to the integration of advanced technologies like drones and AI in defense operations. This evolution underscores the importance of embracing innovation to enhance military capabilities and efficiency.

โžก๏ธ ๐——๐˜‚๐—ฎ๐—น-๐—จ๐˜€๐—ฒ ๐—ง๐—ฒ๐—ฐ๐—ต๐—ป๐—ผ๐—น๐—ผ๐—ด๐—ถ๐—ฒ๐˜€

We explored the concept of dual-use technologies, which are commercial technologies with applications in both civilian and defense sectors. Nicola noted the significance of investing in technologies that not only benefit national security but also have broader societal impacts. By focusing on dual-use technologies, businesses can drive innovation while addressing critical challenges in various industries.

โžก๏ธ ๐—œ๐—ป๐˜๐—ฒ๐—ฟ๐—ป๐—ฎ๐˜๐—ถ๐—ผ๐—ป๐—ฎ๐—น ๐—–๐—ผ๐—น๐—น๐—ฎ๐—ฏ๐—ผ๐—ฟ๐—ฎ๐˜๐—ถ๐—ผ๐—ป ๐—ฎ๐—ป๐—ฑ ๐—ฅ๐—ฒ๐—ด๐˜‚๐—น๐—ฎ๐˜๐—ผ๐—ฟ๐˜† ๐—œ๐—บ๐—ฝ๐—ฎ๐—ฐ๐˜

The discussion also touched upon the ITAR exemptions and the implications for businesses in the UK and Europe. With the AUKUS pact and the focus on emerging technologies, there is a growing need for streamlined regulations to facilitate collaboration between nations and enhance technological advancements in defense. This regulatory shift is crucial for companies looking to engage with the US Department of Defense and expand their market reach.

We also talked about:

๐Ÿ’ป Living through the dark ages of the defence when 8 people would use one laptop.
๐Ÿ”ซ What do you do when you get sent a drone with a gun on it?
๐Ÿ–จ๏ธ Printing aircraft parts at the point of use to bring time to repair down by weeks.
๐Ÿค Countries have different priorities, how to leverage interoperability whilst maintaining a point of difference.
๐Ÿ”ฌ The role of science within defence.
๐ŸŒ How to reconnect disconnected communities.
๐Ÿ•ต๐Ÿฟโ€โ™‚๏ธ How there arenโ€™t many people who have worn a uniform but also understand how to fund innovation.

Listen on YouTube, Spotify, Apple or wherever you get your podcasts!

If you have any feedback on the podcast or the newsletter, just reply to this mail or ping me online!

If you like what Iโ€™m putting out, do give me a follow on LinkedIn and Twitter.

(If you are trying to connect with me on LinkedIn, maybe read this post I wrote and make sure to start your request with โ€œOff Balanceโ€ and, importantly, tell me why youโ€™d like to connect ๐Ÿ’ช๐Ÿพ)

Now letโ€™s get into it.

This edition of Nothing Ventured is brought to you by EmergeOne.

EmergeOne provides fractional CFO support to venture backed tech startups from Seed to Series B and beyond.

Join companies backed by Hoxton, Stride, Octopus, Founders Factory, Outlier, a16z and more, who trust us to help them get the most out of their capital, streamline financials, and manage investor relations so they can focus on scaling.

If youโ€™re a CFO working with venture backed startups and want to join a team of incredible fractional talent, drop us your details here.

If youโ€™re a growing startup that knows it needs that strategic financial knowhow, drop your details here to see how we can support you as you scale ๐Ÿš€

Off Balance

HSBC Innovation Banking has released its second annual Venture Capital Term Sheet Guide, offering valuable insights into the current state of VC term sheets and market trends. This report, based on an analysis of 426 final and completed term sheets from 2023, is a comprehensive guide to the complex world of VC equity terms for founders and provides a benchmark for investors.

And I read it so you wouldnโ€™t have to ๐Ÿ™‚ย 

HSBC Innovation Banking’s 2024 Venture Capital Term Sheet Guide: Key Insights for Founders and Investors

Market Context and Investment Trends

Despite the challenging economic climate, European VC investment activity stabilised during 2023. While there was a decline in overall investment value compared to 2022, 2023 still emerged as the third-largest European VC investment year on record.

Some initial observations:

Investment volume declined less than investment value (25% vs 38% respectively), indicating a shift towards smaller, earlier-stage transactions.

The second half of 2023 saw an 18% increase in investment value compared to the first half, suggesting a gradual recovery in investor confidence.

ClimateTech and AI investments gained significant traction, increasing their combined share of total term sheets from ~9% in 2022 to ~20% in 2023. This trend was also reflected in the broader market, with these sectors representing ~40% of total European VC investment in 2023.

There was a notable uptick in seed-stage investments (<ยฃ2m) between 2021-2023, demonstrating the resilience of early-stage funding – in sharp contrast to later stage fundraises.

Later-stage UK venture-backed businesses continued to seek funding from international investors, particularly from the US and Europe, as they focused on larger funding sizes and scaling opportunities.

Term Sheet Analysis – Key Findings

The report’s analysis of 426 term sheets, representing an aggregate investment value of ยฃ4.5 billion, revealed a number of important trends:

Valuation Shift, Not Structural Change: Surprisingly, despite market uncertainties, term sheets did not become significantly more investor-friendly in 2023. Key clauses remained broadly in line with 2022 standards. It will be interesting to see how this trend continues in 2024, anecdotally, they certainly seem to have hardened with investors looking for both better economics as well as more control.

Liquidation Preference: A 1x non-participating liquidation preference continues to be the standard preference share type, which is considered the most founder-friendly option and almost guaranteed for any company taking on VC funding.

Board Representation: Control and oversight remain crucial, with 79% of term sheets including an investor board appointment (86% if including observer-only seats). This delicate balance between investor control and founder autonomy is something that, in 2024, will continue to skew towards investors where, again anecdotally, we are seeing investors wanting to influence the direction of their portfolio companies in ways that would not have been considered normal a few years ago.

Company Warranties: The survey confirmed an increasing market norm of company-only warranties, present in ~80% of term sheets reviewed. This aligns with the new BVCA model form documents.

Founder Warranties: There was a significant decrease in founder warranties, declining by 25 percentage points to 44% of term sheets in 2023.

Anti-Dilution: These terms saw a decrease across the total survey, primarily due to the increased proportion of seed-stage investments, where such terms are typically less prevalent. But, again, this is one that founders should be looking out for in 2024 as they can have significant impact on the cap table in future rounds.

Investor Landscape and Geographic Trends

The report provides insights into the geographic distribution of investors and companies:

Company Headquarters: 95% of the companies in the surveyed term sheets were headquartered in the UK, with the remaining 5% in Europe. This is on trend with the UKs prominence in the venture ecosystem outside of the US and China.

Lead Investor Location: The mix was more diverse in terms of where investors were based, with 58% from the UK, 22% from Europe, 15% from the US, and 5% from other regions (Middle East, Africa, and Asia).

Seed Investment: This stage was dominated by UK domestic investors.

Later-Stage Funding: UK venture-backed businesses continued to seek funding from international investors, particularly for larger rounds and scaling opportunities. This is something that we have discussed a great deal on Nothing Ventured, the paucity of later stage capital in Europe โ€˜forcesโ€™ founders to look overseas – typically the USA – when trying to secure rounds post Series B.

Venture Debt Insights

While the primary focus of the report is on equity term sheets, it also touches on venture debt, recognising its growing importance as founders seek to minimise dilution while extending cash runways. The guide includes a summary of key structural and economic terms of venture debt agreements based on market experience.

2024 Outlook

The report offers several predictions for the VC landscape in 2024:

Gradual Recovery: European VC investment levels are expected to steadily recover as investors return to new deal activity.

Early-Stage Momentum: Continued strong interest in early-stage investments is anticipated.

Late-Stage Market Bifurcation: High-performing companies may see climbing valuations based on public market reference points, while others may struggle with recaps and down rounds.

Increased Cross-Border Investment: More US VC investors are expected to invest in UK and European companies.

US Market Focus: Increased focus from UK and European companies on scaling into the US market.

Conclusion

The stability in term sheet structures, despite market uncertainties, suggests a maturing VC ecosystem that values founder-friendly terms. However, the shift towards earlier-stage investments and the growing importance of sectors like ClimateTech and AI indicate evolving priorities in the VC world.

As the VC landscape continues to change in 2024, this guide serves as an useful resource for understanding the complexities of fundraising and investment.

But as the report is โ€˜backwards lookingโ€™ we will only understand the true nature of the fundraising landscape in 2024 well into the next year.

What me and the CFOs in my team are seeing in the market suggests that not only has fundraising continued to be difficult for founders especially post seed, but also that the valuation and terms on offer show a significant shift towards investors looking to protect – and exert their protection over – their investments. Whilst this may seem an obvious choice, one of the realities of venture investing has been to incentivise and empower founders to go out and build big.

The expectation seems to be in 2024 that they should go out and build big, but with much tighter scruitiny from their investors at the same time.

Gif by ifc on Giphy

As always, my office hours are open, if youโ€™d like to chat about this or anything else, just grab some time ๐Ÿ˜Š.

I hope you found Off Balance #45 useful. As always, Iโ€™d love to get your feedback and understand the sort of topics you would love to hear about.

Just hit reply to this mail or drop me a line at hello@emergeone.co.uk and let me know ๐Ÿ˜Š

๐Ÿš€And thatโ€™s a wrap for this edition of Off Balance – Iโ€™d appreciate your feedback so just reply to this email if youโ€™ve got something youโ€™d like to say.

๐Ÿ“จ And if you think someone else might love this, please forward it on to them,

๐ŸŽง Finally, if youโ€™re a fan of the Nothing Ventured podcast, please donโ€™t forget to like, rate and subscribe wherever you get your pods – it really helps us spread the word.

Thatโ€™s it from me so until next timeโ€ฆ

Stay liquid ๐Ÿ™‚

Aarish

Intercom for Startups

Join Intercomโ€™s Early Stage Program to receive a 90% discount.

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Off Balance #44

๐Ÿ‘‹๐Ÿพ Hi friends!

Here we are mid way through July and the rain is coming down in buckets. In the last week someone tried to assassinate Donald Trump, England lost to Spain in the finals of the Euros and the weather seems to be reflecting the general mood.

And beyond that, Iโ€™ve been reflecting on the important stuff in life especially after the news that one of my oldest friends mother, who I had spent huge amounts of time with as a child, had suddenly passed away.

One of the things that I was really conscious of was the wealth of experience that those in that generation have and how so few of us take the time to capture it for posterity – and more importantly – for legacy. So this month I sat down in the studio and recorded my dadโ€™s story over two mega 1.5 hour long sessions.

I would recommend to anyone whoโ€™s parents are โ€˜getting to that ageโ€™ to sit down with them, even if itโ€™s with a cuppa and recording the conversation on your phone to do this so as to better understand the life that they have led so you can ensure that your children, and in turn their children, can learn where they came from.

In other news, a good friend of mine – Dr Andrea Isoni – is going to be running an AI Masterclass to help you enhance your business, designed for decision-makers. The course will help you gain a comprehensive understanding of Generative AI, its ROI, and practical applications as well as helping you learn to manage AI vendors, ensure AI safety, and govern implementations effectively. The course includes hands-on experience, expert insights, and a bonus AI use case review. Join Andrea on July 27-28, 2024, to stay ahead in the AI-driven market.

You can register here using the code NOTHINGVENTURED24 to get a massive 50% off.

As you know, Iโ€™m well underway writing about all the things Iโ€™ve learned from the last couple of decades as founder, CFO and CEO, so sign up for early access to Off Balance – The Book and feel free to share with anyone else you think might enjoy it ๐Ÿ˜„. Iโ€™m setting myself the target of getting through a large portion of it whilst Iโ€™m away in Italy during August – wish me luck!

Now letโ€™s get down to businessโ€ฆ

๐——๐—ผ๐—ฒ๐˜€ ๐—˜๐˜‚๐—ฟ๐—ผ๐—ฝ๐—ฒ ๐—ป๐—ฒ๐—ฒ๐—ฑ๐˜€ ๐—บ๐—ผ๐—ฟ๐—ฒ ๐—ถ๐—ป๐˜ƒ๐—ฒ๐˜€๐˜๐—ผ๐—ฟ๐˜€ ๐˜„๐—ถ๐˜๐—ต ๐—ณ๐—ผ๐˜‚๐—ป๐—ฑ๐—ฒ๐—ฟ ๐—ฏ๐—ฎ๐—ฐ๐—ธ๐—ด๐—ฟ๐—ผ๐˜‚๐—ป๐—ฑ๐˜€?

In this week’s Nothing Ventured, I sat down for a wide ranging conversation with TWICE exited founder turned VC, Jan Reichelt.

An entrepreneur at heart, Jan has spent his career in technology start-ups, online businesses, professional information services and digital media.

Jan is now a founding and general partner of 10x Founders, a network-driven investor backed by over 200 entrepreneurs and angels.

Previously, he founded the scientific collaboration platform Mendeley (acquired by RELX / Elsevier PLC) and Kopernio, a ‘Spotify for research papers’ (acquired by Clarivate).

At Clarivate, Jan was Managing Director for Web of Science, responsible for revenues of over $250m.

In 2013, he was named “European Founder of the Year 2013” by TechCrunch / The Europas.

Top Takeaways:

๐—š๐—น๐—ผ๐—ฏ๐—ฎ๐—น ๐—œ๐—บ๐—ฝ๐—ฎ๐—ฐ๐˜ ๐—ผ๐—ณ ๐—˜๐—ฑ๐—ง๐—ฒ๐—ฐ๐—ต: Jan highlighted the immediate global reach of the education and edtech industry, especially in higher education and academic research. The industry’s common standard and global nature present vast opportunities for innovation and growth.

๐—™๐—ผ๐˜‚๐—ป๐—ฑ๐—ฒ๐—ฟ ๐—œ๐—ป๐˜ƒ๐—ฒ๐˜€๐˜๐—ผ๐—ฟ ๐—ฆ๐˜‚๐—ฐ๐—ฐ๐—ฒ๐˜€๐˜€: Jan shared valuable insights on the success of founder investors in the VC space. Data suggests that founder VCs with successful exits tend to have a higher investment success rate, emphasising the importance of founder backgrounds in making impactful investment decisions.

๐—•๐—ฎ๐—น๐—ฎ๐—ป๐—ฐ๐—ถ๐—ป๐—ด ๐—˜๐—ป๐˜๐—ฟ๐—ฒ๐—ฝ๐—ฟ๐—ฒ๐—ป๐—ฒ๐˜‚๐—ฟ๐˜€๐—ต๐—ถ๐—ฝ ๐—ฎ๐˜€ ๐—ฎ ๐—Ÿ๐—ถ๐—ณ๐—ฒ๐˜€๐˜๐˜†๐—น๐—ฒ: Jan spoke about the significance of treating entrepreneurship as a lifestyle rather than just a job. He highlighted the importance of designing a balanced life around the entrepreneurial journey, acknowledging the emotional toll and rewards that come with it.

We also covered:

๐Ÿ’ฅ If you can create value and people are prepared to pay, there will always be an exit route.
โ›”๏ธ Sometimes listening to too much external advice as a founder can be counterproductive – be confident in yourself as a founder.
๐ŸชŸ How windows of opportunity led to Jan selling his second business.
๐Ÿ‘ผ๐Ÿฝ Why you canโ€™t scale investing as an angel.
โš–๏ธ How entrepreneurship wasnโ€™t a job, it was his life; so he designed his life to ensure he had the balance.
๐Ÿ’ก Janโ€™s contrarian advice: You shouldn’t only talk to the partners at a VC fund.

Check it out on YouTube!

Else listen on Spotify or Apple

If you have any feedback, or if thereโ€™s something youโ€™re desperate to see me include, just reply to this mail or ping me online – Iโ€™m very open to conversations.

If you like what Iโ€™m putting out, do give me a follow on LinkedIn, Twitter and Instagram.

(If you are trying to connect with me on LinkedIn, maybe read this post I wrote and make sure to start your request with โ€œOff Balanceโ€ and, more importantly, tell me why youโ€™d like to connect ๐Ÿ’ช๐Ÿพ)

Donโ€™t forget to like, rate and subscribe to Nothing Ventured on Apple, Spotify or YouTube, it really helps more people see what weโ€™re doing – you can find links to these (and more including my Office Hours) right here!

This edition of Nothing Ventured is brought to you by EmergeOne.

EmergeOne provides fractional CFO support to venture backed tech startups from Seed to Series B and beyond.

Join companies backed by Hoxton, Stride, Octopus, Founders Factory, Outlier, a16z and more, who trust us to help them get the most out of their capital, streamline financials, and manage investor relations so they can focus on scaling.

If youโ€™re a CFO working with venture backed startups and want to join a team of incredible fractional talent, drop us your details here.

If youโ€™re a growing startup that knows it needs that strategic financial knowhow, drop your details here to see how we can support you as you scale ๐Ÿš€

As always, my office hours are open, if youโ€™d like to chat about anything finance, tech or venture releated, just grab some time ๐Ÿ˜Š.

I hope you found Off Balance #44 valuable. As always, Iโ€™d love to get your feedback and understand the sort of topics you would love to hear about.

Just hit reply to this mail or drop me a line at hello@emergeone.co.uk and let me know ๐Ÿ˜Š

๐Ÿš€And thatโ€™s a wrap for this edition of Off Balance – Iโ€™d appreciate your feedback so just reply to this email if youโ€™ve got something youโ€™d like to say.

๐Ÿ“จ If you think someone else might love this, please forward it on to them,

๐ŸŽง Finally, if youโ€™re a fan of the Nothing Ventured podcast, please donโ€™t forget to like, rate and subscribe wherever you get your pods – it really helps us spread the word.

Thatโ€™s it from me so until next timeโ€ฆ

Stay liquid ๐Ÿ™‚

Aarish

Intercom for Startups

Join Intercomโ€™s Early Stage Program to receive a 90% discount.

Get a direct line to your customers. Try the only complete AI-first customer service solution.

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Off Balance #43

๐Ÿ‘‹๐Ÿพ Hi friends!

European summer is on, and, whilst the trope goes that everyone is off for the next couple of months, that certainly hasnโ€™t been my experience over the last few years!

Iโ€™ve had more meetings packed into the diary over the next few weeks than I have in a while, and despite the fact that the last year or so seems to have been a slow grind, something feels like it has been unlocked over the last few weeks. Maybe as the election drew to a close, confidence was picking up, or maybe itโ€™s just that all the dry powder out there is flowing a bit more freely.

Whatever it is, the UK feels like itโ€™s back in business! So to celebrate, todayโ€™s post is a bit of a dig into what are the trends in the UK ecosystem in 2024 ๐Ÿš€

Iโ€™m well underway writing about all the things Iโ€™ve learned from the last couple of decades as founder, CFO and CEO, so sign up for early access to Off Balance – The Book and feel free to share with anyone else you think might enjoy it ๐Ÿ˜„.

Now letโ€™s get down to businessโ€ฆ

In this weeks Off Balance:

๐ŸŽ™๏ธ Edward Kliphuis, Partner at Sofinnova Partners on Nothing Ventured
๐Ÿ‡ฌ๐Ÿ‡ง UK Venture in 2024

๐—ช๐—ต๐˜† ๐˜๐—ต๐—ฒ ๐—ฐ๐—ผ๐—ป๐˜ƒ๐—ฒ๐—ฟ๐—ด๐—ฒ๐—ป๐—ฐ๐—ฒ ๐—ผ๐—ณ ๐—ฐ๐—ผ๐—บ๐—ฝ๐˜‚๐˜๐—ฎ๐˜๐—ถ๐—ผ๐—ป ๐—ฎ๐—ป๐—ฑ ๐—ต๐—ฒ๐—ฎ๐—น๐˜๐—ต๐—ฐ๐—ฎ๐—ฟ๐—ฒ ๐˜„๐—ถ๐—น๐—น ๐—ฏ๐—ฒ ๐˜๐—ฟ๐—ฎ๐—ป๐˜€๐—ณ๐—ผ๐—ฟ๐—บ๐—ฎ๐˜๐—ถ๐—ผ๐—ป๐—ฎ๐—น

In this week’s epsiode of Nothing Ventured, Aarish sat down with Edward Kliphuis, Partner at Sofinnova Partners, a leading European venture capital firm in life sciences, specializing in healthcare and sustainability.

Based in Paris, London and Milan, the firm brings together a team of professionals from all over the world with strong scientific, medical and business expertise.

Prior to joining Sofinnova Partners, Edward spent close to a decade in venture with Amadeus Capital Partners and M Ventures.

My top takes:

1๏ธโƒฃ ๐—–๐—ผ๐—ป๐˜ƒ๐—ฒ๐—ฟ๐—ด๐—ฒ๐—ป๐—ฐ๐—ฒ ๐—ผ๐—ณ ๐——๐—ฎ๐˜๐—ฎ ๐—ฎ๐—ป๐—ฑ ๐—–๐—ผ๐—บ๐—ฝ๐˜‚๐˜๐—ฎ๐˜๐—ถ๐—ผ๐—ป: Edward highlighted the significance of the convergence of data and computation in healthcare. Large biology models, akin to large language models, are revolutionising our understanding of biology. By capturing individual variability and isolating cause and effect, we are moving towards personalized and tailored medicine.

2๏ธโƒฃ ๐—–๐—ต๐—ฎ๐—น๐—น๐—ฒ๐—ป๐—ด๐—ฒ๐˜€ ๐—ถ๐—ป ๐—›๐—ฒ๐—ฎ๐—น๐˜๐—ต๐—ฐ๐—ฎ๐—ฟ๐—ฒ ๐—ฆ๐˜†๐˜€๐˜๐—ฒ๐—บ๐˜€: We discussed the challenges faced by healthcare systems globally, including rising costs, demographic changes, and a shortage of practitioners. Edward highlighted the need for innovation to address these systemic issues and ensure accessible and affordable healthcare for all.

3๏ธโƒฃ ๐—ง๐—ฟ๐˜‚๐˜€๐˜ ๐—ฎ๐—ป๐—ฑ ๐—œ๐—ป๐—ณ๐—ผ๐—ฟ๐—บ๐—ฎ๐˜๐—ถ๐—ผ๐—ป ๐—ถ๐—ป ๐—›๐—ฒ๐—ฎ๐—น๐˜๐—ต๐—ฐ๐—ฎ๐—ฟ๐—ฒ: The conversation also touched upon the importance of trust and information in healthcare. With the proliferation of information and misinformation, coupled with the rapid pace of innovation, maintaining trust and delivering accurate information to patients is crucial for the future of healthcare.

We also talked about:

๐Ÿ”Žย Life sciences through the lens of three strategies – existing tech through new channels, new tech through existing channels and new tech through a new channel.
๐Ÿ”ฌ Taking healthcare to the individual level.
๐Ÿฆ  Large biology models as a parallel to large language models.

Listen on YouTube, Spotify, Apple or wherever you get your podcasts!

If you have any feedback on the podcast or the newsletter, just reply to this mail or ping me online!

If you like what Iโ€™m putting out, do give me a follow on LinkedIn and Twitter.

(If you are trying to connect with me on LinkedIn, maybe read this post I wrote and make sure to start your request with โ€œOff Balanceโ€ and, importantly, tell me why youโ€™d like to connect ๐Ÿ’ช๐Ÿพ)

Now letโ€™s get into it.

This edition of Nothing Ventured is brought to you by EmergeOne.

EmergeOne provides fractional CFO support to venture backed tech startups from Seed to Series B and beyond.

Join companies backed by Hoxton, Stride, Octopus, Founders Factory, Outlier, a16z and more, who trust us to help them get the most out of their capital, streamline financials, and manage investor relations so they can focus on scaling.

If youโ€™re a CFO working with venture backed startups and want to join a team of incredible fractional talent, drop us your details here.

If youโ€™re a growing startup that knows it needs that strategic financial knowhow, drop your details here to see how we can support you as you scale ๐Ÿš€

Off Balance

Last time I wrote about what the various political parties policies might mean for the UK venture ecosystem, sticking with the UK theme, this week I explored what are the 2024 trends that are worth keeping an eye on over here.

Whilst headlines often focus on broad trends, this deep dive reveals some of the less obvious, albeit highly impactful shifts in the UK’s VC ecosystem.

Itโ€™ll be interested to see how these continue to play out and what impact they might have on as the tech sector continues to grow.

UK Venture Capital in 2024: Trends and Opportunities for Tech Founders and CFOs

UK’s Resilience Amid Global Slowdown

Despite global venture capital having experienced significant contractions, the UK market has shown some strong resilience.

From 2019 to 2023, UK VC investment grew by 19%, outperforming both the United States (-7%) and China (-25%).

This growth trajectory shows the UK’s strong position in the global VC landscape and its ability to attract capital even in challenging economic conditions – though it is worth remembering that the volume of capital deployed here is still a mere fraction of the cash floating around the US and China.

What does this mean for founders and CFOs?

Confidence in the UK market remains high, providing a solid foundation for fundraising efforts.

The UK’s outperformance suggests a maturing ecosystem that can weather global economic storms more effectively.

Startups should leverage this positive sentiment in their pitches to both domestic and international investors to maximise their chance of success.

Seed Stage Momentum

A really interesting trend is starting to show at seed with UK startups. The median deal size for seed companies is rising, reflecting both escalating startup ambitions and increased investor confidence in ‘hot’ sectors. This trend is particularly of note as it suggests a shift in how early-stage companies are being valued and funded.

Key takeaways:

Founders should be prepared to articulate more ambitious visions and growth plans, even at the seed stage.

CFOs need to adjust their financial models and fundraising strategies to align with these higher expectations.

There’s an opportunity for startups to secure more substantial seed funding, potentially extending their runway and accelerating growth, especially as later stage fundings remain depressed.

US Funds Entering UK Seed Stage

In a significant shift, US VC firms are rapidly increasing their presence in early-stage UK deals, particularly in the tech and life sciences sectors. This trend is reshaping the competitive landscape for both startups and local VCs.

Implications:

UK startups now have access to a broader pool of capital and potentially valuable US market connections.

Competition for top deals is intensifying, which could lead to more founder-friendly terms – though this is not guaranteed as I am seeing in live term sheets today.

Founders and CFOs should familiarize themselves with US VC expectations and practices, as differ from UK norms, as does the style of approach and directness of some firms on that side of the Atlantic.

Corporate VC Stability

Despite the overall funding decline in the UK, corporate venture capital has maintained a steady 20% share of all UK equity funding in 2023. This stability in corporate VC participation is a testament to the strategic value that startups can offer to established companies. Iโ€™ll be talking to Alokik Advani from Fidelity International Strategic Investors to discuss this later in the year.

Opportunities to explore:

Startups should actively consider corporate VC as part of their fundraising strategy, especially if there are potential strategic alignments.

CFOs can leverage corporate VC relationships for more than just capital, including market access, technical expertise, and potential exit opportunities.

Founders should be prepared to articulate how their product suite or customer base can add value to a corporate partner’s existing business or future strategy.

Impact Investing Growth

The UK is witnessing a burgeoning community of impact investors, often overlapping with traditional VC in supporting startups that effect positive societal change. This trend reflects a growing alignment between financial returns and social / environmental impact. I have spoken to a number of guests on Nothing Ventured about how they approach this and how companies should think about measuring their impact.

What it means for startups:

There’s an opportunity to tap into a new pool of capital by emphasising the positive impact of your business model.

Startups should consider integrating impact metrics into their KPIs and reporting, making them more attractive to this growing investor segment.

CFOs should be prepared to demonstrate both financial returns and impact outcomes in their projections and reports and crucially, create a narrative that shows how one positively drives the other.

Sector-Specific Trends

While broad market trends are important, here are some sector-specific insights that might provide a more nuanced understanding of where the opportunities are in the UK market right now:

AI: Unprecedented Appetite

The enthusiasm for AI startups in the UK has reached absolute fever pitch, with some investors prioritising first meetings over detailed traction for AI-focused companies. This presents both opportunities and challenges for founders in the space.

โžก๏ธ Opportunity: Easier access to initial meetings and potential funding for AI startups.
โžก๏ธ Challenge: Increased competition and potential for inflated valuations that may be hard to justify in later rounds.
โžก๏ธ Action item: AI startups should strike while the iron is hot but also focus on building sustainable business models that can withstand future scrutiny.

Digital Health: Gaining Momentum

The UK’s healthcare staff shortages have created a fertile ground for digital health startups. Investors are increasingly interested in solutions that can address these systemic challenges as well as wider interest in the medical and life sciences space.

โžก๏ธ Opportunity: Alignment with a clear market need and potential for public sector contracts.
โžก๏ธ Challenge: Navigating the complex regulatory landscape of healthcare technology.
โžก๏ธ Action item: Digital health startups should emphasise how their solutions specifically address UK healthcare challenges in their pitches.

Climate Tech: Sustained Interest

Climate technology continues to attract significant interest from UK investors, reflecting both global trends and the UK’s commitment to net-zero targets.

โžก๏ธ Opportunity: Access to both dedicated climate funds and generalist VCs with climate mandates.
โžก๏ธ Challenge: Demonstrating scalability and profitability in what can be capital-intensive sectors.
โžก๏ธ Action item: Climate tech startups should focus on clearly articulating their path to profitability alongside their environmental impact.

Geographic Neutrality

Contrary to popular belief, UK VCs are actively investing across Europe, focusing more on talent quality and future potential than company location. This trend is breaking down geographical barriers and creating a more integrated European startup ecosystem – though as I argue on the pod constantly, more needs to be done to unlock even more opportunity, especially at the later stages.

What it means for founders:

UK-based startups should be prepared for increased competition from European counterparts for UK VC attention.

Startups based elsewhere in Europe shouldn’t rule out UK VCs and should actively include them in their fundraising strategies if theyโ€™re not already.

The ability to attract and retain top talent, regardless of location, is becoming increasingly crucial in VC assessments.

Billion-Dollar Deals Driving Growth

In May 2024, two ยฃ1B+ deals contributed to a 1.6% YOY increase in total VC funding, despite a 17.3% decrease in deal volume. This concentration of capital in mega-rounds is creating a bit of a bifurcated market.

Implications for the ecosystem:

While headline numbers may look positive, the reality for most startups may be more challenging.

There’s a potential for a “barbell effect” where very early-stage and very late-stage companies find funding, while those in the middle face a tougher environment as we have been seeing for much of the last 12 months.

CFOs need to be prepared for a potentially longer and more challenging path to mega-rounds, focusing on milestone-based fundraising strategies.

Wrapping it all up

The UK venture capital landscape in 2024 still presents a complex but opportunity-rich environment for startups. Understanding these trends and adapting strategies accordingly, founders and CFOs might find it easier to position their companies for success as the ecosystem continues to evolve.

As we navigate these changes, it’s clear that the most successful startups will be those that can align with emerging investor priorities, demonstrate clear value propositions, and build sustainable, impactful businesses – whilst still satisfying the normal VC growth requirements. The challenge for founders and CFOs is to balance short-term opportunities with long-term viability – this is a difficult needle to thread, especially in the current environment where rounds are taking longer to close and runways are needing to be stretched constantly.

As always, would love to hear what youโ€™re seeing out in the market yourselves, just reply to this email and let me know your thoughts.

Sources: Chambers and Partners, Carta, Insider

Gif by metofficeofficial on Giphy

As always, my office hours are open, if youโ€™d like to chat about this or anything else, just grab some time ๐Ÿ˜Š.

I hope you found Off Balance #43 useful. As always, Iโ€™d love to get your feedback and understand the sort of topics you would love to hear about.

Just hit reply to this mail or drop me a line at hello@emergeone.co.uk and let me know ๐Ÿ˜Š

๐Ÿš€And thatโ€™s a wrap for this edition of Off Balance – Iโ€™d appreciate your feedback so just reply to this email if youโ€™ve got something youโ€™d like to say.

๐Ÿ“จ And if you think someone else might love this, please forward it on to them,

๐ŸŽง Finally, if youโ€™re a fan of the Nothing Ventured podcast, please donโ€™t forget to like, rate and subscribe wherever you get your pods – it really helps us spread the word.

Thatโ€™s it from me so until next timeโ€ฆ

Stay liquid ๐Ÿ™‚

Aarish

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Off Balance #42

๐Ÿ‘‹๐Ÿพ Hi friends!

Where does the time go eh? First half of the year done and I may just to a bit of a retrospective on the state of the market from my perspective in next weekโ€™s Off Balance, but today is all about my conversation with Asif Ahmed, Partner and Head of Early Stage, Tech and High Growth at Cooper Parry.

Last week, I was blown away by the Tech CFO โ€˜24 event that Asif and the Cooper Parry team held and where they announced their partnership with Founders Forum to create the CFO Forum, which will launch later this year – not only that, but Rory Sutherland of Ogilvy fame gave us a rip roaring romp through his thoughts on how to influence behaviour and why you should only execute on a decision when youโ€™ve made it sober, and then drunk – just like the ancients apparently did!

Iโ€™m well underway writing about all the things Iโ€™ve learned from the last couple of decades as founder, CFO and CEO, so sign up for early access to Off Balance – The Book and feel free to share with anyone else you think might enjoy it ๐Ÿ˜„.

Now letโ€™s get down to businessโ€ฆ

๐—•๐˜‚๐—ถ๐—น๐—ฑ๐—ถ๐—ป๐—ด ๐—ฎ ๐—ฝ๐—ฟ๐—ฎ๐—ฐ๐˜๐—ถ๐—ฐ๐—ฒ ๐˜๐—ต๐—ฎ๐˜ ๐—ณ๐—ผ๐—ฐ๐˜‚๐˜€๐˜€๐—ฒ๐˜€ ๐—ผ๐—ป ๐˜„๐—ต๐—ฎ๐˜ ๐—ณ๐—ผ๐˜‚๐—ป๐—ฑ๐—ฒ๐—ฟ๐˜€ ๐—ป๐—ฒ๐—ฒ๐—ฑ ๐—ฟ๐—ฎ๐˜๐—ต๐—ฒ๐—ฟ ๐˜๐—ต๐—ฎ๐—ป ๐˜„๐—ต๐—ฎ๐˜ ๐—ณ๐—ผ๐˜‚๐—ป๐—ฑ๐—ฒ๐—ฟ๐˜€ ๐˜๐—ต๐—ถ๐—ป๐—ธ ๐˜๐—ต๐—ฒ๐˜† ๐˜„๐—ฎ๐—ป๐˜.

This week on Nothing Ventured, I sat down with the incredibly thoughtful Asif Ahmed, Partner and Head of Early Stage, Tech and High Growth at Cooper Parry, an accountancy firm rooted in working with entrepreneurial, fast growth businesses across the UK to help them grow, become more tax efficient, get up to speed with their Tech and transform their culture.

Prior to joining Cooper Parry, Asif was the founder and managing director of Acclivity Advisors, co founder of The Finance Departmentโ„ข – a resource for entrepreneurs and their finance teams and is the author of the best selling book ‘The Finance Playbook for Entrepreneurs‘.

Our top takes:

๐—™๐—ผ๐—ฐ๐˜‚๐˜€ ๐—ผ๐—ป ๐—ช๐—ต๐—ฎ๐˜ ๐—™๐—ผ๐˜‚๐—ป๐—ฑ๐—ฒ๐—ฟ๐˜€ ๐—ก๐—ฒ๐—ฒ๐—ฑ

Asif emphasised the importance of focusing on what founders need rather than what they want. By providing the right guidance and solutions tailored to their actual needs, businesses can thrive and grow effectively. This approach ensures long-term success and value creation for startups.

๐—ฅ๐—ฒ๐˜๐—ต๐—ถ๐—ป๐—ธ๐—ถ๐—ป๐—ด ๐—ฅ&๐—— ๐—ฎ๐—ป๐—ฑ ๐—™๐—ผ๐˜‚๐—ป๐—ฑ๐—ฒ๐—ฟ-๐—”๐—ฑ๐˜ƒ๐—ถ๐˜€๐—ผ๐—ฟ ๐—™๐—ถ๐˜

We discussed the evolving landscape of R&D relief and the challenges founders face in navigating the complexities of tax legislation. Asif highlighted the significance of founder-advisor fit, where aligning with advisors who understand the founder’s journey and needs can lead to better outcomes and strategic decisions.

๐—ง๐—ต๐—ฒ ๐—ฅ๐—ถ๐˜€๐—ฒ ๐—ผ๐—ณ ๐˜๐—ต๐—ฒ ๐—ฆ๐—ผ๐—น๐—ผ๐—ฝ๐—ฟ๐—ฒ๐—ป๐—ฒ๐˜‚๐—ฟ

A fascinating trend they explored was the rise of the solopreneur in today’s tech-driven world. With advancements in technology and the creator economy booming, individuals are empowered to unleash their inner artist and creativity. This shift challenges traditional VC models and opens up new possibilities for self-sufficient entrepreneurs.

We also discussed:

๐Ÿงฉ Whether there is such a thing as founder advisor fit.
๐Ÿ‘ฉ๐Ÿผโ€โš–๏ธ R&D is a term from legislation, not from the dictionary.
๐Ÿ––๐Ÿฝ Segregating the business from the founder.
โ“ Are we witnessing the rise of the solopreneur.

Check it out!

Else listen on Spotify or Apple

If you have any feedback, or if thereโ€™s something youโ€™re desperate to see me include, just reply to this mail or ping me online – Iโ€™m very open to conversations.

If you like what Iโ€™m putting out, do give me a follow on LinkedIn, Twitter and Instagram.

(If you are trying to connect with me on LinkedIn, maybe read this post I wrote and make sure to start your request with โ€œOff Balanceโ€ and, more importantly, tell me why youโ€™d like to connect ๐Ÿ’ช๐Ÿพ)

Donโ€™t forget to like, rate and subscribe to Nothing Ventured on Apple, Spotify or YouTube, it really helps more people see what weโ€™re doing – you can find links to these (and more including my Office Hours) right here!

This edition of Nothing Ventured is brought to you by EmergeOne.

EmergeOne provides fractional CFO support to venture backed tech startups from Seed to Series B and beyond.

Join companies backed by Hoxton, Stride, Octopus, Founders Factory, Outlier, a16z and more, who trust us to help them get the most out of their capital, streamline financials, and manage investor relations so they can focus on scaling.

If youโ€™re a CFO working with venture backed startups and want to join a team of incredible fractional talent, drop us your details here.

If youโ€™re a growing startup that knows it needs that strategic financial knowhow, drop your details here to see how we can support you as you scale ๐Ÿš€

As always, my office hours are open, if youโ€™d like to chat about anything finance, tech or venture releated, just grab some time ๐Ÿ˜Š.

Gif by The_Animal_Crackers_Movie on Giphy

I hope you found Off Balance #42 valuable. As always, Iโ€™d love to get your feedback and understand the sort of topics you would love to hear about.

Just hit reply to this mail or drop me a line at hello@emergeone.co.uk and let me know ๐Ÿ˜Š

๐Ÿš€And thatโ€™s a wrap for this edition of Off Balance – Iโ€™d appreciate your feedback so just reply to this email if youโ€™ve got something youโ€™d like to say.

๐Ÿ“จ If you think someone else might love this, please forward it on to them,

๐ŸŽง Finally, if youโ€™re a fan of the Nothing Ventured podcast, please donโ€™t forget to like, rate and subscribe wherever you get your pods – it really helps us spread the word.

Thatโ€™s it from me so until next timeโ€ฆ

Stay liquid ๐Ÿ™‚

Aarish

Off Balance #41

๐Ÿ‘‹๐Ÿพ Hi friends!

Well weโ€™re about a week away from elections in the UK where we may well see a significant shake up in the composition of our parliament. I have found myself becoming fairly vocally critical of whatโ€™s going on in the governance of this country, but rather than yelling into an echo chamber, I thought I would take a look at what impact the various policies from the main parties may have on the startup and venture ecosystem – read on for the breakdown.

In other news, this Thursday, I will be joining a panel hosted by Vertice the cloud cost opimisation platform co-hosted by Pleo the spend management platform to talk about whether Consolidation is the new digital transformation.

Join me and CFOs from some spectacular organisations this Thursday June 27th at 1000 BST / 1100 CEST to dig into how finance is thinking about growth and spend in the tough funding environment we find ourselves in, as well as the impact of new tools and AI on the finance stack now and in the future.

Sign up to join the webinar or to receive the recording here.

Iโ€™m well underway writing about all the things Iโ€™ve learned from the last couple of decades as founder, CFO and CEO, so sign up for early access to Off Balance – The Book and feel free to share with anyone else you think might enjoy it ๐Ÿ˜„.

Now letโ€™s get down to businessโ€ฆ

In this weeks Off Balance:

๐ŸŽ™๏ธ Lyuba Guk and David Gilgur from Blue Lake Ventures on Nothing Ventured
๐Ÿ‡ฌ๐Ÿ‡ง What impact would the various partiesโ€™ policies have on the startup and venture ecosystem

๐——๐—ผ ๐—ฟ๐—ฎ๐˜๐—ถ๐—ผ๐—ป๐—ฎ๐—น ๐—ต๐˜‚๐—บ๐—ฎ๐—ป ๐—ฏ๐—ฒ๐—ถ๐—ป๐—ด๐˜€ ๐—ฏ๐—ฒ๐—ฐ๐—ผ๐—บ๐—ฒ ๐˜€๐˜๐—ฎ๐—ฟ๐˜๐˜‚๐—ฝ ๐—ณ๐—ผ๐˜‚๐—ป๐—ฑ๐—ฒ๐—ฟ๐˜€?!

In last weekโ€™s episode of Nothing Ventured, I spoke to Lyubov Guk and David Gilgur, Founding Partners at Blue Lake Ventures, an early stage firm investing and supporting pre-seed and seed stage exceptional immigrant founders in the UK focussed on b2b and software startups.

Prior to founding Blue Lake, David was founder of the VimesVC consultancy in Kyiv whilst Lyuba was a partner at VimesVC. David also spent 6 years at Bloomberg ultimately as a Strategic Account Manager within Data Sales.

Our top takeaways:

โžก๏ธ ๐—ฅ๐—ฒ๐˜€๐—ถ๐—น๐—ถ๐—ฒ๐—ป๐—ฐ๐—ฒ ๐——๐—ฒ๐—ณ๐—ถ๐—ป๐—ฒ๐˜€ ๐˜๐—ต๐—ฒ ๐—จ๐—ธ๐—ฟ๐—ฎ๐—ถ๐—ป๐—ถ๐—ฎ๐—ป ๐—˜๐—ฐ๐—ผ๐˜€๐˜†๐˜€๐˜๐—ฒ๐—บ: Despite facing desperate challenges, the Ukrainian ecosystem is marked by resilience. The founders from Ukraine have shown remarkable strength and determination in the face of adversity.

โžก๏ธ ๐—œ๐—บ๐—บ๐—ถ๐—ด๐—ฟ๐—ฎ๐—ป๐˜ ๐—™๐—ผ๐˜‚๐—ป๐—ฑ๐—ฒ๐—ฟ๐˜€ ๐—•๐—ฟ๐—ถ๐—ป๐—ด ๐—จ๐—ป๐—ถ๐—พ๐˜‚๐—ฒ ๐—ค๐˜‚๐—ฎ๐—น๐—ถ๐˜๐—ถ๐—ฒ๐˜€: Immigrant founders, especially from Eastern Europe and India, exhibit a strong work ethic, a willingness to take risks, and a drive to succeed. Their diverse backgrounds and experiences contribute to their success in the startup world.

โžก๏ธ ๐—•๐˜‚๐—ถ๐—น๐—ฑ๐—ถ๐—ป๐—ด ๐—ฎ ๐—š๐—น๐—ผ๐—ฏ๐—ฎ๐—น ๐—–๐—ผ๐—บ๐—บ๐˜‚๐—ป๐—ถ๐˜๐˜† ๐—ณ๐—ผ๐—ฟ ๐—œ๐—ป๐˜๐—ฒ๐—ฟ๐—ป๐—ฎ๐˜๐—ถ๐—ผ๐—ป๐—ฎ๐—น ๐—™๐—ผ๐˜‚๐—ป๐—ฑ๐—ฒ๐—ฟ๐˜€: Blue Lake is working towards creating a super community for international founders in the UK. By fostering collaboration and support among founders from different cultural backgrounds, they aim to create a thriving ecosystem for startup growth and success – check out their International Office Hours 3.0 here.

We also discussed:

๐Ÿš€ How they went from working with SMEs, to launching an accelerator to investing first in Ukrainian immigrants then to all immigrant founders in the UK
โœ‹๐Ÿผ Too many people being pushed into โ€˜founderโ€™ roles
๐Ÿฆ„ 62% of unicorn ventures across the UK and the US were founded by migrants.
๐Ÿ•ธ๏ธ Building a super community for international founders in the UK
๐Ÿ’ฐ Why VCs need to shut up and stick to investing

Listen on YouTube, Spotify, Apple or wherever you get your podcasts!

If you have any feedback on the podcast or the newsletter, just reply to this mail or ping me online!

If you like what Iโ€™m putting out, do give me a follow on LinkedIn and Twitter.

(If you are trying to connect with me on LinkedIn, maybe read this post I wrote and make sure to start your request with โ€œOff Balanceโ€ and, importantly, tell me why youโ€™d like to connect ๐Ÿ’ช๐Ÿพ)

Now letโ€™s get into it.

This edition of Nothing Ventured is brought to you by EmergeOne.

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Join companies backed by Hoxton, Stride, Octopus, Founders Factory, Outlier, a16z and more, who trust us to help them get the most out of their capital, streamline financials, and manage investor relations so they can focus on scaling.

If youโ€™re a CFO working with venture backed startups and want to join a team of incredible fractional talent, drop us your details here.

If youโ€™re a growing startup that knows it needs that strategic financial knowhow, drop your details here to see how we can support you as you scale ๐Ÿš€

Off Balance

As we gear up for the 2024 UK General Election, it’s essential we understand how each party’s policies might impact us.

So I took to the interweb sprinkled with a bit of chatgpt to see what we need to keep an eye on.

๐Ÿš€ Navigating the 2024 UK General Election: What It Means for Startups and VCs ๐Ÿš€

Conservative Party ๐Ÿ›๏ธ

Economic Policies: Cutting NI by 2p could enhance cash flow for startups. However, a legal cap on migration might restrict access to international talent, essential for innovation.

Education: 100,000 high-quality apprenticeships and the Advanced British Standard could produce industry-ready grads, aligning with our tech needs.

Labour Party ๐ŸŒน

Economic Reform: Wide ranging reforms and green energy initiatives could create new opportunities, though higher taxation might affect net earnings.

Carried Interest Taxation: Labour plans to change how carried interest is taxed, potentially increasing tax liabilities for VCs by taxing it like income instead of capital gains. This could affect investment returns and strategies, making the UK less attractive for investment managers compared to other European countries.

Social Policies: Expanded social safety nets might lead to a more stable consumer base, increasing market potential and share of wallet for tech products.

Liberal Democrats ๐ŸŒผ

Healthcare & Mental Health: Investing ยฃ8.4 billion in the NHS might improve employee productivity and reduce absenteeism.

Green Economy: Support for green energy investments creates opportunities for startups focused on sustainability, climate and greentech.

Green Party ๐Ÿƒ

Green Economy Transition: Investments in renewable energy and banning fracking open doors for clean tech startups.

Social Justice: Enhanced social programs could expand the customer base for tech products by increasing disposable income across the population.

Reform UK ๐Ÿ”ง

Tax Reduction & Deregulation: Lower taxes and reduced regulatory burdens can boost profitability and attract VC investment.

Immigration Controls: Stricter policies might limit access to the international talent pool.

Key Takeaways

Opportunities: Tax cuts, apprenticeship programs, and green investments are all net positives for reducing costs and encouraging growth.

Clearly, none of these can be guaranteed, and of course, many of the policies have been challenged in terms of affordability though for some of the parties – as they themselves have said – these are the themes theyโ€™re interested in given they wonโ€™t be likely to form a government in the upcoming elections.

Challenges: Immigration caps and higher taxation may restrict talent acquisition and increase operational expenses. Labour’s proposed changes to carried interest taxation could impact investment returns and disincentivise emerging managers.

Equally, whilst these may seem negative on the face of it, one can never be sure of the second order effects that will flow out of these policies though, in speaking with VCs the changes in carried interest are definitely a point of concern. I have long maintained that talent and capital are interlinked, if we see a flight of one, it wonโ€™t be long before we see a potential flight of the other.

Obviously I can’t capture it all, for example corporate tax reform might have an impact on whether you choose to incorporate in the UK or elsewhere. And, equally, I didn’t go into the detail of how viable these policies or reforms actually are (and obviously only one party gets to implement anyway).

All I think we can really say right now is that we are likely to see some changes in the shape of UK PLC post the elections on the 4th of July, and only time will really tell what impact theyโ€™ll ultimately have on the ecosystem – one thing is for sure, whilst a rising tide lifts all boats, is the tide goes out, we might just be left with a bunch of rubbish on the beach.

As always, my office hours are open, if youโ€™d like to chat about this or anything else, just grab some time ๐Ÿ˜Š.

I hope you found Off Balance #41 useful. As always, Iโ€™d love to get your feedback and understand the sort of topics you would love to hear about.

Just hit reply to this mail or drop me a line at hello@emergeone.co.uk and let me know ๐Ÿ˜Š

๐Ÿš€And thatโ€™s a wrap for this edition of Off Balance – Iโ€™d appreciate your feedback so just reply to this email if youโ€™ve got something youโ€™d like to say.

๐Ÿ“จ And if you think someone else might love this, please forward it on to them,

๐ŸŽง Finally, if youโ€™re a fan of the Nothing Ventured podcast, please donโ€™t forget to like, rate and subscribe wherever you get your pods – it really helps us spread the word.

Thatโ€™s it from me so until next timeโ€ฆ

Stay liquid ๐Ÿ™‚

Aarish

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Off Balance #40

๐Ÿ‘‹๐Ÿพ Hi friends!

This week I sit down with Kiran Mehta, investor at Mercia Ventures, we talk about everything from the changing VC landscape to why decks and financial models arenโ€™t the be all and end all and why founders might want to think about them differently.

In other news, Iโ€™ll be joining a panel of CFOs hosted by Vertice and Pleo to discuss:

How to balance daily tasks with tech management

Identifying and preventing tech overspend

Tips for conducting tech audits

How to decide on tech contracts

And plenty moreโ€ฆ So if youโ€™re a finance pro working in a high growth venture, join us on the 27th June at | 10AM BST | 11AM CEST | 3PM EST.

Register here to watch live or to get the recording ๐Ÿ’ช๐Ÿพ

Register here to join us on 27th June at 10am BST

Iโ€™m well underway writing about all the things Iโ€™ve learned from the last couple of decades as founder, CFO and CEO, so sign up for early access to Off Balance – The Book and feel free to share with anyone else you think might enjoy it ๐Ÿ˜„.

Now letโ€™s get down to businessโ€ฆ

๐——๐—ฒ๐—ฐ๐—ธ๐˜€ ๐—ฎ๐—ป๐—ฑ ๐—ณ๐—ถ๐—ป๐—ฎ๐—ป๐—ฐ๐—ถ๐—ฎ๐—น ๐—บ๐—ผ๐—ฑ๐—ฒ๐—น๐˜€ ๐—ฎ๐—ฟ๐—ฒ ๐—ด๐—ฟ๐—ฒ๐—ฎ๐˜, ๐—ฏ๐˜‚๐˜ ๐—ฎ๐—น๐—น ๐—ถ๐—ป๐˜ƒ๐—ฒ๐˜€๐˜๐—ผ๐—ฟ๐˜€ ๐—ฟ๐—ฒ๐—ฎ๐—น๐—น๐˜† ๐˜„๐—ฎ๐—ป๐˜ ๐˜๐—ผ ๐—ธ๐—ป๐—ผ๐˜„ ๐—ถ๐˜€ ๐˜„๐—ต๐—ฎ๐˜ ๐—ฎ๐—ฐ๐˜๐—ถ๐—ผ๐—ป๐˜€ ๐—ฎ๐—ฟ๐—ฒ ๐—ด๐—ผ๐—ถ๐—ป๐—ด ๐˜๐—ผ ๐˜‚๐—ป๐—น๐—ผ๐—ฐ๐—ธ ๐˜๐—ต๐—ฒ ๐—ป๐—ฒ๐˜…๐˜ ๐—บ๐—ถ๐—น๐—ฒ๐˜€๐˜๐—ผ๐—ป๐—ฒ๐˜€ ๐Ÿ’ก

In this week’s episode of Nothing Ventured, I sat down with Kiran Mehta, Investment Manager at Mercia Ventures, a national venture capital provider, which has been closing the funding gap across the UK, partnering with exciting start-up and scaleup businesses.

Prior to joining Mercia, Kiran worked at Lloyds Bank and the Real Estate Equity Fund.

My top takeaways:

1๏ธโƒฃ ๐…๐จ๐œ๐ฎ๐ฌ ๐จ๐ง ๐ƒ๐จ๐ข๐ง๐  ๐–๐ก๐š๐ญ ๐˜๐จ๐ฎ ๐‹๐จ๐ฏ๐ž ๐š๐ง๐ ๐–๐ก๐š๐ญ ๐˜๐จ๐ฎ’๐ซ๐ž ๐†๐ซ๐ž๐š๐ญ ๐€๐ญ: Kiran noted the importance of pursuing something you enjoy and excel in. He highlighted the significance of prioritising working with smart people and how venture is chaotic yet rewarding. Good founders will always have a chance in any market, regardless of the challenges they face.

2๏ธโƒฃ ๐“๐ก๐ž ๐„๐ฏ๐จ๐ฅ๐ฎ๐ญ๐ข๐จ๐ง ๐จ๐Ÿ ๐„๐๐ฎ๐œ๐š๐ญ๐ข๐จ๐ง ๐š๐ง๐ ๐‰๐จ๐› ๐Œ๐š๐ซ๐ค๐ž๐ญ: Kiran discussed the rapid changes in the job market and the evolving landscape of education. He highlighted the need for students to prioritise their interests and skills, especially if they aspire to head into the world of venture capital. The discussion shed light on the importance of adapting to changing job cycles and market conditions.

3๏ธโƒฃ ๐๐š๐ฅ๐š๐ง๐œ๐ข๐ง๐  ๐†๐ซ๐จ๐ฐ๐ญ๐ก ๐š๐ง๐ ๐‚๐š๐ฉ๐ข๐ญ๐š๐ฅ ๐„๐Ÿ๐Ÿ๐ข๐œ๐ข๐ž๐ง๐œ๐ฒ: The conversation touched upon the shift towards capital efficiency and the intersection of venture-style growth with financial prudence. Kiran highlighted the challenges faced by founders in deciding between pursuing profitability or continuing to raise capital. The discussion provided valuable insights into the evolving dynamics of venture funding and the need for sustainable growth strategies.

We also touched on:

๐Ÿช How you canโ€™t live in a parallel universe, do what you love and what youโ€™re great at.
๐Ÿง  Why you should prioritise working with really smart people.
๐Ÿฆ‹ How venture is chaos.
๐Ÿ’ช๐Ÿพ Why great founders will have a chance in any stage of the market
๐Ÿ“ˆ Why founders need to internalise that growth is still very important even as they have to be more capital efficient.
๐Ÿ‘ฉ๐Ÿผโ€๐Ÿซ Decks and financial models are great, but they aren’t everything.
๐Ÿ’ฅ The disproportionate effect that investors can have by driving support.

Check it out!

Else listen on Spotify or Apple

If you have any feedback, or if thereโ€™s something youโ€™re desperate to see me include, just reply to this mail or ping me online – Iโ€™m very open to conversations.

If you like what Iโ€™m putting out, do give me a follow on LinkedIn, Twitter and Instagram.

(If you are trying to connect with me on LinkedIn, maybe read this post I wrote and make sure to start your request with โ€œOff Balanceโ€ and, more importantly, tell me why youโ€™d like to connect ๐Ÿ’ช๐Ÿพ)

Donโ€™t forget to like, rate and subscribe to Nothing Ventured on Apple, Spotify or YouTube, it really helps more people see what weโ€™re doing – you can find links to these (and more including my Office Hours) right here!

This edition of Nothing Ventured is brought to you by EmergeOne.

EmergeOne provides fractional CFO support to venture backed tech startups from Seed to Series B and beyond.

Join companies backed by Hoxton, Stride, Octopus, Founders Factory, Outlier, a16z and more, who trust us to help them get the most out of their capital, streamline financials, and manage investor relations so they can focus on scaling.

If youโ€™re a CFO working with venture backed startups and want to join a team of incredible fractional talent, drop us your details here.

If youโ€™re a growing startup that knows it needs that strategic financial knowhow, drop your details here to see how we can support you as you scale ๐Ÿš€

As always, my office hours are open, if youโ€™d like to chat about anything finance, tech or venture releated, just grab some time ๐Ÿ˜Š.

I hope you found Off Balance #40 valuable. As always, Iโ€™d love to get your feedback and understand the sort of topics you would love to hear about.

Just hit reply to this mail or drop me a line at hello@emergeone.co.uk and let me know ๐Ÿ˜Š

๐Ÿš€And thatโ€™s a wrap for this edition of Off Balance – Iโ€™d appreciate your feedback so just reply to this email if youโ€™ve got something youโ€™d like to say.

๐Ÿ“จ If you think someone else might love this, please forward it on to them,

๐ŸŽง Finally, if youโ€™re a fan of the Nothing Ventured podcast, please donโ€™t forget to like, rate and subscribe wherever you get your pods – it really helps us spread the word.

Thatโ€™s it from me so until next timeโ€ฆ

Stay liquid ๐Ÿ™‚

Aarish

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Off Balance #39

๐Ÿ‘‹๐Ÿพ Hi friends!

Well last week was a bit of a blur to say the least! After landing late into Berlin on Tuesday evening and getting stuck for an hour waiting to get through passport control, I had a super early start the next day hosting a series of talks at TOA 2024.

Iโ€™m going to talk a bit more about the panel I was on further down, but overall, it was great to have had the chance to host the startup pitch competition watching around 20 startups do a 2 minute cold pitch without slides which the TOA audience then judged followed by the final 10โ€™s (slightly!) longer 3 minute pitches to the judges the next day.

It was probably the first conference I have attended since before the COVID-19 pandemic, and certainly the first I have participated in to this extent and I LOVED IT!

Also thought it was time for a bit of a personal rebrand and refresh so say hello to my new profile pic cross platform!

Iโ€™m also super proud to be partnering with the London Venture Capital Summit this Saturday, hosted by LVCN (London Venture Capital Network).

Come along on the 15th of June for London’s premier forum for VCs, operators, and innovators, and make sure you grab a ticket quick, theyโ€™re selling out fast!

Get your discounted ticket on me, here!

Iโ€™m well underway writing about all the things Iโ€™ve learned from the last couple of decades as founder, CFO and CEO, so sign up for early access to Off Balance – The Book and feel free to share with anyone else you think might enjoy it ๐Ÿ˜„.

Now letโ€™s get down to businessโ€ฆ

In this weeks Off Balance:

๐ŸŽ™๏ธ Tamta Gamezardashvili, founder of Unorthodox Ventures on Nothing Ventured
๐Ÿ”ฎ Reimagining Work – The Future of Productivity and Value

Do investors have inferiority complexes too???

Check out the latest episode of Nothing Ventured where I spoke to Tamta Gamezardashvili founder of Unorthodox Ventures, an advisory firm that leads capital raising strategy helping VC funds to raise capital by incorporating analysis of explicit and implicit data and human behaviour.

She is also the founder of Founders’ Social, an all-female community of founders and investors bringing together like minded, supportive, high calibre females as well as the host of My Kitchen, Her Story a show that celebrates female leaders whilst cooking their favourite dish.

Prior to founding Unorthodox Ventures, Tamta held senior sales roles at Palantir, Google, Salesforce and IBM.

We got into the weeds of some pretty interesting topics, here were my top takeaways:

โžก๏ธ Leveling the Power Dynamic in Venture Capital

Tamta highlighted the struggle that many VCs face when it comes to fundraising. The inferiority complex amongst investors can create a tricky situation where ego comes into play. By understanding the psychology behind fundraising and focusing on building relationships, VCs can level out the power dynamic and approach investors with confidence.

โžก๏ธ Empowering Women in the VC Ecosystem

Tamta’s initiative, My Kitchen Club, and the female-focused community she has built are empowering women in the VC ecosystem. By providing a safe space for women to connect, share experiences, and support each other, these communities are breaking barriers and fostering diversity in the industry.

โžก๏ธ Understanding the Importance of Empathy and Compassion

One of the key insights from the episode was the importance of empathy and compassion in our interactions. Tamta shared her contrarian conviction that understanding the experiences and backgrounds of others can lead to more meaningful and positive interactions. By taking the time to empathise with others, we can contribute to a better and more inclusive environment.

We also talked about:

๐Ÿ’ฐ How VCs struggle to raise too
โšก๏ธ Levelling out the power dynamic.
๐Ÿค How people buy from people.
โšฅ The difference between how men ask for money versus how women do.
๐Ÿ”ช How Tamta is bringing women back into the kitchen.
๐Ÿ™‹๐Ÿฝโ€โ™€๏ธ Tamtaโ€™s contrarian conviction – ask the question first.

Listen on YouTube, Spotify, Apple or wherever you get your podcasts!

If you have any feedback on the podcast or the newsletter, just reply to this mail or ping me online!

If you like what Iโ€™m putting out, do give me a follow on LinkedIn and Twitter.

(If you are trying to connect with me on LinkedIn, maybe read this post I wrote and make sure to start your request with โ€œOff Balanceโ€ and, importantly, tell me why youโ€™d like to connect ๐Ÿ’ช๐Ÿพ)

Now letโ€™s get into it.

This edition of Nothing Ventured is brought to you by EmergeOne.

EmergeOne provides fractional CFO support to venture backed tech startups from Seed to Series B and beyond.

Join companies backed by Hoxton, Stride, Octopus, Founders Factory, Outlier, a16z and more, who trust us to help them get the most out of their capital, streamline financials, and manage investor relations so they can focus on scaling.

If youโ€™re a CFO working with venture backed startups and want to join a team of incredible fractional talent, drop us your details here.

If youโ€™re a growing startup that knows it needs that strategic financial knowhow, drop your details here to see how we can support you as you scale ๐Ÿš€

Off Balance

My elder daughter has just entered the workforce. Sheโ€™s not yet in the field she wants to be in, but as we all know, itโ€™s easier to get a job when youโ€™re in a job. Or at least that used to be the standard thinking.

But the reality is that the nature of work has changed substantially over the last couple of decades, even more so since the pandemic and now with the advent of AI.

So it was a real pleasure to try and unpack some of the themes we believed were going to impact how we might think about work in the future on a panel during TOA 2024 in Berlin.

I was lucky enough to be sat with some pretty interesting individuals – Joshua Greene – Founder of Groove, the co-working community app built for a remote world (Joshua used to be Adam Neumannโ€™s Chief of Staff at WeWork), Felix Steffens, Founder of WorkMotion, a remote first business building the EOR built for the DACH region and Megan Knab, Founder of Franklin Payroll the platform that allows you to pay your team in cash and crypto. All masterfully moderated by Caro Henne.

Now 30 minutes is nowhere near enough time to try and unravel the complexity and the nuance around this topic, but we hopefully gave the audience some things to think about. Hereโ€™s a bit of a summary and exploration of everything we discussed.

Reimagining Work – The Future of Productivity and Value

Remote work and the skills shortage

At the same time as we are seeing calls to restrict migration from throughout Europe, itโ€™s also never been truer that there is a significant deficit of skills especially in key areas like software engineering. Felix argued that the advent of remote, precipitated and fuelled by the pandemic has meant that Europe has not only had to get its head around the concepts of remote or hybrid work, it has had to embrace it. This has obviously been facilitated by employer of record (EOR) businesses such as WorkMotion, Omnipresent, Remote and others but these tools actually highlight one of the big problems or inefficiencies that as yet has not been tackled – the red tape, bureaucracy and tax systems that are still largely stuck in the old paradigm of working. These make it less viable for smaller businesses to compliantly employ people overseas forcing them to look for solutions in country which may well be more expensive.

Whatโ€™s happening to careers?

Gone are the days where you would leave university, get a job with a corporate (probably through the milk rounds) and stick with them for most (if not all) of your career. Sure, you may move a couple of times for a more senior title, better money, or more benefits, but the role is much the same, the career is still the career and itโ€™s one job to rule them all. We are seeing the rise and rise of freelancers, contractors, fractional talent and talent from throughout the gig economy as well as the fact that even when an individual lands a full time role they are neither tied to the company nor, in many instances the functional role either. Now I personally think that we are going to see changes as people who entered the fractional world during the pretty bullish 2021 / 2022 period start finding it tougher to secure new roles, but directionally, the whole panel felt that this need for autonomy and to own your own future will just continue. As Josh said, switching jobs is as easy as switching Slack channels nowadays.

Redefining Value

I have long been an advocate for moving away from a model where we charge for our time to one where we charge for our output. But this is easier said that done, it requires firstly the experience to actually know where your value lies, as well as the ability to productise your service. People also are redefining what value they want from their employers, itโ€™s not about the free beer and the ping pong but really allowing them to do meaningful work every day. But taking it back a step even, and thinking about the weird situation where you are effectively providing your employer with working capital via your monthly (or fortnightly) salary is something that can be redifined – precisely what Megan is working on with crypto payroll. Imagine how much more stimulus that would bring to the economy, how much better people could plan and match their income to their expenses on a daily basis and what value that could unleash.

Reimagining how we educate

I am a massive bore on this subject, mention education once in my presence and be prepared to have your ears chewed off for a pretty good portion of time. But, at the risk of repeating myself, we have to change the way we educate our kids, we are not preparing them for the workforce they are going to enter (see below). I have a 23 year old and a 16 year old and I am very proud of the fact that we were able to send them to an IB school which I feel does a much better job of providing them with the skills theyโ€™ll need than the standard UK system does. What are these skills? Sales, finance, teamwork, empathy, communication, feedback loops, empathy and many more. Letโ€™s face it, our current system was built to suit the first industrial age 150 years ago – the problem is that weโ€™re now entering the fourth.

The advent of AI

And all of this, of course, leads to the advent, and impact, of AI. None of us truly know the size of the impact that AI will have on the existing and future workforces, but one thing we do know is that it will have an impact. So the best advice for everyone, whether in or entering employment, is to get yourself as acquainted as you can with the new tools that are coming up on almost a daily basis at the moment because whilst the tools themselves may not replace you, the people who know how to use them probably will. But we also cannot underplay the reality that AI will have a dual impact, some negative, some massively positive – on the negative side, it will mean that companies will need less headcount to deliver, but on the positive side, AI means that more businesses will be created as new entrepreneurs embrace the tech which hopefully then means more jobs overall. Whatever the coming reality, the only thing you can count on is that things are going to change fast, so you need to be prepared.

Sadly we only got to scratch the surface of many of these topics given the time we had available, but would love to hear other peopleโ€™s thoughts on what they think the future of work is going to look like over the next decade and beyond.

Gif by goldenglobes on Giphy

As always, my office hours are open, if youโ€™d like to chat about this or anything else, just grab some time ๐Ÿ˜Š.

I hope you found Off Balance #39 useful. As always, Iโ€™d love to get your feedback and understand the sort of topics you would love to hear about.

Just hit reply to this mail or drop me a line at hello@emergeone.co.uk and let me know ๐Ÿ˜Š

๐Ÿš€And thatโ€™s a wrap for this edition of Off Balance – Iโ€™d appreciate your feedback so just reply to this email if youโ€™ve got something youโ€™d like to say.

๐Ÿ“จ And if you think someone else might love this, please forward it on to them,

๐ŸŽง Finally, if youโ€™re a fan of the Nothing Ventured podcast, please donโ€™t forget to like, rate and subscribe wherever you get your pods – it really helps us spread the word.

Thatโ€™s it from me so until next timeโ€ฆ

Stay liquid ๐Ÿ™‚

Aarish

Off Balance #38

๐Ÿ‘‹๐Ÿพ Hi friends!

This weekโ€™s podcast catch up explores the interesection of venture capital, startups, journalism, PR and, for a short while, quick commerce too.

Iโ€™m in conversation with Steve Oโ€™Hear, founder of Oโ€™Hear & Co who is probably bet known for the decade or so he spent covering the European tech ecosystem for TechCrunch.

Check out the conversation and let me know your thoughts ๐Ÿ™‚ย 

Iโ€™m well underway writing about all the things Iโ€™ve learned from the last couple of decades as founder, CFO and CEO, so sign up for early access to Off Balance – The Book and feel free to share with anyone else you think might enjoy it ๐Ÿ˜„.

Now letโ€™s get down to businessโ€ฆ

๐˜ž๐˜ฉ๐˜ข๐˜ต’๐˜ด ๐˜ต๐˜ฉ๐˜ฆ ๐˜ณ๐˜ฆ๐˜ญ๐˜ข๐˜ต๐˜ช๐˜ฐ๐˜ฏ๐˜ด๐˜ฉ๐˜ช๐˜ฑ ๐˜ฃ๐˜ฆ๐˜ต๐˜ธ๐˜ฆ๐˜ฆ๐˜ฏ ๐˜ซ๐˜ฐ๐˜ถ๐˜ณ๐˜ฏ๐˜ข๐˜ญ๐˜ช๐˜ด๐˜ฎ ๐˜ข๐˜ฏ๐˜ฅ ๐˜ท๐˜ฆ๐˜ฏ๐˜ต๐˜ถ๐˜ณ๐˜ฆ?

In the latest episode of Nothing Ventured, I spoke to Steve O’Hear. Steve has played a pivotal role in the European technology sector for more than 20 years, as a journalist, founder, executive, and angel investor.

Steve is currently the CEO and co-founder of O’Hear & Co, a strategic communications agency helping startups, scale-ups and venture capital firms tell their story while reducing risk and increasing commercial success. He also serves as SVP at Zapp, Londonโ€™s leading premium 24/7 on-demand convenience app.

With over 15 years of experience as a technology and business journalist, Steve spent over a decade at TechCrunch, where he is famous for having covered European startups and venture capital and being the first journalist to report on companies such as Wise, Deliveroo, Monzo Bank and Wayve.

He was also the CEO of the social question and answer platform Beepl, which he founded and led until its acquisition in 2012 and in 2006, he wrote and directed the Silicon Valley documentary “In Search of the Valley.”

My top takeaways:

โžก๏ธ ๐— ๐—ถ๐˜€๐—ฐ๐—ผ๐—ป๐—ฐ๐—ฒ๐—ฝ๐˜๐—ถ๐—ผ๐—ป๐˜€ ๐—ฎ๐—ฏ๐—ผ๐˜‚๐˜ ๐—ค๐˜‚๐—ถ๐—ฐ๐—ธ ๐—–๐—ผ๐—บ๐—บ๐—ฒ๐—ฟ๐—ฐ๐—ฒ:

Steve highlighted the misconceptions surrounding the quick commerce space, noting the importance of understanding the convenience retail model. He discussed the need to attract customers willing to pay for convenience and the significance of serving the right use cases with premium products.

โžก๏ธ ๐—ง๐—ต๐—ฒ ๐—ฃ๐—ผ๐˜„๐—ฒ๐—ฟ ๐—ผ๐—ณ ๐—ฆ๐˜๐—ผ๐—ฟ๐˜†๐˜๐—ฒ๐—น๐—น๐—ถ๐—ป๐—ด:

We explored the intersection of journalism and venture capital, discussing how storytelling plays a crucial role in attracting customers, investors, and aligning stakeholders. Steve really highlighted the value of a compelling story and the impact it can have on a startup’s success.

โžก๏ธ ๐—œ๐—ป๐˜๐—ฒ๐—ป๐˜ ๐— ๐—ฎ๐˜๐˜๐—ฒ๐—ฟ๐˜€:

Steve shared a contrarian conviction about the importance of intent, highlighting the human element often overlooked in debates and culture wars. He talked about the significance of understanding people’s intentions and the role it plays in shaping our interactions and perceptions.

We also discussed:

๐Ÿ“ฐ Whether journalists move through the hype cycle, bullish when startups are small, but critical when theyโ€™re bigger.
๐ŸšฆWhen an investor puts capital into an early stage startup, thatโ€™s a signal where very few exist.
๐Ÿฅด Can you have too much press.
โš–๏ธ The Ideal Balance of Story, Relationships, and Execution in PR.
๐Ÿ’ป Steve’s thoughts on remote work and the impact on social mobility.

Check it out!

Else listen on Spotify or Apple

If you have any feedback, or if thereโ€™s something youโ€™re desperate to see me include, just reply to this mail or ping me online – Iโ€™m very open to conversations.

If you like what Iโ€™m putting out, do give me a follow on LinkedIn, Twitter and Instagram.

(If you are trying to connect with me on LinkedIn, maybe read this post I wrote and make sure to start your request with โ€œOff Balanceโ€ and, more importantly, tell me why youโ€™d like to connect ๐Ÿ’ช๐Ÿพ)

Donโ€™t forget to like, rate and subscribe to Nothing Ventured on Apple, Spotify or YouTube, it really helps more people see what weโ€™re doing – you can find links to these (and more including my Office Hours) right here!

This edition of Nothing Ventured is brought to you by EmergeOne.

EmergeOne provides fractional CFO support to venture backed tech startups from Seed to Series B and beyond.

Join companies backed by Hoxton, Stride, Octopus, Founders Factory, Outlier, a16z and more, who trust us to help them get the most out of their capital, streamline financials, and manage investor relations so they can focus on scaling.

If youโ€™re a CFO working with venture backed startups and want to join a team of incredible fractional talent, drop us your details here.

If youโ€™re a growing startup that knows it needs that strategic financial knowhow, drop your details here to see how we can support you as you scale ๐Ÿš€

As always, my office hours are open, if youโ€™d like to chat about anything finance, tech or venture releated, just grab some time ๐Ÿ˜Š.

Gif by YellowstoneTV on Giphy

I hope you found Off Balance #38 v. As always, Iโ€™d love to get your feedback and understand the sort of topics you would love to hear about.

Just hit reply to this mail or drop me a line at hello@emergeone.co.uk and let me know ๐Ÿ˜Š

๐Ÿš€And thatโ€™s a wrap for this edition of Off Balance – Iโ€™d appreciate your feedback so just reply to this email if youโ€™ve got something youโ€™d like to say.

๐Ÿ“จ If you think someone else might love this, please forward it on to them,

๐ŸŽง Finally, if youโ€™re a fan of the Nothing Ventured podcast, please donโ€™t forget to like, rate and subscribe wherever you get your pods – it really helps us spread the word.

Thatโ€™s it from me so until next timeโ€ฆ

Stay liquid ๐Ÿ™‚

Aarish

Off Balance #37

๐Ÿ‘‹๐Ÿพ Hi friends!

As election fever ignites passions in the UK (not entirely sure what is going to get ignited across the Atlantic), tribalism and the fight for the hearts and minds of the population is underway.

Sadly, from my perspective neither of the main parties are really giving me much hope for the future instead trying to galvanise the country around either adding VAT to private school fees or conscripting 18 year olds into National Service.

Itโ€™s going to be an interesting 6 weeks, thatโ€™s for sure.

Thankfully, Iโ€™ll be spending at least one of those weeks far from the madding crowd attending TOA Berlinย ๐Ÿ‡ฉ๐Ÿ‡ชย 

Actually, not just attending, Iโ€™ll be hosting their pitch competition, MCโ€™ing a couple of the mornings and talking on a panel discussing Reimagining Work: The Future of Productivity and Value.

If you are thinking of heading over to join thousands of founders, investors, creatives and leaders – and of course lโ€™il olโ€™ me – then enjoy a 30% discount on me – make sure you secure your place and book here ๐Ÿ’ช๐Ÿพ

Look forward to seeing you there!

Iโ€™m well underway writing about all the things Iโ€™ve learned from the last couple of decades as founder, CFO and CEO, so sign up for early access to Off Balance – The Book and feel free to share with anyone else you think might enjoy it ๐Ÿ˜„.

Now letโ€™s get down to businessโ€ฆ

In this weeks Off Balance:

๐ŸŽ™๏ธ Shwetank Verma and Henry Goodwin, Partners at Leo Capital on Nothing Ventured
โšก๏ธ Who <really> holds the power in the boardroom?

Talking the India Advantage with Leo Capital ๐Ÿ‡ฎ๐Ÿ‡ณ

In the latest episode of Nothing Ventured, I spoke with Shwetank Verma and Henry Goodwin, Partners at Leo Capital, a VC fund investing in early stage, technology centric opportunities investing anywhere from $500K โ€“ $2M in early seed rounds or pre-Series A rounds in India, South East Asia and now the Nordics.

Prior to joining Leo, Henry worked at various law firms in London and in Asia, ultimately as Partner and Head of Asia for Taylor Vinters and then as Partner at PwC Legal International setting up their TMT specialist team in Singapore. He worked with Octopus Ventures as their Venture Partner for SE Asia before joining Leo Capital as Europe lead where he is now launching their Nordic fund.

Shwetank is a Co-Founder of Leo Capital and prior to founding the fund, founded MyHealthMate which he exited to Ambicare Clinics. He also worked in the corporate innovation space with MetLife Asia in Singapore, where he led open innovation and partnerships with startups.

Top takeaways:

1๏ธโƒฃ Stimulating the Early Stage Ecosystem in Singapore: Henry shared the concerted effort by the Singaporean government to stimulate the early stage tech ecosystem between 2010 and 2020. The incentives and the introduction of capital into the system have been pivotal in fostering growth and innovation in the region.

2๏ธโƒฃ The India Advantage: Shwetank explored the India Advantage, emphasising the vast talent pool in India and the potential for Indian diaspora to create global impact.

3๏ธโƒฃ Expansion into Europe and Nordics: Henry and Shwetank discussed Leo Capital’s expansion into Europe and specifically the Nordics in late 2023. They emphasised the importance of a global mindset and the strength of talent in the Nordics.

Beyond this, we spoke about:

๐Ÿ‡ธ๐Ÿ‡ฌ How Singapore is stimulating the early stage ecosystem.
๐Ÿ‡ฎ๐Ÿ‡ณ Talent in India is now global.
๐Ÿ“ˆ How loss making startups can now list on the Indian stock exchange.
๐ŸŒ Launching in the Nordics and how smaller markets bring global mindsets.
๐Ÿš€ Why becoming an entrepreneur has gone from shame to game on in India and the diaspora.

Listen on YouTube, Spotify, Apple or wherever you get your podcasts!

If you have any feedback on the podcast or the newsletter, just reply to this mail or ping me online!

If you like what Iโ€™m putting out, do give me a follow on LinkedIn and Twitter.

(If you are trying to connect with me on LinkedIn, maybe read this post I wrote and make sure to start your request with โ€œOff Balanceโ€ and, importantly, tell me why youโ€™d like to connect ๐Ÿ’ช๐Ÿพ)

Now letโ€™s get into it.

This edition of Nothing Ventured is brought to you by EmergeOne.

EmergeOne provides fractional CFO support to venture backed tech startups from Seed to Series B and beyond.

Join companies backed by Hoxton, Stride, Octopus, Founders Factory, Outlier, a16z and more, who trust us to help them get the most out of their capital, streamline financials, and manage investor relations so they can focus on scaling.

If youโ€™re a CFO working with venture backed startups and want to join a team of incredible fractional talent, drop us your details here.

If youโ€™re a growing startup that knows it needs that strategic financial knowhow, drop your details here to see how we can support you as you scale ๐Ÿš€

Off Balance

For those of you who have been following Off Balance for some time now, youโ€™ll know that there are two elements to raising capital from VCs – the economics of the deal (what is the valuation, how much is being invested for what % ownership) and then there are the control elements (what voting powers, what reserved matters, who gets a board seat and so on).

Currently weโ€™re seeing throughout our client base that control starting to be exerted in a much stronger fashion as investors seek to push back on excessive spending or take a stronger line with poorly performing portfolio companies.

In some instances, that may well mean some pretty big shake ups in the organisation – including potential changes at the senior leadership level – so it is important for founders to understand board dynamics and scrutinise their shareholder agreements to see who is able to do what and when.

But I want to explore a slightly different point, one that many people donโ€™t necessarily appreciate, and thatโ€™s who holds the actual power in the boardroom.

Who Holds the Power in the Boardroom?

This is quite the contrarian take, but do bear with me.

So youโ€™ve set up your company, maybe youโ€™re one of two co-founders, youโ€™re both directors in the business and things are pretty breezy.

Then after slogging away fuelled by ramen, hope and stale coffee you start seeing some traction and decide itโ€™s time to open up your cap table and invite some investors on board.

You go through a few months of rollercoaster emotions, one VC in the data room, another talking about diligence, more rejections than you can count, but the glimmering of hope.

Until finally you get a term sheet – and theyโ€™re willing to lead!

It all seems ok, the valuation is more or less as you expected, youโ€™re going to have to carve out some additional equity for the team, which is fair enough and the investor want a seat on the board.

But of course theyโ€™re not taking the whole round. So youโ€™re going to need another investor, and they will come in on the same terms.

Fast forward another month or two as dilligence is done and long form legals are inked and you finally have cash in bank and itโ€™s time to put that money to work.

You file all the necessary paperwork and add the two Investor Directors to the board but now youโ€™ve got a slight problem, there are now 4 of you on the board – what happens if you get to a deadlock?

Well thatโ€™s solvable through a number of ways, but maybe, to keep everyone honest, itโ€™s worth bringing in an external Chair to run the board and hold the casting vote.

Wonderful, this feels like a pretty grown up place to be in doesnโ€™t it?

Youโ€™ve set up quarterly, maybe even monthly board meetings, where you can strategise how youโ€™re going to take over / disrupt / create the market / competition / industry.

This is going to add so much value to how you run things, finally you have the support you need on the big stuff.

But at some point, you wake up with this nagging question in your head. Youโ€™ve now got 2 co-founders, 2 investors and 1 non exec Chair on the board.

So who is running things?

Who actually holds the power?

Some might say it’s the Chairperson, after all, they hold the casting vote, they are able to change the trajectory of the business and influence the rest of the board as the neutral voice at the table.

Others might say it’s the Investor Directors, after all, itโ€™s their cash on the line, and for lots of startups itโ€™s their cash theyโ€™re going to rely on to some extent in the future – itโ€™s really hard to convince new investors to come on board when youโ€™re existing ones either donโ€™t take up their pro-rata or donโ€™t like where the business is heading.

You may even think it’s the CEO especially if things are going well (though it is always worth remembering, itโ€™s probably going to be easier to replace the CEO than it is a board member – remember what happened to Travis Kalanick at Uber?).

But often it’s the last person you might imagine it to be.

So this is my contrarian take:

Having sat through 100s of board meetings from startups to corporates there is a truism that emerges…

The person (or potentially people) that hold the most power in a board meeting are the following:

๐Ÿ“ The person who sets the agenda.

โœ๐Ÿพ The person who writes the minutes.

Why is this the case?

Because if you set the agenda you direct the flow of the meeting. You shepherd people in the direction you want the discussion to go.

You can tackle hard topics tangentially rather than head on and steer the conversation towards the outcomes you’re looking for.

People rarely question the format, progression or detail of the agenda so, once set, it is quite easy to steer the board meeting in the direction you want to.

Donโ€™t get me wrong, this doesnโ€™t mean you can steamroll the meeting, if you try and do something that is clearly contentious, be prepared for push back.

But all other things being equal, setting the agenda gives you a great deal of power to influence the flow of your board (or any other) meeting.

The second powerful role is held by the person writing the minutes.

Your role is to record salient points from the meeting and the pertinent actions that arise.

Think about this for a moment. You are writing the definitive record of a meeting that people will refer back to over subsequent months, if not years.

You essentially dictate how people ‘remember’ the meeting in the future.

In fact, it may not even be the case that the people referring to your minutes would have even been present at the meeting because board members change on a regular basis.

The other thing about minutes is that very few people truly understand how to write a good set of them. Most people default to some university style notes with lots of Person A said x and then Person B responded with y – much of which is peripheral to the actual core message that needs to be recorded for posterity.

I have, over time, gotten very good at writing minutes, mainly because I have spent A LOT of time in board meetings over the years. The trick is to write short form notes in the meeting in the style of your finished minutes and then condense and circulate within 48 hours of the meeting having wrapped up – this allows for maximum contribution to ensure that the record is straight.

When I wrote about this topic on LinkedIn a while ago, a lawyer came back with this comment:

Now Iโ€™m by no means suggesting that every person that sets the agenda or writes the minutes has some sort of Machiavellian desire to hijack the meeting for their own purposes, simply that most people would assume that power only ever sits in the hands of the people either making the decisions or investing their cash.

The reality is that you’ll almost always get others’ inputs into both the agenda and the minutes.

But how you write the way the meeting flows and what the outcomes were is more powerful than most people understand.

Gif by FTX_Official on Giphy

As always, my office hours are open, if youโ€™d like to chat about this or anything else, just grab some time ๐Ÿ˜Š.

I hope you found Off Balance #37 useful. As always, Iโ€™d love to get your feedback and understand the sort of topics you would love to hear about.

Just hit reply to this mail or drop me a line at hello@emergeone.co.uk and let me know ๐Ÿ˜Š

๐Ÿš€And thatโ€™s a wrap for this edition of Off Balance – Iโ€™d appreciate your feedback so just reply to this email if youโ€™ve got something youโ€™d like to say.

๐Ÿ“จ And if you think someone else might love this, please forward it on to them,

๐ŸŽง Finally, if youโ€™re a fan of the Nothing Ventured podcast, please donโ€™t forget to like, rate and subscribe wherever you get your pods – it really helps us spread the word.

Thatโ€™s it from me so until next timeโ€ฆ

Stay liquid ๐Ÿ™‚

Aarish