When the BBC iPlayer project ran into strong headwinds and fell two years behind the original 2005 date, he was brought on by Ashley Highfield, (then head of the BBC’s Future Media and Technology group) to help turn the struggling project around, beat a desperately close deadline and create a winning product. He succeeded. One year later, the iPlayer was serving 41 million video requests a month! That number has grown almost 150x to 6.1 billion in 2021. With 10.1 million unique accounts using the service every week,  the iPlayer accounts for 12 percent of BBC television viewing. It is simply one of the BBC’s biggest products. 

Anthony Rose, Co-founder and CEO of SeedLegals, a successful serial builder with several exits is “the man who saved the BBC”. He joined Aarish on Nothing Ventured to talk about what he has learned building SeedLegals, one of his latest interests and the UK’s leading one-stop legaltech shop for founders to manage the legal side of starting and growing their businesses.

Already more than ⅙  of all seed and pre-seed rounds raised in the UK happens on SeedLegals. According to Crunchbase, $2.8 billion was raised in seed rounds in Europe last year in 1000 deals. A good chunk of that $2.8 billion came from a handful of multiple million-dollar deals. So while SeedLegals handles a sixth of the UK’s share of seed deals, it does not control a significant portion of the UK’s share of cash that was raised across Europe.

How SeedLegals grew to dominate the seed market.

Rose likes to joke that the reason SeedLegals is successful is that “I like to think, ‘What will a law firm do? And we’ll do completely the opposite.’”. He adds that people do not necessarily want legal documents as a problem in itself. They only want legal documents because they need to do something else that is crucial for their business. Like hiring new staff or raising capital from investors. “You never wake up in the morning and go ‘I’m looking for a legal document,’ what you do say is, ‘I want to hire a team member, I want to get some investments,’ or ‘I need to do something to run my business.’”. 

SeedFAST, for example, is one of SeedLegals’ flagship products that acts as a sort of 24/7 platform that allows founders to “automate” investments by subscribing for shares in the next funding round in exchange for immediate cash. This uniquely branded version of Advanced Subscription Agreements is one SeedLegals’ answer to the problem founders face when they struggle to raise capital, and once they have a bit of investment traction, and get a media mention, they now have to deal with a torrent of investors who want in at the last moment. SeedFAST allows founders to continue to receive money even when a previous round is already closed, similar to how rolling closes typically happen.

 Rose says his team also offers unlimited free legal and accounting support for all SeedLegals users regardless of their pricing plan. Beyond the support, SeedLegal utilizes the data at its disposal to build unique and proprietary market intelligence. Rose believes that this market intelligence gives them a significant edge over choosing the DIY route or their traditional law firm competition. “They [traditional law firms] work in silos and my goal is to take all the data and show you what you should do, what’s the market. ‘Are you the only schmuck who’s agreeing to this deal term? Or is everyone agreeing to it and you’ll be an idiot if you didn’t agree to it?’ ”

Take SeedFAST mentioned earlier as an example. Founders who hope to raise from investors who in turn wish to benefit from the tax incentives that two popular tax-efficient investment programs offer can dramatically reduce the time and stress they would ordinarily face when they use SeedFAST. The UK’s Seed Enterprise Investment Scheme and the Enterprise Investment Scheme(SEIS/EIS) offer generous tax breaks for investors who can invest up to £100k (SEIS) or £5 million (EIS) in young UK companies.

Typically, the founder will need to prove that their business is eligible for SEIS/EIS tax breaks. They do this by obtaining Advance Assurance from Her Majesty’s Revenue and Customs (HMRC). But to be able to apply for Advance Assurance you should have.

This catch-22 situation is further compounded by the fact that information from HMRC is often incomplete and vague. For example, while filing for Advance Assurance, you have to indicate how much funding you raised previously, but as Anthony Rose shares, you also need to show that you have raised 25 percent of the total you need to raise. HMRC’s website does not volunteer that information which is perhaps, another good example of the market intelligence edge that Roses’ company offers users. SeedLegals now handles a third of all Advance Assurance filings in the UK.

The UK’s SEIS remains the most popular and effective tax scheme for venture capital in Europe with France’s “Madeline” tax reductions coming behind.

Placing bets, mom testing, and what’s next for SeedLegals.

Rose shares a humorous illustration of what entrepreneurs go through when they first start muddling over an idea (Listen here:[]). Instead of founders obsessing overbuilding their idea into a product, he suggests they do two things instead.

• Find out if people want what you’re building.

“People think the difficult thing in a startup is building whatever it is,” Rose says, “actually that’s in retrospect quite easy.”. The first thing is to mind the gap and validate your idea before you take the leap to Entrepreneur Land. He recommends reading The Mom Test: How to talk to customers & learn if your business is a good idea when everyone is lying to you, by Rob Fitzpatrick.

• Learn how to place your bets.

When you begin to find traction in the market, also (fondly) called product-market-fit, you then need to learn when and how to place your bets for the next stage. “Do you place small bets and say ‘we’re moving into adjacent markets or do you start placing really big, maybe crazy bets…?” Rose admits that this is where SeedLegals is at the moment. “If you bet the farm on something, it could be a fantastic bet, but you might spoil everything. If you place smaller bets. That’s great, but maybe they’re not ambitious enough. And if you don’t place any bets, life is easy, but one day for sure, you’re going to wake up and see someone eating your lunch, and the people that you were disrupting, you’re going to find out yourself is the one now being disrupted.” 

That question is the “To be or not to be” of startup-ing. At what point should you begin to bet the farm and be led by what sounds like the future today? “The starting point of a company is the major bet” Rose muses, “after that maybe you think about it as playing a game of roulette. You can put some money on 26 red, but you wouldn’t want to bet everything on 26 red because it’s unlikely to come up. You only do that if everything else is a mess and that was the last [option]… Otherwise, you’re going to spread some things.” 

Rose says some founders think they will impress investors by doing more. So they pack in the latest buzzword technologies onto their decks. According to Rose, while this might impress a naive investor, it is essentially a red flag. He suggests that internally early teams should focus on the single proposition that their customers would want. Founders have two goals. (1) To sell something of value to their customers (2) Get money from VCs. Anthony says founders should separate these two goals mentally, because investors, especially VCs who are hunting for billion-dollar ideas tend to overlook oversimplified businesses. Internally the singular focus should ideally rest on providing enough value for the customers while sharing your ambition and vision for growth with investors. “Quote about vision 17:14 – 17:30”. This makes sense. While your team continues to delight and improve on customer experience and service delivery in the short term, investor cash helps you build and reach for ambitious goals. As Aarish simplifies, “If you have a small team and limited capital, you have to be laser-focused.”

Listen to the full episode here. Anthony shares his thoughts about what is driving the boom in seed-stage funding, what he means by “Agile funding” and how his idea can help unlock capital if it ever becomes mainstream.

Pro tip: Everything here is just one-half of the conversation. Can you imagine that?! 

Seriously. Listen here.