‘Behind the Scenes, through the Secret Door and into the world of Venture Capital’

by Jessica Greenhalgh

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More often than not when I am asked what I do in my job, the most common response when I say I work in the Venture Capital industry is a nod and ‘oh wow, money, finance’ which can be deciphered as, ‘I really have no idea, but that sounds important’. To be fair to the wider audience, yes – the Venture Capital world is to do with money and investments – but it also incorporates a lot more which I would like to enlighten you about. Hopefully, you’ll realise it’s not all just about stuffy guys in suits which seems to be the main stereotype!

 

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I came to work in this niche world just over a year ago, and to be brutally honest it was not intentional at all. I was similar to those of my peers that knew of the industry but who were not fully aware of how it functioned.

I’ve worked in two VCs, both being small teams and with their own individual styles, attributes and differences. However, where both are identical is having the same goal to help build startups from the ground upwards and help them become successful multi-million, or maybe even billion pound, companies. So, I thought I would share with you the two most surprising things about VCs and Venture Capital that I feel I’ve learnt and you may not be aware of.

Surprising Thing 1: How VCs are Humans, Not Robots !

Strange, to those who might know them personally 😉 (just kidding), but the Partners and Investment Managers at Episode 1, are really approachable and human. Not only are they super knowledgeable and experienced, but they’re really nice and down to earth guys. Having been entrepreneurs themselves, they’ve been in your shoes! They know the struggles, trials and tribulations entrepreneurs face better than most, so that’s why Episode1 aims to get a decision back to the entrepreneur as soon as possible. Additionally, in the event that an investment is made, Episode1 will be there every step of the way, guiding and supporting to make the best decision not only for the company but for the entrepreneur too.

In my mind, this has to be one the best qualities of Episode 1, and it gets regularly quoted by the entrepreneurs we meet that we are ‘Founder Friendly’ and that having a great relationship with entrepreneurs is the way we work. I feel we definitely look at every investment as a partnership, so it’s not only important for us to get on with the founders, it’s important they get on with us. 🙂

 

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At Episode 1, we have 4 partners. Our Managing Partner, Simon Murdoch, is a previous entrepreneur and angel investor, and has been extremely successful. He’s got a great depth of experience and knowledge and I hope he doesn’t mind me saying that he functions in a way I can can only describe as organised chaos (thankfully he has me and others to help!) and he just doesn’t stop, like Road Runner!

There are two other Founding Partners: Damien Lane, the resident marathon runner both metaphorically (he’s been around in the investment world for some time…) and literally (he runs a sub-3 hour marathon), and can best be described as the straight talker, aka “Mr Marmite” i.e. he’ll love it or hate it!; and Adrian Lloyd, ‘the young buck’ as he has been called and probably the most meticulously organised person I have ever met.

The final partner, Paul McNabb recently joined last year, previously from Cisco, and has a wealth of knowledge in the enterprise world, along with the most bizarre accent, (cue Nathan Lane) – accrued from all the different places he’s lived. He’s also a massive coffee connoisseur.

 

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The team is also comprised of two Investment Managers: Ash Puri, the ‘King of Bling and (surprisingly) TenPin bowling’ (trust me – we were all shocked at his skittle skills), and Martin-Afshari-Mehr, gym obsessed, master on powerpoint and excel, and the most ‘eggscellent‘ narrator I know. Finally, there’s me!  The resident Marketing Executive, who would like to think of herself as hard working, floating on air,  but also able to take the banter (I definitely consider it  part of the job :-)), and handle working with 6 guys day in day out.

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Surprising Thing 2: How a business can be created in under 3 months!

The second thing I’ve found surprising is how companies can be fully formed in only a few months especially given the impressive level and breadth of talent I’ve seen in entrepreneurs and the fact that the industry is so rife with competition. It seems that everyone continues to raise their game and the fight for both survival and investment is extremely high.

With the backing of the Government and accelerators like Entrepreneur First and organisations like Tech City UK supporting the development of the tech industry, the infrastructure has been created for entrepreneurs to create a business much more quickly than in previous years. The stepping stones now exist for new entrepreneurs to build a business rapidly with the added bonus that technology has also advanced allowing for companies to be built at a quicker pace. It isn’t just the logistical and practical changes that have enabled this over the past 5 years but also a shift in attitude in the tech environment.

Experienced angel investors and venture capital firms now seem to have a focus on investing in businesses earlier. Perhaps this is not only due to the help of the government via the SEIS & EIS Schemes but also because there has been an increase in the number of startups due to more people giving entrepreneurship a go in view of other’s successes together with the possibility of better returns for an investor if they invest at an earlier stage.

On a related note, it’s safe to say that there will always be entrepreneurs but will the increase in investment over the last few years stick around? Are we in a tech bubble and, if so, could the bubble burst? What would be the impact on investors mindsets? Experienced investors may become less willing to risk capital at this stage and decide to invest at later stages but I guess we just have to watch this space….

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At the end of the day from my experiences so far, I’ve come to believe that early stage investing is similar to making informed bets. Even though all investors demonstrate an outward confidence when every investment is made, there is always uncertainty, and similar to startup founders, there needs to be a champion in the investment team that has the ability to lead and convince others that the startup is a good idea and worth pursuing. With that I’ll end by saying welcome to the world of Venture Capital :-)!

Episode1

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