Industry events / 08 June 2021

BVCA HighGrowth 2021 - Day 1 key takeaways (part 1)

BVCA HighGrowth 2021 - Day 1

Across the 2 day event Crestbridge will publish a brief rundown of key takeaways from each session as the event unfolds. 

The event, which is deemed to be the UK's leading event for growth companies partnering with venture and growth capital, took place virtually for the first time and featured entrepreneurs, management teams and investors as they share their thoughts and experience on what it takes to succeed in today's environment.

Read our key takeaways below from the first part of Day 1 at BVCA HighGrowth.

What does data tells us about Series A raising since COVID?

Henry Whorwood, Head of Research & Consultancy, Beauhurst

  • Since 2011 have tracked over 50,000 equity investments
  • Our data shows Q1 of this year record quarter in amount invested in and number of deals. Example is, which raised hundreds of millions of pounds
  • 2021 has already overtaken 2018, so very strong year.
  • Very healthy supply of finance
  • Another trend is companies finding themselves able to stay private for longer.
  • Series A: £636m in 205 deals so far, already above 2016.
  • That number is very flat 2017 to 2020, just shy of a billion pounds most years.
  • So fairly confident in saying by end of 2021 will probably see record year for Series A investments.
  • Top 3 investors in order: Mercia Fund Managers at 194 deals, Seedcamp, SFC Capital
  • London focal point for these transactions, but more and more outside London
  • Fintech continues to drive a lot of activity, as do software as a service businesses.

Series A perspective: What did we learn during the crisis?

Panel Moderated by Jenny Tooth OBE, CEO, UKBAA

  • June last year very different time. We were helping our portfolio companies navigate new way of working. Was hard for them to continue strategic growth. Venture capitalists had to work very hard to work with profitable companies. So slow investment in that period. But then we started to engage and make investments.
  • Government has ambition for Britain to become science superpower. Have been engaged with us to understand how we can help with this.
  • They launched Future Fund to help companies struggling with their fundraising.

Kerry Baldwin, Managing Partner, IQ Capital, and BVCA Chair 2021/22

  • In seed investment, have seen some large funds coming down into seed investing.
  • But founders need to make sure go to right VC for what part of their business they need help in.
  • Companies are raising more capital, thinking more global. Founders have been bolder in what they’re trying to do.
  • Tips for fundraising: be efficient, get to the point, don’t assume you have 45 minutes to pitch, assume you have only 20. Get your data prepared. Pick your right person at the VC firm. Do your homework.

Gary Davidson, Investment Lead, Tech Nation

  • Still very difficult for founders. For example, speaking to Scottish founder last week who has seed funding locally but doesn’t have connections into London or US. So capital is available but founders find it difficult to break into those ecosystems.
  • In Northern Ireland have seen lots of deals happen.
  • Sometimes Northern Irish founders think small, about market in Northern Ireland rather than having global mindsets – pricing in dollars for example.
  • But have seen a lot of good deals in the regions.
  • Have sometimes seen effect of pandemic on founders’ mental health. Spoke recently to a founder with team of about 30 who was trying to raise capital but finding whole situation very tough. Loves meeting people and couldn’t get the strength to keep going on. But that founder has turned it around, with help.

Will Sheldon at Accel

  • In terms of how we see last year we noticed impact of the new remote environment on company growth.
  • Have seen companies with higher velocity, scalability than ever seen before. Shift to remote selling has had huge impact as well. Software companies have shifted well to a virtual environment. This is fuelling velocity.
  • Are seeing more diversity of funding sources. The remote trend has lowered the walls for investors from all over world to come into UK.
  • Collaboration more important than ever as an investment theme, but most funds haven’t had dramatic shift in what they’re looking for.
  • Have made numerous investments where haven’t ever met the person in person. But no substitute for getting to know people in person.
  • Tip for pitching: Remember need for focus on talent and team. We want to see how you as a company can attract great talent.

Funding ambitious new VC managers

Mark Sims, Director, Funds – Venture Solutions, British Business Bank

  • Wholly owned subsidiary of UK government. The UK government’s development bank.
  • Just do SME lending because this sector is key to UK economy but underserved historically.
  • The Enterprise Capital Fund is a long-term LP into venture capital funds. We are typically 60% of a fund. Have very strong track record of backing first time and emerging managers. We have backed 34 funds with this programme, amounting to about £900m. We back about 4 new managers a year.
  • How to pick the right VC manager? Do diligence, work out right company for the stage you’re at, rather than the fund that will write the biggest cheque. Focus on who can help you get to next stage of your journey.

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