Industry events / 08 June 2021

BVCA HighGrowth 2021 - Day 1 review

BVCA HighGrowth 2021 - Day 1 review

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 full review of Day 1 at BVCA HighGrowth 2021 below.

“Too much love will kill you just as sure as none at all”, sang Queen guitarist Brian May back in 1992. That warning was a big theme of Day One of the BVCA High Growth 2021 conference, which looked at early-stage funding and pitching. 

With all the money investors are trying to put to work, “it’s a great time to be an entrepreneur”, Hussein Kanji, Co-Founding Partner, Hoxton Ventures, said in a session on the pitfalls of overfunding. But at the same time he warned that this “ends up distorting the market”. In particular, many VC investors being locked out of best companies at Series A or B are responding by investing at seed stage. It was all, as Kanji said ominously, “reminiscent of 1999”, the night before the morning after, when the world saw the dotcom crash. 

Putting numbers on this, Henry Whorwood, Head of Research & Consultancy at research company Beauhurst, said in a session on Series A funding that it had already reached £636m in 205 UK deals so far this year, with 2021 looking set to be a record year. Deal sizes are also growing. In a session on funding round definitions, Bao-Y Van Cong, Investment Director at Target Global, said the industry used to see £10m fundraises just at the Series B stage, but this was sometimes happening for Series A deals these days. Because of this, she said that sometimes founders don’t think these days in terms of whether a deal is Series A or Series B. 

Speakers also drew attention to the much greater diversity of different types of funding, including Pipe and venture debt. Raj Saxena, Founder and Managing Director of Juice Ventures, talked about his model of lending venture debt against marketing data. He predicted that venture debt, already big in the US, will grow in Europe – particularly to fund user acquisitions, which is an expensive business. Mark Sims, Director of Venture Solutions at the British Business Bank, discussed how this government body could help fund SMEs. 

But several speakers warned against just pursuing the largest cheque they could get, or another big funding round. “The world is celebrating large amounts of funding and valuations”, said Stephen Nundy, Partner & CTO at Lakestar VC, in the session on overfunding. He warned that founders were sometimes seeking public funding rounds “as a badge of honour”, but should think carefully about what was right for them. For example, they might be ill-served by having a large VC on their cap table early if they are not the right partner for the next 12 or 18 months of their journey. The same goes for angel investors: in a session on angels, panellists agreed it’s important to pick the right one. Carlos Eduardo Espinal, Managing Partner at Seedcamp, said founders should look for an angel investor with experience in areas they don’t know about, and who can perhaps offer access to large customers through key connections. 

Thankfully, it looks like conference attendees know it’s not just about getting the most money. In a snap poll, a striking 93% said “no” to the question, “Should entrepreneurs get as much money as they can get from whatever source and ignore the implications for future rounds?”
But even though there’s a lot more money sloshing around, it can still be hard for early-stage companies to find a VC. In a panel on “selecting the right VC for your journey”, speakers advised founders to go for the “warm intro” if they could: reaching out to a VC person with a mutual connection. Maria Palma, Partner at Kindred Capital, sounded an optimistic note: when you think you don’t have the network, you can build it. “You can hustle your way into conversations, coffee chats, put together a lunch or dinner event, find a way to build your network.”

Another theme of the day was how founders have coped with the pandemic, and which businesses have thrived in these challenging conditions. In a session on what we learnt during the crisis, Will Sheldon of Accel suggested the trend to do everything remotely actually helped UK founders, by lowering the walls for investors from all over world to come into the UK. 

Another theme was sustainability. Michael Moore, BVCA Director General, noted in his opening remarks to the conference that the VC industry could help the UK government meet its ambitious net zero target, by funding businesses providing solutions to this. Conference delegates voted DAME, which makes sustainable period products for women and girls, top among eight founder pitches. 

The overall tone on Day 1 of the conference was one of guarded optimism: that founders, venture capitalists and angel investors can work together to solve society’s problems – but they shouldn’t let all the loves being thrown at them go to their heads. We think Brian May would agree with that. 

Follow us on LinkedIn for more key takeaways on Day 2 of BVCA HighGrowth 2021, tomorrow.

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