2 April 2020
You’ve been a City Lawyer, a serial entrepreneur and set up a Telecoms Company. Tell us more about your journey.
My journey was, in many ways, quite traditional. I studied law at university, was offered a training contract in my second year and then spent a decade on the treadmill in the City (and briefly Silicon Valley) working as a corporate lawyer. Despite law being fairly consuming, I setup a telecoms business in 2001, which we scaled to operate in 14 countries, and then started angel investing when I returned from Silicon Valley in 2008. Law was a challenging career, but I enjoyed running my own business and investing far more. I toyed with going in-house, but knew that I wanted to get away from practising law entirely and learn how to build companies.
I was extremely fortunate to meet Dan Craddock at the end of 2013. Dan is Managing Director of Bramden Investments and a successful serial entrepreneur. He was in the process of setting up plan.com when I met him and, perhaps because I had some experience in the space, he asked me to join the team at HQ on the Isle of Man. Plenty of people thought walking away from law a few years away from partnership and moving to a rock in the middle of the Irish Sea was nuts, but it was one of the best decisions I ever made. Through several roles, principally as Sales Director and Head of Tech, I learned a huge amount about what it takes to build a successful company.
In summer 2018 I met the team at Playfair Capital. I knew immediately that this was my dream role – I’d have the opportunity to invest full time and use my previous experience to help our founders navigate the most exciting and challenging phase of building a company.
What was the inspiration around Playfair Capital?
The Playfair Capital story starts in 2010. Our Founder, Fede, moved to London and became involved with the nascent angel investing community, initially working out of White Bear Yard. Whilst most people invest for returns, he was particularly excited by the impact his cheques and advice had on founders – watching them go on to employ teams, raise further rounds and build large companies was hugely satisfying (a feeling angel investors, including me, know all too well). Quickly, Fede built a strong reputation as a helpful, supportive angel investor which lead to lots of completed deals and a rapidly expanding pipeline. In 2013, he founded Playfair to put a formal structure around his investing activities and hire a multi-disciplined team to support existing and future founders.
To this day, our founding story guides the approach to everything that we do. Being down to earth and approachable, doing everything we can to make our founders successful, and working hard to support the ecosystem and our local communities are not words from our marketing team; they represent how Fede approached his investing and are baked into the DNA of our fund.
What vision do you have for Playfair?
We want to be the go-to fund at the seed (and pre-seed) stage for the World’s most ambitious founders. We know that the best way to achieve this is to build a great track record with founders and we work hard to do that, offering general strategic support and advice alongside specific work on hiring, sales and finance. We are fortunate to have an unfair advantage – whilst most funds spend 30% of their time fundraising, we are able to spend all that time working with our founders. We also optimised our fund size to ensure that we can spend plenty of hands on time with each company.
What has been the most challenging and enjoyable part of your career so far?
I’ve been fortunate to have a lot of highlights in my career so far, but what I do today as Managing Partner of Playfair is the most challenging and enjoyable. Venture is an apprentice business – you’re always learning and that keeps you humble and fresh. My days are hugely varied, but the thing they have in common is being surrounded by inspiring people full of energy and building their dreams. I get a huge amount of satisfaction seeing our founders and the Playfair team grow and succeed.
What would you say are the biggest misconceptions people have about working in the investment industry?
People often assume that the constituent parts of the investment industry are all the same – in reality, they are very different. An investor’s motivations, attitude and approach to a deal vary hugely in different parts of the capital structure and across asset classes. In venture, and particularly at the seed and pre-seed stages, investors tend to be more collaborative and look to generate win-win outcomes for all the stakeholders. I think people might be surprised that we share opportunities, talk openly and generally work closely with other investors (funds and angels). People also tend to assume that we are very well rewarded for what we do, but don’t necessarily know that our success is tied directly to that of our investments and that a meaningful exit can take at least 10 years.
Is there a piece of advice you would offer to founders looking for investment?
I could probably write a book on this! If I had to offer one piece of advice, it would be for founders to mentally and emotionally prepare themselves for the fundraising journey. Make sure you have a support network in place, both professionally and in your personal life. Even the best companies will be told ‘no’ many times, and this is especially true now as we navigate the challenging environment caused by coronavirus. Success in the world of venture backed businesses requires an ability to roll with the punches, hoover up feedback from every rejection and have the stamina to get to a ‘yes’.
Is there a question you are asked more than any other?
Can I send you my deck?!!! Of course, the answer is ‘yes’. We made a decision at the beginning of Fund II to have an open ‘pitch us’ form on our web site. Answer the questions, upload your deck and one of the team will review and come back to you. The old rule that you can only pitch a VC fund if you can get a warm introduction is a pointless barrier for entrepreneurs and funds alike, and one that serves to reinforce the problem of access to venture funding for people of certain backgrounds. We want to meet the best businesses and we don’t care where they come from.
What is something you’ve learned that you lean on daily?
My Dad once told me that ‘things always take longer than you expect and never go as high as you hope’. He was talking about property prices, but you can certainly apply this to venture as well! I originally thought this comment was unnecessarily negative, but over time I’ve learned to interpret it a little differently. What I think he really meant was, ‘don’t get carried away, keep your feet on the ground and don’t stop working hard’. I’ll always try my best to do this.
Is there a small change which has made a big difference in your life?
As a trainee at Weil, I remember a partner telling me that he left his Blackberry downstairs and never took it into the bedroom. From that night onwards, I did the same. Putting some distance between me and my phone helps me switch off and avoids the temptation to just quickly check messages that don’t need checking.
How do you envisage the VC industry in London and globally over the next five years?
Technology will continue to impact the way we live and do business – that macro trend is well established and the potential for deep technologies will take decades to fully realise. Where there are companies developing disruptive technologies, there will be capital willing to fund them. So, broadly, the VC industry will continue to be an exciting place to build a career and make a living.
That said, the economic impact of the coronavirus pandemic is significant. I see this playing through in a few ways. First, it’s going to be very hard for new funds to get going – LPs simply don’t have the risk appetite at the moment. Second, commitments to all but the very top tier of existing funds are likely to be reduced in the short term leading to a reduction of available capital in the market. Third, funds will be allocating more capital and time to their existing portfolio companies versus doing new deals. It’s hard to say how long this will last, but it is a challenging funding environment at the moment. Founders should look at alternatives in the short term where possible and also plan for their funding round to take significantly longer than it would have done earlier this year.
On a more positive note, the long term trend towards more cross-border activity as funds look for value in overlooked or better value markets is set to continue. We can already see this with US funds moving aggressively into Europe. These funds bring not only capital, but also diverse international perspectives, which help enrich the ecosystem.
Finally, funds that are able to demonstrate genuine value add and superior outcomes as a result will thrive, whilst suppliers of commoditised capital will likely be squeezed out of the best companies.