How many VCs does it take to find a light bulb?
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It’s a rare occurrence for investors to open their doors to anyone wanting to meet them so, when it did happen, GrowthBusiness went along to find out what was going on.
It’s a perennial problem for start-up entrepreneurs, how do they forge those first and important contacts with investors?
They can send hundreds of unanswered emails, make countless and thankless phone calls and still be nowhere.
So when 11 investment firms got together for an afternoon and invited the great and good of the start-up space to come and meet with them, the response was unsurprisingly overwhelming.
Organised by new kids on the block Passion Capital, the afternoon saw the likes of Index Ventures, PROfounders Capital, Eden Ventures and #1Seed come together to meet with entrepreneurs and share advice on all aspects of business building.
With each firm being represented at either a partner or principal level, the session offered an unrivalled opportunity for start-ups to forge all-important early relationships with the kinds of investors that will one day be vital to growth.
One of the attendees on the day was Drummond Gilbert, founder of goCarShare, a business which pairs drivers with unused passenger seats with those looking for a ride.
His business is looking to raise seed funding to move the concept forward, but Drummond said that previously he has made the mistake of focusing on growing the business and getting it going rather than forging relationships with investors.
‘One of the things we have done which has been useful is an accelerator scheme. We then did two big presentations at pitch events and through that we’ve managed to get a lot of meetings with VCs and angel investors,’ he added.
‘The thing about meeting investors is that the likelihood of any one of them investing in your business is pretty low, but the most important thing is meeting them and taking away things which are relevant to improving your business.’
As lead of the project, Passion Capital used the experience it received in hosting similar but smaller in-house open office programmes to organise the event.
Passion Capital partner Eileen Burbridge commented that they received a great response from the VC firms, which were ‘thrilled’ to be involved. The firm has previously backed two businesses which it met during its office hours so is a firm advocate of the process.
With the event taking place in Farringdon, a stone’s throw from the Old Street roundabout which serves as a base for many of the tech-orientated companies that attended, it served as a rare opportunity for VCs to leave their traditional home patch in the west of the city and immerse themselves in the start-up environment that dominates the east.
Burbidge said that there had been a high calibre of early-stage businesses on show and added that the great thing about the open office get-together was that even people with a simple idea could come and get feedback.
‘Most of them [VCs] are partners and they can give you a quick “that’s not going to fly, no offence”, or they can give them things to go away and investigate,’ she commented.
Walking round Passion Capital’s offices, I bumped into former Apprentice star Nick Holzherr who made it through to the final of the last series but was unable to secure the £250,000 investment.
Holzherr secured the investment he needed for his business idea shortly after the TV series ended, but said that he wanted the opportunity to meet many VCs in one go, having not met many previously.
His business, Whisk, allows customers to access an online system which converts recipes into shopping lists which can then be bought through online stores.
With early funding already secured, Holzherr said that he was there primarily to get some feedback on his venture.
‘Hopefully when everything works well and we have users and traction, are making sales and have a bigger team, that is when we will be looking for VC funding,’ he commented.
‘So I think it is really good to meet VCs at this stage and build relationships they can watch our progress so when we do need some VC funding it is easier and quicker to get.’
Meet and greet
Like most events involving venture capitalists and start-up entrepreneurs the atmosphere was relaxed and pizza and soft drinks were on hand for those between appointments to take a break.
Passion Capital shares its office space with a number of businesses it has already backed so the event intersected with those going about their day-to-day tasks.
One of the partners in attendance was Sean Seton-Rogers, partner at PROfounders Capital, a firm which is described as being ‘for entrepreneurs, powered by entrepreneurs’.
He’d already met with four companies by the time I spoke with him and said that the concept of open office hours is something which PROfounders has employed in the past but let slip a little in the last year as the firm became increasingly busy.
He said, ‘It is great; a fantastic chance to meet so many companies in a short space of time.
‘Entrepreneurs can feel quite gated about how they can interact with the VC community. No long introductions are needed here – they can just rock up and have a conversation, so it’s great for both sides.’
For Sitar Teli, managing partner at Connect Ventures, the concept of open office hours is something she’s taken with her from a previous role at Doughty Hanson and employed at the investment firm.
‘We are a big fan of open office hours as it is a different way of meeting entrepreneurs and interacting with them as normally it’s under the pressure of big networking events or the horrible reeling of a cold email, so this is in-between the two, a different context for meeting people,’ Teli said.
Mingling by the pizza and drinks I met Graham Parker, CEO of online shipping business Youshipped.com, who was at the beginning of forging his relationship with would-be investors.
Fresh from appearing as part of the start-up competition at last week’s Dublin Web Summit, Parker said the business is launching its platform on 1 January and is now hoping to meet as many investors as possible.
Parker said, ‘It is just great to have everyone under one roof. It is fantastic for start-ups as it helps you hone your pitch and get an idea for what people are looking for, so hopefully there will be some more of these.’
Burbidge said that following on form the success of the event, Passion Capital has already earmarked another date on 11 December for a repeat.
And with three requests from more than 50 entrepreneurs for each of the 150 slots available this time round, the VC love-in concept is sure be just as successful next time round.
Take a walk around the VC afternoon:
Full list of investors in attendance:
Passion Capital (partners Stefan Glaenzer, Robert Dighero, Eileen Burbidge; associate Greg Young)
Index Ventures (principal Gil Dibner)
Accel Partners (associate Luciana Lixandru)
Balderton Capital (principal Harry Briggs)
Wellington Partners (partner Daniel Waterhouse)
PROfounders Capital (partner Sean Seton-Rogers)
Notion Capital (partner Jos White)
Eden Ventures (partner Ben Tompkins)
Connect Ventures (partners Sitar Teli, Bill Earner)
#1Seed (partner Raj Ramanandi)
EC1 Capital (partner Julian Carter)
Playfair Capital (Federico Pirzio-Biroli)
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