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Entrepreneurship & Venture Capital (VC) Investment

Explore the world of entrepreneurship and venture capital investment with insights from an experienced industry professional. Learn about the risks, rewards, and strategies involved in starting and funding a business. Discover how to secure VC funding, build a successful team, and navigate the entrepreneurial landscape.

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Entrepreneurship & Venture Capital (VC) Investment

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  1. Entrepreneurship & Venture Capital (VC) Investment A Risky Business? Hampton Consulting Ltd. jtucker@hamptonconsulting.co.uk

  2. Experience – Before MBA (03-04) • 13 years in mobile telecoms & IT • Co-founder / CEO of CopperEye • High performance indexing for databases • Raised c. £6M institutional funding • Catalyst: MIT’s Entrepreneurship competition • Prior to CopperEye: • I was a “corporate career person” • Stagnating in operational senior management • Overworked, under-challenged, under-rewarded Hampton Consulting Ltd. jtucker@hamptonconsulting.co.uk

  3. Experience – Post MBA • Co-founder / MD of Hampton Consulting • Advice to start-up technology companies • Consultancy to mobile telecoms companies • Co-founder / Non-exec director of Aquantra • Specialist Bath-based technology recruitment company • Self-funded (a little!) plus organic growth • Co-founder / CEO of Zenulta • Providing enterprise event correlation solutions • Delivered 2 rounds of funding • Co-founder / CEO of iRooms • Providing enhanced utilisation of space • Self-funded by founders – relationship with electronics manufacturer Hampton Consulting Ltd. jtucker@hamptonconsulting.co.uk

  4. Entrepreneurial Motivation • Reduced bureaucracy • Ability to take decisions • Speed to market • Share in the fruits of your labour • Unlimited upside potential. Downside potential? • Faster career progression • Less rigid role definitions Hampton Consulting Ltd. jtucker@hamptonconsulting.co.uk

  5. Recipe for Success? • Experienced team • Diverse skill sets • “Stand on the shoulders of giants” (I. Newton) • Find a unique angle on a business problem • Network like crazy • http://www.linkedin.com • Build strong reference customers Hampton Consulting Ltd. jtucker@hamptonconsulting.co.uk

  6. Funding a Business • Bank loans • Secured loan • Often matched by personal investment • High personal risk • Venture Capital (& angel) investment • Can provide “value added” operational skills • Low personal risk Hampton Consulting Ltd. jtucker@hamptonconsulting.co.uk

  7. Why is Venture Capital the Lower Risk Route? • No personal financial risk • Just warranties & disclosures • Job security in large companies? Yeah right!! • Funding gives run of at least 1 year • Follow on funding • Longer notice periods (6 months) • Saleable commercial experience Hampton Consulting Ltd. jtucker@hamptonconsulting.co.uk

  8. How do you get VC Funding? (1) • Find a good idea – a solution to a problem • Network with individuals in different vertical markets • “Know your onions” • Exit value £60M -> £300M • Do market research • Know your competitors • Build a business plan Hampton Consulting Ltd. jtucker@hamptonconsulting.co.uk

  9. How do you get VC Funding? (2) • Draw up a shortlist of VCs who invest in your marketplace • http://www.bvca.co.uk • “Value added” investment, or “dumb money”? • Try to get personal introductions / referrals • Choose your professional advisors carefully Hampton Consulting Ltd. jtucker@hamptonconsulting.co.uk

  10. MBA Summer Project • “Leveraging the VC Relationship – The Entrepreneurs’ Perspective” • Interviewed 6 entrepreneurs in areas of: • Relationship with VCs • Legal & commercial terms used in investment agreements • Board balance & composition • Control within the relationship Hampton Consulting Ltd. jtucker@hamptonconsulting.co.uk

  11. Earlier Research • Relationship between entrepreneur & VC • MUST be balanced & cooperative for a company to be successful • If an entrepreneur loses influence due to poor performance or greedy investors, the company will fail Hampton Consulting Ltd. jtucker@hamptonconsulting.co.uk

  12. Project Findings (1) • Entrepreneurs have most influence at first funding round • Negotiate then “play the long game” • Board structure has no effect on entrepreneur’s influence within relationship • Founder mentoring is a good idea Hampton Consulting Ltd. jtucker@hamptonconsulting.co.uk

  13. Project Findings (2) • Choose a VC with entrepreneurial experience if this is your first company • Fairer terms • Fairer terms promote trust and cooperative behaviour • Greater chance of success Hampton Consulting Ltd. jtucker@hamptonconsulting.co.uk

  14. Project Findings (3) • Entrepreneurs should raise more capital than they think they need • Maintain influence by recognising “domain expertise” Hampton Consulting Ltd. jtucker@hamptonconsulting.co.uk

  15. What’s next for me? • Developing my current businesses • Helping others grow theirs • Advisor capacity on strategy & investment • Conducting venture capital “due diligence” Hampton Consulting Ltd. jtucker@hamptonconsulting.co.uk

  16. QUESTIONS Hampton Consulting Ltd. jtucker@hamptonconsulting.co.uk

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