I founded and ran a digital agency for seven years. In that time I helped launch around 300 businesses and watched as some did magnificently and others did, well nothing. As time went on I gained a feel for the projects that would do well and those that wouldn’t. It is hard to say the things that make the difference (another post maybe) but it is certainly a combination of the innovation, the market, the strategy and the team.
I have always been excited by the process of turning an idea into a commercial reality and my problem has always been more one of trying to do everything. When I sold MS Internet I started to think about what I could do as a next project and there were just too many possibilities, all of which were interesting but none that eclipsed the others. Then (probably with the assistance of Charles Tanqueray) I started to think about how brilliant a job being a VC must be. There’s the money, sure, but then that’s the lure of entrepreneurialism also. The thing that made being an investor great to me was not having to choose just one project to work on but many and to be able to be involved in a dozen successes instead of just one really floated my boat as it were.
I’m lucky to have made the acquaintance of some pretty extraordinary people and even luckier to call some of them my friends. I started talking about the idea of raising a VC fund and got a few other people excited and so ‘Bright Star Investment and Advisory‘ was born.
We have three partners and a number of advisors (all of whom make me feel very inexperienced). Our partners are myself, Nick Brown and Grant Slatter. Nick was IT Director at Sky and invented the ‘Red Button’ before taking two IPTV startups public. Grant had a stint as a Royal Marines Officer before going on to have a series of quite varied ventures gaining him an aggregate IRR of 86% (that’s a really good return on investment). For my part I have the digital agency experience so I bring technology and digital marketing to the table but I also have a scientific background so I was quite excited about looking at med-tech and clean-tech also.
I have done a whole lot of research into venture capital over the past year and I’m sure I will blog about things like vesting and preference shares but as a Midlander one thing that stood out to me was the amazing lack of early stage investors in the East and West Midlands. There are a few of the bigger, later stage investors but for early stage there are an amazing three funds propped up by the local angel network. To put this into perspective the BVCA cites there as being around 450 private equity funds in the UK. There are a number of subdivisions but three early stage funds in the East and West midlands combined is pretty pathetic.
I have to say that I am slightly baffled as to why there is not more of a balance with the size and innovation derived of Birmingham, Coventry, Warwick, Leicester, Nottingham and so on. However, to me this represents a huge opportunity for an ambitious new fund.
This brings me to why I think Bright Star would be worth investing in (subject to regulatory approval). Any VC’s primary job is to give a return to their investors. To do that there are four steps – 1) getting ‘deal-flow’, 2) choosing the right deals, 3) encouraging growth and 4) exit by acquisition or floatation. Our collective networks give us a strong advantage in deal-flow in the first place but we are deliberately engaging with Midlands companies and expect a certain amount of ‘low hanging fruit’ (we have a few good examples already). Next, we are an experienced bunch and this would help to inform our funding decisions on the basis of commercial experience rather than spreadsheets (although they do help!). This experience and that of our advisors gives our investees an advantage over their competition so their growth is easier and this leads to the crucial last step – nice big exits!
The last thing to say about Bright Star is that having collected together a bunch of extremely capable and experienced people it seemed silly to have everyone just sit on their hands. So, we decided to offer advisory services also. This is a pretty broad church ranging from consultancy, team-for-hire, software creation, marketing plans and obviously financial and fund-raising assistance.
N.B. Bright Star provides consultancy services only at this time.