A little later than we anticipated (sorry folks), the final part in our “London’s top VC’s” series. A few weeks ago we decided to research 5 different sized VC’s, with different areas of expertise, contrasting investment targets and sizes, and different kinds of internal cultures and investment strategies.
The results have been well received by the VCs themselves, founders, angels and many more casual readers from a range of different industries and backgrounds. feel free to leave your comments below!
Our final instalment looks at Charlotte street capital, a small, hardworking and highly effective team of tech, IT and finance experts that work closely with founders and are steadily building up a portfolio with a lot of potential to deliver stellar returns if the tech industry in the UK continues on its upward trajectory.
Charlotte Street Capital are a VC team made up of just 3 Angel investors, but this does not noticeably appear to hold them back.
Their website reveals that since the company began in 2010 the firm has made at least 4 investments in every year since, into incubator and accelerator programs such as Entrepreneur First and Seedcamp, Mexican Restaurant chain Chilango, founded by 2 ex Skype employees, creative marketplace CultureLabel.com, and cloud hosting provider Cluster HQ.
All 3 partners specialise in co-founding new businesses and investing in start-ups that can demonstrate market validation, as well as acquiring later stage businesses and carrying out advisory work.
Charlotte Street’s mantra is “people matter more than money”. The firm believe that there is funding available for early stage businesses, but that many funds are too large for the interests of investors to be aligned with the start-up. “Success is clustering around talent and hard work”, says their website, which also emphasises the importance of investing early to take advantage of the momentous impact that developing technology is having on the world around us, and the growing digital economy.
Bo Pedersen’s career began at Visio, then Microsoft and later Webgain in account management roles, before he joined DataDirect, where he rose to the position of Director of Marketing Planning and Programs. Since becoming a partner at Charlotte Street Pedersen has made numerous investments, become a mentor at Seedcamp, Chief Revenue Officer at Mojn Ltd and a board member at Likely ltd.
Anton Wellenreiter was an ex JP Morgan Chase banker and Director at Barclays Private Equity before he founded Redpoint Capital in Dec 2011 shortly after founding Charlotte Street Capital in June 2011. A graduate of Cambridge University, Wellenreiter has more than 20 years experience as an investor, having backed financial news site TheStreet.com, Gaucho Grill, Dial-a-phone, luggage retailer Antler and Go-Fly amongst many others. His expertise lies in originating and structuring private equity and growth capital investments, and helping businesses to grow in value. He specialises in the consumer products, retail and travel sectors.
Thomas Jones spent the best part of 17 years building the company he founded, Smarts, a market surveillance platform for brokers and stock exchanges, into a 150 strong enterprise which was sold to NASDAQ in 2010. Since then he has made more than 15 investments either through Charlotte Street or independently as an angel. He specialises in software, FinTech and mobile companies. Investments include Tedbets, Cluster HQ and social analytics platform GoSquared.
It would be simplistic to say that Charlotte Street Capital are experts at creating a culture of success; if it were as simple as that everybody would be doing it. The team believe that “there is little value in an idea alone”, but that with the right blend of talent and passion, companies can raise money quickly and scale fast. The firm offers to help its clients in 3 ways: by offering investment, or advice where the team have the appropriate skillset, and also through the acquisition of small businesses as part of a wider investment syndicate. They promise to listen, understand, and try to help where they can. That might sound trite coming from a more traditional VC, but where Charlotte Street is concerned, its a genuine promise that will deliver results.
Charlotte Street’s blog provides more insight into the rationale behind some of the investments the firm has made; the “always on” consumer leaving digital fingerprints wherever they go, news that the average Briton spends more time using digital devices than they do sleeping, and profiles of recent investments such as property rental site SpotaHome and Kidslox, a parental control app that allows users to lock other iOS devices.
Charlotte Street Capital have consistently made investments, beginning with Seedcamp, now one of Europe’s oldest and best regarded accelerators, GoSquared, Ondevice Research and Avigilon in 2010, and then into amongst others, Last Second Tickets in 2011, sold to AIM listed Monetise in 2014 for an undisclosed fee which returned a healthy multiple to investors, Cluster HQ in 2012, a Bristol based business who raised in total a £600k round before Charlotte Street topped up its holding in in 2014, Entrepreneur First in 2013, the graduate start-up incubator which is attracting to talent to rival that of top professional services companies and consultancies, and 2014 saw the firm make 6 investments, Snaptrip, Kidslox, Visscore, Transact, Mojn and Create Intelligence.
The firm have stuck rigidly to their investment principles as well as working closely alongside many of their portfolio companies; for example, Bo Pedersen spent a large part of 2014 acting as a sales agent for Mojn, a Danish business providing targeted email solutions for advertisers and publishers.
If anything Charlotte Street Capital is becoming larger and more expansive, and, depending on how much more work the founders can take on before the strain of handling too many investments with such a small team begins to show, there are plenty more investable opportunities out there that would be a good fit for their investing profile. The founders have chosen not to operate a fund but to rely on a network of friends and contacts to source investment opportunities, acting more like co-founders than fund managers.
It will be interesting to see if Charlotte Street Capital formalise their investment approach by launching a fund, or whether they stick to the format of being entrepreneurs who are prepared to invest. A lot of the bets that they have placed show a great deal of faith in technology, the importance of user experience, and their own ability to spot talent, join the team or board, and deliver tangible results or improvements that can improve a company’s chances of success.
The team certainly have the track record and presumably the funds to continue to operate in this way; its possible one of their portfolio might scale far more quickly than the others, demand more attention, start to dominate its marketplace and achieve a stupendous valuation or exit to a major player; after all, something similar happened to Jones’ start-up Smarts, which was purchased by Nasdaq.
The difficulties and risks associated with both venture capital and early stage tech start-ups means that inevitably there will be many companies and investments that fail. The hope is that some investments will be successful and, if a “unicorn” company is created then the rewards for the early backers are almost unparallelled, certainly financially, by almost any other industry. Charlotte street are an observant bunch who seem to have their fingers on the pulse, plus a wealth of experience in sales, marketing, product development and tech that means they and the teams they invest into could really make something special happen.