The seed phase: the event puts startups ahead of the best investors
Have you ever thought about pitching your business to a group of experienced investors, like Dragons Den? Or maybe you are a budding angel investor who wants to invest some money in the next Revolut or Monzo.
The Seed Stage is an opportunity for small start-ups to present themselves to some of the best venture capital funds in Europe in just five minutes.
Taos Grisdale and Hector Mason kicked off an investment event just before the first foreclosure in March 2020.
Their plan was to change the way startups get funding by bringing both parties together in one place, and they billed it as “Dragons Den on a larger scale”.
“Dragons Den on a larger scale”: The Seed Stage investment forum gives startups the opportunity to apply to the best European venture capital funds, as well as to daily investors
Seventy leading venture capital firms support The Seed Stage and attend pitch events.
“The industry is highly fragmented and characterized by information and communication silos, which means startups and investors spend a tremendous amount of time trying to find each other, let alone promoting and securing investments. Explains Grisdale.
“This archaic approach prevents founders from growing their business, which is a losing streak for founders and investors.”
The world of VC has long been criticized for being too closed a circle with limited diversity.
In Europe, around 91% of venture capital went to startups with all-male founding teams last year, according to a 2020 report from Atomico.
This has led to the creation of a number of networking events, and some venture capital funds like Ada Ventures have explicitly committed to investing in overlooked founders.
However, problems remain at the pre-seed and start-up stage, especially for founders who do not have an exceptional contact book.
Grisdale and Mason know these issues well, having worked in the venture capital world for several years.
Grisdale works at DMG Ventures, the venture capital arm of the Daily Mail which has invested in companies like Cazoo and Zoopla. Prior to that, he worked at investor True Capital, and he also had a brief stint at a startup.
Hector Mason started two companies before joining Episode One Ventures venture capital fund
Mason knew very early on the difficulties encountered by startups, having launched two companies before joining the venture capital fund Episode 1 Ventures.
There is clearly a demand for the platform provided by Seed Stage, as there have been 1,000 applications from startups to each of its three events.
Interested companies have until September 20 to apply for a chance to pitch at the next event on October 21.
Founders are encouraged to provide information about their business, including the industry in which they operate, the income they have made, and the amount they are looking to raise.
Venture capital funds help reduce the number of applications from around 1,000 to 15, and those startups are then invited to apply on demo day in October.
“It’s a tough application process, with a lot of amazing startups not having the chance to pitch,” says Grisdale.
However, even those who don’t pitch that day will still make themselves known to the top 70 VCs that back The Seed Stage.
“There have already been several cases where companies not shortlisted for the pitch day have nevertheless received investments from one or more of the 70 funds.”
For Michael Dunnett Stone, who started his Feasty business this year, that changed everything.
He showcased his business, which helps social media leaders grow and monetize their businesses, at an event earlier this year and has since received funding.
“It changed everything. It was just me in my room with a laptop and now I’ve hired a crew, ”he says. “We are recruiting a team of three or four developers, I have an office. It’s a good deal now.
Everyday Investors Can Invest in the Next Big Thing
The October event will take place virtually and follow a similar pattern to the previous events of The Seed Stage.
This time, however, ordinary investors will be able to invest small amounts in businesses they see on the right track via a special vehicle.
An SPV is generally structured like an LLC and can be used as a financing structure, where all the investors are brought together into a single entity.
Taos Grisdale started The Seed Stage while working for a startup
Investing at an early stage in promising companies is still relatively rare, outside of crowdfunding platforms.
“Crowdcube and Seedrs have done a good job opening up access to private market investments, but the problem is that there is still some stigma attached to these types of platforms in the eyes of VCs,” Mason says.
“They tend to attract second- or third-tier private companies because it’s easier for the top companies to go talk to a few VCs and they can raise funds relatively easily.
“Our mission is not to kill crowdfunding… The deals that reach Crowcube and Seedrs are never reviewed by VCs or angel investors. They are subject to rudimentary regulatory controls.
By investing through the seed stage, sophisticated investors or high net worth individuals will gain access to leading companies that have obtained the seal approval of major venture capital funds.
Participants interested in investing will need to register with the Odin investment platform which manages the necessary regulatory processes. The minimum investment is £ 1,000.
- Startups can apply for the pitch here
- Individuals can register to participate here
Essential for small businesses
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