A New Concept
An interview with Concept Ventures, who just launched their £50m pre-seed fund
Hi folks, Patrick Ryan here from Odin. We make it easy to invest together in startups and funds, with Special Purpose Vehicles (SPVs)
In the ~12 months since Odin launched, we’ve worked with over 60 angel syndicates and emerging fund managers in the UK, France, Germany, Singapore, USA, Australia, Finland, Denmark, Estonia and many more countries.
It’s always exciting to see the businesses we work with grow and evolve.
Today I’m featuring Reece and Oliver, from Concept Ventures. Concept (previously RLC) have been a loyal Odin customer since we started. They recently launched their first institutional fund (£50m), focused exclusively on pre-seed companies in the UK reshaping how we work, play and learn.
Reece (founding partner) has spent the last 10 years building and investing in pre-seed stage business across the UK and Europe. Oliver (principal) leads on their Games, Entertainment and Web3 verticals - with a focus on marketplaces and the post-investment support network.
It’s great to see an institutional fund going truly early, backing teams based on nothing but a pitch deck. This is still not that common in the UK.
Let’s see what makes them tick.
You can also apply to join their syndicate and invest alongside the Concept team via Odin.
What experiences led you to set up RLC and how did that evolve into Concept?
Reece: We started investing solely at pre-seed back in 2018, and set up our first fund, backed by private individuals, as outsiders to VC.
Our experience from the get-go was that VC at pre-seed sucked! Funds weren’t transparent, their investment processes weren’t clear, and they weren’t built to invest at pre-seed in the first place. They all left founders constantly in the dark.
That actually hasn’t changed much over the past half-decade. Herd mentality is still far too common, how VCs work is still opaque and there are too many tourists at pre-seed doing optionality investments.
That’s why we decided to build the UK’s largest dedicated pre-seed fund, with £50m solely focused on supporting your first 12-18 months, from pre-seed to seed.
We know this end of the market well. We’ve invested in 100+ founders, supported some in going from pre-seed to exit (e.g. Cliff.ai), and our wider team have been core to building the likes of Uber, Revolut, and Improbable. We’ve created a combined $2B in exited value in the process
As a fund we have a 71% graduation rate to Seed - so you’re ~2x more likely to raise your next round with Concept on your cap table. We don’t mess around with monthly support calls and we don’t tell founders how to run their company - we’re just committed to being hyper responsive to what you need (message on WhatsApp) and we bring in Concept’s function-specific partners where needed (e.g. to advise on go to market).
Tell us about some of your portfolio companies
Oliver: A lot of the portfolio is still very young. Some of the more notable companies at this stage are probably Reachdesk - B2B gifting marketplace (now backed by Highland Europe and Hubspot Ventures); Screenloop - Intelligence Hiring Platform (Stride.vc, AllIron Ventures); Condense - Live Events for the Metaverse (LocalGlobe, 7Percent); Playter - BNPL for Businesses (FinVC).
You focus on three verticals in your investment thesis - work, play and learn. Can you tell us a bit about this?
Reece: So we’re a generalist software fund at our core, investing in teams & people over specific solutions and theses. We are less ‘thematic’, but do segregate the team’s focus across how we ‘Work, Play and Learn’. It’s sometimes easier to explain what we don’t invest in - hardware & healthcare.
Oliver: Going forward we see crypto / Web3 sitting at the intersection of all our focus areas, as structural shifts across multiple industries open opportunities for superior business models & experiences, disrupting legacy players. More on that below.
Are there any underlying technological developments or themes that you are especially excited about?
Oliver: Concept is the only fund in the UK to focus on games at pre-seed. We are massively excited about how this multi-hundred billion $ market will evolve in the coming years. Platforms with huge portions of consumer attention-share are quickly adopting/experimenting with game content strategies (see Netflix & TikTok’s recent efforts), and despite the ‘covid bump’, it’s clear that mainstream attitudes to gaming are shifting. The UK has traditionally possessed a rich vein of games talent. The future is bright for this category across Mobile, PC, Console and next-gen platforms alike.
What becomes really interesting is when other technologies such as Web3 or AI intersect with this already gargantuan industry, unlocking completely new dynamics & business models for players and developers alike. Whether that’s rethinking what we conceive as toys - something our portfolio company Magicave are working on - or seamlessly bridging the physical & digital - eg. Condense - we’re just starting to see the possibilities here.
Want to invest alongside Concept Ventures? Apply Below:
How does focusing so early affect your deployment strategy? How many deals do you plan to do, and what % of capital is reserved for follow on vs. initial deployment?
Oliver: There aren’t many investors and firms out there who want to roll up their sleeves and meaningfully back founders at the very early stages of their journeys. And the ones that do so opportunistically, end up being severely misaligned with their founders as their fund strategies and make-ups are not optimised for pre-seed, leading to signalling risk on later rounds.
For Concept Fund I, we will be investing in 70 companies over the next 4 years, so around 17-18 a year. We can follow-on to Series-A, but our main focus is on the first 12-18 months of a company's lifecycle, ensuring they are set up for a successful Seed or Series-A. We are committed to roughly 60/40 initial: follow on ratios, writing first cheques of up to ~£750,000.
What do you look for in founders? How do you validate opportunities at such an early stage?
Reece: We have obviously been thinking deeply about this for as long as we’ve been active angels & VCs, about 7+ years now.
Above all else we look for founder-market fit (i.e. teams who have strongly felt the pain of the customers/users they look to serve) and are especially excited when we meet teams with complementing skills and characteristics, beyond just technical, commercial and operational.
We’ve also developed a few in-house tools to help understand some of the more desirable traits and dynamics between founding teams. Using our proprietary 6X Engine, we assign founders a score across the following traits: Self-Belief, Openness to Experience, Risk-Taking and Visionary.
Following that we compare how well suited they are to the role they will assume within the company, and how this compares and contrasts within the wider leadership team. This is built not only from a questionnaire (based on hundreds of founder data points we’ve collected) but also augmented using data from the team's interactions, as well as independent references.
Referencing is key, but nothing beats an in-person meeting. Both sides need to ensure there is a fit beyond just the ‘deal’ and that this is someone we could work side-by-side with for decades.
What are your top 3 insights from your previous experience about what makes a good venture investment?
Oliver: Maybe we give one or two each? Happy to start. The main thing I’ve learnt is how fast things can change, both for better and for worse. The best founders know this and keep pushing through even when the odds are stacked against them, keeping a cool head and an objective approach to problem solving.
Reece: Companies never end up where they think they’re going to end up. There are always three good pivots in a company's lifecycle. This means you really need to judge the team in-depth; that is often the only thing that remains constant.
Anything else you want to say?
We never underestimate how important Angels are in early rounds, and we’re always looking to have brilliant people involved who bring something unique to the (cap) table. If anyone wants to join our network, or for us to look at a deal you’re excited about, please don’t hesitate to get in touch! We can lead, co-lead or follow in rounds up to £2m GBP, and are specialists in the first 12-18 months of company life cycles.
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Going to start featuring more jobs in this newsletter. If you’re a founder and you want us to feature your jobs, hit me up.
Odin: engineering, product, content marketing, sales and partnerships.
Check out all roles here. Selfishly, I’m especially interested in finding someone who is a good writer (and preferably funny) to focus on content marketing & social. We’ll be doing much more on this front.
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Risk Warning
Investing in start-ups and early stage businesses involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. Odin is targeted exclusively at investors who are sufficiently sophisticated to understand these risks and make their own investment decisions. You will only be able to invest via Odin once you are registered as sufficiently sophisticated. This content is for informational purposes only and should not be considered investment advice.
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