The Stage: Invest With The Best
The Stage: Invest With The Best
We are partnering with the Stage so that angels can co-invest in selected companies alongside top VC's
Hi folks, Patrick Ryan here from Odin. We make it easy for people to invest together in startups and funds, with Special Purpose Vehicles (SPVs)
We are delighted to be partnering with the Stage so that angels can co-invest in the top 5 companies from each Demo Day they run, alongside leading global VCs.
Fundraising is a tedious process. You traipse from office to office, from one Zoom call to another. You answer the same questions over and over. You also don’t know if you’re going to vibe with the investors or want them on your cap table until you meet them, so you waste a lot of time that could be spent building your company.
Demo Days are great; the investors come to you, and the most enthusiastic ones get in touch after your pitch.
In the UK, nobody is doing a better job of Demo Days than the Stage, who run a “Demo Day without the accelerator” every few months for a select group of companies from pre-seed to Series A.
Over 100 funds now attend each event, and the team whittle down over 1,500 applicant companies per event to 15, who pitch to these investors.
Winning companies have received backing from top European and US funds -including Lightspeed, Google Ventures, 20VC, Kindred, Octopus, MMC, Concept Ventures, APX, Ascension and Jamjar investments - as well as angel investors like Tom Blomfield (cofounder of Monzo) and William Shu (founder of Deliveroo).
Previous winners include Mojo, Bonnet and Scan.com.
Here’s an interview with the Stage’s founders, Taos and Hector. Let’s find out what makes them tick.
Tell us about yourselves.
Hector: Brought up in the middle of nowhere in the UK, I always planned to be an entrepreneur. That’s how my career started, but I’ve now been hooked by VC and have discovered there’s a huge opportunity to build product within the venture space.
After I sold an IT consultancy to an established competitor, I did a stint in innovation consultancy. I’m now a Partner at Episode 1 Ventures, a London-based Seed and Pre-Seed VC fund that backs B2B software startups.
I love my day-to-day. Most of my time is spent speaking to extraordinary people, mostly entrepreneurs, and I scratch my entrepreneurial itch by co-running The Stage and co-hosting Riding Unicorns, a podcast about growth startups with guests including the founders of Cazoo, Zoopla, Babylon Health, Bloom & Wild and Many Pets (was Bought By Many) as well as investors from Sequoia, Lightspeed and Target Global.
Taos: UK-born and bred, although I did spend a few years in Aus and NZ when I was very young. Growing up, I saw myself as a suit in a corporate, but was immediately bored senseless when I tried that. I have a lot of ideas, and I couldn’t stand the intellectual confines of a corporate. I found my way into private equity, before moving into VC a few years back. I’ve worked at a couple of consumer VC funds (currently Principal at dmg ventures), and a logistics startup in between, which IPO’ed at the start of 2021.
Now, I can’t see myself ever wanting to do anything other than VC. I love meeting, and working with, incredible entrepreneurs and operators every day. I also enjoy trying to get my head around new business models and working to make the startup / VC ecosystem better.
The Stage has become a bit of a household name in the UK venture scene. How did it get started? What experiences led you to set it up?
The initial insight was that startup fundraising is inaccessible (i.e. you often need ‘warm intros’) and inefficient (i.e. you have to find and approach every potential investor one-by-one). That insight holds true today.
We started with an office hours type model, but with 6 funds rather than 1. We then quickly redesigned it. We built a platform where the startups could reach hundreds of leading VCs and angel investors in one go, through quick-fire pitches. We figured this would be far more scaleable and have a greater network effect for founders.
It’s essentially an accelerator demo day on steroids, but without the accelerator element! Although they have a place in the market, accelerators are often a tick-box exercise and time-consumptive for founders.
This model has proved wildly popular. We have >1.5k applicants per demo day, >100 funds which help us run demo day and >1.5k attendees!
You’re now moving beyond doing seed stage deals - what’s next?
That’s right, our Nov 2022 demo day will feature Series A companies for the first time! We work with every reputable seed VC in the UK. Our thinking was that if these funds are referring their best portfolio companies to The Stage, every great Series A company will come to us! The thesis seems to be working out so far, with some awesome Series A companies due to pitch at demo day. Long may it continue!
What’s your long term vision?
Ultimately, we see The Stage becoming the first port of call for all founders when looking to raise at Pre-seed to Series A. We provide the mouthpiece for them to engage every VC and angel they want to speak with, plus we, and The Stage’s attendees, can contribute to the rounds.
Today, all of the notable VCs and angel investors in the UK work with us or attend demo day. More and more investors from across Europe are joining our number as well. In the long term, we see every reputable VC and angel investor in the world interacting with The Stage in some shape or form.
Do you think more founders will raise money this way in future?
We wouldn’t be doing it if we didn’t!
A cliche it may be, but early stage fundraising is broken. For an industry that vaunts the importance of innovation, the way it operates is desperately antiquated.
Through The Stage, we’re trying to make startup fundraising infinitely fairer and more efficient.
And it’s working, although there is much more to do! 60% of the finalists for the November 2022 demo day have an underrepresented founder, which is far, far higher than the industry average. The startups that pitch also go on to raise from world-leading VCs and angel investors, so hopefully we are helping to redress the balance on these things.
Tell us about some of the companies you guys have supported via your syndicate so far - who are they, what do you like about them?
We only started setting up SPVs for some of our finalists 12 months ago.
To take one example, one of our first SPVs was into a company called Bonnet, an aggregation platform for EV charging points. We came in just before Bonnet closed a major seed round, following demo day, led by Ligthspeed (a tier 1 US fund). Bonnet is probably one of the fastest-growing startups in Europe right now, and is looking to raise a major Series A in the first half of 2023.
We’re very happy to report that all our other 4 SPVs are also performing strongly.
Are there any specific investment verticals or themes that excite you at the moment? Why?
In our day jobs, Hector is a B2B investor and Taos is a B2C investor. So, we’ll break out our responses here.
Hector: I like any startup that has the potential to become huge and is founded by people who I think have what it takes to run a category defining business. If you really forced me to pick a vertical, I like saas-enabled marketplaces.
Taos: anything too techy goes over my head (that’s why I have a co-founder like Hector). As a consumer investor, one thing I’m particularly excited by is startups aimed at over 50s, who hold the vast majority of wealth, but are so often neglected by the startup community. I’m also interested to see how ‘Web3’ technologies can benefit mainstream consumers, although I have minimal interest in the tech itself.
For your syndicate, how do you assess companies? What’s your framework?
As we’re VCs in our day jobs, we apply a VC investing lens when assessing companies for SPVs.
We pay close attention to the quality of the founder and wider team. We also dig into the problem being solved, the size of that problem and whether the business actually makes sense financially. For us, this is more about delving into the unit economics (particularly for B2C startups) as P&L forecasts will always be way off the mark at Pre-seed to Series A.
We also do the unglamorous bits of due diligence, such as looking at legal and compliance factors, as we do in our day jobs. As one of us is a B2B specialist and the other B2C, we divvy up due diligence between us.
Finally, one very interesting element to our analysis is that we have a huge amount of data on the amount of interest a startup gets from our >100 VC partners and 1.5k attendees. This data plays a key role in our decision-making process.
You can now apply to join the Stage’s syndicate and invest in the winning companies from the current batch alongside top VC’s.
Quickfire Q&A
A concept worth understanding:
‘What do you mean?’ It sounds trite but being able to articulate something in plain English is an acid test of understanding. If a startup founder, or anyone else, is firing jargon and vacuous statements at you left, right and centre, don’t be afraid to pick them up on it.
An opinion you once held that you’ve changed your mind on:
The UK government is run by people with a basic level of competence.
A phrase worth knowing:
“The beauty of diversification is it's about as close as you can get to a free lunch in investing.” Barry Ritholtz
Best of the Internet
Small Teams = Great Things
Efficient capitalists don’t hire thousands of people to build unicorns. Original site here.
Buying Opporunities?
Where are your bets in the NASDAQ rout? There are surely some big future earners amongst the below.
$8
Some takes I enjoyed regarding Elon’s plans for Twitter. It will be interesting to see how this all unfolds. I personally believe that the probability of a competitor taking market share is pretty low.
You’ve been doing it all wrong
Take care of yourselves out there.
PR
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.
Join Odin Limited is an appointed representative of Aldgate Advisors Limited, which is authorised and regulated by the Financial Conduct Authority (No. 763187).