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Investor interview: Praeseed is 'diligence-first' pre-seed

Praetura Ventures' Jess Jackson is keen you know this isn't an accelerator

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Every few months, we break from our menu of early-stage startup profiles to bring you something from the other side, as we talk to an investor.

Today we meet Jess Jackson, who is leading a new first-cheque programme for startups at Praetura Ventures. The ‘Praeseed’ programme also cannily acts as decent bit of marketing and dealflow pipeline creation. Read all about it below.

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– Martin

This issue of PreSeed Now is brought to you by EHE Ventures.

Known for backing high-growth tech, EHE just announced they're building a £15m AI tech fund, and have finalised their core Fund Advisory team. The fund itself seeks to support and accelerate the growth of AI technologies, empowering the brightest minds in tech at pre-seed, seed and Series A.

Learn more about their mission and the fund here

Praetura Ventures’ Jess Jackson on going ‘diligence-first’ at pre-seed

Jess Jackson, investment manager at Praetura Ventures

“You should sue!” That’s what a couple of people joked to me when they saw Praetura Ventures had launched the adventurously-spelled ‘Praeseed’ (pronounced ‘pre-seed’) programme.

It was at that point I realised that a lot of people think PreSeed Now is just called ‘PreSeed’, for some reason.

Anyway, rather than embark on futile legal action over a generic industry term, I thought instead I’d talk to Praetura Ventures investment manager Jess Jackson about her career so far and find out what the programme is all about.

This is a very ‘Northern’ conversation, so it might be illuminating to readers beyond the North of England about how things are in that part of the country.

Who is Jess Jackson?

Manchester-based Jackson says she has “done her career in reverse”, because she began with an acquisition and has worked back to the early-stage world.

Starting out at digital health company Ascribe, she was working closely with with the leadership team as it was acquired for £57.5 million.

This experience sparked an interest in how companies are constructed and grown, which was further developed when she worked to help a high-net-worth individual to support his portfolio of angel investments.

Moving onto a three-and-a-half year stint at social enterprise The Growth Company, she worked on pre-seed and seed investments using local authority capital from Greater Manchester Combined Authority.

Keen to move on to a role somewhere with more capital to deploy, she joined Praetura Ventures as an investment manager in 2022, and now leads the VC firm’s Praeseed programme, which is part of its work managing the North West part of the Northern Powerhouse Investment Fund (NPIF).


This interview has been lightly edited for clarity. Ben Davies, who heads up marketing for Praetura Ventures, was also present and makes a couple of appearances in the conversation, too…

MB: So what is Praeseed?

JJ: We think it's the first cohort investment programme in the North. We certainly haven't come across anything like this before, where it's diligence-first.

We're not interested in rebuilding an accelerator. There are so many great ones out there that we support and partner with. We wanted to see how could we deploy capital in the pre-seed space at scale in a way that makes economic sense.

It's expensive to deploy £200k tickets, because you're still doing a lot of work and you might as well write half a million, and that's kind of what everyone's been doing so far.

So we wanted to find a way that we could back, at scale, a bunch of companies that were incredibly exciting, but were pre-revenue and could benefit from the kind of support that we could offer at Praetura as part of our ‘more than money’ approach.

So what we've built is a capital-first programme, and we've got £1.4 million to invest each year for five concurrent years. We're going to do a cohort of 10 companies each year and we'll invest in between five and seven of them.

So there's no guarantee that because you've been offered a place on the programme that you're going to get investment, you still need to engage with our sessions. This is ‘diligence-first’.

We've designed a programme running every Monday for six weeks, across three pillars: Assess, Invest, Support. We'll be doing ‘inspire’ talks, ‘educate’ sessions, and then mentoring, so they’ll be quite intense days.

Everyone's going to be leaving quite tired, but we really want to show them what best-practice thinking looks like, how they should be thinking about their business in a way that they might not done before. They might be tasked with going away and producing a go-to-market plan, or some ideal customer profiles, or a financial model, for example.

Throughout the whole of the six weeks, they're going to be producing a mini investment strategy. We want to back businesses that will grow and have got ambitions to grow.

They're going to go away and produce all of these things and that will then form an investment pack. We will be going to our committee in September and putting forward the strongest out of the cohort that we want to invest in.

MB: What kinds of startups can best benefit from this?

JJ: We are open across sectors, as per the NPIF criteria, from consumer to advanced materials. We're open to lots of different business models aside from tech, but I think critically, the ingredients will be the same.

They need to obviously want to be want to grow. We want to build a portfolio that will ultimately then go on to receive more investment from us. So this is about a follow-on pipeline.

We really want growing sectors, whatever that looks like. Sell that to us. Tell us why your sector’s exciting. Tell us how you’re going to stand out from the competition and why we should work with you.

And that can be a multitude of things. It could be the fact that a founder has got X years’ experience in their sector role. Though that's not absolutely necessary and nor does it automatically a great founder make.

But if you've got that sector experience either in a direct or adjacent sector, that's often a good sign. Have you built a good team around you that mitigates for you not having the tech skills, for example?

We're really open to any and all types of founders coming to us, but we'd really like to see well-developed, or ideally complete, MVPs. And we are seeing that coming through in the applications.

BD: It’s still a £200,000 equity investment at the end of the day. In the grand scheme of things, that's not a lot of money. But also, when you're at this end of the market, it also is also quite a lot of money.

From our point of view, we have tried to take an active position in the north and look at where the gaps are in the ecosystem. We designed this predominantly because we understood that there was a real gap in early-stage risk capital to help startups towards a Seed or Series A round… We know that ‘education plus money with a route to follow-on’ is something that we could do with more of.

Praeseed’s web page on the Praetura Ventures homepage

MB: Praeseed is focused on companies based in the North of England, but how important is location to startups in these days of remote teams and distributed working?

JJ: In terms of this programme, it’s about a ‘material presence’ in the North of England. We want the businesses that are based here, meaning they've got offices here and they’re hiring local people.

There's nothing wrong with businesses going to raise from London, it's a ‘necessary evil’ you might say - you've just got to do it. If you're raising money and you've spoken to everyone on your doorstep and got interest but you still need co-investment or even a lead ticket, then you've got to go where the money is.

And I don't think anyone begrudges a founder for doing that. But our own research showed us that 63% of founders want local funders because they want people who understand them, who might get their businesses in a way that maybe someone in London and the South East doesn't.

Businesses are shaped differently here. We've got different challenges, like less inherent access to wealth, and things like that.

BD: Let's not get into the usual tropes, but I think the North is a really exciting place to start a company now. We're big enough to be globally ambitious, but small enough that everyone's still cheering each other on, which is quite a nice environment to be in.

As we grow, we do need to perhaps not London-bash quite as much, because no one cares.

You can grow a globally meaningful company from the North of England now, which is quite exciting, because probably a decade or two ago, you might not feel quite as confident in making that statement.

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MB: People like to say ‘Oh, yes, this city is great for fintech. This city is great for cybersecurity’, or whatever. Do you think there needs to be those kind of pegs for particular locations? Or does it not really matter anymore?

I'm in two minds about it, especially if we look at how location is less important than it used to be. Can’t you just build pretty much any kind of business anywhere?

JJ: I think you absolutely can build any kind of business anywhere. But it’s important to have clusters too. Startups can get support that’s tailored to them. And the people running those programmes can bring in investors who are actually interested in that sector.

I don't think it means that if you're a cybersecurity business in Cumbria you shouldn't exist because the cybersecurity cluster’s in Manchester or wherever. I just think if you're lucky enough to be close to it, then why shouldn't you take advantage of what it can offer you?

MB: Finally, working in the tech investment world isn’t for everyone. What excites you about it?

JJ: What I really like the most is when you meet a good founding team and you get to see that spark in someone that they've got a passion for an idea and that it that it could grow, especially at the pre-seed stage because it's all hypothetical.

You can meet that one business and you’re kind of ‘wow, actually, there's a huge amount of potential in this space’. And you get talking about all of these things need to be solved in terms of ‘how are you going to build the tech?’ ‘How are you going to build a sales strategy?’ Or ‘how do you actually scale this?’

But I just love that potential and that spark of excitement that you get. It's exciting to go and find those really good ideas and be able to back them, which is something that traditionally is just really, really hard to do.


The deadline for applications for this year's Praeseed cohort has been extended to 3 June 2024.


Like this interview? Check out our other investor interviews with Andrew J Scott of 7percent Ventures and Katharine Spooner of Speedinvest.

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