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Why more VCs are looking beyond the Golden Triangle

Meet Speedinvest's Katharine Spooner, exploring the broader UK startup scene

Hello there,

Today we’re taking a break from our usual diet of super-early-stage B2B and deep tech startup profiles.

Instead, here’s our latest chat with an investor who looks out for the kinds of startups we cover here at PreSeed Now.

I’ve worked with the Speedinvest team in other roles outside of PreSeed Now, so it was pleasure to catch up with one of their UK team as they expand their reach across the UK.

– Martin

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Why Speedinvest’s Katharine Spooner is excited about startups beyond the Golden Triangle

A little over a decade ago, tech founder meetups in Manchester took place in a small, office meeting room, and attracted about 10 or 15 founders complaining that VCs from London never ventured north.

Fast forward to the Manchester of last month, where around 250 founders piled into the headquarters of A.I. unicorn Peak for the first FLIP MCR event, to hear from 11 investors on stage… some of whom had happily ventured up from London to explore a vibrant local startup scene.

How times change.

Among the VCs onstage was Katharine Spooner of Speedinvest.

Given Speedinvest’s long history of investing with startups from across Europe, I thought it was worth checking in with Spooner to find out why more VCs are beginning to look beyond the traditional ‘golden triangle’ of London, Oxford, and Cambridge to find high-potential UK startups.

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Who is Katharine Spooner?

Spooner began her career with Boston Consulting Group, where she developed an interest in private equity deals.

This led her into the VC world, first with Sprints before joining Speedinvest last year.

Vienna-based Speedinvest was founded by Oliver Holle in 2011 and invests across Europe.

She is part of the firm’s Marketplace and Consumer team in London, exploring opportunities for deals anywhere from pre-seed to Series B+.

Beyond marketplace and consumer startups, Speedinvest has other specialist teams backing companies in deep tech, fintech, health and techbio (not a typo!), climate tech, industrial tech, SaaS and infrastructure.

Given most companies we’ve profiled at PreSeed Now fall into one of those buckets, it’s worth finding out more about what makes Spooner, and Speedinvest, tick.

MB: Tell us about what what Speedinvest is looking for at the moment, and what you in particular are looking for.

KS: Speedinvest has six sector-focused teams…. The idea of this is that if you are really focused on one particular sector, you bring a degree of domain expertise, so you can hopefully help founders a little bit more if you've seen many more marketplaces then someone who might not have.

And it also means that you have a little bit more of a sense of what's going on within Europe, within the UK, if you're so sector focused.

What are we looking for within Marketplace and Consumer? If it's a marketplace, it could be early signs or potential to have network effects. This is something that the venture partners spend a lot of time talking about - what network effects look like in pre-seed and seed stage companies.

And if it's within consumer, we really love companies that are fundamentally disruptive. I know that seems like a very nebulous term, but that is shown by a couple things. Does it have a strong product-market fit? Is it a service or product that you use and fundamentally changes your life; will it occupy part of your wallet as a consumer?

So we really try to apply that lens to the companies that we look at.

MB: I think it's fair to say that traditionally, most venture capital in the UK, and around Europe when looking at the UK, has focused on London and the Southeast.

But I saw you at an event in Manchester a few weeks ago. Are you starting to look further afield? And what's your sense of the opportunities across the UK as things stand?

KS: What is probably one of the most exciting things about looking at the UK right now is the effect of innovation and growth outside of the Golden Triangle of Oxford, Cambridge and London.

There are incredible tech centres in Bristol, Manchester, Birmingham and Liverpool, and so many companies that are being built, getting funding, and growing quickly in these other cities.

For such a long time, London has been leading the charge. And certainly they have been incredible, and continue to be incredible companies, coming out of London.

That's excellent, I’m not knocking that at all. But equally, there is something to be said about the talent and the ideas and the scope of great companies that are coming out of other tech hubs.

And the event that we were at was such a testament to that; absolutely packed room, loads of ideas - not just on the panels, but in the one-on-one conversations before and after.

And I left that event feeling so excited by it and the drive and the spirit to keep on building when other people were working on was was really clear to me and super exciting.

MB: What are some of the areas of the UK you're looking at? And are there any strengths outside the Golden Triangle that seem clearly stronger in the North, or anywhere else in the UK?

KS: What's really interesting about a lot of these smaller but really quickly growing tech hubs like Liverpool, Bristol, Birmingham, and Manchester, is oftentimes they foster a particular sector.

That might be because as there’s an incubator coming out of the region, or founders might attract other founders to move within a sector. So for example, Bristol has really strong biotech.

And outside of the actual cities. I think you're also increasingly getting people who have benefited from remote work in Covid. I spoke to a couple of founders who were based in Norfolk a few weeks ago, working entirely remotely on their business and meeting up once every couple of weeks in person.

One of the silver linings of remote work is that it allows for innovation to continue from a geographical distance. And to me, that's really exciting because it ultimately means there isn’t a reliance on cities to be the only places that are fostering startups.

There have been a few other companies as well, including two I spoke to recently in Wiltshire and Dorset that are building marketplaces.

These conversations make it really exciting because when you speak to a UK founder, front and centre of your mind is ‘are you based in East London right now or in South London? Where about the city are you based?’

That is something that has gradually being debunked, which I think is really good.

MB: It used to be that investors would only invest in companies that were based near to them so they could keep an eye on them. Even if they were in another city, all of them had to be in an office.

It's nice to see see the opportunities of distributed teams being more widely embraced by VC.

KS: I agree so fully with that. I also think that if you are in a remote working setup, there's a degree of trust. I actually think that helps foster really positive cultures long-term, if you just know that a colleague or a co-founder will do what they say [without you seeing them do it].

And I also think it lets people, especially founders, optimise their lives in a much better way so that people can make time with remote work for things that are really important to them, whether it's being able to get to the gym everyday, or being at home with your kids or whatever it is.

Given just how tough building a startup is, to be able to have a degree of control in at least how and where you spend your hours is really significant. So I'm a big advocate for it.

MB: For fundraising founders, the theme of 2023 was dealing with a drought in investment activity. What should early stage startups be thinking about as they look to fundraise and grow in 2024?

First and foremost, when the startup goes out to raise, it's super-important for them to have an idea of who they want to raise from.

I know that sounds kind of obvious and simplistic, but the reality is when you’re raising venture capital funding, investors can be so different in terms of the value that they might bring, to what extent that they’re hands on versus hands off, and I think it's really a matter of intrinsic preference from the founder.

There’s a very old adage where people say, investing is a little bit like marrying someone. You've set up this potential to work so closely with them, you might have a board seat, and you're there with them as the company grows. And that's a really long journey. It's actually probably, I would wager, longer that the average marriage in the UK.

And so given that close dynamic and the fact that inevitably, there will be–touch wood–a lot of highs on the journey but equally, we all know it's so challenging.

When navigating those challenges, you'll really want to have an investor that you feel comfortable with having difficult conversations, with being able to strategise with them, with being able to hold a psychological safe space for someone who you’re with on the cap table is really critical.

And so what I would really encourage founders to do if they’re going out to raise in 2024 is have perhaps a view initially before meeting people of what kind of investor they might want on their board or even putting equity into the company.

And so that, to me, is a really driving factor. I think that somewhat reframes the narrative a little bit from 2023 where, yes, capital investment went down. Yes, there was a market correction.

But equally, I think there's a degree of framing around the agency of the founder, that I think is really critical now.

MB: Anything else you think founders should do?

KS: When fundraising, I think it's always helpful to have a roadmap and a plan, so I try to be very practical with my advice.

I would say that if possible, have warm introductions to investors. The reason for that is it automatically frames you in a really great light. If you have a friend who might know someone , or somehow figure out get an intro, that I think is very beneficial.

The other thing I would recommend early stage founders to have is a really polished deck and the reason for that is because the first impressions deck really counts.

I love a decks I see where there has been a pretty high degree of market research attached to them, because it helps me be able to move through something a lot faster.

You can find Katharine Spooner on LinkedIn.

Now read our other investor profiles: 7percent Ventures and the Ride Home AI Fund.

Back on Tuesday

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