- Comparing Q1 2019 to Q1 2020, there's been a 42% fall in deal volume from 1517 to 880 - Venture is not the only source of money, you should also consider family offices, HNWs, Angel syndicates and venture debt, along with government support - VCs who are likely open for business will be those who have recently closed their own new fund, have made recent investments, and their portfolio is not within high risk sectors - When considering family offices and HNWs, first generation ie. the creators of wealth are more likely to invest than second and third generation who are typically more institutional in their approach - Valuations follow the public market which is 30-40% down, multiples of 3x-8x have become 2x-5x

1. &
In This Together Series
Who's actually investing in Europe, and how do
you best engage?
Jonathan Hollis - Managing Partner, Mountside Ventures
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Housekeeping:

4. About Jonathan Hollis
Jonathan is the Managing Partner of Mountside
Ventures, a company specialising in helping early
stage companies raise their next round of funding.
Previously, he co-founded the PwC Scale and Raise
programmes, who's alumni have raised over £400m
with a combined valuation of over £2bn. He is an
ICAEW Chartered Accountant and holds the CISI
Corporate Finance Certificate, which is recognised by
the FCA. He also runs Tech London Advocates’ SaaS
Group and is a mentor on a number of accelerators.
About Mountside Ventures
Mountside Ventures is on a mission to optimise the
fundraising process for European startups and
investors.
They help the most ambitious entrepreneurs raise
their next round of funding and connect the most
promising Venture Fund Managers with forward-
looking Limited Partners.
4

5. Agenda
● Snapshot of the UK data
● Fundraising landscape
● How to access European funds and
implications of today’s climate
● Valuation implications
● How to engage with investors
● Where to find out more
5

6. Snapshot of the UK data
● Total value invested remained relatively flat compared to previous periods (Q3
and Q4 19’) due to a couple of significant Series C and D raises this quarter
● April data - raise volumes halved from c. 800 to c. 400 deals compared to last
year
Quarter Q1 19’ Q1 20’ Change
Amount invested £4.1 bn invested £3.3 bn invested 20% fall in value
Number of deals 1,517 raises 880 raises 42% fall in volume
6

7. Fundraising landscape
Venture Capital
firms
Family offices
and HNWs
Corporate
Venture
Capital
EIS and VCT
firms
Government
support
Venture debtAngel syndicates
7

8. Venture Capital
firms
8
Where does the money
come from?

9. Sources of funding
COVID Implications - the reality
● Entrepreneurs are right to be confused
● You need to put yourself in a VC’s shoes
● In reality, it depends on whether VCs...
○ have portfolios who are at risk
○ have recently raised a fund
○ have recently invested
○ are currently fundraising
○ need to draw down LP money
● Uncertainty kills deals, so you need a robust
business model and clear growth strategy
COVID Implications - at face value
● If you believe everything you hear, 99%
of VCs are ‘open for business’
● Surveys suggest that investors are
continuing to source deals and meet
companies virtually
● Investors are continuing to meet
companies
● Yet, deal volumes are significantly lower
than previously
Venture Capital
firms
9

10. How to tell who is really open for
business?
COVID Implications - VCs who are not open for
business
● They are at the end of their cycle of capital
deployment
● They can afford to sit on their hands
● They weren’t able to close their fund pre-COVID
● Their LPs are asking them to stop investing as they
do not have the capital in the next 6 months.
COVID Implications - VCs who are likely
open for business
● They have recently closed their fund
● They have made recent investments
● Their existing portfolios are not within ‘at
risk’ sectors (e.g. real estate, retail, travel,
some consumer)
Venture Capital
firms
10

11. VC funds with fresh capital
New European funds (2020)
● henQ (Holland)
● Runa Capital (Moscow)
● BITKRAFT Esports Ventures (Germany)
● BitStone Capital (Germany)
● CapitalT (Netherlands)
● Grove Ventures (Israel)
● Heal Capital (Germany, healthcare)
● VR Ventures (Germany)
● TLV Partners (Isreal)
● Target Global (Germany)
● Speedinvest (Austria)
● Sabadell Selection Ventures (Spain)
● OTB Ventures (Poland)
● Merantix (Germany)
● Icebreaker (Helsinki)
New UK funds (2020)
● Northzone
● Dawn
● Index
● AccelAnthemis
● Atomico
● Basinghall Partners
● Blossom Capital
● Felix Capital
● OXX
● Ada Ventures
● Balderton
● Partech
● AXA
Venture Capital
firms
11

12. Recent investments
● Amadeus
● Connect Ventures
● Illuminate Financial
● Origin Capital
● Pentech Ventures
● Accel
● Augmentum FinTech
In the last 3 weeks between £500k and £10m
● Backed VC
● Global Founders Capital
● IDInvest Partners
● Initial Capital
● Localglobe
● MMC
● Playfair Capital
Venture Capital
firms
12

13. EIS and VCT
firms (UK)
● Where does the money come from?
● Investment criteria
● COVID Implications
○ Focus on existing portfolio
○ EIS funds tend to deploy the
majority of their capital in March (tax
year end), so are unlikely to be
deploying much in the next few
months
○ Future Fund - still being debated but
expected not be valid for EIS and
TBC for VCT
13

14. Recent investments
● Albion
● Deepbridge Ventures
● Downing
● Octopus Ventures
● Praetura Ventures
● Beringea
● Foresight
EIS and
VCT firms
In the last 2 weeks between £500k and £10m
● ID Invest
● IW Capital
● Maven
● Pembroke
● Triplepoint
● Hambro Perks
● Fuel Ventures
14

15. Corporate
Venture Capital
● Where does the money come from?
● Investment criteria
● COVID Implications
○ Unlikely to be deploying much
capital in the current climate.
(Biggest fall across investors)
○ Lengthy investment cycle and
approval process will be
extended
● Recent investments
○ ING Ventures
○ Legal and General
○ Sky
15

16. Family
offices and
HNWs
● Where does the money come from?
● Investment criteria
● Access
● COVID Implications will depend on
type / generation
○ Opportunistic investors will
remain active, but many will be
conservative
○ Active angels (Those who
invest to work with startups) will
continue to invest
○ Family offices who already have
a large startup portfolio will
likely pause investing
16

17. Angel
syndicates
● Where does the money come from?
● Investment criteria
● COVID Implications
○ Opportunistic investors will
remain active
● Recent investments
○ 24 Haymarket
○ Beacon Capital
○ Cambridge Angels
○ Newable
○ Green angel syndicate
○ Angel Investment Network
17

18. Government
support
● Initiatives
○ Future Fund (EIS companies unlikely to
qualify, but VCT TBC)
○ Grants c.£5k
○ Startup loans c.£50k
○ Bounce back loans
○ COVID Business interruption loans
○ Furlough schemes
○ R&D Credits
The biggest determinant will be the speed at which
capital can be deployed and whether you meet the
eligibility criteria
18

19. Venture
Debt
● Where does the money come from?
● Investment criteria
● Access
● COVID Implications
● Recent investments
○ SVB
○ CYBG
○ FSE Group
○ Harbert
19

20. Valuation implications
● Headline figures
○ Majority suggest the fall should follow the public market (c. 30-40%)
○ Consensus that pre-COVID valuations were inflated and so the current
climate has brought them back to reasonable levels
○ Revenue multiples for software businesses have tended to be at a multiple
of c. 3x-8x revenue, now 2x-5x is more common
○ Anecdotally, many companies are still pitching with pre-COVID valuations
● Positive news - more attractive valuations for VCs increases investor appetite
● How LPs and VCs are valuing their own portfolio
○ Triangulation method
○ Emphasis on the Fair Value method
20

21. Engaging with investors in this climate
● Build relationships now: investors are certainly ‘open for business’ if this
translates to being open to receive decks and take zoom calls to find out
more about your company
● Things you want to show:
○ Your plan to mitigate the impact of the economic downturn
○ The resilience of your business
○ Your plan should show 18-24 months of cash runway with investment
● Some investors are looking to drop their minimum cheque size to support
companies via bridge rounds so be open to this
● The majority of investors believe that the very best companies will continue
to receive funding and some of the best businesses came out of a crisis
21

22. ● Get in touch if you’re looking to raise your next round or would like to be sent
further active investor lists / relevant investors for your business!
● Find me via jonathan@mountsideventures.com
● Further resources at www.mountsideventures.com