THE POWER OF NARRATIVE

TELLING THE WHOLE STORY, NOT JUST THE BACKSTORY

When starting a business, many if not most founders are aware of the importance of their story - where they came from, how the idea formed, the charming or synchronicitous nature of their company’s provenance. These details are important, they engage the listener and add to the character of the company, but that is not enough to get investment.

The narrative is the full arc of the story, and it is a mistake to conceive of it only as merely what led you to this point. The narrative should start at the beginning and reach through the present to the future, featuring all notable steps along the way:

How you identified the business problem - why does it matter - how will you solve it - a vision of the changed landscape after.

A narrative is an account of connected events, so make sure there is connection and flow.

As with any good story, the points should always be relevant, so leave out the extraneous. Predictability is a problem; would you want to watch a film where you knew exactly what was coming? How often do you think your potential investor reads the same 3 year forecast? Keep this in mind when putting together the deck, and you’ll achieve a freshness in your pitch that others lack.

Similarly, would you be drawn in by a book where things only go right? No perfect plotline was ever worth reading. If you’ve faced adversity, say so. If you’ve overcome challenges in your business journey to date, and still made it into the pitching room, that counts for something. Outline how you addressed them. This provides a three dimensional quality to you as leaders, and will engage your audience at a deeper level.  


RCP is a family office in London.  We invest in a wide variety of sectors, across diverse stages of development.  Get in touch to discuss what you’re building.  


Alicia Huertas
Scouting vs Scoring - The evaluation of founders

Is there a right way to pick successful start-ups?

Depending on who you talk to in the venture capital world, investment decisions are either an art or science. This post will explain an aspect of that debate - Scouting vs Scoring.


How do we define these terms?  Scouting is the traditional way of judging founders and companies - face to face pitch meetings and discussions with people around a start-up and industry.  Scoring is an analytical methodology - compiling data about the start-up, its industry, etc and distilling that down to a decision.

Generally, VCs use scouting for earlier stage investments, where company data, industry data and comparables are tough to come by.  Here’s a post that is a good rearview mirror reflection on an investment decision from 5 years earlier, that illustrates that gut decision.  Scoring is seen more in later stage investing - where data is more readily available. Having said that, several VCs are now applying AI to the evaluation of seed stage investing.  

Why is this debate important?  Because when you’re a founder, you need to understand how family offices and VCs will evaluate you.  Your business idea may be great, but people will judge the future success of that idea through their lens of understanding.  

It’s also important for decision-makers at family offices and VCs to understand their own methodology and biases.  Almost all decision-makers need some confirmation - whether it comes from other investors in that round or their AI output.

RCP tend towards a scouting methodology. That means we put a great deal of emphasis on founders and how they articulate their pitch.  And then we talk to people like advisors and other VCs around the start-up, to get a multi-dimensional picture of the founding team. When a start-up is conducting a fundraise, they should ensure they can articulate the problem, solution and roadmap clearly.


What are the key points to take away from this?

  • To answer the question at the top, there is no right way to select successful start-ups.

  • The person making capital allocation decisions needs to find their own best methodology.

  • As a founder, you need to plan for how you will be evaluated and act accordingly.  


RCP is a family office in London.  We invest in a wide variety of sectors, across diverse stages of development. Get in touch to discuss what you’re building.


Alicia Huertas
What's in your deck

At RCP we receive countless emails with powerpoints (decks) from companies pitching for money.

Dealflow is not an issue for investors, but there is only so much of the day that can be dedicated to reviewing new opportunities.

Therefore, a deck that is clear, focused and concise is more likely to get attention.


Each investor will have their own criteria.  Here’s the information that we look for at RCP:

  • What problem(s) you're solving; why does your company exist, what is the pain point you’re getting paid to solve?

  • Achievements to date; we're unlikely to be your first investor, we like to know what value you've created to date.

  • Roadmap; where is your company going, do you have a clear vision for the future and what success looks like?

  • Use of funds for this finance raise; linking to roadmap, what resources do you need to make it happen?

  • Headline financials; both historic and forecast, ideally 3 years ahead.

  • Brief bios on your team.

A good deck is a foot in the door to a meeting, which is a critical part of our investment evaluation.

If you would like to apply for investment, please get in touch via the website, phone or LinkedIn. We look forward to hearing from you.


Alicia Huertas
Azadyne Investment

RCP is excited to announce its investment in Azadyne - a spin-out from Trinity College Dublin, based on research into Queuine, a micronutrient.  RCP partnered with the Kent Life Sciences Fund to take a meaningful stake in this very early stage IP-based bio-tech company.

Dr Jason Rutt, the CEO of Azadyne remarked, “Our approach to autoimmune disease has the capacity to provide treatment to a number of diseases with no cure, including MS. “

“This is a prime opportunity to shepherd emerging research out into the world and make a significant impact,” said Adam Park, COO of RCP.

The Kent Life Sciences Fund, represented by Jonathan Synett, CIO added: “Azadyne’s approach to auto-immune disease is unique, and has the potential to be a game changer, in a huge area of unmet need.”

The Opportunity

There are over 30 specific autoimmune diseases with no known cure, that affect around 10% of the world’s population.  Current therapies focus on symptom management, but are often poorly tolerated. An agent which has utility for treating many autoimmune diseases represents a significant commercial opportunity.

Rapidly proliferating cells such as the excessive number of T-cells found in autoimmune disease have been found to be queuine deficient. The research work at TCD by the three Founders has developed a synthetic queuine which potentially dampens down an autoimmune responses. The initial focus has 5 targets: MS, RA, IBS, Ps neurodegenerative issues.

The roadmap for Azadyne is long - it will take several years before the full benefits of this research are felt in medical outcomes - but RCP and the Kent Life Sciences Fund are committed to supporting this important work.


Alicia Huertas
Year in Review 2018

This post reflects on a busy and successful year for RCP, as it reached its ten year anniversary.

Over the last decade RCP has invested millions of pounds into early stage companies.

Venture Capital:

RCP made a number of new and follow-on investments in 2018, including:

Oxford Biotherapeutics - committed to the discovery and development of novel therapies for various cancer types.

Appy Parking - a software that shows on-street and off-street parking options in major cities in the UK.

Micrima - developing technology for breast cancer screening that is painless and side-effect free.

AMTE - bringing new energy storage solutions to UK manufacturing.

Centauri - focused on the discovery and development of novel molecules targeting life threatening diseases.

RCP also made two exits at a premium in 2018, FCFM and Two Chicks.

Going forward, RCP will continue to focus on innovative businesses that are looking for funding to support their growth.

We expect to announce some exciting new investments in early 2019.

Real Estate

RCP started work on two new projects in 2018, the Penthouse and Commercial unit at Randall Court.

RCP are actively searching for the next development project in London and the surrounding counties, with a focus on creating premium quality homes.

Renaissance Capital Partners Ltd. is a private company established in 2008 to invest funds in high-growth, innovative and entrepreneurial businesses. It now has a diverse investment portfolio across various industries including Health, Fund Management, Clean Tech, Media and Real Estate Development.



Alicia Huertas
Competing uses for capital at RCP

The rationale behind an investment pass

RCP is in the venture capital business, which means that several of the investments we make don't follow the plan we share with the Founder.  Sometimes they outright fail, sometimes they pivot into a new direction, but many times they just don't hit an inflection growth point.

In the past, we’ve written about why we’ve made an investment or how we want to see the business grow.

Today, I want to write about a follow-on investment that we passed on.  We will keep it anonymous and straightforward.

To set the context:  A company we invested in a few years back, was now raising more funding to extend their runway to profitability.  The business thesis hadn’t changed over the intervening years, and the company hadn’t developed the traction within its market.  So, we began to evaluate this follow-on funding opportunity.

Because of our earlier investment, we understood the technology and management team.  We met with CEO and Chair, looking to understand what lessons they had learned over the last few years, how the marketplace had changed, and what their plans were going forward.

And then we declined to follow our original investment in the follow-on round.  

Why?  Two reasons:

First, the CEO and Chair didn’t convince us that their technology was on the edge of widespread adoption.  In our view, the marketplace was making a judgement about their technology relative to the competing technologies, and deciding the competitors held better technology.  Generally, it’s better to trust the marketplace over your own view of tech adoption in a situation like this.

Second, and more importantly, we have competing uses for our capital.  When we evaluate investments, we need to compare alternative uses for those funds.  Should we put funds into a new start-up, back an existing investment or keep our powder dry for a sunny day?

In this instance, the drawbacks outweigh the positives.  We kept the powder dry for a future investment.


Alicia Huertas
WHAT WE EXPECT FOR PORTFOLIO INFORMATION FLOWS

TRACKING THE RESULTS; PREPARING FOR THE FUTURE

At RCP, we get involved with and monitor our portfolio companies at various levels.  For some we hold Investor Director Board seats; for others, we just get irregular, informal updates.  For others, we've found ourselves intimately involved in operational management when the situation calls for it.  

In this post, I wanted to give a taste of what we expect and aim for when it comes to reporting on and valuing our portfolio.

Our relationship with Founders begins just after the initial investment.  We try to meet regularly and get trackable information, so we can follow the trajectory of the business.  Ideally, we come away with concrete, objective data that we can use to create some value markers.  The question we want to answer:  Is it growing in some form- revenue, net profit, customers, etc- and tracking to its projections.   A solid measure is ever increasing valuations at fundraising points.  

We maintain a Portfolio Tracker so that we can monitor, reflect and project these data points.  This gives us some level of comparison over time and a method to value our entire portfolio, albeit imperfectly.  

There are some added benefits to this reporting.  We can prepare for risks, cash calls, exits and get more involved operationally to help the business.

What are some of the issues to overcome:

  • Irregular data- as startups, some companies are constantly refining their management information presentation.
  • Inconsistent access over time- With one company, we held observer rights for Board meetings, then when a large VCs came in, we gave up our position (quite rightly), and we now have a less complete view.
  • Valuation objectivity- It's possible to use revenue and net income numbers for valuation, but may not give a true market picture.  And even the last fund raise valuation may be misleading because it may be dated or over-inflated.

The nature of the beast in early VC investing is constantly changing management information.  Hopefully, that is down to growth; sometimes it's not.  We just want to make sure we're keeping an open line of communication and getting some sense of value inflection points.  

Alicia Huertas
MAKING THE WORLD A BETTER PLACE

RCP LOOKS TO EMERGING TECH TO SOLVE HEALTH ISSUES

A key focus for RCP is on making the world a better place through emerging biotechnology.  We want to fund start-ups who are developing key technology in the fight against cancer and other debilitating diseases.

Over the last few years, we’ve backed the strong management teams fighting big problems.  Here is a sample:

TC BioPharm is currently developing the closest to market drug candidate in Gamma Delta T cell therapies. These cells are naturally-occurring within the human body, inducing one of the first lines of defense against infectious disease.  Their work focuses on priming these cells to attack and destroy pathogens within the body.  Why is this important? Because TCBio is harnessing the body’s own immune system to fight cancer.

Centauri Therapeutics is developing new ways to treat bacterial infections.  Many infections nowadays are resistant to existing antibiotics. Centauri is bringing to market new ways for the immune system to find and destroy bacteria and cancers.  Why is this important?  Bacterial infections are responsible for the deaths of 700,000 people worldwide a year.

Micrima has developed the MARIA breast cancer screening system. This imaging system uses harmless radio-waves to detect breast cancer, unlike mammography that uses ionising radiation.  The process gives a clearer picture and is less invasive than the current methodology.  Why is this important?  Because it helps doctors find and treat tumors more quickly by reducing the false positives in current screening. 

And we've been looking at other companies doing things like-

·       Developing 3D printing for orthodontics.

·       Dendritic cell therapies for tumor reduction.

·       Technologies that reactivate the immune system to fight cancer. 

So, if you’re developing new technologies in this space, get in touch.  We want to support emerging biotech efforts to make the world a better place. 

Alicia Huertas
Year in Review- 2017

RCP saw a successful close to 2017, both in venture capital and real estate development. 

This post is a review of what we did to support our investment strategy over the last 12 months.  Chief Operating Officer Adam Park commented “The year presented several great opportunities- for investing, realising gains and solidifying our niche in what we do”. 

Venture Capital:

RCP continued it’s focus over the last 12 months on high growth, innovative businesses. We put to work close to £2.2m in new and existing businesses, both in the form of equity and convertible debt. At the end of 2017, the portfolio was conservatively valued at approximately £7m.  Highlights included-

·      Adding to our earlier seed funding in AMTE- bringing new energy storage solutions to UK manufacturing. 

·      Backing a convertible note in TC Biopharm, which is focused on beta delta t-cells and their fight against cancer. 

·      Joining the management company for NCL Technology Ventures, to leverage our investing thesis in the life sciences sector. 

Going forward, RCP will build upon it’s focus on emerging technologies that make lives better and emphasise life sciences as a theme for it’s venture capital investments. 

Real Estate

RCP continued to improve the built environment in and around London in 2017.  Our development portfolio saw significant milestones through the-

·      Selling of the remaining flats at our Randall Court development in Elephant & Castle. 

·      Tendering and construction of the Penthouse and Commercial unit at Randall Court. 

·      Final works on Park View, ready for marketing in the Spring 2018.

All of these helped markedly increase the profitability of our projects over the last 3 years.

With funds to recycle into further development projects, RCP put a half-dozen potential sites through our development appraisal process. Most of these didn’t show the necessary ROI to take forward.  But, with dry powder and a buyer’s market, we’re confident that 2018 will unearth several possibilities. 

The built environment of London, and the surrounding counties, is an emerging theme for our development portfolio.  In 2018, RCP will look to focus on bringing premium quality homes to the residents of London. 

Renaissance Capital Partners Ltd. is a private company established in 2008 to invest funds in high-growth, innovative and entrepreneurial businesses. It now has a diversified investment portfolio across various industries including Healthcare, FCFM, Media, Clean Tech and real estate development.

Alicia Huertas
RCP EXITS FC FUND MANAGEMENT AT SIGNIFICANT PREMIUM

PROVIDING AN OPPORTUNITY TO RECYCLE FUNDS INTO GROWTH SECTORS

Renaissance Capital Partners, a leading-edge family office, completed a sizeable di-investment out of FC Fund Management, a distressed opportunity fund based in London, it announced today.  RCP’s decision followed a restructuring of the ownership of the FCFM business, which will allow RCP to further expand its pipeline of innovative investments.  RCP had supported the business through several investment rounds, over several years. 

Mark Randall, Managing Director of RCP, remarked “This was an excellent opportunity to realise a great profit, and move money into other high-growth opportunities.  We constantly scan our investment horizon for opportunities that balance risk and reward.”

With an expanding pipeline of opportunities, RCP is looking forward to putting the recycled funds to work.  It’s current holdings in bio-tech are gaining momentum and the remaining portfolio is showing growth. 

Renaissance Capital Partners Ltd. is a private company established in 2008 to invest funds in high-growth, innovative and entrepreneurial businesses. It now has a diversified investment portfolio across various industries including Robotics, Healthcare, Location Based Services, Clean Tech and Telecoms.

FCFM Group is a privately owned investment firm undertaking principal investing. 

Alicia Huertas