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