Five years of game-changing VC: Why pre-seed founders choose us

Luke Smith

Partner + Investor

June 24, 2021

Key Takeaways:

  • Founders backed by FP achieve 1.5x the average UK seed valuation (which translates to an additional £1.2m on their pre-money valuation).
  • Our pre-seed investments raise seed rounds 25% faster than other startups.
  • Startups who work with us can access tech, product and growth resources that are 3x cheaper than employing an agency or hiring in house.
  • We build stronger foundations for founders by providing young startups with the right capital, great people and an incredible network to succeed.

Over the last five years, we have established ourselves as the UK's leading super early-stage VC firm, providing a game changing combination of capital and operational support to supercharge tech startups.

For those unfamiliar with our pre-seed offering, Forward Partners invests more than just capital – on top our investment of at least £250k, we provide entrepreneurs with access to an experienced team covering product, tech and growth to help them execute on their idea, whilst leveraging our proprieatary business-building framework referred to internally as the "Forward Flow".

Backing world-class founders

On 29th November 2012, we made our first pre-seed investment into Appear Here, after 21-year-old Ross Bailey came up with the idea to build an ‘Airbnb for retail’. Since then, Ross and the team have gone on to raise an additional £20m in venture funding, expanded into three countries, including France and the USA, and established a platform that generates over £20m in demand per month from 100,000s of retail customers and brands worldwide.

Five years on, we have supported a further 15 pre-seed founders to turn their startup ideas into venture scale businesses.

To highlight a handful by the vintage year that we invested:

  • 2013: Matt Fox and Dan Harrison came up with the idea behind SnapTrip - a last minute holiday rentals platform. With deep domain expertise and a data-led approach, they have grown rapidly to become the UK’s leading holiday rentals site.
  • 2014: Against the backdrop of a fledgling “law-tech” sector, we backed former city lawyer, Daniel Van Binsbergen when he spotted an opportunity to build Lexoo - the first B2B legal marketplace, also using AI to automate repeatable legal tasks.
  • 2015: Frustrated from her professional and personal experiences of the support offered to cancer sufferers, Tamara Rajah left her job as Partner at McKinsey to build Live Better With - a platform to improve the day-to-day lives of cancer sufferers. Since then, the site has expanded, via their partnership with Marie Curie, as well as opening the UK's first store dedicated to cancer sufferers in a London hospital.
  • 2016: Freddie Blackett spotted a £4bn opportunity to disrupt the poorly served UK gardening market by creating Patch - a next generation garden centre that brings great products and service online. One year on, and the team is about to deliver over 5,000 Christmas trees to house-proud Londoners.

Finally, 2017 has been a phenomenal year for us, with four pre-seed founders joining us and another about to move in, not to mention closing our second fund (£60m). This allows us to continue our unique approach, helping to build the UK's next-generation of talented AI, ecommerce and marketplace businesses.

Better, faster, stronger

So what makes Forward Partners different? Building on 5 years of data, we delve into the numbers behind the startups we have backed to find our founders achieve better valuations at seed,  get there faster (and cheaper), and build stronger foundations for their companies, together.

By comparing figures on average UK seed valuations in Angel List, (£2.4m) and the London Co-Investment Fund, (£2.7m), we find that amongst our 16 pre-seed investments, founders backed by us achieve 1.5x the average seed valuation (£3.6m).

Secondly, if we look at the number of days from angel to seed investment amongst startups listed on crunchbase (calculated as 1 year), our pre-seed investments get there 25% faster (within 9 months). However, this could be between 2-3x faster if we compare the date the company was founded with the date that seed was raised, which is arguably a more realistic benchmark considering that many of our pre-seed investments are at such a super early stage (some not even registered on Companies House!)

True to our mission of “supercharging startups”, founders gain access to a highly skilled team of tech, product and growth talent following a proven methodology, (referred to internally as the “Forward Flow”). To put it into context, over 100,000 man-hours from our team have gone into building the startups we support. We offer these services at a heavily discounted rate, subsidised by our management fee, which based on conservative salary and day-rate assumptions make us 3x cheaper than comparable services. For instance, agency costs, factoring in salary, overheads and profits, imply a cost to founders of up to £150k, whilst to hire in house, even the leanest operation (of product-tech-growth experts on £50k salaries) would cost £150k + equity. More importantly, there’s a wealth of experience within the team having supported 16 pre-seed companies and a broader portfolio of 40 companies, which significantly reduces execution risk.

Beyond the numbers, our commitment to pre-seed founders is so much more than cold, hard results. Based with us in our Hoxton home, founders can spend time building out their product and getting their business off the ground, in a fun and supportive environment. In doing so, we build stronger foundations for founders, and live our commitment to “providing young startups with the right capital, great people and an incredible network to succeed”. This means gaining access to world class mentoring and support, as well as our portfolio community.

How can pre-seed founders engage with Forward Partners?

Looking to 2018 and beyond, as part of of our commitment to founders and the ecosystem as a whole, we are constantly improving our touchpoints with pre-seed founders. From sharing unique content via The Path Forward to holding monthly Office Hours (15 minute pitch sessions with our investment team), we are always on the search for great minds, looking to commercialise exceptional ideas.

Where are we on the Path Forward?

The Path Forward now has over 10k subscribers, over 152 articles covering everything from evaluating ideas, to building a valuable business. It remains close to our hearts and is a central pillar to our mission of sharing th knowledge across the entrepreneurial ecosystem.

In 2018, we are launching an exciting new initiative with Google for Entrepreneurs (Campus London) to operationalise The Path Forward. This will take the form of a six-part event series, providing a platform for founders to learn from and meet the Forward Partners product team in person.

Office Hours

4 out of 40 of our portfolio companies have come to us via Office Hours. We receive over 200 applications per month and only 10% of applications are selected to come and meet us. However, those founders that come through have a unique opportunity to share their idea and receive feedback from an experienced team of investors.

As part of our commitment to entrepreneurs, we track each interaction to ensure we offer the best service and advice to founders. We send a short survey to all attendees, which asks for feedback and asks “How likely are you to recommend us to a friend”, which is the basis of the Net Promoter Score (NPS) used by our own portfolio companies.

Our current NPS score is 70, which is “Excellent” and is a testament to the overwhelmingly positive feedback received from attendees.

Here is just some of the feedback we have received from founders:

“I really like the non-pitch format. A conversation leads to a mutual way of understanding things, which helps the concept to become clearer for everyone”

“I really enjoyed their way of questioning - the investor dived straight to the key points, which was refreshing as I haven't communicated like that since the RAF!”

“I was very encouraged by the office hours... it felt open and inclusive, yet clear and direct. I prepared information concerning the four main questions in the FAQs. It was a unique and welcome experience, so thank you”

“The office hours are a good part of the Forward Partners strategy. I'm sure I speak for many founders that 'getting to a quick no' is appreciated. Some great comments during the meeting as the investors clearly had some experience in the market and had reviewed my application carefully. ”

“It was a good way to get some feedback and hear some good questions in a non-intimidating way, as well as learning about myself in how I answered them.”

Other Forward Partners milestones:

Forward Partners has backed 40 UK startups since 2012.

Forward Partners portfolio businesses have gone on to raise £200m from co-investors including Google Ventures, Index, Octopus and Balderton

Collectively, Forward Partners have helped our portfolio to reach a valuation of £1bn

The startups we've invested in have injected £100m into the UK economy since 2012

Our portfolio businesses have created over 1000 jobs so far

100,000 man hours from the Forward Partners team have gone into building the startups we support.

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Luke Smith

Partner + Investor

June 24, 2021

Luke joined Forward Partners from REV Venture Partners, a corporate VC, where he was responsible for deal origination, investment due diligence and portfolio reporting. He was previously a consultant with the strategy consultancy Oliver Wyman, where he worked across the retail, aviation, healthcare and FMCG sectors. Luke originally planned a career in science and he holds a PhD in biochemistry. His focus at Forward Partners is on sourcing and executing new investments.