Sep 13, 2021
Dear SaasCo, VCs often look at revenues as a benchmark for valuation – we do this because (1) the companies we invest in are very early-stage and have no EBITDA and (2) because, in most software/technology businesses costs of sales are negligible and become... 
Sep 7, 2021
Dear SaasCo At its most basic level measuring financial performance is the review of revenue, gross profit and income/loss before tax. For many start-ups busy with growing teams, building product, dealing with customers and planning for the future the analysis of... 
Aug 25, 2021
How it works in practice In this short series we’ve looked at various aspects of investor controls in venture funded companies – what they are, why they’re needed, who gets to have them, and how they’re shared between investors. We’re going to close off this topic,... 
Aug 25, 2021
Moving up and making room So far in this short series, we’ve examined simple scenarios, those where there’s a founder group and a single investor. As time goes by, SaaSco scales and attracts new investors. How do the founders and investors negotiate a position that... 
Aug 25, 2021
Don’t ask, don’t get Here we are again on the fascinating subject of investor consents. We’ve previously scheduled out why investors want them, what they are, and now let’s take a look at when they get deployed in practice. As with a lot of venture investing rules,... 
Aug 25, 2021
Why do investors need special rights? We covered off in our last post the typical rights that investors seek in the running of a scale-up company, and now ask the question: why do they need those rights in the first place? It helps for founders to understand the... 
Aug 25, 2021
Learning to live with strangers We recently completed an investment in our seventh portfolio company. An exceptional business, great management, but nothing extraordinary about the deal. Except that, in this instance, we have never met any of the founders and... 
Jul 28, 2021
A company which has developed a new type of biomaterial that can be used for 3D printing of medical implants has completed a £1.6m funding round. The investment into Nottingham-based 4D Biomaterials was led by DSW Ventures and backed by the MEIF Proof of Concept... 
Jul 26, 2021
Exit preference – yet more problems down the line In our last post we covered what kind of follow-on round structures were likely to follow, when an earlier round contained exit preference rights. In this post, let’s consider the position when that earlier-round... 
Jul 19, 2021
Exit preference – problems down the line In our last post we briefly introduced exit preference structures and how they work in a first-round of funding. In this post, we are going to take a brief look at how exit preference can work in a second or... 