Whilst for latter stage venture capital companies their investment criteria can be quite distinct, what is it that makes an early stage, seed, or even pre-seed company investable? We spoke to Reece Chowdhry, Founder of RLC Ventures, to understand more about what it is they look for in potential portfolio companies.
Let’s start by giving us an insight into your background, how did you come to be a Venture Capitalist?
From a young age, I have been interested in investing in early-stage companies. I made my first tech investment when I was 13, purchasing Apple Stock before apple became cool again.
From an operational point of view, I just loved the jigsaw puzzle of business and from the age of 15, every summer, I would work in small businesses run by friends and family – from retail companies in Scotland to tech companies in Silicon Valley. It gave me a fantastic grounding in business.
I started my career as a Management Consultant at EY where I chartered as a Management Accountant. I helped large businesses in financial services transform their digital propositions.
This gave me greater insight in the inefficiency and lack of innovation in large companies, particularly banks, which made me more passionate about solving this inefficiency. It also made me realise that my skills and passion were best suited to the Venture world.
How was RLC Ventures formed, what’s the background?
RLC Ventures was established in 2015 after I left EY. Organically, RLC Ventures started through deploying our own capital and helping scale companies from ideas to award-winning operational businesses such as the peer-to-peer lending platform LandlordInvest.
Over time, our investor community has grown significantly and has become more active in investing and co-investing in our startups. We are gaining great traction and have been featured in various national publications including The Sunday Times for our work.
What’s RLC’s focus, in terms of company profile and investment amount?
- We focus on pre-seed and seed-stage companies – ticket size ranging from 25k – 250k (first / second round).
- We invest across Europe but mainly in the UK.
- We focus on FinTech, PropTech, Social Impact Tech and Sports Tech.
Given that you are investing at the very early stage, how do you decide what makes a company investable? What is your criteria?
We focus on three key areas:
- Team – how committed are you are as founders and do you have the correct experience – we have various tests for this during our due diligence process.
- Market – We love propositions which attack large markets and problems e.g. insurance (Global insurance industry: EUR 3.6 trillion in 2016, up 4.4% y-o-y (ALLIANZ Research).
- Product – The idea must be able to rapidly scale and have high barriers to entry e.g. regulation or deep tech.
What does RLC bring to an early stage company, aside from funds?
- Product testing – ensure the product is viable and scalable.
- Marketing strategy – ensure the product can be branded to a high quality.
- Board advisory – RLC’s sits amongst the board members to provide advice and support to companies that we invested in – we have 80 years of experience combined across our mentorship network; all our mentors are experts within their domain e.g. founders of fintech companies.
- Other support includes forming JV partnerships, recruitment, financial support and opening doors to larger funds to help with a series A round (if required)
What is the vision for RLC Ventures?
RLC Ventures is just the start. My vision is to create an alternative Asset Management platform which encompasses venture at its heart but also has elements of various other alternative asset classes such as lending, property, P2P, Social Enterprise. Maybe even block-chain one day. This will cater to all types of investors on all elements of the risk spectrum from early-stage risky investor to large-scale pension funds.
What type of company would you like to hear from, and how should people get in touch?
We would love to hear from anyone looking to get their first or second round of funding and who focus on our target areas FinTech, PropTech and Sports Tech