The mood at this year’s BVCA High Growth Conference was buoyant. Speakers and attendees were upbeat about the future despite economic and political uncertainties. It’s no wonder spirits were high: venture capital and growth markets are becoming more robust, sophisticated and sustainable; it’s a very different landscape to what we were looking at just ten years ago.
A good deal of the great advice from experts on stage was aimed at start-ups and established businesses pitching for venture or growth funding to build their brands. As I listened, I realised that much of this could be applied to the people we speak to every day: investors looking for their perfect role and firms searching for investors that fit their business model.
As the venture capital market has matured, funds have specialised, focussing in on the sectors and business models they know best. This is great news for portfolio partners as their financers bring market expertise, a live network of relevant contacts and plenty of passion to the table as well as funding. However, it means that finding the right investment partner is more complex than securing the highest bid.
Cold calls aren’t the best way to approach venture capital or growth fund about investment. Instead, speakers advised, businesses should try warm introductions that will grab their attention. This involves using your network wisely and utilising contacts at other businesses who’ve already received funding. This warm route in can save businesses a lot of time and effort when explaining how they fit the investment model.
Companies represented at the conference were based on innovative ideas that answered a specific business or consumer need. Two standout examples were Bloom & Wild, the letterbox flower delivery service, and Apex Airspace, which has responded to London’s housing shortfall by investing in and utilising the airspace on top of existing buildings. Niche businesses need niche investors to thrive and these companies talked about the importance of the symbiotic relationships they’d developed.
How and why a business functions is increasingly important to investors. Impact investment, which is thriving in the US, is making its way across the Atlantic and can make or break a company’s bid for funding. A shining example of a company that has put social value on a level playing field with profit is Recycling Lives. This hybrid business / charity uses commercial operations in recycling and waste management to support offender rehabilitation, residential support and food redistribution programmes. At ten years old, this relatively young company is a shining example to new start-ups looking to make a difference and a return.
Somewhat counterintuitively, firms told businesses that they shouldn’t be hearing from them at the point when they need growth investment. This relationship, based on a sound understanding of business model, values and growth plans, should start long before the financial need materialises.
Just as businesses need to research an investor with synergies, job hunters need to look for a firm that fits with their interests, experience and values. Due to the differentiation of firms in venture capital and growth, every role is different and involves more involvement with the investees in the portfolio than other investment roles. If you can demonstrate your own passion for and expertise in the sector the firm invests in, you’ll be better placed to land the role. For many firms we work with, fit and passion is as important as the skills on your CV.
Like the investors at the conference, a growing number of people are coming to us to find a role at a firm with values that mirror their own; to many, this will determine their choice of employer, sometimes more than compensation. So, our advice to firms when they’re recruiting is to appeal to candidates by emphasising Environmental Social and Governance strategies and any impact investing activities as well as career development potential. This will ensure a pool of candidates with the right values for a perfect fit.
As recruiters, we’re committed to creating relationships that will last. If you’re recruiting for your venture or growth firm or looking for a role in the sector, get in touch with us and tell us what really matters to you.