Seneca Partners have forged a reputation for having an uncanny knack of being an early-stage investor in the next big thing.
The Haydock-based specialist SME investment business was formed in 2010 by a group of financial services professionals with backgrounds in accountancy, stockbroking, wealth management, legal and banking.
Success stories include connected vehicle data Wejo, which completed a $1bn Nasdaq listing last year, and cloud telephony firm Mission Labs, which was bought in 2021 by Gamma Communications for £46m.
Matt Currie is Seneca’s investment and growth director and says they’re ‘paranoid’ about deals going wrong so they have to be sure they’re backing the right horse.
“As an institutional fund manager we have an obligation to be paranoid,” he told TechBlast’s latest Going 4 Growth roundtable. “We manage high net worth individuals’ cash that they’ve worked really hard to accumulate over the years and we’re paranoid about losing that money for them.
“Not every investment we’re involved in will go to plan hence why we build them a diversified portfolio, but we need to be able to look into the eyes of our investors in three or four years down the line and explain why we made every decision and why we’d come to a similar conclusion now.”
Currie highlights Wejo founder Richard Barlow and Mission Labs’ co-founders Damian Hanson and David Hague as the perfect entrepreneurs to deal with.
“One of the key elements we look at when going into a business is the management team and the founders,” he says. “There’s no set criteria but it could be as simple as a spark between us and the founders. Are we of the same mindset? Are we agreed about the future direction of the business? Previous experience of scaling a business clearly helps.
“The entrepreneurs who approach the process the best will have a clear grasp of our decision-making processes so we have a defendable position.
“The worst thing you can do is come to a funder or investor with a limited cash runway. A lot of early-stage businesses are a bit hand to mouth and that’s to be expected but to turn up and ask us to invest our investors’ money after exploring every other option first is not a good look.
“Having a two or three week or even a two or three month cash runway is not a very good dynamic to kickstart that conversation and puts everyone in an awkward spot. My advice to entrepreneurs is to always think one or even two steps ahead and to do your homework first.”