The CEO of a startup is the figurehead: they lead on fundraising, network relentlessly, speak at events and are the face of the business in the media.
Yet if their venture is to become a success, it is the leadership team as a whole which will make the difference.
“Before we invest in a startup, we want to build a relationship with them. We really want to see what the founding team looks like,” Jess Jackson, investment manager at Praetura Ventures, tells TechBlast.
“It’s not just the front person – the figure at the helm of the fundraising and CEO. We want to know: have they built a team around them that works well together, covers all of the critical facets that the business needs?
“We don’t want someone to be overburdened straight away – we need a good team in place. If we need to understand the business plan and the financials, we’re probably going to talk to the CFO; if we want to understand the product and the product roadmap, we’re going to want to talk to the CTO.
“So there’s different people that are involved in that due diligence process.”
Jackson recently joined Praetura from GC Angels as one of five new hires announced by the Manchester-based venture capital firm last month as it bolsters its team to support growing demand for funding.
Prior to joining GC Angels in December 2018, she worked in healthcare technology with the likes of Emis Health and Evergreen Life, gaining experience in M&A, startup growth and angel investment. While at Praetura, she will continue her role on the steering group of Fund Her North, which supports and promotes female entrepreneurs across the North of England.
More recently, Jackson has led investments into Guardian Angel, Collctiv and Xploro, and has also helped support funding rounds led by Praetura Ventures into Manchester-based workplace harassment platform Culture Shift, a startup led by Gemma McCall which recently hit a £1m annual recurring revenue milestone.
Speaking at Enterprise City’s Scaling up Manchester’s tech ecosystem event – held in collaboration with Tech Nation – she says that its portfolio companies can draw upon expertise from ‘operational partners’, including Apple’s former director of US consumer retail Colin Greene and Dominic McGregor, co-founder of Social Chain, when needed.
“They’re there to help the businesses with whatever their specific challenge might be: if they have a PR crisis one day, for example, we can call Dom; or if they are looking at their tech’s resilience, we’ve got people to help with that specific challenge as well,” explains Jackson.
“It’s really about identifying what they need help with, having a good business plan and a dynamic management team.”
Jackson will drive new investments from Praetura’s EIS Growth Fund, as well as its new £20 million GMC Life Sciences Fund – a joint venture between Greater Manchester Combined Authority, the Warrington and Cheshire LEP and Bruntwood.
“It’s investing into early-stage life sciences businesses, so the ticket size is very different – really interesting companies that might not necessarily be ready for EIS, but we’re now able to invest in. It’s incredibly exciting,” says Jackson.
Praetura raises an EIS fund every year which it seeks to deploy into around 10 businesses.
“A lot of founders don’t know about government support schemes or free-to-access business support,” she adds. “Then there’s the tax relief schemes: SEIS, which stands for the seed enterprise investment scheme; and EIS, the enterprise investment scheme.
“SEIS is a 50% relief, EIS is 30% relief.”
The recent ‘mini-Budget’ will see the SEIS investment limit increase by 66% to £250,000 from April 2023, which Jackson says is “really good news”.
“Startups will be able to benefit from more money at that earliest stage, because people will be comfortable taking that risk. Or that’s the logic, anyway,” she explains.
Prateura as a group now has more than £500m assets under management, while Praetura Ventures has raised a total of £125m since its first EIS fund launch in 2019. It has reviewed more than £3bn worth of investment opportunities this year.