A more considered approach to investing
by David Grimm
by David Grimm
"Move fast and break things"
until recently Facebook’s internal motto, is a go-to mantra for the start-up community. It resonates with entrepreneurs who have their idea and just need some capital to start executing.
"How quickly can you move to completion?"
tends to be the first question we get asked by entrepreneurs. In the pre-product, pre-revenue world where the UCLTF often invests, this drive to ‘get going!’ is a crucial characteristic that we look for.
On the flip side, sometimes we want our entrepreneurs to slow down. Whilst this sounds counter-cultural in the start-up world, we believe that time spent getting certain things right at the start leads to faster growing, more successful companies in the future. The agreements that a company signs at the very beginning of its life can mean that commercial success doesn’t translate to corporate success. Companies can build technically excellent capabilities without a market that needs them. Great products can be buried in a mire of bad go-to-market strategies.
There’s lots of capital available in the pre-seed market which caters to the need for speed. There are an increasing number of investors and funds which are incentivised to deploy capital quickly without getting drawn too much into details. In that market the UCLTF’s offer of a deeper diving, more thoughtful approach can be a hard sell to entrepreneurs who value speed above all else. But we’ve been proving that this more considered approach works, and we can now reference it across our portfolio.
Examples include a company with a great set of capabilities but an unclear product and market. Although they wanted to get building, we helped them put together a team of strategic advisors who worked with the founders as they iterated their product and market ideas over a few months, reining in their expansion plans and driving a more in-depth thought process. At first it may have felt dispiriting for the founders as the brakes were on and the first few iterations of their plans were worked and re-worked. Suddenly, though, a clarity of vision for product and market emerged, validation quickly followed - and the brakes were off.
This is why our model includes a Proof of Concept funding route which allows companies and projects at UCL to make sure they are ready to take an investment that drives growth in the right direction. It turns out that we’re not as counter cultural as we used to be. Facebook abandoned their motto this year, opting instead for
“Move Fast with Stable Infra”
we agree it’s worth pausing to think before breaking new ground.