Venture capital is changing and a public listing will help unlock the transformation
In 2013, I started Forward Partners with a single mission: to give more start-up founders their best shot at success. Since then, we have built a portfolio we are immensely proud of, and packed with ambitious, growing businesses operating in the hottest technology sectors. We have proven our approach to investment works, growing net asset value to £103 million with an investor return of 25 per cent. Our model – which offers more than money by supplying capital with capability – has been widely adopted across the venture capital industry.
But a lot has changed in eight years. East London’s Silicon Roundabout started as an insider joke. Once the underdog of tech ecosystems, it has now become a world-leading centre for technology innovation and business growth, bigger than the next three markets combined in terms of deals.
Today, VCs must compete for stakes in the most exciting businesses – and money alone is not enough to win. Some firms – us included – have built the capability to provide growth support on a non-for-profit basis to supercharge the growth of our portfolio companies in order to live up to the changing market.
But tomorrow’s market will require VCs to innovate even further, by becoming more founder-centric in their approach. Entrepreneurs want capital that is fair, flexible and supportive. We need to redesign the VC proposition, focusing on the needs and expectations of the world’s next top businesses.
Now is the time for that evolution, and for us, an IPO is a crucial step towards building a proposition that better serves the fast-growing tech ecosystem in the UK. It will help allow us to move away from short-term fundraising cycles that limit the length of time VCs can partner with portfolio companies.
The current VC model makes it difficult to create more value from new initiatives that sit outside traditional investment. Our offering is already specialised, with a revenue-based funding offer. But we would like to continue to grow this. Firms that seize opportunities like these will forge a new wave of growth capital that will help more businesses succeed as well as drive the UK’s economy.
For a long time, institutional investors have enjoyed exclusive access to VC as an asset class – they have diversified and curated portfolios of some of the most lucrative and successful businesses in the world, before they have made it big. VC needs be to democratised. This will mean opening up opportunities to those who have previously been excluded, such as individual, retail investors.
Our vision for the next chapter of VC is one that provides the freedom to invest with flexibility and to build the products entrepreneurs need not just to grow, but to succeed over the long term. This IPO will help us to make it a reality as access to permanent capital will enable us to innovate, to build faster, and to make longer-term investments.