VC Under The Spotlight: Russell Buckley, Spring Partners

VC Under The Spotlight: Russell Buckley, Spring Partners

16-Jun-2016 by Sam Ahmed

In this month’s VC Under The Spotlight, we spoke with Russell Buckley, a serial  angel investor and now a partner at London-based early-stage VC firm Spring Partners.

Known as the ‘Godfather of Mobile Advertising’, Russell was the first employee at AdMob before turning his attention to investing.

Joining us at the Tea With A VC event, Russell talked to us about Spring Partner’s investment strategy, what he looks for in a team and his top advice for those looking to raise funding…

Tell us about yourself

My background is in marketing, but in 2000 I became involved in a mobile marketing startup. It did quite well, but unfortunately, we signed the term sheet on September 11 2001 and the investors decided they didn’t want to continue with the investment due to market volatility that followed.

However, I still believed in the potential of the mobile tech space so I carried on doing consultancy work in this field. In 2006, Omar Hamoui who had just started a company called AdMob reached out to me after several of his investors suggested that we speak.

This resulted in me becoming AdMob’s first employee. It was probably the first and only time a Silicon Valley company employed a European based in Europe as their first hire. The company turned out to be very successful and was sold to Google four years later for $750 Million dollars – making it their third biggest acquisition at the time.

After leaving AdMob and Google, I became an angel investor and started a small fund called Ballpark Ventures with some friends. At the same time, I started working with the UK Government on a joint initiative between Number 10 and UKTI, where I was helping startups raise a total of $150m in Series A funding.

What is the Spring Partner’s founding story?

Initially, I started working and getting to know the rest of the Spring Partners on the Angel investing side. We were all attracted to the same type of CEOs and companies and ended up investing in 14 startups together. We also found that we were all committed to building the tech community to make the UK a better place to start and run a tech company.

In time, our shared values and complementary skills led us to starting Spring Partners in 2015.

We had our first close of the fund in November 2015 for £40 million – which already makes us one of the largest seed funds in Europe.

Our focus is early-stage startups where the average cheque size is £500k. To date, we have made five investments, which are a mixture of B2B and B2C companies. We’ll also close three more in the next few months.  We’re both lead investors and co-investors with other firms and Angels.

Does your fund focus on any specific industries and business models?

Of all the 100 companies that we have previously invested in over the years, 80% have been marketplaces or SaaS. From an industry perspective, we have invested in Digital Health, MarTech and AdTech, FinTech and some retail / fashion tech companies.

Having said that, this is not set in stone. The most important thing for us is the team. If someone has assembled a world-class team then we’re generally willing to talk.

However, there are certain sectors that are too capital intensive for a seed fund like us such as CleanTech. We keep an open mind on Hardware and MedTech generally.

Does your fund focus on any specific geographies?

We’re UK first, but we’re open to potentially investing in other European countries too.

What we have found with early-stage companies is that proximity is important.  If you invest in a company outside of your immediate vicinity, then it means that you don’t see them very often. As our modus operandi is to be as actively supportive as we can with our portfolio companies in the first few years, distance can cause problems.

Do you have personal focus within your fund?

Usually, VC firms tend to operate on a lone wolf principle, where a partner goes off to find a startup, brings it back to the rest of their firm and champions it through their investment committee process.

At Spring Partners, have more of a team approach, both pre- and post-investment. We normally have two partners looking after a portfolio company and we involve the other partners when their skills and experience are relevant. Our investment process also includes a working session with all our team and theirs, to see how we all work together, as it could be the start of a very long collaboration and both sides need to see if the chemistry is right.

Besides providing capital, how else do you support your portfolio companies?

Because we have all been founders ourselves, we hope that we know what support our portfolio companies need.

We’re big fans of OKRs (Objectives and Key Results), which is a great way of managing companies to ensure the whole team is aligned behind what needs to be done and is used by leading tech companies, such as Google. We run regular sessions to help our companies hone their OKRs, as an example of how we help.

We also share 20% of the partner profits (carry) with the founders we invest in. The intention behind this is to build a community around Spring Partners, who all have a stake in our success. This helps with deal flow, but also encourages founders in our portfolio to share learnings and support each other, as they grow.

We also facilitate exchanges between founders within the community through quarterly dinners, monthly expert-led breakfast meetings to develop specific skills and we produce content designed to share knowledge.

What attracts you to investing in a new startup?

It starts and almost finishes with the team.

Where every investor often makes a mistake – including myself in the past – is to get too excited by the idea or technology and forget that it’s the people who have to deliver it.

As an investor, you have to consistently remind yourself that it’s about execution as much as the idea. Give me an A team with a B idea and I may well invest. While an A idea with a B team rarely works, in my experience.

Do you have any ‘golden rules’ when evaluating a potential startup?

It really is all about people. If you’re doing later stage investment then it becomes more about metrics and data, but during the seed stage understanding people and whether they can deliver is what counts.

Are there specific ‘hot-sectors’ you’re keeping a close eye on?

We’re very much into everything new! Some of the things that are currently exciting us here at Spring Partners are autonomous vehicles, P2P marketplaces, bitcoin, blockchain and AR/VR. Obviously, machine learning and AI too, but these can be seen as a sub-sector for everything else.

As a vegetarian for the last 16 years, FoodTech personally interests me.  I’d really love to see the end of meat eating  and believe technology has an important role in this.

What would you say is the biggest challenge facing European startups when it comes to fundraising?

It comes down to the fact that not many people in the ecosystem have fundraising experience and therefore, expertise. This leads to simple errors that should easily be avoided and would never be made in a more mature market, such as the Valley.

As an example, I’ve seen a couple of companies where there was a great meeting, seemed to be a good team, everything was interesting and then you ask about their cap table and they say: ‘We own 15%.” In other words, they’ve given away 85% of their company already, which essentially means that they are uninvestable.

Another common one is that founders don’t spend enough time developing a compelling investment story and pitch deck. As a rule of thumb, founders should spend the same amount of time on their deck as they do for their website – and get it designed by a professional.

Founders really need to look around and do some research before they start fundraising. This blog might be a good place to start, which I wrote a while ago.

What advice would you give to a founder fundraising for the first time? Can you give us three tips?

It’s not just enough to write down your pitch. The best pitch decks tell a good story that resonates on an emotional level with the audience.

This is something that founders normally learn if they go through accelerator programs such as Startupbootcamp. I can’t stress enough how important the content and design of the deck are.

Secondly, it’s really important to understand the VC you’re approaching and the lifecycle of their fund. The bigger the fund, the bigger return they need to generate. Even for a relatively small fund like ours, the economics need to add up and move the needle.

Lastly, never say your projections are too conservative – because that’s what everyone says!

————————————-

Check out other VC Under The Spotlight exclusive interviews: 

 

VC Under The Spotlight: Balderton Capital

VC Under The Spotlight: Accel 

VC Under The Spotlight: Notion Capital 

VC Under The Spotlight: Northzone 

VC Under The Spotlight: Spring Partners 

VC Under The Spotlight: Frontline 

VC Under The Spotlight: MMC Ventures 

VC Under The Spotlight: Maxfield Capital 

Sam Ahmed

Sam is the Global Marketing & Communications Manager at Startupbootcamp. With a BA in Journalism & MA in Brand Development, she is passionate about content marketing, branding, diversity, and all things startups.