“Early stage VC funding is a myth in the UK”

Plugg 2009: Anil Hansjee
Those were the words spoken last night at a Taylor Wessing / Tech City event by Anil Hansjee, who used to do M&A at Google in Europe, and is now setting up a seed stage fund here. He did clarify by saying that yes, there have been some deals but “you can count those on a few hands”. Anil is just confirming what us entrepreneurs already know, but here it is coming from a soon-to-be VC and one that knows the market really well.

Anil backed it up by saying that of the 80 inbound pitches he’s received since an article appeared on TechCrunch about his new fund in June, 75% merited a closer look, confirming that the quality of opportunities in Europe appears high. (And a majority of those were from UK based startups). I imagine that’s just scratching the surface of what startups are out there chasing funding.

When Anil’s fund is ready to start investing you should be aware that if your startup is not located in a cluster with a functioning ecosystem, then he won’t be investing and will give you the advice that you should be relocating to the best ecosystem for your industry. He specifically cited SaaS or cloud infrastructure startups where in most cases the best place to be is the Valley; to stay in London would damage your chances of success and funding. But there is some good news, there are plenty of areas where London is the right choice to be if your focus is on fashion, music, finance, advertising, retail, etc.

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8 Responses to “Early stage VC funding is a myth in the UK”

  1. No problem with his initial observation but think his later one shows evidence of a misspent youth. Companies should only start where there are other companies like them?

    • Can you clarify “evidence of a misspent youth”? Not sure what you mean.

      The point he was making was about the support that’s available in startup hubs, whether financial, or otherwise. Startups are hard, and it’s extra-hard if you’re not in the right place.

  2. Yodhe says:

    Success it seems is something often defined in retrospect, and seems dependant on two factors, luck (those factors out of your control) and how much capital one has. My advice, is ignore all advice, (including my own!) and do “what thou will” and leave the stratagems to the historians, and bloggers.

    • Very true – talent and effort come into success as well, but I agree that capital and luck is nearly always crucial. Rather than “ignore advice”, I would say listen and then make up your own mind!

  3. Philip says:

    Picking up on – “he specifically cited SaaS or cloud infrastructure startups where in most cases the best place to be is the Valley”….

    Looking on Anil’s own website home page it states: “Innovative strategic insight and financing for the Cloud Software and Digital Media Industries; to stay in London would damage your chances of success and funding”

    Does this imply that he is only looking at opportunities suited to SV?

    • I can’t speak for Anil, but I understand the focus of his fund is Europe and that he is only prepared to invest in appropriately located businesses. I think he also said that while they might be prepared to co-invest farther afield that would depend on a good lead investor local to the investee company.

      • Philip says:

        Sure, I thought he would be focusing on UK / Europe. But it was the apparent contradiction between what his website states and what he said according to your blog that I was thinking about – re Cloud etc.

        The good news is that there is a VC in the UK looking to do early stage:)

  4. Mike Butcher says:

    In Vienna, in conversation with me, Anil said if you are a full blown Cloud Computing startup you should be in the Valley. Other things – ecommerce, social, etc – can be run just fine from Europe.

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