Alex Leigh as a Managing Director at Future Planet Capital. He focuses primarily on the UK Innovation and Seed Fund with a focus on Defense & Security. He talks to AIN about his move from PE to specialty VC, how a pre-seed founder can increase fundraising efficiency, and what startups should spend more time on to prepare for investor meetings and the behavioral traits that founders should avoid at all costs.
Why did you become an angel investor?
For the excitement of what the future could be. I started my career in PE, where I mainly looked at historical financial figures. I wanted to look forward more than backward, which made VC much more suitable.
How did you experience the transition from Private Equity to specialist Venture Capital?
I leverage my strengths given my technical training and early-stage startup experience. Although the defense part was quite new to me, but since I’ve been doing it for 3.5 years now and before defense technology was ‘cool’, I’m a bit of an expert in that too. Maybe I’ll change again in the future, but for now this is interesting!
You focus on commercializing scientific research. What is the biggest challenge for university spinouts in moving from research to commercial growth?
Culture. It’s a double-edged sword because you need smart academics to create true deep tech, but startups require a hustle mentality, so they need to make that transition quickly.
If a pre-seed founder only has 30 seconds to get your attention, which phrase should they focus on and why?
“You’ve invested in X, which is similar to us because Y, and this is why you’re likely to be interested.” Because it shows they are being targeted with their reach, they understand your investment mandate and what VCs are looking for. Same mentality as being customer focused, which is always a winner.
Our data shows that 38% of founders spend 30% or more of their week actively fundraising. What would be your top tips for founders to be more efficient in the fundraising process?
Do the work before approaching VCs. Build all equipment and make sure it is easily accessible. Record a 3 to 5 minute video pitch and upload it to Vimeo. VCs will appreciate you saving them time and being seen by so many more people. Think about scalability: it’s a game of numbers and communication.
What are the top non-negotiable pieces of research or questions a founder should ask about you/your company before approaching you?
Are you within range? Sector and stage. This is the main reason why startups get rejected and waste a lot of time.
For founders preparing for their first investor meeting, what do they usually overprepare, and what do they often forget to prepare?
Overprepared: Glossy pitch deck. Buzzword bingo – trying to get investors hooked.
Too little preparation: clearly articulating the strength of their value proposition compared to existing alternatives. Financial figures are generally not well articulated.
How do you propose founders balance acting quickly and making thoughtful, data-driven decisions when resources are limited?
Create frameworks for decision-making in advance. Strategy is an important area for management and the best definition of strategy is the things you as a company are not going to do. Once you get that clear, decisions are easy and quick.
Were there any behavioral warnings noted during your due diligence that caused you to reconsider or abandon an investment?
Being late, especially since it happens before you even give them the money! Poor interactions between founders as team risk is significant early on. Rude behavior/inflexibility – you need to know you can work together. You wouldn’t hire someone like that and often that is only a decision for three to five years, while it is ten years – you listen strongly to your feelings.
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