My first 3 months at Playfair Capital
Updated: Feb 3, 2021
Author - Jeevan Sunner
When I was young, I wanted to be an author. Then a policewoman. Then a doctor. Then a scientist. Strangely, venture capital investor never came up.
The one thing that did last the test of time was wanting to have my own business. Despite this, the early stages of my career took a very different, meandering path. Wanting to be on the cutting edge of innovation in science, my degree in Pharmacology involved long discussions about the benefits of psychedelics (today, a mainstream debate) and injecting lab rats with neuromuscular blockers.
Despite the glitz and glamour of the lab (!), I was enticed by the glitz and glamour of the City (!), undertaking summer internship roles at BlackRock and PwC. I took a graduate role in the Restructuring team at PwC thereafter — where I completed my ACA Chartered Accountant qualification — before moving into the Commercial Innovation team, running the corporate accelerator for early-stage startups and helping founders fundraise for their Series A. During the early years of my career, there were many learnings that are still relevant to my role today:
How not to run a business. My first Day 1 insolvency started with a briefing call at 10pm in advance of the public press release (and arrest of the CFO for fraud) and progressed to securing estate and assets, before reading out the legal correspondence in making staff redundant. These were the direct consequences of a poorly run business — with unhealthy and irregular cash flows, inadequate leadership making high-impact, high-risk decisions and the company’s inability to adapt to technological changes in the market — and a great lesson in how not to run a business.
The importance of product-market fit. Running PwC’s first cybersecurity corporate accelerator, in conjunction with CyLon, involved screening and interviewing hundreds of startups in a highly competitive and fragmented space. On the other side of the coin were their buyers: CISOs at FTSE 250 companies. I heard from two sides — buyer and seller, disruptive startup and rigid incumbent, technophile and technophobic (okay, I’m stereotyping but this was my experience in most cases) — and in doing so, I understood the importance of product-market fit. Even with the best founders and the best technology, growth is fundamentally capped unless the solution fits a need and demand in the market — a demand created by addressing a key pain point of the buyer/end user.
Use numbers to get a more detailed bigger picture. A good understanding of numbers — through my ACA qualification, working capital and valuations experience, and financial modelling technical skills — I saw how high-level concepts become easier to understand when you can break down revenue streams, key cost drivers, commercial assumptions and cash flows. Starting with the bigger picture, then honing in on the detail to add colour to support the bigger picture helps understand the fundamentals of a business quicker.
And above all else, the world is a people business. As my father often reminds me, it’s nice to be important but it’s important to be nice. I try to apply this ethos to every aspect of my job (and particularly during valuation discussions which can get heated)!
Combining my long-standing interest in business and entrepreneurship, with my experience working with startups, a friend and I launched When Unicorns Fly — A Startup Podcast, aimed at bringing early-stage founders advice from Subject Matter Experts (Season 2 dropping soon, watch this space!).
Venture capital was the next logistical step.
The importance of moving to the right firm was far greater than simply moving into venture capital. Every firm is individualistic in its deal-sourcing, investment process and value-add; there is no ‘typical VC job’. So, I prioritised what was important to me and used this as my filter:
People with diverse backgrounds who invest in people with diverse backgrounds. Diversity in VC sucks. For example, women in VC represent only 30% of the workforce and female founders receive less than 1p of every £1 invested in startups. But extrapolate that across ethnicity, socioeconomic background, education and prior work experience and you see how diversity by representation and diversity by thought can be highly disproportionate at VCs. Recognising the importance in moving towards a more diverse ecosystem, I loved the Female Founder Office Hours initiative that Henrik and Alie first kicked off. Beyond that, the diversity in the team’s backgrounds was surprisingly unique. For a start, our founder Fede is an angel investor-cum-entrepreneurial philanthropist. Chris was previously an angel investor and is our sales and GTM expert, having led the sales team at plan.com, and Joe has experience of recruiting talent for Google and Facebook. Henrik was an Investment Banker with Bank of America Merrill Lynch and Jeremy is our startup operator. Each team member brings a diverse set of experiences and mindset which translates into enriched decision-making and discussions!
A fund that prioritises ‘smart capital’ over cash capital. VCs offer support to their portfolio companies, in the form of network, strategy and opportunities. But in reality, the level of post-funding support is highly inconsistent from fund to fund. It was important to me that the fund I chose prioritised ongoing support as much as that initial cash injection. At the time of interviewing, Joe, our investment Partner, had c.30 initial screening calls scheduled with lawyers for a role in one of our portfolio companies to help take the hiring burden off the founders — in doing so, he was forsaking time spent elsewhere within the fund. This emphasised to me Playfair’s ethos on supporting founders and consistently going the extra mile.
Having the opportunity to work across the entire lifecycle of a deal. I was concerned about my personal learning and development as a generalist VC; the skillset is not quite as technical as what I was accustomed to. And so, it was important to me to have the opportunity to learn how to make sound investment decisions as well as to learn how to operationally scale a high-growth tech company. At Playfair, every team member does everything from deal-sourcing to execution to portfolio support, giving exposure to every aspect of the startup’s lifecycle. You can read more about my specific roles within this below!
In theory, Playfair ticked all the boxes and in reality, it was my favourite team member Scotch who ultimately sealed the deal for me (and was also the reason I dropped my brand new AirPods down an elevator shaft on Day 2…).
Our amazing office companion, Scotch
My job role
VCs are time-poor. Not founder time-poor but generally time-poor. Largely because there’s an infinite possibility of things you could be doing but also a seemingly infinite flow of people (founders, brokers, accelerators, event organisers etc.) that are vying for your time. I use the task management tool TickTick, email organiser Superhuman, collaborative workspace tool Notion and a plethora of Google calendar holds and reminders to stay organised. But to stay on track at a high level, I strive to divide my time equally between the following: Deal-flow
Sourcing. Inbound requests, our Typeform application (that is open to anyone), investor/founder referrals and demo days are some of the many sources of deal-flow for Playfair. Deals often come to us but staying active publicly in the market and doing outbound outreach are important to keeping opportunities coming our way.
Screening. Speaking to founders and reading through decks are the key ways of initially screening an opportunity. My usual week consists of c.30 active deals to screen, progress or pass accordingly — contrary to popular belief, saying ‘no’ is the worst part of the job, and this can add up to an unhealthy portion of my week. Providing detailed feedback that is relevant and useful to the founder helps make this task slightly easier.
Tracking. Quite often, we meet founders and think ‘not now’ rather than ‘no’, although it can sound like one and the same to founders. Common reasons include the lack of track record at the pre-MVP stage or weak traction during early commercialisation. And so, by tracking the company via regular touch-points with the founder, we can prevent an amazing ‘not now’ company from slipping through the net.
Due Diligence. This is where it starts getting exciting. You think you might be onto something but need to get all the facts right to present to your team and build your investment thesis. DD can include competitor analysis, financial analysis, market sizing, reference calls to VCs or customers, and more. The more that founders have prepared for this by collating a Data Room in advance, the easier my job is but often, for a generalist VC, there’s a lot to get up to speed within a very short amount of time which can lead to some frantic late-night pre-IC Googling.
Supporting portfolio companies It has been more difficult to get stuck into portfolio support from day one because of its impromptu nature. But there are always ways to help founders. For seed-stage VCs, helping founders with their Series A fundraise is key. 8 months after fundraising with us, it’s often time to do it again except, the parameters of the game have changed. The A round is far more metrics and traction-driven, to demonstrate product-market fit. And so, helping founders strategise the best time to go out to market, making introductions to the right Series A funds, supporting with pitch deck and financial models and of course, signalling our support and belief in the company as existing investors, can really help the founders in securing the next term sheet. Beyond fundraising, investors can become a sounding board for general strategy support. Attending board meetings can be the best way of staying up to date with the startup and its challenges and hence, find a way to help e.g. making introductions to other investors, providing ideas for user engagement or marketing strategies, and challenging what ‘success’ looks like from a metrics-perceptive, amongst others. This is one area I’m really looking forward to getting more exposure to in the coming months!
Building the Playfair brand
Events and panels. Organising and hosting the 600+ meeting female founder-investor event that you can read about here almost became a full-time job. This entailed screening founders’ applications, briefing investors on the purpose of the initiative, creating the 1:1 meeting schedule with no double bookings and writing weekly ‘Meet the Investor’ blogs (that you can read here, here and here). But beyond Female Founder Office Hours, I usually attend at least one event or panel session a week. In the first 3 months of joining, I’ve attended Othership’s Pitch for Investment panel, UK Israel Hub and Global Tech Connect’s Destination UK panel and have been mentoring founders as part of the Tech In Colour initiative. These events are a great way of building Playfair’s network with founders and other players in the ecosystem.
Social media. Joining VC during the Covid-19 pandemic has been a blessing and a curse. On one side, not being able to meet people in person in what is commonly known to be a highly social job is frustrating. On the other side, LinkedIn and Twitter create excellent ecosystems for founders and investors which have really helped myself and Playfair to continue building relationships and staying connected with the world. Posting regularly with engaging content can be a great way of getting out there — especially when a post goes viral 🥳🥳🥳
Meeting with other players in the ecosystem. Investors need co-investors for prospective deals and follow-on investors for portfolio companies to raise subsequent rounds. Something that surprised me when joining VC was how readily people would jump on a call just to say hi (which probably has something to do with the number of extroverts in the industry). I often meet 1:1 with investors, accelerators and other networks to help understand how we can mutually help each other.
The next three months
There’s lots that I’m looking forward to getting involved in during the next three months including specific market deep dives; continuing to create content to break down the opaque walls of the VC world; building that all-important pattern recognition to efficiently and effectively cherrypick the right deals; and continuing to grow Female Founder Office Hours with Henrik.
Although, if the graph below is anything to go by, it’s a re-read of Zero to One and focus on SaaS enterprise for me!
You can follow the Playfair team on LinkedIn, Twitter, Forbes and Vimeo and here on Medium.
About the Author
Investor at Playfair Capital