EXCLUSIVE: London-based Form Ventures is ready to back eight to 10 early-stage tech start-ups in heavily regulated markets in 2023.
The VC will invest £200,000 to £1m into the new deals, its co-founder Leo Ringer confirmed.
Form Ventures is primarily an early-stage VC fund with two funds.
The first, a pilot fund formed in 2019, consisted of nine deals.
The second, Form Ventures Fund II, is a 10-year £30m fund which has been up-and-running for a year but half of this will be held back for follow-on investing.
“Over the following two to three years we will make the rest of our first investments which will account for about half the capital in our fund,” Ringer told Growth Business.
Ringer has led an unconventional route into venture capital. Before Form Ventures, he worked for former business secretary Sir Vince Cable as an advisor before moving to an advisory firm helping businesses understand how public policy impacts their business.
Then, in 2018, he and co-founder Patrick Newton bounced around the idea of starting a new investment firm with a difference over a coffee. “What we landed on was bringing our public policy and regulatory experience and skills,” he said.
After piloting their first fund while still working part-time, Form Ventures became a fully-fledged VC firm in 2021 and now has a small team of four.
“We think we have an edge when it comes to understanding public policy and regulatory drivers and success and obviously if you’re in a fairly regulated market it could have quite a big impact,” Ringer said.
“If you’re in a market where public policy and regulation matter, they can matter across a whole spectrum of things that a founder is trying to be good at – that might be developing a product, technology, sales, operations, a team, or financing. Public policy and regulation can have a big bearing on any of those.
“When we sit down with the founding team, we run through what the issues are going to be for this company and where should we be spending our time when it comes to policy and regulation. That can involve helping the company engage with government and make the case that reform is needed.”
Ringer explains that it’s not about making the case for government reform, rather helping founders understand what’s going on in the policy world and how it could impact them commercially.
“Their product – cultivated meat – isn’t authorised for sale anywhere in the world apart from Singapore where you can buy chicken nuggets which have a degree of cultivated meat within them,” Ringer explains.
“What we’ve been helping them think about is where and how these new foods be authorised for approval and where they be able to sell them. That has implications about where they will be based in their activity.
“In terms of fundraising – investors may not be regulation experts and we can also play a role in helping those investors get a better feel for the regulatory environment and explain why we’re confident there’s a market for this.
“[Cultivated meat] could be a sector in which the UK is really strong,” he concluded. “The more ambitious they are the more likely the UK will succeed in being the destination of choice for these companies.”
What Form Ventures looks for in founders
Team: “Of course, we’re looking for a big enough market and high-quality tech but the one thing we don’t compromise on is ability of the team and their appetite to build a very large business. Are they ambitious and here for the long haul?”
Grit and perseverance: “There are so many challenges constantly. Being a start-up founder is a constant problem-solving journey so do they have the grit and resilience.”
Fairly high degree of humility and self-awareness: “While ambition is good, overconfidence is potentially a downside because it means you’re not alive to the risks, you’re not necessarily able to reflect on how you’re doing or take advice.”