Fresh from picking up Investor of the Year at this year’s Investor AllStars, Advent Venture Partners’ Frederic Court tells GrowthBusiness what he thinks makes a successful investor and why he’s hedging his bets on internet and mobile.
In beating off strong competition from the likes of Index Ventures’ Danny Rimer and Davor Hebel from Fidelity Growth Partners, newly crowned Frederic Court, general partner at Advent Venture Partners, tells us why the award means so much to him.
What does an accolade such as Investor of the Year mean considering it came from your peers?
For me, ‘peers’ is exactly the key word, in that it comes from a great group that I not only really respect but also enjoy working with.
Getting that kind of recognition is amazing. It has also been nice that since receiving the award I have been getting kind emails and messages saying congratulations. We have few opportunities as a community to get together and celebrate our successes so it was fantastic to be able to do that.
What about the rest of the shortlist, do you have any personal involvement with any of them?
Actually one in particular is one of my partners at Advent [Mike Chalfen]. It was a special year for us in that we had two partners from the same firm named in the shortlist.
I guess it shows that not just what I am doing is interesting but generally as a firm we have been working pretty hard over the past five years to take Advent forward.
As an investor we have been around for a long time but we now have a new younger generation of partners taking it forward for us.
We were also shortlisted for Venture Capital Fund of the Year as well as Exit of the Year for our sale of Zong to eBay last year so the firm was probably the most present in the shortlists.
The past couple of years have been extremely good as a result of a lot of hard work. We have closed a significant amount of exits over the past 18 months where we got returns of over 5x. So where there a lot of questions about venture capital in Europe, we are proving that we can make money and generate very strong returns. That is worth celebrating not just for us, but also as a community generally.
What excites you about the mobile, consumer internet and software sector?
Generally what is truly exciting is linked to the fact that growth is happening everywhere. We see opportunities to build new businesses, and if you look backward ten years ago when people were dreaming about where we could be with the internet, these dreams are becoming a reality. Especially in Europe we have a great infrastructure to build new businesses.
Everyone has broadband at home, they are using credit cards to buy online, and are connected by social networks. So all of these platforms like could, mobile and social are extremely well established in Europe and we have seen a strong resurgence in innovation and appetite to create new start-ups. Young entrepreneurs are inspired by the successes that have happened in the last decade.
Now all of these changes are being linked to other industries like finance, manufacturing and health. So it is a very exciting but a very challenging time for the technology sector. Going forward we are going to be in this kind of strange world with lots of opportunities for growth but extremely difficult access to capital.
Unfortunately for the venture industry I expect a bit of a bloodbath on the fundraising side as it has already become very difficult.
What, for you, makes a successful investor?
Especially at our end is it a very personal thing, the people are very important. It is more and more less about the numbers.
At the lower end of venture and growth, where companies are at an early stage, the people are much more important so it is about backing the right kind of entrepreneur.
I have learned that good instinct is important as well as spending the right amount of time with an entrepreneur beforehand. It is going to be journey which will last a few years, and it is never a straight line, so building that relationship is important.
At the same time you have to remember our roads are different, we are there to help the entrepreneur and make money and you have to remind them that our interests need to converge.
The Zong example is a good illustration of a great success story in that we backed a fantastic entrepreneur and helped him grow his company and ultimately sell it. When he did sell the business he ended up being very successful within PayPal. So I think it demonstrates our flair and instincts for tracking talent. It is one of the key assets that we have in that we can identify someone who is talented and then put capital behind them to build the business.
What attracted you to the Farfetch investment that you made this year?
There are three things there, starting with what I was saying about the people. The second thing is that it operates in a huge market where we have been looking for an online fashion investment. In Europe we feel that luxury fashion and lifestyle are areas where we have a great strength and tradition so therefore it’s a great place for us to be exposed to.
The third thing is very important to us in that the business is highly differentiated. We like companies which are different and are more likely to generate strategic exits through M&A because they are doing something which is hard to replicate.
Which exit would you pick out as particularly satisfying?
I think it would be Zong because that is one we met in 2004, tracked for three years and backed in 2007, and then sold to eBay in 2011. Nine months later our entrepreneur is then promoted to run the overall business. We joke that we kind of took over PayPal and that is not far from the truth. A lot of the top management is now in some key roles like CEO, head of product. So that was a wonderful story and a rare one as there are few companies that can make it from Europe to the US in such a spectacular way. It was a great personal experience.