Playfair Capital’s Managing Partner Chris Smith discusses finding the right opportunity and supporting founders post investment

Author

UK Business Angels Association

12 September 2019

Finding the right opportunity can be a challenge for angel investors. With 14 deals and 3 exits under his belt, Playfair Capital’s Managing Partner Chris Smith shares his experience with us and highlights the importance of supporting founders post-investment.

Founded in 2013 by Chris, an angel investor, Playfair Capital is one of London’s leading seed investors. Chris is responsible for managing the team, sourcing and reviewing new opportunities and supporting the fund’s group of founders.

Identifying the right opportunity is no easy task so what does Chris look for when deciding to invest in an entrepreneur?

“For us, it really does start with the founder – we are looking for a combination of character, deep domain expertise and a record of prior achievements (not just in business, but in life more generally). It’s hard to articulate, but we all know immediately when we see it!” says Chris.

“Aside from the founder, we like to see: a defensible proposition (this can be hard IP or some other sustainable competitive advantage); a big and fast growing underlying market; a burning pain point that is being solved (the company’s product is a must have not a nice to have and has substantial ROI for the customer); a strong understanding of the market the company is selling into; and a sense of urgency. We also need to feel confident that we can support the founders on their journey and share their passion for the business they are building.”

“For us, it really does start with the founder – we are looking for a combination of character, deep domain expertise and a record of prior achievements (not just in business, but in life more generally). It’s hard to articulate, but we all know immediately when we see it!”

Playfair Capital has a focus on Deep Tech and B2B businesses, with an interest in other sectors, and has backed more than 50 founding teams across 11 countries. What is it that draws them to those sectors?

“Deep Tech, B2B SaaS and marketplaces are all areas we’ve had success with in Fund I and we believe there remains a compelling opportunity to invest in these types of companies in the UK,” explains Chris.

“London is incredibly well placed for Deep Tech with UCL and Imperial turning out extremely talented data scientists and a broad range of engineers. Entrepreneur First has also had a hugely positive impact on the ecosystem by nurturing this talent.”

Chris is keen to stress that Playfair Capital does look outside of those sectors. “We do enjoy being a generalist tech investor though. In fact, meeting founders and getting to learn about new markets every day is one the joys of being a VC. We really listen to them to understand emerging market and technology trends as they are the experts in their respective sectors.”

One of the core values of the company is Collaborative Capital, which is multiple investors coming together for a deal. There are clear benefits to having more than one investor.

“Investors should bring network or experience or both. Having multiple investors, multiplies the network and gives the founders different experiences to draw from. We love to invest in rounds where we are investing alongside relevant domain experts – that really helps support the company.”

Aside from investing, Playfair Capital brings much more to the table to support and guide founders.

“We are very active and supportive board members and shareholders. I think this stems from the fact that we only do deals where we are passionate about the company’s mission. We want to get stuck in and help as much as the founders want us to. What this looks like in practice is that I’ll be on WhatsApp with the founders at least a few times a week. I’ll act as a sounding board, help with introductions and provide a sense check. More broadly, the team is well versed in hiring and culture, financial analysis and preparation for future rounds, sales and marketing, and introductions to other investors.”

Chris believes that there are three core things that Playfair Capital does that differentiates them from other seed stage investors.

“First, we work hard to be open and accessible. We feel strongly that our industry needs to be based on merit and nothing else. Second, if we like a company, we’ll involve the entire team as quickly as possible. This gives the founder access to all of us – allowing them to make a judgement on whether we are the right fund for them – and allows us to avoid wasting a founder’s time by ensuring our team is aligned on the deal from an early stage. Third, our team has extensive experience of starting and scaling businesses – I was shocked to see that only 8% of London VCs do.”

In the future, the vision for Playfair Capital is to continue building its reputation by investing in the right team members. Chris shares:

“I want to build Playfair Capital into a long-term institution with a reputation as one of the leading seed stage funds in London. Our founder, Fede, made an incredible start, so it’s now about making sure we have the right team (we’re currently hiring for a technical investment associate with a deep technology focus) to continue the mission.”

“We’re just at the beginning of deploying Fund II so we’ll make another 20 or so investments over the next 3 years. We’re also working on some initiatives to deepen our engagement with the angel community and open up access to VC further. We’ll also continue to enter partnerships like the ones with the BVCA, UCLE and SaaStock we recently announced.”

Find out more about Playfair Capital by visiting https://www.playfaircapital.com.

Want to know more about angel investing? Enrol in our E-Learning course The Effective Angel Investor at http://bizangels.thinkific.com.

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