Venture Capital

A venture capital firm is making an unusual move and going public in a $51 million UK listing

Read more at timesnewsexpress.com

Forward Partners founder Nic Brisbourne.

  • Venture capital firm Forward Partners is going public, aiming to raise £36.5 million in its London listing.
  • The UK-headquartered investor has backed startups such as lending marketplace Zopa.
  • The move is a shift from the usual VC pattern of privately raising cash from bigger funds.
  • See more stories on Insider’s business page.

Venture capital firm Forward Partners is going public on Monday, becoming one of the few European VCs listed on a stock exchange.

The London-based firm aims to raise £36.5 million ($51 million) when it lists on the AIM section of the London Stock Exchange on Monday. It will also offer shares to retail investors via PrimaryBid, a partner of the London Stock Exchange.

The firm will place around 35 million new shares at 100 pence, with an additional 1.7 million via PrimaryBid.

Founded in 2013 by former Draper Esprit partner Nic Brisbourne, Forward Partners has invested in AI, marketplace, and ecommerce startups. Its portfolio firms including peer-to-peer lending marketplace Zopa, and car subscription startup Drover. Its net asset value is $103 million ($142 million).

The move is an unusual one in venture capital. Firms conventionally fundraise from “limited partners”, such as pension funds or funds of funds, and will generally raise a new fund every few years. Retail investors are usually locked out – not necessarily a disadvantage for inexperienced investors, since venture capital is a high-risk business.

But Brisbourne wants to “democratize access to the venture asset class” through the retail component. He follows in the footsteps of his former colleagues at another venture capital firm, Draper Esprit, which went public in 2016.

“I’m so grateful to those guys for blazing a trail,” he told Insider.

Brisbourne also consulted listed investment firm Mercia while mulling whether to IPO, and said he’d been working on the plan since 2018. “It’s made it much easier for us to go down the same path,” he said.

The listing oversubscribed, Brisbourne said, as the company first set a target of £25 million ($35 million).

Becoming a full-service fund

Brisbourne repeated arguments made by other public VC investors: Going public should result in better outcomes for the founders the firm backs.

VC funds backed by LPs are normally under pressure to return the money at some point at a high return, with most funds operating on lifecycles of around a decade. A VC with a fund approaching the end of its lifecycle may pressure some of its startups to exit – IPO or sell – to generate those returns.

“That can result in VC funds pressuring entrepreneurs to exit on the timescale that’s right for the fund rather than right for the company,” Brisbourne said.

Going public, he argued, would result in a pool of permanent capital, rather than funds operating on limited timescales. Brisbourne’s old shop, Draper Esprit, made similar arguments when it floated in 2016.

Forward Partners’ major LP, BlackRock, is set to buy shares in the floated business, with a commitment of £15 million ($20.6 million), with a further £2 million ($2.8 million) committed by Draper Esprit. The firm will no longer raise new funds from LPs, instead using its balance sheet to invest.

The funding will go towards Forward Partners’ investments, and to fund its revenue-based financing arm Forward Advances.

“We’ve kind of managed to hack our way through innovation,” Brisbourne said. “But to continue to innovate properly and in particular to really take advantage of what we have started with Forward Advances, then we need to be a company.”

Brisbourne has ambitions to launch new products as his team continue to find new ways to help entrepreneurs grow their businesses, be it a pre-formation startup or a large corporation.

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