- Venture capital firm Forward Partners goes public and aims to raise £ 36.5million in its London listing.
- The UK-based investor has backed startups such as the Zopa loan market.
- This move is a change from the usual venture capital model of raising funds privately from larger funds.
- See more stories on the Insider business page.
Venture capital firm Forward Partners went public on Monday, becoming one of the few listed European venture capital firms.
The London-based company aims to raise £ 36.5million ($ 51million) when listed on the AIM section of the London Stock Exchange on Monday. It will also offer shares to retail investors through PrimaryBid, a partner of the London Stock Exchange.
The company will place around 35 million new 100p shares, with an additional 1.7 million through PrimaryBid.
Founded in 2013 by former Draper Esprit partner Nic Brisbourne, Forward Partners has invested in AI, marketplace and e-commerce startups. Its portfolio companies, notably the peer-to-peer lending market Zopa, and the car subscription start-up Drover. Its net asset value is $ 103 million ($ 142 million).
The movement is unusual in venture capital. Companies traditionally raise funds from “sponsors,” such as pension funds or funds of funds, and typically raise a new fund every few years. Retail investors are usually locked out, which is not necessarily a disadvantage for inexperienced investors, as venture capital is a high-risk business.
But Brisbourne wants to “democratize access to the venture capital 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 these guys for leading the way,” he told Insider.
Brisbourne also consulted with listed investment firm Mercia while considering an IPO, and said he has been working on the plan since 2018. “It made it much easier for us to follow the same path,” he said. -he declares.
The listing was oversubscribed, Brisbourne said, as the company initially set a target of £ 25million ($ 35million).
Become a full-service fund
Brisbourne repeated the points made by other public venture capitalists: The IPO should translate into better results for the founders backed by the company.
LP backed venture capital funds are normally under pressure to return money at some point at a high return, with most funds operating on lifecycles of around a decade. A VC with a fund nearing the end of its lifecycle may pressure some of its startups to pull out – IPO or sell – to generate those returns.
“This can cause venture capital funds to pressure entrepreneurs to exit on time that is convenient for the fund rather than the business,” Brisbourne said.
The IPO, he argued, would result in a pool of permanent capital, rather than funds operating on limited time frames. Brisbourne’s former store, Draper Esprit, made similar arguments when it launched in 2016.
Forward Partners’ main LP, BlackRock, is set to buy shares in the issued company, with a commitment of £ 15million ($ 20.6million), with an additional £ 2million ( $ 2.8 million) incurred by Draper Esprit. The company will no longer raise new funds from LPs, instead using its balance sheet to invest.
Funding will go to Forward Partners’ investments and to funding its income-based funding arm, Forward Advances.
“We’ve kind of managed to forge our way through innovation,” Brisbourne said. “But to continue to innovate properly and in particular to really profit from what we started with Forward Advances, then we have to be a business.”
Brisbourne has ambitions to launch new products as her team continues to find new ways to help entrepreneurs grow their business, whether it’s a pre-training start-up or a big business.