An interview with Form Ventures

We caught up with Leo and Patrick from Form Ventures to discuss their first six months working with the ECF team. Read on to find out what we discussed.

Form Ventures Team

Q: Who are Form Ventures?

A: We’re a pre-seed and seed VC fund investing in markets where public policy and regulation matter. Whether that’s typically slow-moving regulated markets like financial services and health, or completely new markets where regulation is shaping outcomes, such as cultivated meat, crypto and climate tech. We’ve just closed our £30m Fund II – an Enterprise Capital Fund (“ECF”) backed by the British Business Bank (“BBB”).

Q: Why do you focus on regulated markets?

A: It’s certainly unique! First of all, we think it makes a strong investment thesis – the vast majority of the big, outlier companies backed in the UK and Europe have policy and regulatory exposure, according to our analysis. We have several theories about why that’s the case, ranging from the regulatory culture in the UK and Europe, to the kind of entrepreneurs here and the nature of these markets. Secondly, it gives us a clear way to differentiate among investors. We are the only Fund dedicated to helping founders understand and navigate policy, so we think we can always earn our place in a deal. Finally, we think it gives us an edge in assessing some opportunities where the regulatory and policy outlook are a big part of understanding a market or a trend.

Q: Who are the Form Ventures team and what are your backgrounds?

A: In some ways our backgrounds are unconventional. Patrick Newton, Partner, started in policy but moved into strategy consulting and then venture at Deloitte Ventures. Leo Ringer, Partner, spent over a decade in policy having initially worked with Patrick at the CBI before advising a Secretary of State in the UK government, and then working with early-stage companies and VC funds.

Form was born out of two insights coming together: Patrick’s view that to succeed in the future, new VC funds will need to clearly differentiate around something (in our case, a distinctive value-add), and Leo’s experience of seeing a gap in understanding of regulation and policy in the early-stage ecosystem.

Fund II has seen us add two further members to the team. Mayowa Ogunremi has joined us as an investor helping us to source more and better deals and improve our decision-making. Andrew Bennett has a tech-policy background and is leading on our policy value-add and analysis – our distinctive USP that we were keen to invest resource behind.

Q: What made you decide to apply for an ECF?

A: All emerging managers want LPs with institutional credibility and presence, but it can be hard to fundraise from them when you are early in your journey. The ECF programme has a strong track record of backing first-time and emerging fund managers. That felt like a perfect fit for us given our unique approach and the fact we’d only been operating for a little while under the Form Ventures banner. We also knew we’d benefit from going through an institutional-grade application and diligence process, even if that meant more work for us! The other reason is that the ECF programme structures the economics of the fund to make it more attractive to private investors, which is a real boost when fundraising.

Q: What are you hoping to achieve with your ECF?

A: First and foremost, strong returns for our investors, which in turn means backing some real break-out companies within the Fund’s portfolio. But if our LPs are one set of customers, our founders are the other. We aim to provide distinct, meaningful support and be rated as one of, if not the, most helpful investor that our founders have on their cap table.

We also want to build the foundation for a multi-fund venture capital business – putting in place the infrastructure, processes and culture that will underpin continuous success. You don’t often hear VCs talking about building businesses in their own right as opposed to the companies they back, but we very much see it that way.

Q: Who have you backed, and who have you invested with?

A: Our policy and regulatory thesis might sound quite narrow, but these are issues which cut across a wide range of tech-related businesses and markets. Our aim is to back the most promising founders with the biggest ideas, and we’ve been lucky to invest in some top teams.

Most of our Fund II deals are unannounced at the time of writing (though we’re itching to share news!), but in Fund I we invested in companies including Sylvera (carbon offset ratings, led by Index Ventures and Insight Partners), Hoxton Farms (cultivated fat, led by Founders Fund) and Peppy (digital health, led by Outward VC and now Felix Capital). But the portfolio extends well beyond that, covering proptech, childcare, mental health, consumer fintech and more.

Q: What is the biggest lesson learnt in your initial six months of running an ECF and working with the ECF team?

A: Working with the ECF team has been great. Both during the application process and now through their role on our Limited Partner Advisory Committee (LPAC, the governance committee for the Fund) they have really helped us think about what it means to make that step up to running an institutional fund. The ECF programme has been around for a long time and has backed a lot of managers, so the team has a wealth of experience and insight for us to draw from.

Q: What advice would you give to a first-time or emerging fund manager?

A: We often say to founders when fundraising that they should think about the kind of investor base they want and aim to bring in the kind of capital that will fit best. In a way it’s the same for fund managers – different types of LPs bring different things to the table, whether that’s institutional money, fund of funds, family offices, high net worth individuals, and so on. And they each have different expectations and motivations for investing. Trying to suss that out in advance can really help when it comes to the grind of fundraising, but it’s not easy!

We’d recommend anyone planning a fund that fits the ECF criteria to at least reach out to the Enterprise Capital Funds team for a discussion, because their input will be valuable even if it doesn’t progress beyond that point.

And finally, it’s worth reaching out to emerging managers like us for a chat, because we’re always happy to talk to people about our experience – we benefitted massively from conversations like this when we were getting started.