Triple Point today announces a rapid turnaround investment initiative to help new start-ups launch, in recognition of the role innovation and technology will play in accelerating the UK’s economic recovery.
Periods of uncertainty and change often create significant opportunities for entrepreneurs to innovate. This has been seen during past economic downturns, when companies such as Uber, Slack, AirBnB and Pinterest were born. There is high potential for other ground-breaking businesses to be established now, as the COVID-19 impact accelerates change and creates opportunities for fresh business models and new disrupters.
The impact of the pandemic has lowered wage, rent and advertising costs, and businesses now have better access to the skilled human talent that they need. All these factors give early-stage companies a much better chance of accelerating their growth and driving their future commercial success. The entrepreneurs who succeed will choose to view this current crisis as an impetus to arrive at a breakthrough.
Critical for start-ups to fulfil their potential is access to funding. The Government has announced a range of measures to support growth businesses, which are welcome and much needed. These include the £500m Future Fund, which is focused on early stage companies. However, to qualify for investment from the Future Fund, businesses need to have raised at least £250,000 in private investment in the last five years, which still leaves many of the earliest stage start-ups struggling to access funding.
An illustration of the issue is the funding that UK start-ups raised in the first month of the lockdown. According to research from innovation centre Plexal and data provider Beauhurst, start-ups raised £663m in investment during this period. However, deal flow was down 39% year-on-year and of the total amount raised only £50.2m went to start-ups that had never raised funds before.
Triple Point’s investment initiative “Kick Start” is designed to target those very early stage businesses that have yet to raise funding. It will invest ticket sizes of between £100-£150k in companies with pre-money valuations of between £1m-£1.5m, usually as the first external money into a business.
Typically, the earlier in a growth company’s journey an investment is made, the greater the potential impact that investment can have, while also allowing investors the opportunity to see significant capital growth.
As part of their Kick Start initiative, Triple Point will be committed to providing founding teams with an investment decision within 10 days of applying, with the aim of signing terms within 14 days and deploying capital within 21 days. The firm will also launch a dedicated online application form (www.triplepoint.vc/kick-start-application/) so that interested startups can have the opportunity to apply for funding as well as to see Triple Point´s track record within the early stage sector.
The initiative will be led by the team that manages Triple Point’s successful venture capital funds. Triple Point has been investing in early stage businesses for over 15 years and has a track record of supporting innovators, building enduring partnerships as well as exceptional investments. This has led to over 130 early stage companies receiving funding and support from Triple Point in the past. The firm has £600m invested in young UK businesses, with over £1.5bn overall assets under management.
Ian McLennan, Partner at Triple Point, said: “High growth companies will be critical in driving the UK’s economic recovery, and early stage start-ups are the most exciting, innovative and dynamic companies in the country. Now is an opportune moment for investors to support compelling new investment opportunities, ensuring the best new start-ups have access to the vital early stage funding they need. Ensuring those start-ups have access to the funding they need is fundamental to them playing a full role in our economic and business revival. Triple Point is proud to play its part in this by deploying further investment dedicated to support start-ups and we encourage such businesses to get in touch and promise them a fast turnaround of their application and an investment decision within ten days.”