An interview with: Ben Davies of Praetura Ventures
If you’ve attended one of the recent FHundED Founder x Funder events, there’s a good chance you’ve spoken with Ben or one of the other members of the Praetura Ventures team.
Praetura Ventures are a UK-wide venture capital company. But, the support they offer goes far beyond financial. They also establish strong relationships with their clients, providing unparalleled mentorship, community, and growth resources for founders.
As Praetura’s Group Marketing Director, Ben oversees all their marketing and comms activity. He’s keen to strengthen Praetura’s community connections and loves having the opportunity to attend events, meet with business leaders, and hear all about their journeys so far.
We recently caught up with Ben to get a snapshot of the North West’s funding landscape and hear his business funding advice and wisdom.
To start, please can you tell a little bit about the background of Praetura Ventures?
Ben: There are six different companies within the Praetura group. Of those six, we have Praetura Ventures which was originally formed back in 2011.
Praetura Ventures was created as a way to plug the gap between the amount of talent and exciting businesses that are here and the amount of funding available for such businesses. Our founders were part of some of the early day fundraisers for companies like the Hut Group and AO.com. They were involved in funds that floated for billions of pounds.
You might think raising capital at this level is fairly easy but it’s not. So, Praetura Ventures was born out of those experiences. They wanted to help businesses get greater access to funding.
What does the funding landscape look like across the UK?
Ben: Our perspective is that London doesn’t have the monopoly on entrepreneurial talent. Yet, most funding goes towards London and the surrounding areas.
We know that 80% of VCs are based in London and 69% of their funding goes to the South East. The second most popular destination for funding is then international funds. The North West specifically only sees approximately 7% of VC funding.
Wow, so the North only received 7% of investment. Can you tell us more about the state of North from a funding and VC perspective.
What does the landscape look like currently?
Ben: The landscape today is incomparable to where we were when we first started.
In the past 12 months, there has been a slight slump in funding due to economic volatility, war, and other impacting factors. Across all regions, most VC funding has dipped. The North West is one of the only regions that has kicked that trend and slightly increased funding during the slump.
We are also establishing Angel networks a lot better these days. Those Angel investors are critical for early stage funding. I know a lot of work is going on in Lancashire right now to strengthen the Angel network here.
Last year, in a piece of research that we did, we calculated that there is a £9 billion shortfall in funding for the North. Whilst there is still that funding gap that needs to be addressed, there is a clear opportunity for growth here. We are consistently creating global breakout success stories of Northern businesses.
The reality is that the North West has only been put on the map in this sector for the last 10 to 15 years. But the momentum is definitely going to just keep growing.
Looking back to the industrial revolution, the North West has a long, exciting history in innovation and growth. From docks to data and steel to SaaS, you can see the next piece of the North West’s journey coming.
One other thing to note is that Manchester is obviously attracting a lot of investment which has a lot of benefit for the areas surrounding it.
“Bashing other regions doesn’t help anyone.”
Bashing other regions doesn’t help anyone. You have to become globally competitive for your own merits. Being 2 hours away from London is an amazing benefit for the North West of England.
But, simultaneously, what I’d also say is that places like Lancaster, Liverpool, Preston may benefit from Manchester’s ecosystem, they are also growing their own ecosystems known for certain critical industries or abilities. That’s really important.
We have the opportunity to take inspiration from other ecosystems while also doing it our way in terms of what did or didn’t work for other people and what actually could work for us.
What do you think makes the North West, and Lancashire in particular, a great place for founders and funders?
Ben: One thing that I think is exciting about the North West is that it’s big enough to have global ambitions but small enough that everyone still knows each other. So, there’s a kind of cohesion here. Something that is good for the area will be good for you personally too.
There are also some amazing academic assets. The Universities are producing some really bright, ambitious people.
In the North West, we’re particularly good with things like tech, life sciences, and there’s some amazing engineering here. The Lancashire Innovation Plan by LEP has also mapped out a plan for the next five years.
There are also people like Dan and Rory who are great super connectors. You can tell they are trying to do something good for Lancashire’s ecosystem. They recognise that nothing changes if you keep doing the same thing. In Lancashire, there are these ecosystem builders putting their head above the parapet to do something differently, collaborate with the LEP, and try to push the region forward.
So, supporting super connectors in the region will only boost the ecosystem. I think we, as investors, have a duty to support things like that.
Based on the research we did last year, we interviewed 300 founders and stakeholders to figure out what challenges they had. We found that North of England founders were most responsive to ecosystem initiatives like events and accelerators than any other region. They were also the region most likely to worry about access to funding.
Whether it’s the Electech Innovation Cluster, UCLan Engineering and Innovation Centre, the Barclays Eagle Labs, or any of the other people we’ve met here, everyone is incredibly focused and ambitious in terms of the impact they want to have on the region.
“The North West benefits from a collaborative public sector that knows its goals and works well with the private sector.”
There’s some great people both on the public sector and private sector side who are working together in the same direction. The North West benefits from a collaborative public sector that knows its goals and works well with the private sector.
From an investor perspective, we’ve also noticed that the silly market bubble valuations that you see happening elsewhere don’t tend to happen in the North of England. So, investors can really benefit from more realistic and stable valuations where the global potential for growth is much higher. You can grow a business here then take it elsewhere to start benefiting on a global scale.
How does Praetura Ventures help Founders in the North West?
Ben: Education can be a real problem. Making sure people have access to the right information about how to scale a company is really critical.
For our own portfolio, we have our more than money support. That support includes things like operational partners, who are industry heavyweights that act as active mentors for our portfolio founders. What they’ll do is introduce the founders to their networks and help them with any problems or questions. For first time founders, especially, that level of support works really well.
Outside of our portfolio, we offer lots of education around how you might raise funding, what’s realistic, and what the process looks like. Sharing some of the teachings at places like Fraser House Hub has had a really positive response.
Is there any advice you can offer for investors who might be interested in the North West?
Ben: We’d like to see more investors be interested in the North West. I don’t think they need an office in Lancaster or Manchester, but they should be making more trips up here to Manchester, Lancaster, and Liverpool.
You need to have a willingness to get out there and speak with people. Don’t try to kill people with jargon or investor buzzword bingo, just speak like a human being.
Spend time with founders and be active in the community.
If you can’t support founders, make sure you tell them who might be able to support them.
We see 1,400 opportunities a year. We won’t be able to fund all of that so connecting founders with other investors and funds is critical.
You have to be honest about the support you can provide founders. One of the ways investors attract founders is by the support they can offer them, as well as the capital afterwards.
What advice would you give to a Lancashire founder looking to secure funding?
Ben: It is as important for founders to do their due diligence on investors as it is for investors to do it visa-versa.
Ultimately, you have to work with someone who you are going to get on with. You have to work with someone who is going to be fair because stuff doesn’t always go to plan. When you are side-by-side trying to figure out a problem or some future disaster, do you trust that they are going to be reasonable to deal with?
Speaking of due diligence, if you are speaking with an investor, go to their portfolio and pick a few at random who you can ask, “what are they really like post-deal?”, don’t just speak to the ones they want you to speak to.
I think we sometimes assume founders know all this stuff when starting a company. When the reality is they don’t. There’s some great resources where you can learn all of this. You should also get out to events like the ones Lancashire Digital Hub and Fraser House Hub run.
How does Praetura go beyond only offering money support?
Ben: Growing a business isn’t linear.
Half of our team internally has been part of a scale up journey or grown their own companies before. We’ve had people who have spent time in some of the businesses they have scaled up so we understand that it’s not a case of ‘put in one, get out two next year’.
We know that growing a company is really hard. So, we have a dedicated portfolio team which is headed up by Colin Green, who was previously CEO of Apple in Japan and Korea and also headed up the US Retail division for Apple, which was a $10 billion PNL. The operational partners in the portfolio team regularly check in with each of the portfolio companies.
Then, our portfolio founders have got that mentorship and active support through their operational partners. We also have a portfolio toolkit. This gives them access to pre-established contacts, discounts, and other things to help them with their day-to-day operations.
We run monthly masterclasses. Previously, we’ve had the Chief Economist for KMPG give a masterclass about her economic outlook for the future all the way through to marketing experts to talk about brand building and lead generation to grant funding.
Then, they get access to our internal teams too. My team [the marketing team] regularly makes video content for them, as well as training them in things like LinkedIn, PR, public speaking or events. We’ll put them forward for press speaking opportunities and positions too.
We also have a central HR resource that helps them with any challenges they may have there.
Our portfolio founders will regularly use our offices if they need meeting rooms too.
Our founders are also all in WhatsApp groups together. So, not only are we helping them, but they can support each other too. We even have a separate group for the Marketing leads within our portfolio companies too, for example.
They have a dedicated Investment Director as well. So, they always have a point of contact if they ever need something from us.
For want of a better phrase, we’ve got their back. We really try to go over and above where we can.
What is the benefit of working with investors who are geographically close to you?
Ben: If your investors are within 50 miles of you, you can have a fundamentally different relationship because you will be at similar events and will be doing similar things in and around the same ecosystem.
In our research, we found that 65% of North of England founders wanted their investor to be present in their region because you get more contact that way.
This is a contact sport. It’s people-driven so that regular close connection is really important.
Being familiar with a region is key. The founders based here will face similar issues. For example, we know a lot of life science businesses struggle for lab space or we know people are fighting over the same talent from certain places. An investor based in the region will have experience dealing with these issues.
At Praetura, we are becoming known for certain sector specialisms because we have time taken to understand the regions we work with. I think that is really positive.
Plus, people need to be inspired by someone who is a few stages ahead of them. Having breakout success stories in the ecosystem in their region can really help.
“This is a contact sport. It’s people-driven so that regular close connection is really important.”
What types of founders or companies are you the right fit for?
Ben: There are some opportunities that we have really liked the look of that we haven’t done, mainly because we’re probably not the right person for them or we might not be able to add value to them.
We typically look at B2B businesses that work in technology sectors. Those are the businesses that work well for us, and that we have experience with. But, we will also invest in things like health, gaming, AI, and related fields.
If you want an inactive or quiet investor, we’re probably not the right fit for you. But, what we’ve typically found is that founders don’t want that.
I would recommend founders look at a website called Landscape.vc which is like the TripAdvisor for VCs. It will give you a gauge of what people like about certain VCs, and what they don’t like about them. I’m pretty proud of our reviews there. But it’s great for helping you see which VC might be the best fit for you because there’s a real mix of different people and companies.
Are there any diversity considerations in VC and funding? How can investors address those?
Ben: A lot of female founders are over mentored and underfunded. They don’t need any more advice, just give them some cash.
A commitment to things like the Investing in Women Code is important.
Having an open, transparent, and centralised resource that shows who has backed who and where is important too. This is something that I hope we will eventually have at Praetura.
In Praeture, we have specifically engineered our team so that it is diverse. So one-third is from an ethnic-minority background, half are female, and two-thirds of the department are female-led. We’ve now found that is almost exactly mirrored in our pipeline and our portfolio. That is something we continuously try to improve.
55% of our portfolio is in the North West of England. Of the £40 million we invest here, for every pound we invest four comes from elsewhere. So, that’s like £203 million coming into the North West because we put £40 million into it.
I think anyone can write a shiny press release, But you need to be able to show genuine, measurable, sustained commitment. Being upfront and transparent is really important.
With that said, the more funding coming in is important. Organisations like Fund Her North are doing really well at acting as a central point for female founders. I think what Playfair do with Female Founder Office Hours is really positive. There’s a lot moving in the right direction in this space. But we need multiple organisations doing that. We have a few doing it now but we need more.
At Praeture, we commit support where we possibly can for initiatives like that. There is a funding gap in the North of England which squeezes those who have less first.
What could founders do to make sure they stand out and capture the attention of investors?
Ben: I think people expect investors to have more time to spend on each individual than they do. You need to be really good at distilling why you add value immediately. You have to leave investors wanting more.
If you have a planned date as to when you need to fundraise and when you need to start speaking to investors, make it six months earlier.
If you need to raise money in three months, you have already not raised money. You have already not hit that deadline for your round.
Start 12, 24 months in advance. Send them stuff on what you are doing, send them key milestones and keep them up to date. The longer they know you, the easier it becomes. So networking can be really important. It also means you aren’t running to people cold. It puts you in a much better position than you were before.
And focus on both the people and the proposition. The business may change. We are betting on the people in the business as much as we are the business idea itself.
Before you go, are there any final words of wisdom you want to share with founders?
Ben: You have to choose an investor, as much as they need to choose you. Make sure you choose the right money that is aligned with your values and what you want to achieve.
People can focus so heavily on fundraising that they don’t realise that when the money comes in, that’s just the start. You need to look at the long term view. It’s bloody hard to get rid of shit money.
Final thoughts — funding, ecosystems, and ways to get involved
From recognising the funding differences between different regions to highlighting the potential held by the North, Ben offered a plethora of insights into the world of business funding from a VC perspective.
As a business owner looking to raise investment, be sure to start early and do your due diligence. As for investors, spend time in the region you are investing in and show a genuine interest in supporting the wider ecosystem.
If you are interested in hearing more investment insights from Ben and the team at Praetura Ventures or you are keen to build founder-funder relationships, they are hosting a series of founder feedback sessions across the North. These Founder Feedback sessions are designed to connect founders with industry insiders across the investment landscape to help startups perfect their investor pitches. Get your ticket for the Founder Feedback session being held at Fraser House Hub on 24th October here.
You can also view Preature Ventures research into the North’s scale up landscape here. This research is overflowing with valuable data on the North’s landscape, what founders need to build better businesses, and expert advice from those who’ve been there before.