London-based venture capital firm Concept Ventures has launched a £50m fund to invest in British pre-seed startups and address the “major gap” in that stage of the investment ecosystem.
The fund will invest between £100,000 and £600,000 in more than 60 startups over the next four years.
Coinciding with its pre-seed fund launch, Concept Ventures has rebranded from RLC Ventures – the name under which the VC firm was launched in 2018.
In those four years as RLC Ventures, it backed more than 100 founders at the pre-seed stage.
The state-owned British Business Bank provided a cornerstone £30m investment to the oversubscribed pre-seed fund. That came via the bank’s Enterprise Capital Funds (ECF) programme.
The fund aims to close the funding gap at the pre-seed level. The VC said that 71% of the founders it has backed have taken their startup beyond the pre-seed stage.
Two of its portfolio companies have exited in the past two years, including Cliff.ai, which was acquired by Gtmhub in June for an undisclosed sum.
“There is a major gap in the pre-seed ecosystem, with too few funds offering dedicated pre-seed expertise,” said Reece Chowdhry, founder and general partner of Concept Ventures.
“We are completely focused on this critical stage of a company’s life cycle and are able to provide the funding, expertise and network they need to succeed. We’re deeply committed to setting our portfolio up for future success.”
Concept Ventures focuses on ‘founder personality’
Concept Ventures said that “founder personality” will be a key factor when choosing its investments. This approach is not uncommon at the pre-seed stage, as these startups tend to have a vision rather than a clearly defined business model or product-market fit.
But Concept Ventures sees a gap in the investment space to focus solely on pre-seed stage companies. In recent years – amid record levels of VC cash available – the lines between funding stages have often become blurred.
Concept Ventures sees this s a chance to provide more targeted advice for startups at this stage and said it provides a tailored framework to founders to guide them through the first 12-18 months.
The limited partners at the fund are 80% ethnic minorities and 18% women, Concept Ventures added.
Ken Cooper, managing director, venture solutions at the British Business Bank, said: “Our cornerstone commitment to Concept Ventures will help them to provide finance and support to young and diverse, high-potential businesses at the pre-seed stage, helping to close the early stage equity funding gap.”