Meet the Investor: Paul Soanes, Worth Capital

Set to launch a £1.8m funding competition, the founder of the Startup Series SEIS fund discusses investment criteria and looking past "hot sectors"...

Firm: Worth Capital
Name: Paul Soanes

Where are you based?

Kentish Town.

What kind of investor are you?

We invest through our FCA-regulated Startup Series SEIS fund, which allows participation from high net-worth investors and also IFA/wealth managers’ client bases.

What kind of deals do you finance?

We provide start-up capital, under the Seed Enterprise Investment Scheme (SEIS), meaning that our investments are in new or very young businesses. With most of our investments we ideally like to see some traction already, so we’re not going in completely cold.

What kind of person do you invest in?

We look for three primary qualities in our founders:

1. Someone who is prepared to listen to advice – they don’t have to accept advice, but they certainly need to have that quality to listen and weigh up other people’s views.
2. The ability to relentlessly execute a plan.
3. Plain speakers, who can also inspire.

How do you source prospects?

Worth Capital has a unique approach to sourcing deal flow. We run large-scale start-up competitions with high profile media partners, historically with the likes of Facebook and the Metro newspaper.

Our new media partnership will be announced in the autumn where we will be running a series of large-scale competitions with £1.8m funding for a number of winners. We’re anticipating reviewing up to 250 businesses plans a month, which we will then distill down to a number of lucky founders. Keep an eye on our website or social media pages for more details…

What is your ideal investment?

Speaking personally, it is intoxicating to see products you’ve invested in on the shelf in a store. I absolutely love fast-moving consumer goods (FMCG) investments because of this.

However, professionally speaking, a consumer product that is expanding an existing and measurable marketplace through offering innovation can be very attractive.

What are your USPs?

  • We run the largest equity prize pot in the start-up competition world…£1.8m. Other start-up competitions have attention grabbing headlines, but often award value-in-kind. Worth Capital only award hard cash and direct expert oversight.
  • We are only focused on B2C businesses.
  • The Worth Capital partners are all entrepreneurs, and have all built and exited businesses. We completely understand the world of an entrepreneur and our founders enjoy working with us because of this.

What are the hot sectors?

Worth Capital doesn’t think in terms of hot sectors, so long as we can sense that the brands we invest in will have trial-ability followed by enduring consumer appeal. Obviously, in the consumer service sector, we see a lot of solutions looking for a problem; which has always been an issue for investors.

Three things a company should be able to offer an investor?

  1. An idea of their addressable market and a truly executable game plan on how they intend to penetrate that market at the right cost.
  2. A real sense that the management team have the relentless drive to ‘keep it simple’ and not try to overburden the business by trying to fight on all fronts.
  3. An understanding of the brand’s position in the marketplace – what needs it serves and what it means to the consumer.

What is the cardinal sin when looking for investment?

We see a lot of business plans where the numbers are being driven by output rather than the input required. Don’t tell me you’re going to turnover £5m in year three without telling me how.

What continuing involvement do you like in an investment?

A Worth Capital partner will normally take an investor director role in every business, which is the formal bit. However, quite often board meetings aren’t always conducive to expansive conversations about challenges and opportunities – so we tend to meet our founders as and when they call us with a specific issue.

What has been your best performing investment to date?

We’re a new fund trading on our partners’ track record of investing and building businesses so its difficult to answer this question right now. But a number of investments are showing exceptional executional ability, which I believe will result in a good exit for our investors.

Two of note are Tart, a chain of beautiful savoury pastry shops, and Splendy Interactive; which has pioneered a new genre of live action gaming. Both of these businesses have delivered exactly what they told us they would.

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