Feature Title
INTERVIEW
Bruce Macfarlane, managing partner and Founder. MMC Ventures MMC Ventures isn’t looking for tax breaks, it’s looking for fast-moving companies that are going to grow quickly and provide attractive gains. ‘The EIS tax breaks are the cream on the cake, not the cake’, said Bruce Macfarlane, Managing Partner and Founder. ‘We are investing in an asset class of private, growth companies run by entrepreneurs with very big ambition. It is called venture capital.’ When choosing a company to invest in, MMC is looking for a team with the talent and ability to deliver on a plan that targets an interesting
business sector; where there is the opportunity to disrupt the current market approach to product or service delivery and quickly establish a strong niche position. These businesses will have taken seed or start-up capital and developed their proposition sufficiently to show that the market wants it. ‘We are typically the first institutional investor in. Companies we back will have taken seed capital and have significant business angels on board as well as growing sales and are able to prove the market wants the service or product they are providing.’ www.eismagazine.com · Yearbook 2015
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We are investing in an asset class of private, growth companies run by entrepreneurs with very big ambition.
The MMC strategy is then to follow their initial investment if the company performs. ‘We invest between £1.5 million and £3 million in the first round and we will do that again in one or more further fund raising rounds to a total of around £5 million to £7 million per company,’ he says. MMC Ventures aims to ‘build the company to be profitable or to a stage where other large investors come on board’. The firm is a very hands-on investor and gets involved in the new business directly. ‘Good entrepreneurs want more than money,’ says Macfarlane.
‘The businesses we back are looking for business-savvy and strategic input to the growth decisions they make. We look to provide experience, draw on our network of connections for expertise and introductions, and generally assist the entrepreneurs in achieving their goals.’ The employees at MMC Ventures do not just invest their time, but also their own money. ‘We invest personally in the deals we do. Around £10 million has come from the partners and team’. Recent successes for the firm include recipe kit company Gousto, which delivers fresh ingredients for gourmet meals to your door with cooking instructions included. Many of the companies that MMC Ventures invests in are now attracting interest from major US venture capital firms and corporate investors. For example, the venture arm of consumer goods giant, Unilever invested £5 million last year into Gousto. More recently, MMC Ventures has invested in drone technology business, Sky-Futures, which has pioneered drone inspections of offshore oil and
gas rigs, and Bloom & Wild, an online gifting business with special packaging that allows flowers to be posted through letterboxes. What makes MMC Ventures investments different, according to Macfarlane, is that ‘they are innovative and exciting businesses. These are the kinds of companies that really get people’s attention and get talked about at dinner parties’ While MMC Ventures invests in companies that are early-stage and therefore arguably pose more risk, Macfarlane claims that his firm’s approach to risk is carefully calibrated. MMC is known for the quality of its due diligence. In addition, as one of the top 10 most active investors in the UK, their investors can expect a good level of diversification. Finally, as Macfarlane points out, the Government introduced the EIS scheme in order to attract investors to this vital asset class and so provide capital to companies that create employment and growth to the economy, and did so by designing EIS to mitigate the investment risks through the tax benefits. EIS
The employees at MMC Ventures do not just invest their time, but also their own money. ‘We invest personally in the deals we do. Around £10 million has come from the partners and team’.
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EIS Magazine · Yearbook 2015