When ADV launched last year, it was hailed as a brand new approach to venture capital. Founder Lee Strafford told us how it would invest in early-stage startups and late-stage scale-ups alike, right across the UK.
However, since then, entrepreneurs who have pitched ADV disappointedly tell me how it isn’t interested in early stage companies. What was going on? Things are a little clearer today, as the firm has announced its first batch of investments.
True to Strafford’s word, the deals span from South East England, right up to Scotland. However, while ADV hasn’t announced individual deal sizes, there are some early-stage companies in the mix. It has invested in Newcastle-based Ignite accelerator and London’s branch of Techstars. Through these investments, it’s putting money into the early stage ecosystem.
How ADV’s Ignite deal works
Let’s focus on what the Ignite deal means, as they’re in the North and so are we. As David Fogel, ADV’s Investment Lead told me at an event last night, Ignite’s structure means that when they invest in the accelerator, they also invest directly in all the companies that graduate from it. Therefore, the firm has a stake in all the companies from Ignite’s most recent Manchester cohort.
The big picture here, as Fogel explains, is working through trusted ‘seed partners’ to do small deals at scale. By directly working with accelerators, ADV is priming its dealflow pump for follow-on investments while supporting the ecosystem overall.
These seed partners might not always be accelerators. Fogel says that there’s a plan for a microfund in partnership with local angel investors in Manchester that could serve a similar purpose.
It’s a complicated, but clever, approach to VC. If the execution is as good as the vision, it’s one the UK tech sector as a whole could benefit from. The ADV team certain spends a lot of time whizzing around the whole country, which should allay concerns they might stick to easy pickings in London.
If you’re interested in pitching ADV, their newly redesigned website explains the process. Refreshingly, they aim to give you a response within five working days – more work for the firm’s partners to catch up with on all those train journeys.
Here’s the full list of ADV’s first deals:
- Care Sourcer (Edinburgh)
- CharlieHR (London)
- Ignite Accelerator (Manchester and Newcastle)
- MoveGB (Bath)
- Techstars Accelerator (London)
- WeFarm (London)
Header image: Mike Dimelow, ADV’s Head of Investment, speaks at an event at The Landing, Media City UK.
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From ADV side, it’s all about achieving efficiencies and taking a hands off approach to dealing with risky very early stage startups. Whilst this is great for them, it’s bad for the startups, as this method implies that a startup must go through an accelerator in order to secure investment.
Love the guys at ADV, but not very happy with the trend they are setting.