#BehindTheRaise with SidebySide

It’s not actually exclusively startups that raise on AIN, there’s a growing number of funds too. We caught up with James D’Mello from EIS Fund SideBySide to hear about their experience:

Who are SidebySide?

SidebySide is run by a management team responsible for over $1.5bn in exits to date. We have worked with younger companies for a number of years and concentrate on adding benefit to help these companies scale from startups to larger, growth businesses. 

The UK management team is formed of our founder, John Bailye. Our Junior partner, Ben Ashworth. Our Portfolio Manager, Alicia Taylor, our portfolio company mentor, Sheli Gupta, and James D’Mello, who heads up our investor relations function.

John Bailey, Founder

Our investment thesis

Although we score third globally in an OECD ranking of the number of start-ups created, we don’t make it into the top ten when it comes to businesses that grow into established, medium-sized companies that have a lasting impact on our economy” – The Independent, referring to the UK in the OECD Global Rankings 2017.

This is our focus and why we formed the SidebySide Partnership. We want to help founders take their business to the next level.

James D’Mello

What types of companies do you invest in?

We invest in fast-growing technology-enabled businesses with £1-10 million in revenue. These more established companies will usually be at least several years old and typically have over 30 employees. We look for companies where there is evidence of a strong customer acceptance of the product and service offered, and where we believe we can add value to them in the long run.

Tell us about your portfolio

We invest in “tech-enabled” companies. That translates to companies who use tech to change the way we do something by a company that is looking to define the way future companies in their sector will operate. 

As an example from our most recent round. We invested in a company called Laundryheap.

Laundryheap offers door-to-door laundry and dry-cleaning services to consumer and business customers, including major brands. The platform allows users to have their laundry collected, washed, ironed, and returned to them in a guaranteed turnaround time of 24 hours.

One of the main reasons we love them is the fact that they are able to scale into new markets without the capital heavy constraints that have held back their competitors. Across its US and Asian markets, Laundryheap has seen particularly rapid growth since March 2020. In the US, where the platform is now operational in multiple cities, the business is reporting month-on-month growth between 50 to 100 per cent. As for the Middle East, where, customer growth is hitting between 60 to 80 per cent month-on-month.

What is it like raising investment as a fund? How is it different from raising for a single company?

Raising as a fund is very similar to raising as a single company, except, instead of talking about one company, we talk about many. Typically investing in 3-5 companies per round, there is a lot to talk about. We pride ourselves on the amount of time we spend with our companies each month, therefore can go into as much detail as a potential investor wants to go into.

What are your tips for raising on AIN?

Our first campaign with AIN received a lot of interest but the interest didn’t lead anywhere. We took things back to think about what we could do differently, One of the main things we changed was the points that we highlighted, less of the traditional X amount of revenue, aum etc – more of what made us different to other investment funds they may have seen. We were very upfront and frank with potential investors and made sure to schedule zoom/phone calls after speaking on AIN to allow them to meet us and ask their questions in a more conversational manner.

What are your plans for the funds? How are you deploying them?

We have invested in 6 different companies now over our last few deployments, in our most recent round we invested into a fashion marketplace that is changing the way retailers and brands sell their old season and discounted stock, a travel courier company that picks your bags/skis/golf clubs up and takes them to your holiday home/hotel for you so that you don’t have to worry about checking them all in and carrying them around.

How does SidebySide help startups? And what experience do you bring to the table?

Whilst a lot of UK VCs come from an investment banking/accountancy background, SidebySide is a team built from entrepreneurs and operator types. They have been responsible for founding, investing in and running over 30+ companies, one of which was founded and grown into a billion-dollar exit. The early mornings & late nights, the stress of running a company, the hurdles to overcome to scale your business, the team has been through all of it before, rather than just financed it and watched from the sidelines. We help the companies in our portfolio by spending time with them, a couple of times a month, going through whatever the company needs support on. 


Any tips about pitching investors over Zoom?


I used to love nothing more than speaking in a room full of people at pitch events/industry talks. When Covid hit, these events were all moved to Zoom, Which as I’m sure many of you will have experienced by now, Is a whole different ball game. It’s very hard to read peoples body language and facial expressions when there are 50+ people in a Zoom call, you also don’t know if anyone is laughing at your bad jokes if they’re all on mute! 

One of the main things I have tried to focus on and has seemed to work well so far is to try and concentrate on talking into the camera lens, it may seem like a small thing but it is the closest thing to eye contact you can do over Zoom. I also set out a couple of bullet points on my screen on a notes app to prompt me to go through set points on the call. 

Lastly, A great tip I read in a guide from Sequoia capital – One of the mistakes most people make is thinking because you have a 60-minute meeting slot that you have that persons attention for 60 minutes – Spoiler, You don’t. You should use the first 5 minutes to earn their attention for the next 15 minutes which in turn will interest them enough to listen for another 30 minutes.  


Where do you plan SideBySide to be in the next 10 years?

Unlike traditional VCs, SidebySide limits the number of companies that we invest in at any one time. We do this so that we can actually spend important time with each of them and make sure they have the best chance of success. So whilst most VCs would say in 5 years we want to have backed another 50+ companies – that is not us. We want to continue backing great management teams and working closely with them to help them scale their businesses to the next stage and become the type of company that defines the sector in which they operate. 

Keen to hear more?

If you would like to see what other companies are up to on Angel Investment Network, or are interested in raising funding yourself, you can find your local network here.

#StartUp Buzz

Each month, we share a selection of stand out companies that our team have picked out as particularly exciting, or high potential. This month we have selected the following:

Immersify Education 

Immersify Education is a learning app, initially creating a totally novel experience for dentistry students, but ultimately a comprehensive solution that makes it much easier for students to learn across disciplines.

Immersify fast tracks the pace of learning by combining rich multimedia content and an AR experience that gives the students the sensation that they are working on a patient right in the dentist’s chair.

– The founder is an award winning edtech entrepreneur with an exit in the dental education space

– 100% recommendation for the B2B offering 

– Rated 5 Stars on the app store 

Immersify Education are raising £1.2 million and have SEIS and EIS relief available.  

Find out more about Immersify Education.


28 Well Hung 

28 Well Hung

28 Well Hung are pioneering the regenerative restaurant concept in London. 

All their food is chosen to help regenerate the planet, sequestering carbon and methane in the process and specifically working with farmers who are obsessed with regenerating the soil that they use. 

Starting out as a street food stall, 28 Well Hung is now an established restaurant with £230k revenue that was profitable during Covid. 

‘28’ are raising funding to expand, they have acquired a 9 year lease in Brixton and plan to open this summer, with a further London site due by the end of the year. Of note: 

– Strong vegan and vegetarian customer base (50% of menu is veggie)

– Nominated for multiple awards including Best Street Food Trader

– 16% operating profit in 2020

Find out more about 28 Well Hung Ltd


Scrubbingtons

Scrubbingtons produce a range of bespoke personal care products perfect for kids, from hand sanitiser and soap to shampoo and bubble bath. 

They use natural ingredients, perfect for sensitive skin, and make the product easy for kids to use themselves.

Why’s it special? It’s 98% natural, very soft, and has special foam that lasts twice as long as gel. It’s sustainable with refillable pouches and recycled. 

– 4.9* average across thousands of reviews 

– Already supplies 150 school and nurseries directly

– 400k revenue in 2020 with 200% Y-O-Y growth

Scrubbingtons products are widely available including in Tesco, Amazon and Ocado. 

Find out more about Scrubbingtons here.

#SixtySecondStartUp with Jumpstart

Matthew Sarre shares the story behind JumpStart in this month’s SixtySecondStartUp:

  1. What does your company do?

    Jumpstart is the UK’s only start-up graduate programme. We find exceptional graduates (the top 1% applicants), train them up, match them with start-ups, and then provide ongoing, mentorship and a peer network. 
  1. Why did you set up this company?

    To stop the brightest and most ambitious graduates from sleepwalking out of university and into big corporate grad schemes to go ‘sell their soul’. Instead, we get them to go and have an impact in a start-up and build something meaningful. Basically, my co-founder (Kabir Bali) and I built a programme that we would have wanted to do when we left university. 
  1. How did you get your first customer?

    We set up the company in the depths of the pandemic, so it was not easy to find start-ups to pitch to. But, at the end of every zoom call with friends & former colleagues, I would ask: “are there any start-ups that you can introduce me to” and follow it up with awkward silence until they made an introduction… Good advice for anyone who wants to build out a customer base. 
  1. We knew we were onto something when?

    We thought we were onto something when we got 10 applications to our programme on our very first day live. This was, of course, very misguided. But, we are now trending upwards of 1500+ applicants a month and have carved out a niche that seems to work: we place graduates in Founder Associate roles to take B and C tasks off the founders’ plates so that they can focus on A tasks. 
  1. Our business model:

    We’re a little like ambulance chasers in the sense that we operate a “no win, no fee” model! That means that we only charge a fee if the graduate is still in role 3 months after they have started. 
  1. Our most effective marketing channel has been:

    Word of mouth referrals. Which, I am reliably told is a good sign! 
  1. What we look for when selecting our candidates:

    It boils down to attitude. Sure they are smart, but we look for ‘hungry’ go-getters who have done something interesting like founding a company or society while at university. 
  1. The biggest mistake that I’ve made is:

    I once allowed someone into my Zoom meeting who I thought was a founder and ‘pitched’ them as if they were a start-up. It turns out that they were a graduate applying for the scheme… 
  1. We think that there’s growth in this sector because:

    There is a growing trend away from traditional career paths and a rapid acceleration of the start-up scene in the UK. 

  2. We worked with AIN because:

    They have an exceptional network of start-ups.

Keen to hear more?

If you would like to see what other companies are up to on Angel Investment Network, or are interested in raising funding yourself, you can find your local network here.

Behind the Raise with Wealthyhood

Alex Christodoulakis is co-founder of Wealthyhood, the app ‘to turn you into your own wealth manager’.

Alex shares his story about Wealthyhood, how he raised investment, and his advice for entrepreneurs:

Tell us about Wealthyhood and how you came up with the idea

A few years ago, together with Kostas, co-founder of Wealthyhood, we wondered how we could invest our money on a monthly basis. We were busy professionals at the time and couldn’t devote much time to research or execute any sophisticated investment strategies, and of course not in the position to actively trade the markets.

So, we spent time trying to identify what was out there to solve this problem. However, we soon realised we weren’t alone in that. The problem was everywhere around us. There was a typical question among our friends, family and colleagues: “How can I invest my money? I don’t have the time or the knowledge to trade…”.

But how will they do that? 

Trading apps are usually too complex for beginner investors. They offer no guidance on how to get started or tools to create a long-term portfolio. They incentivise you to actively trade, by constantly notifying you for random price movements. Everyday investors get caught up on their emotions and end up gambling instead of investing. This was not the experience we were looking for.

So, we decided to build Wealthyhood to bridge the gap. Instead of just giving friendly advice to our friends, we decided to build a product that would guide long-term investors to build their wealth over time, by intelligently investing their money the way they want, with fewer fees.

It’s not only how our interactive guidance helps users to invest the right way, but also how we help them develop the right wealth-building mindset. You don’t have to be a millionaire nor an expert to have a successful and pleasant investing journey.

And this is how Wealthyhood was founded to become the first DIY wealth-building app for long-term investors.

Why did you decide to raise investment?

Unfortunately, Fintech is a very capital-intensive industry, even before you decide to spend aggressively on growth and marketing.

The initial costs have to do with securing regulatory approval and FCA compliance, even before you get started. And this is why we initially decided to raise some external money, alongside covering some operational costs and our plans to grow the team.

Apart from that, raising money from angel investors is a great way to validate your value proposition and showcase their belief in the vision of the company and the ability of the team to execute!

A successful angel raise doesn’t just get you money, but also access to the network and connections of your investors, so it’s a two-way process. The right investors can significantly accelerate our progress.

What is your top tip for anyone raising investment for the first time?

It’s always easier to approach angel investors, than early-stage VC funds. Start from your own network, pitch them your company and vision and then expand to your second degree connections, angel networks and of course the Angel Investment Network.

If you can’t persuade angel investors to invest in your company, then you should reconsider your pitch.

Always have a story to share; why you’re building this product, what’s the problem and why you’re the perfect team to  succeed!

Any signs of initial traction are a great validation that you’re heading to the right direction.

What attracted investors to your company?

I think it was a combination of different things. Probably the most important is the problem we solve. Our angel investors immediately acknowledged the gap between trading apps and robo advisors and the need for a DIY wealth building app for long-term investors.

Our vision to create the wealth-building app not for the top-1%, but for the 99% fully resonated with them.

At the same time, our investors had faith in the team behind Wealthyhood and us as co-founders. The first angel investors were people from our close network with strong  belief in our capabilities as a team. Then, friends of friends and finally professional angel investors, who got to know us better and believe in our determination and skills to execute.

Apart from that, we had already built some momentum, showcasing that we were heading in the right direction. We had more than 3,000 users signed up to our waiting list, over 10,000 followers in our LinkedIn and Instagram pages and had developed a community of 50 Wealthyhood Ambassadors across Europe.

Last, but not least, a few months ago we won 1st place on FinQuest Accelerator and are currently participating in the VISA Innovators Program, which for angel investors shows strong progress.

My biggest fundraising mistake was…

My biggest fundraising mistake was that we began by approaching early-stage VC funds, instead of angel investors.

This was wrong; it cost us time and money, but we soon realised it and switched our focus to angels, who were a much better fit for our stage and needs!

However, it helped us challenge our value proposition, improve our deck and positioning and make it more robust.

Why did you choose to use the Angel Investment Network?

Angel Investment Network was an amazing way to connect with the right investors for our company. It’s very time-efficient for founders and probably the best portal to share your story from a fundraising perspective.

It was first suggested by our advisors and we soon realised they were right to insist. 

Our number 1 focus for Wealthyhood for the year ahead is:

To build the investing experience we envision and make it publicly available through a web platform, iOS and Android apps. We’ve already launched a beta version of the product and are onboarding the first users from our waiting list.

Over the coming months we want to onboard the whole waiting list and give instant access to new users in the UK and EU!

Keen to hear more?

If you would like to see what other companies are up to on Angel Investment Network, or are interested in raising fundraising yourself, you can find your local network here.

#Start-up Buzz

Each month on the Angel Investment Network blog we feature some of our start-ups making waves. Here are some of the ones to keep an eye out for in June:

Vitabeam

Vitabeam has developed a patented LED technology that mimics the sunlight spectrum to stimulate plant growth, extend shelf life of food and kill unwanted pathogens, such as bacteria and mould.

Vitabeam has £1.72 committed sales, a pipeline of £6.5 million, and has received 2 Innovate UK government grants valued at £640k. Tests have shown biomass increase in herbs as high as 54% from using Vitabeam. 

Learn More 

Mintago

Mintago helps businesses save on their workplace pension tax bill, whilst improving the ‘pension well being’ of their employees. Mintago helps businesses to structure their pension in the most efficient way using HMRC’s salary exchange scheme reducing NI contributions, whilst rolling out pension optimisation tools.

Founded by the founder of Perkbox, and with the team ex RBC, BDO and Atomico, Mintago is growing at 100% MoM and saved customers over £250k despite only launching in December 2021. 

Learn More

KiKaPay Digital Payments

KiKapay enables merchants to collect payments from customers in a manner that is typically 80% cheaper than card payments, by using their bank’s secure customer authentication process, and because it doesn’t require an app to be downloaded, KiKapay provides a frictionless solution. 

With open banking payments increasing ten fold in 2020 and 25 billion card transactions having been processed in the UK alone. KiKapay has brought onboard an experienced team with 75 years experience, including a partner at Deloitte and the ex Head of Advisory for European payments at EY.

Learn More

The New Era of Flexible finance: Why Startups are Embracing Portfolio CFOs in 2021

Addition offer a suite of financial services, from bookkeeping to growth funding. Their CEO Graham Davies explains in the guest article below how start-ups can benefit from having a portfolio CFO working alongside them.

When it comes to multi-tasking, entrepreneurs take the crown. Wearing a plethora of hats is pretty much a given. Not all roles can be juggled, however. A jack of all trades is a master of none – which is why a growing number of startups are choosing to outsource certain company tasks.

The average self-employed person spends an average of 12 working days a year on tax compliance alone. Time is golddust to entrepreneurs, and 12 days worth of drumming up new leads (or spending time with loved ones) is a lot of time to spend on something you may not even fully understand. 

It isn’t only about saving time. Strategic outsourcing is usually a money-saver, too. This is especially true when it comes to accounting and financial planning. According to Glassdoor, the average CFO wage in the UK is £121,443 per annum. Taking on a full-time Chief Finance Officer is far too costly for most startups. However, they still look for these insights and advice to help them plot a course for growth. 

This is why portfolio CFOs have started to become increasingly attractive. 

But let’s take a closer look at this on-trend dynamic. 

What Is a Chief Financial Officer?

A chief financial officer (CFO) is a senior executive who manages the financial actions of a business. Their duties typically include:

– Tracking cash flow

– Financial planning

– Analysing and acting on financial strengths and weaknesses

– Forecasting

Essentially, a CFO oversees every aspect of your company’s accounts, finances and compliance. Their job is to ensure informed decisions are made to support the financial wellbeing of the business.

What is a Portfolio CFO?

Many startups choose to outsource their financial management to a third-party CFO. These high-qualified individuals usually work with agencies or freelance, and will manage multiple company accounts – or portfolios – at once. They will typically have extensive experience in their field, and offer dedicated services at a much more affordable rate. 

Why are Portfolio CFOs so popular?

Startups are becoming increasingly attracted to Portfolio CFOs. But what is the chief driver behind this surge in popularity? 

John Miller, Chief Operations Officer at Addition, links this rise to one simple factor: cost. Having previously served as CFO in green tech startup Spring, John now manages Addition’s CFO services. “Startups don’t require a CFO on a full-time basis,” He reasons, “as the cost is arguably not worth it. At £80k – £150k+ for a full time CFO in a startup to a medium company, this expense is often hard to justify.” 

Of course, hiring a portfolio CFO is still an expense. However, the investment is well worth the cost. “The aim for all back-office roles, like finance, is to pay for yourself.” Says John, “Therefore, having a CFO on a part-time basis makes this easier in a small business. At £3k per month, it’s almost a third of the cost, whereas I would argue the benefits will not be a third of the size.”

Are Portfolio CFOs similar to Accountants?

As your startup grows, you’ll likely be advised to hire an accountant. This is definitely sound advice. Accountants will help with your tax compliance, bookkeeping and reports. But once the ball gets rolling faster and you’re looking to drive growth, a CFO can work wonders.

In order to appreciate what each of these roles brings to the table, you need to understand exactly what it is they do. “An Accountant or bookkeeper is focussed on implementing the rules and guidelines set out in the accounting standards for companies.” John explains, “This includes ensuring your company meets its statutory and tax obligations, accounts filed, returns processed etc.”

A CFO, meanwhile, is a strategic position in a company with the aim of driving the business towards its goals. “CFOs need a particular set of skills to do their job that accountants generally don’t.” says John, “One of the main skills needed is agile thinking – the ability to understand the ramifications from proposed or imposed decisions very quickly. For example: should business A start offering their online english tutoring business to China? The Portfolio CFO needs to quickly think about the ramifications of selling in China and the tax implications. They need to consider legislation, marketing the service in a different language, hidden charges and how to monitor progress. The role of a CFO goes beyond following the letter of the law – it involves creating strategic opportunities for growth.” 

Portfolio or not, the CFO supports the startup on its journey and drives it forward in the most effective way possible. “Ultimately, an accountant and CFO work hand in hand.” John acknowledges, “It’s a symbiotic relationship, which is why at Addition we have a team made up of portfolio CFOs and bookkeepers. This gives our clients access to both elements required and is more economical to use both roles where they are best suited. There is no point in paying a CFO day rate to complete bookkeeping tasks.”

What does a Portfolio CFO do?

They might not be a full-time employee, but make no mistake: portfolio CFOs are definitely on your team. 

During their contracted hours, a portfolio CFO will work as strategically and diligently for you as any of their full-time colleagues. Here are five of their main areas of focus:

1.   Financial Management and Strategic Planning

Your portfolio CFO will implement controls so funds can be spent easily, but with solid regulations. They’ll help you determine where the business wants to go, and what it needs to get there. Finally, they’ll turn this understanding into a financial strategic plan.

2.   Forecasting and Budgeting

This involves breaking the overall strategic plan into nuts and bolts. Your CFO might ask questions like, “How much are we going to spend – and hopefully earn – on all elements?” They’ll help adjust your budget to reflect this, 

3.   KPI and Performance Tracking 

KPIs are vital to financial growth. A portfolio CFO will implement automated ways to periodically track performance to plan. They’ll help answer questions like, “What do we need to do more of – or less of? Do we need to do something completely different?”

4.   Cash Flow Management

Cash is king for all startups. Staying on top of what is coming in and what is going out is vital for survival as well as success. Your portfolio CFO will help you utilise your cash-flow efficiently. 

What Can a Portfolio CFO do for my small business?

While anyone can make use of a portfolio CFO’s services, the best fit are small to medium startups- especially ones who are focussed on operational delivery direct to customers. 

You may wonder what scale ‘small to medium’ is operating on. “Once a business gets to a certain size,” says John, “let’s say 50 full-time employees and £25m+ revenue, getting a full-time CFO would be more economical.”

For John, this is due to the complexity of the organisation. “Someone who is fully focussed in the CFO role would be able to add the most value to that entity. Therefore businesses who are smaller than that, I would argue, may not get the full benefits for the cost of a full-time CFO.”

Establishing when the time is right isn’t always straightforward. For some helpful context, here are some examples of startups who’ve hired portfolio CFOS:

Example 1: A restaurant group with several sites. They’ll obviously have experience when it comes to running the restaurant profitably. However, a portfolio CFO could help with raising money to open a new site.

Example 2: A startup which has seed investment (before PE where it gets serious –  a PE firm may want a 100%-focussed CFO to guard their investment and drive growth their way). This business is still in its infancy. The experience of a part-time CFO to guide the founders ideas will be vital to success.

Example 3: A hairdresser who is looking to expand into another site. A part-time CFO could spend some time working out a business plan for the new site. This would be presented to a bank to help raise the funds. The CFO could then track the performance of the site to make sure it is delivering the plan (and if not, help with what to do next).

Example 4: An online tutoring startup which may offer English courses all over the world. The tax treatments need to be carefully managed.

Example 5: A gym or fitness centre looking to sell. A CFO can support with financial reporting to give to potential buyers, as well as projections to support the valuation.

All of the above examples are in need of good financial management and leadership. However, they aren’t large or complex enough to require a full-time CFO within the business. Their main focus is on operationally delivering for their clients. This means a bank-office role such as a CFO isn’t needed daily. 

“The CFO doesn’t help these example startups to cut more hair, offer more classes, or clean more flats.” John analyses, “Therefore in order to maximise profits, why not take on a part-time CFO?”

What Makes a Good Portfolio CFO?

When it comes to key traits and talents, portfolio CFOs and in-house CFOs fall under the same umbrella. Demonstrable experience and qualifications are obviously important. However, with portfolio CFOs managing multiple clients at once, commitment and dedication to each customer is more important than ever. 

A stand-out portfolio CFO should be:

1.   Transparent

“When it comes to numbers, the CFO’s analysis and guidance needs to be true and actionable for the client on the journey to achieving their goals.” Says John, “Due to the portfolio nature of the role, this is a challenge. Dipping in and out of several businesses means focus cannot be 100% 24-7 – unlike that of the client with their business. Therefore, it’s about building solid advice on the facts of the business.”

2. Experienced

A catalogue of prior experience with startups and goals similar to yours is key, according to John. “I’ve found that providing experience of how events have played out in historical scenarios really helps clients understand ramifications.” He says, “Failing that, it’s about drawing on the diligence disposition of a CFO to research, investigate and provide insight, as well as drawing on the network of contacts.”

3.   A team player

As mentioned before, you’re not paying a CFO day rate for them to replace your bookkeepers. That being said, they should be working closely alongside your bookkeeper. 

“30% of my day is spent with bookkeepers to ensure that all base financial data is strong, solid and makes sense.” Says John, “No analysis works without good foundations, which is why our Portfolio CFO’s are supported by a team of bookkeepers.” 

4.   A visionary

Once they have the necessary information, a good CFOs should make the most of it. “I use informed insights about my client’s business to give them actions that, when put in place, help them achieve their goals.” John explains. “Your CFO should be modelling out the future for your business, and helping set a course for the future. This could be help with raising money; working out which hires to make; whether to add a new product line and many other strategic decisions for small business.”

5.   Clued in

A good CFO (portfolio or not) should always be aware of the latest financial guidance pertaining to your business. “10% of my day is spent researching the latest guidance from the government.” John states, “This is to ensure that we can provide insight on the latest legislation, as well as which grants could be claimed for.”

6.   Ethical

Advising multiple clients calls for an extra set of scruples. This is especially true when it comes to any potential conflict of interest. 

“We have one set of clients where there could be room for connection. In order to ensure ethical practices, we divide the work between myself and my business partner.” Says John, “Were either of us in a situation where we were working on our own, we would not take on the work if we believed there was a conflict of interest. Our integrity is worth more than the paycheck.” 

A good CFO should also keep on top of their ethical and professional requirements – as part of their membership to the relevant accounting bodies. 

7.   Attentive

We all know how frustrating it can be to wait on a response from someone – especially where money is concerned. Along with the cost-effective perks of a portfolio CFO comes the fact that they can’t be on call 24-7. 

“A portfolio CFO cannot serve all clients at the same time and immediately.” Says John, “Some startups value this more than the cost of full-time versus part-time. The biggest challenge as a Portfolio CFO is staying on top of multiple clients and prioritising effectively. The way we get around this at Addition is by having two portfolio CFOs to share the load.  We also have a team of highly qualified accountants and bookkeepers to ensure the financial information is clean, robust and clearly presented.”

AIN members can obtain the following offers in our Perks & Benefits section.

1. Annual Budgets & Forecasting

Addition helps you plan your business’ journey for the next 12 months and transform your vision into an actionable finance plan. £1,500 per scenario – Angel Investment Network members get 20% off.


2. Financial Modelling

Every business decision has a financial impact. Addition creates a dynamic model for your company, based on today’s needs and tomorrow’s goals. £500 per scenario – Angel Investment Network members get 20% off.


3. Financial Pitch Deck Review

Addition has helped startups from pre-seed to to Series A and beyond. They know what investors are looking for when it comes to financial reporting and projections in your pitch deck. £650 per review – Angel Investment Network members get 20% off.

Behind The Raise with Ziglu

Up next, Ziglu, a digital platform bridging the gap between cash and crypto; Yang Li, Chief Growth Office, shares his story behind the company’s £6.1 million seed round:

Tell us about Ziglu and how you came up with the idea

Ziglu was born out of the realisation that both traditional and challenger banks were preventing their customers from having access to cryptocurrencies. With the rise of cryptocurrencies we could be seeing the biggest ever transfer of funds into a new asset class, and decentralised finance (DeFi) is providing unprecedented opportunities to grow wealth.

Yet the majority of consumers are unaware of the opportunities of cryptocurrencies and DeFi, or are confused by them, or have no affordable way to participate in them. To solve this problem, Ziglu has been designed and built to combine modern challenger banking features for everyday spending with safe, simple, affordable and insured access to cryptocurrencies. 

Why did you decide to raise investment?

We saw some remarkable early customer engagement and wanted to accelerate our customer acquisition, particularly to coincide with the amazing bull run we’ve been seeing in the crypto market. Giving ownership to customers also gives them a chance to benefit in our growth and success too and that’s at the heart of what we stand for.

Furthermore, our product and tech team had built an innovative but aggressive roadmap of features that they wanted to deliver. Fundraising has meant we can now deliver new features and improve customer experiences pretty much as fast as we can think of them.  

What is your top tip for anyone raising investment for the first time?

Don’t overly focus on how your product compares to competitors. Be clear about how your product truly delights customers. No startup has failed due to competition alone. 

What attracted investors to your company?

Ziglu has an experienced team with a proven track record of building amazing startups like Starling, Monzo, Wirex, Meituan, and a product that provides a significantly better crypto-investing experience for beginners and aficionados alike. This combination of a proven track record and a visionary product and proposition has proven to be very attractive to investors.

My biggest fundraising mistake was…

Worrying too much about the aesthetics of the pitch deck.

Why did you choose to use Angel Investment Network?

Angel Investment Network stood out to us because of its superb track record of assisting innovative startups to find strategic investors: investors that provide us with first hand advice about disrupting huge industries, broaden our network of partners and add significant value beyond cash. 

What has the funding enabled?

The funding has allowed us to significantly ramp up our marketing, build new features faster and accelerate our plans for international expansion. The team is currently very focused on Ziglu’s international expansion, with our first overseas launch slated for the second half of 2021.

Keen to hear more?

If you would like to see what other companies are up to on Angel Investment Network, or are interested in raising fundraising yourself, you can find your local network here.

Research & Development Relief: An Overview for Startups 

In this guest blog, James Taylor, Director at Dragon Argent, shares his top tips of how start ups can claim R&D tax credits, a useful relief or rebate from HMRC. Here are the key things that you need to know:

Many new businesses spend the first season of their existence researching and developing a concept or a prototype.  They then prove their product market fit, secure their first customers and start generating revenue.  What some founders don’t realise however, is that any project which advances the fields of science or technology are eligible for tax relief, through its annual corporation tax return. 

This extra relief could be as much as 25% of the cost of the project.  For a loss-making company, a cash rebate of up to 33.5% is available in lieu of tax relief, which is often paid within 4 weeks or a successful claim being made.  

This relief or rebate could make a huge difference to a bootstrapping startup and as HMRC believe that 75% of business who could be claiming R&D tax relief do not, it is too often a missed opportunity.  

Does Your Business Qualify?

You can claim R&D relief up to two years after the end of the accounting period of the expenditure. The following criteria are flags that you could be eligible: 

You are innovating, improving, or inventing processes or technologies which are not currently available on the market.

To your knowledge, at the start of the project you have no clear answer of how the project will conclude. This uncertainty proves the first point that the development is producing new knowledge.

You can document evidence of your research and development, and the expenditure relating to these activities

Eligible Costs 

If your company meet the criteria laid out above, you should endeavour to maintain detailed records of every cost associated with the project, including:

Staff costs associated with the project. Some staff may work entirely on the project. In these instances, it is straightforward. Other staff may work a proportion of their time on this project, or on things associated with the project such as recruiting someone to work on the project. Using timesheets or similar, a log should be kept of this proportion as that might be eligible. For example, a staff member who works 30% of their time on the project while on a salary of £30,000 can be deemed a cost of £9,000 on which extra tax relief is available.

Subcontracted staff. On the same basis as above, the costs associated with subcontractors rather than employees is eligible.

Software associated with the project. If software was bought or licensed entirely or in part to service the project, these costs are eligible too.

Consumables. Any utilities or materials used in the project are eligible for tax relief.

Ineligible costs. These include the costs of distributing the goods produced, capital expenditure, rent or rates, and the cost of patents.

R&D Tax Credit Cap 

As part of the Finance Bill 2021, introduced in April, HMRC have announced a cap on the amount that a loss-making SME can receive in R&D tax credits to stop abuse of the scheme.

Currently, loss-making companies can reduce the cost of their R&D by up to 33%. However this amount will be capped at a maximum of £20,000 plus 3 times the total PAYE and NI paid by the company in the year.

HMRC have maintained that the aim of this legislation is to target those who are seeking to abuse the system, rather than genuine claimants. However, SMEs with very few staff, or with directors taking low salaries, may also be affected by this.

If an SME is loss-making, normally claims around £25,000 in R&D credit but whose only employees are directors being paid a non-tax attracting director’s salary will now only be able to claim £20,000, a loss of £5,000 on their previous expectation.

This means that it may become tax-efficient for the company to increase their director’s salary so that it attracts National Insurance so that 3 times that amount can then be reclaimed through R&D. There will be other implications of doing this so it should always be considered in conjunction with these other factors.

HMRC have also included an exemption for any entity who meets the following two tests:

The company’s employees are creating ‘relevant intellectual property’.

Expenditure spent on work subcontracted to a related party makes up under 15% of the total R&D expenditure

The tax relief an R&D claim results in can often make a big difference to startups and SMEs at a critical stage in their development.  Its sensible to seek professional advice to make the process of claiming as efficient and fruitful as possible and also to ensure the business as a whole is tax efficient in respect to the new R&D Cap. 

#SixtySecondStartup You’ve Got This

  1. What does your company do?

You’ve Got This is a talent marketplace for startups. We bring together experienced professional talent with the UK’s fast growing startup ecosystem. 

We’re making it quick and simple for hiring teams to find mission aligned team members with the sales, finance, product and sector knowledge they need now. 

We enable you to get to know each other on a project basis and hire on an employment basis when the time is right. 

  1. Why did you set up this company?

Covid has accelerated job losses but it’s also given us the opportunity to weigh up our priorities and how we allocate our resources. Many of us want to be more efficient with our time and to work on things that connect with our values and sense of purpose. 

At the same time more mission driven businesses are being created. Innovative startups and SMEs are looking for ways to bring on flexible diverse talent, and that is harder to find through traditional channels. 

They look for highly skilled individuals that can get them through the early years and establish shared values and trust before they hire long term employees. That’s where we come in. I felt there was an opportunity to use technology to help us find meaningful flexible work with businesses and become their early team members if there’s a fit. 

  1. How did you get your first customer? 

Our first customer came through our co-working space. They’re a startup in the renewables space. They had tried platforms like Upwork but couldn’t find what they needed; someone with specific qualifications, who could work part-time, come into the office a couple of days a week and become their first hire down the line. 

  1. We knew we were onto something when? 

We had a first degree connection with the first 50 professionals that signed up to the platform. After that we started to get referrals from individuals who we’d matched for conversations with businesses.

Similarly one of our businesses who we matched with a part-time Finance Director came and asked if we could connect them with a Sales and Marketing expert. 

Together with my CTO Stephen, we’ve built a platform based on customer insight and a roadmap that positions us well alongside platforms such as Upwork and People Per Hour. 

We’re now producing content for our user base on joining and building high performance teams. Our content has been reshared by NatWest business builder and venture capital funds.

  1. Our business model: 

We’ve looked to modernise the traditional recruitment model of upfront commission on annual salaries. Many of our startups find this prohibitive in the early stages. It’s free to search and start connecting with available professionals. 

We apply a service charge on the value of bookings made through the platform. We also provide the process for getting timesheets approved and payments made once work is complete. You can read more about our pricing on our website here

Based upon our conversations with our  business users, we’re planning to launch a pay monthly service with a discounted service fee and extra features for our regular users. 

We think that there’s growth in this sector because:

The gig economy is growing rapidly, with 50% of the workforce are expected to be full-time or part-time self-employed by 2025. 

Automation is replacing the jobs of people who have worked in one sector for many years, pushing people to make a career change later in life.

There are 1.3 million SMEs in the UK (1-49 staff), currently spending an average of £6,000 per year on recruitment. This market is worth £7.9 billion. We’re looking at entering new markets in the future.

Start-up Buzz

If there is one positive from the pandemic, it has been the sheer volume of innovation and exciting businesses that are forming and growing as a result, as markets shift and new trends emerge. 

Each month we’ll select a few start-ups that we see as particularly exciting and worth a further look. Here are some of the current highlights: 

Zero Carbon Farms

Farming needs to evolve. Urbanization, population growth and climate change demand it.

Food supply challenges are well documented – Covid-19 has seen empty supermarket shelves and highlighted the need for secure supply chains, awareness of the damage of pesticides and GMO crops is growing, and extreme weather events are making food production more unreliable. 

Enter Zero Carbon Food (ZCF), a cutting edge AgTech company that builds and operates controlled environment farms, providing a future-proof and sustainable solution for growing. This innovative method allows them to use less water, less space and run on 100% renewable energy. Their first farm? It’s 13 storeys below London in a WW2 air raid shelter.

ZCF supplies brands nationwide including M&S, Tesco Whole Foods and is discussing an international licensing agreement. 

ZCF Pitch

Anatome 

Anatome is an innovative healthcare brand, founded by an exited entrepreneur. Built on the founder’s passion for apothecaries of old and combining it with cutting edge science. It’s already on track to turnover £1.3 million and is playing in the global wellness market,with a total size of $7.2 trillion. 

It’s a digital first platform focused on online sales, but also leveraging real world stores to activate customers in premium locations, including Marylebone, Chelsea and Islington.

On top of this it’s FDA approved, has margins in excess of 70% and has developed partnerships with the Hug group and Space NK.  

Anatome Pitch

ClearWaste

ClearWaste is the first platform of it’s kind offering a price comparison site for household waste – it’s effectively Money Supermarket for household waste. 

Founded by a former EY Entrepreneur of the year, the business has gained traction by helping citizens report where rubbish has been illegally left, and councils link it back to the culprit. Each month ClearWaste submits thousands of reports to local communities. 

ClearWaste has over 500 certified waste removal companies on it’s platform, has hit the top 10 on the Apple app store and is projecting £729k revenue this year. 

ClearWaste Pitch