Hoxton Ventures

“Despite Hoxton's age, their portfolio is immense, with the likes of Deliveroo, Darktrace by the famous Mike Lynch from Autonomy, and Campania, recently acquired by a twenty-four-seven customer.”

“We're out of the J curve, which means we're kind of, you know, in the money now on, on the fund, you know, for a fund that's just going to become two years old in two weeks.”

“We're always going to be a small firm, but I think we can be a little bit bigger so that we can support our entrepreneurs the best way. But, you know, we want to be, I don't think we want to be a big firm. I don't think we want to be and doing growth deals. We…”

“Through a family office called Talus we bumped into Darktrace. And together, Talos and us ended up investing in Darktrace, and that clearly is turning into a cybersecurity winner.”

“Following such success, Hussain set out to raise his own fund, and is now the founder of Hoxton Ventures, a 2013 fund with forty million under management.”

“For us, we go there every, like, six to eight weeks, you know, you get back into the flow of information”

“It took us 39 months to do this.”

“Article 50 got invoked, and everyone who had a check or a commitment from EIF at that point felt it. Seedcamp got one of the first calls, they tore up the document, and all of us lost the EIF commitment because they were no longer able to invest in the UK.”

“And then we had a weird scenario in that particular company where our pro rata rights got taken away from us, and in the legal documents, they changed the definition of who would get the pro rata, To basically, I mean, basically singling us out.”

“We put in 10. It was an AI company, a foundational model, didn't necessarily need all the money on compute, so 10 in a foundational model, and 10 is a really large number, but 10 in foundational model land is still a small number. We took it off the table, and…”

“And so I think the formula that we now have is at the time of the IPO, as soon as you're out of lockup, A third of it you sell, a third of it you sell six months later, and then a third of it you sell another six to 12 months after that. Just make it a formula…”

“When we first started, there was about a billion that went into European venture. These days, about thirty billion that goes into European venture.”

“We, that would have been, we would have been a 10 X net fund on, on, on, on Darktrace at the, at its peak.”

“We sold out a delivery at the IPO. We thought it was a, we thought it was like very Fairly valued at the time.”

“We have a company in our portfolio, It's about two years away from IPO. It's appointing bankers right now. One hundred fifty million net, one hundred sixty million net revenue right now on a run rate basis.”

“The company, when it got privatized, did seven hundred thirty two million of revenue. I mean, we, but when we invested, it was doing like 10 K.”

“The only time we probably maybe sped up was like, 20, 21, but I think the whole industry was speeding up at that point, and then we slowed down intentionally in 22. So we do, we used to do about four to six a year.”

“No not an uncap note.”

“The best investment on paper was, I mean, not paper, like, realized was Deliveroo. It was about 34 X on the first check.”

“So we have a fairly trained growth investor on our team who is not in these companies, who can look at the data just on pure databases and give a view. So we basically assemble a different team other than the person leading the investment, saying take a look a…”

“I would love for us to have built a partnership, and I'm thinking actively about this, and I can hand the reins over where I'm just one of a few, and someone else is running the firm. If I can do that successfully over the next decade, I know I have a durable …”

“Yes, because we care about ownership, but no when it comes to the check.”

“So in the run-up to the Darktrace IPO, we did a bunch of SPVs with our investors. We put more money to work in Darktrace than the fund size of Fund One. And we think the lowest performing IRR for us was net 66%. This is all realized, by the way. Net 66%. And t…”

“And so every, every quarter we have like an immediate shopping list, which is if this company falls into trouble, I'm picking up the phone, I'm calling this person At this buyer in this level of the organization who wants this kind of product technology, techn…”

“In the second fund, that's now shifted to a little bit over 50% of our capital is in the top third of the fund. And in the third fund, it's getting closer to about 60, 65% of the top, like, The money's going into the best companies.”

“40. At 35 or 40, something like that.”

“So if we see early traction in any one of our companies, we will figure out a way to put more capital in, and these days for our best companies, and our best companies are much higher concentrations than our average company. We're getting closer to like 15, 20…”

“10%.”

“We now think the closer number is like a 150 to two 50, but back then it was about a hundred. And if you're going to play this game well, that's about the size that you need to be.”

“We put in just around a million of that first round.”

“Fun one was 39 months for us to get going. Like three nine, like over three years.”

“There are some great women who are very capable. It is hard for me to poach them because they're very well taken care of in their existing funds for very good reasons, because there's a shortage of them.”

“And then CUSP walked in the door, which is this foundational model for material science, and we wrote down a double check. Like, we took our reserves and did one big investment, own 11%, decent sized investment”