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Feb 9, 2015 · 25m · 20vc

20 VC 011: London's Early Stage Funding Scene with Thomas Jones

Thomas Jones · 20m spoken Harry Stebbings · 3m spoken
0:00 / 0:00

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Host Harry Stebbings interviews Charlotte Street Capital partner Thomas Jones on episode 11 of The 20 Minute VC to discuss Jones's transition from entrepreneur to investor, early-stage funding strategies, European market dynamics, and tech disruption in traditional sectors.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 15.5% of the talking time here. How this is scored →

Harry as informed peer 2.3 Guest teaching 3.6 Guest disagreement 1.7 Harry pushing back 0.6
05100:0010:0020:001:00–5:08 · Harry as informed peer 1/10 Thomas Jones's Founder Journey with Smarts Group Harry asks standard background questions about Thomas's founder journey with Smarts Group and transition to Charlotte Street Capital. Thomas provides a friendly narrative of his career without any friction or technical debate from the host.5:08–7:38 · Harry as informed peer 2/10 Early-Stage Investment Strategy and the Power of Team Harry asks whether early-stage VCs maintain strict exit timelines. Thomas gently reframes the question, explaining that exit timelines matter in late-stage private equity but are inappropriate and unhelpful for early-stage venture investing.7:40–10:46 · Harry as informed peer 2/10 Evaluating Founders and Building Founder-VC Relationships Harry prompts Thomas on founder evaluation and social versus professional VC-founder dynamics. Thomas clarifies how early-stage contracts remain light and collaborative compared to aggressive late-stage VC terms.10:58–15:37 · Harry as informed peer 2/10 Comparing European and US Venture Capital Landscapes Harry invites Thomas to compare European and US VC scenes. Thomas delivers a broad overview highlighting market size differences, US product culture versus European service culture, and US acquisition power, while Harry listlessly agrees.15:40–19:20 · Harry as informed peer 4/10 Startup Valuations and Early-Stage Equity Pricing Harry cites Uber's massive forty billion dollar valuation when probing late-stage pricing bubbles. Thomas demystifies early-stage valuation mechanics, explaining how pricing is calculated backwards from funding requirements and ownership targets.19:24–22:01 · Harry as informed peer 3/10 The Rise and Real Risks of Equity Crowdfunding Harry references portfolio company Chilango raising on Crowdcube to discuss equity crowdfunding. Thomas takes a stark contrarian stance against industry hype, warning that retail crowdfunding will end in tears and citing FCA data regarding retail investor inexperience.22:17–23:37 · Harry as informed peer 2/10 Career Advice for Aspiring VCs and Founders Harry asks for career advice for aspiring VCs. Thomas offers the unconventional advice to start a business first rather than joining a firm directly, which Harry accepts without pushback.1:00–5:08 · Guest teaching 2/10 Thomas Jones's Founder Journey with Smarts Group Harry asks standard background questions about Thomas's founder journey with Smarts Group and transition to Charlotte Street Capital. Thomas provides a friendly narrative of his career without any friction or technical debate from the host.5:08–7:38 · Guest teaching 4/10 Early-Stage Investment Strategy and the Power of Team Harry asks whether early-stage VCs maintain strict exit timelines. Thomas gently reframes the question, explaining that exit timelines matter in late-stage private equity but are inappropriate and unhelpful for early-stage venture investing.7:40–10:46 · Guest teaching 3/10 Evaluating Founders and Building Founder-VC Relationships Harry prompts Thomas on founder evaluation and social versus professional VC-founder dynamics. Thomas clarifies how early-stage contracts remain light and collaborative compared to aggressive late-stage VC terms.10:58–15:37 · Guest teaching 4/10 Comparing European and US Venture Capital Landscapes Harry invites Thomas to compare European and US VC scenes. Thomas delivers a broad overview highlighting market size differences, US product culture versus European service culture, and US acquisition power, while Harry listlessly agrees.15:40–19:20 · Guest teaching 4/10 Startup Valuations and Early-Stage Equity Pricing Harry cites Uber's massive forty billion dollar valuation when probing late-stage pricing bubbles. Thomas demystifies early-stage valuation mechanics, explaining how pricing is calculated backwards from funding requirements and ownership targets.19:24–22:01 · Guest teaching 5/10 The Rise and Real Risks of Equity Crowdfunding Harry references portfolio company Chilango raising on Crowdcube to discuss equity crowdfunding. Thomas takes a stark contrarian stance against industry hype, warning that retail crowdfunding will end in tears and citing FCA data regarding retail investor inexperience.22:17–23:37 · Guest teaching 3/10 Career Advice for Aspiring VCs and Founders Harry asks for career advice for aspiring VCs. Thomas offers the unconventional advice to start a business first rather than joining a firm directly, which Harry accepts without pushback.1:00–5:08 · Guest disagreement 1/10 Thomas Jones's Founder Journey with Smarts Group Harry asks standard background questions about Thomas's founder journey with Smarts Group and transition to Charlotte Street Capital. Thomas provides a friendly narrative of his career without any friction or technical debate from the host.5:08–7:38 · Guest disagreement 2/10 Early-Stage Investment Strategy and the Power of Team Harry asks whether early-stage VCs maintain strict exit timelines. Thomas gently reframes the question, explaining that exit timelines matter in late-stage private equity but are inappropriate and unhelpful for early-stage venture investing.7:40–10:46 · Guest disagreement 1/10 Evaluating Founders and Building Founder-VC Relationships Harry prompts Thomas on founder evaluation and social versus professional VC-founder dynamics. Thomas clarifies how early-stage contracts remain light and collaborative compared to aggressive late-stage VC terms.10:58–15:37 · Guest disagreement 1/10 Comparing European and US Venture Capital Landscapes Harry invites Thomas to compare European and US VC scenes. Thomas delivers a broad overview highlighting market size differences, US product culture versus European service culture, and US acquisition power, while Harry listlessly agrees.15:40–19:20 · Guest disagreement 2/10 Startup Valuations and Early-Stage Equity Pricing Harry cites Uber's massive forty billion dollar valuation when probing late-stage pricing bubbles. Thomas demystifies early-stage valuation mechanics, explaining how pricing is calculated backwards from funding requirements and ownership targets.19:24–22:01 · Guest disagreement 3/10 The Rise and Real Risks of Equity Crowdfunding Harry references portfolio company Chilango raising on Crowdcube to discuss equity crowdfunding. Thomas takes a stark contrarian stance against industry hype, warning that retail crowdfunding will end in tears and citing FCA data regarding retail investor inexperience.22:17–23:37 · Guest disagreement 2/10 Career Advice for Aspiring VCs and Founders Harry asks for career advice for aspiring VCs. Thomas offers the unconventional advice to start a business first rather than joining a firm directly, which Harry accepts without pushback.1:00–5:08 · Harry pushing back 0/10 Thomas Jones's Founder Journey with Smarts Group Harry asks standard background questions about Thomas's founder journey with Smarts Group and transition to Charlotte Street Capital. Thomas provides a friendly narrative of his career without any friction or technical debate from the host.5:08–7:38 · Harry pushing back 1/10 Early-Stage Investment Strategy and the Power of Team Harry asks whether early-stage VCs maintain strict exit timelines. Thomas gently reframes the question, explaining that exit timelines matter in late-stage private equity but are inappropriate and unhelpful for early-stage venture investing.7:40–10:46 · Harry pushing back 0/10 Evaluating Founders and Building Founder-VC Relationships Harry prompts Thomas on founder evaluation and social versus professional VC-founder dynamics. Thomas clarifies how early-stage contracts remain light and collaborative compared to aggressive late-stage VC terms.10:58–15:37 · Harry pushing back 0/10 Comparing European and US Venture Capital Landscapes Harry invites Thomas to compare European and US VC scenes. Thomas delivers a broad overview highlighting market size differences, US product culture versus European service culture, and US acquisition power, while Harry listlessly agrees.15:40–19:20 · Harry pushing back 2/10 Startup Valuations and Early-Stage Equity Pricing Harry cites Uber's massive forty billion dollar valuation when probing late-stage pricing bubbles. Thomas demystifies early-stage valuation mechanics, explaining how pricing is calculated backwards from funding requirements and ownership targets.19:24–22:01 · Harry pushing back 1/10 The Rise and Real Risks of Equity Crowdfunding Harry references portfolio company Chilango raising on Crowdcube to discuss equity crowdfunding. Thomas takes a stark contrarian stance against industry hype, warning that retail crowdfunding will end in tears and citing FCA data regarding retail investor inexperience.22:17–23:37 · Harry pushing back 0/10 Career Advice for Aspiring VCs and Founders Harry asks for career advice for aspiring VCs. Thomas offers the unconventional advice to start a business first rather than joining a firm directly, which Harry accepts without pushback.

speaking balance: gold is Harry, purple is the guest (3 minute bins)

0:00 · Harry 41.8% · guest 58.2%0:00 · Harry 41.8% · guest 58.2%3:00 · Harry 8.6% · guest 91.4%3:00 · Harry 8.6% · guest 91.4%6:00 · Harry 16.6% · guest 83.4%6:00 · Harry 16.6% · guest 83.4%9:00 · Harry 6.1% · guest 93.9%9:00 · Harry 6.1% · guest 93.9%12:00 · Harry 0.3% · guest 99.7%12:00 · Harry 0.3% · guest 99.7%15:00 · Harry 8.8% · guest 91.2%15:00 · Harry 8.8% · guest 91.2%18:00 · Harry 15.1% · guest 84.9%18:00 · Harry 15.1% · guest 84.9%21:00 · Harry 19% · guest 81%21:00 · Harry 19% · guest 81%24:00 · Harry 32.4% · guest 67.6%24:00 · Harry 32.4% · guest 67.6%
Sharpest disagreement ▶ 20:30 Crowdfunding reality check

Thomas strongly dissents from popular enthusiasm surrounding equity crowdfunding, declaring that retail participation in early-stage investing will end in tears due to extreme risk and illiquidity.

 Hardest push from Harry ▶ 16:46 Uber valuation callout

Harry pushes back on Thomas's discussion of market valuations by specifically interjecting with Uber's forty billion dollar market cap to challenge whether gung-ho US attitudes drive unsustainable bubbles.

 Biggest teaching moment ▶ 21:30 FCA regulatory statistic on retail investors

Thomas educates the host and audience on the structural danger of crowdfunding by citing official FCA survey data showing nearly two-thirds of crowdfunding investors have no prior investment experience.

 Harry holds his own ▶ 19:20 Referencing Chilango's Crowdcube raise

Harry demonstrates specific knowledge of Thomas's portfolio by bringing up Chilango's recent raise on Crowdcube to frame the question on crowdfunding trends.
the scores for every segment, with the reasoning behind each
ChapterTopicHarry as informed peerGuest teachingGuest disagreementHarry pushing backWhy
Thomas Jones's Founder Journey with Smarts Group 1210 Harry asks standard background questions about Thomas's founder journey with Smarts Group and transition to Charlotte Street Capital. Thomas provides a friendly narrative of his career without any friction or technical debate from the host.
Early-Stage Investment Strategy and the Power of Team 2421 Harry asks whether early-stage VCs maintain strict exit timelines. Thomas gently reframes the question, explaining that exit timelines matter in late-stage private equity but are inappropriate and unhelpful for early-stage venture investing.
Evaluating Founders and Building Founder-VC Relationships 2310 Harry prompts Thomas on founder evaluation and social versus professional VC-founder dynamics. Thomas clarifies how early-stage contracts remain light and collaborative compared to aggressive late-stage VC terms.
Comparing European and US Venture Capital Landscapes 2410 Harry invites Thomas to compare European and US VC scenes. Thomas delivers a broad overview highlighting market size differences, US product culture versus European service culture, and US acquisition power, while Harry listlessly agrees.
Startup Valuations and Early-Stage Equity Pricing 4422 Harry cites Uber's massive forty billion dollar valuation when probing late-stage pricing bubbles. Thomas demystifies early-stage valuation mechanics, explaining how pricing is calculated backwards from funding requirements and ownership targets.
The Rise and Real Risks of Equity Crowdfunding 3531 Harry references portfolio company Chilango raising on Crowdcube to discuss equity crowdfunding. Thomas takes a stark contrarian stance against industry hype, warning that retail crowdfunding will end in tears and citing FCA data regarding retail investor inexperience.
Career Advice for Aspiring VCs and Founders 2320 Harry asks for career advice for aspiring VCs. Thomas offers the unconventional advice to start a business first rather than joining a firm directly, which Harry accepts without pushback.

Statements from this episode (11)

Prediction Held up
Charlotte Street Capital makes five to six investments yearly
“We now find ourselves probably actively making five or six investments a year, and also these days, we tend to, we're trying to both lead the investments, or sometimes actually set the businesses up ourselves, because in some cases, we spot a market opportunit…”
Thomas Jones Feb 9, 2015 ▶ 4:10
Disclosure
Charlotte Street Capital ignores spreadsheets and exit plans for early-stage deals
“We don't spend time looking at spreadsheets and projections. We don't spend time looking at potential acquirers or exit plans.”
Thomas Jones Feb 9, 2015 ▶ 6:08
Insight
Thomas Jones says a startup's vision inevitably changes every 12 months
“In 12 months time you know, the vision to the future will look quite different, and another 12 months later, it will probably look different again”
Thomas Jones Feb 9, 2015 ▶ 7:01
Disclosure
Charlotte Street Capital avoids founders lacking market fit to prevent boredom
“If they don't have a natural, if they don't naturally belong in the market they're operating in, then That's a bigger risk, and probably not one that we'd want to take, because the risk of them getting bored, even, is, you know, is material.”
Thomas Jones Feb 9, 2015 ▶ 8:20
Assertion Not checkable as stated
Late-stage VCs impose aggressive, restrictive terms on companies
“So the later stage VCs will Potentially have quite aggressive agreements with their companies with lots of you know, first rights to any income or to any proceeds at their disposal you know, conditions that the company, tying the company down, what they can do…”
Thomas Jones Feb 9, 2015 ▶ 9:40
Opinion
Product culture is stronger in the US, services culture in Europe
“The product culture is stronger in America, and the services culture is stronger in Europe, and in particular in London and the UK.”
Thomas Jones Feb 9, 2015 ▶ 11:57
Opinion
High tech startup valuations in 2015 are not a bubble
“So I don't think the valuations themselves are symptomatic of a real bubble. Even if I do think they are pretty high.”
Thomas Jones Feb 9, 2015 ▶ 17:31
Insight
Early-stage startup valuation is a distraction for investors
“When you're in the early stage worlds which is the really early stage world you know, valuation is, is a bit of a distraction, and probably the right way to think about it, and this is what early stage investors should do, is to first of all say, well, how muc…”
Thomas Jones Feb 9, 2015 ▶ 17:48
Prediction Not checkable as stated
Retail investors making only a few Crowdcube investments will likely lose money
“So if you're making a couple of early stage investments on Crowdcube, you know, you're probably going to lose your money.”
Thomas Jones Feb 9, 2015 ▶ 21:27
Assertion Supported
FCA survey shows two-thirds of UK crowdfunding investors lack experience
“I mean, the FCA, which is the regulator here in the UK, they commented on a survey recently, which suggested that I think nearly two thirds of crowdfunding investors admitted they had no previous investing experience.”
Thomas Jones Feb 9, 2015 ▶ 21:38
Prediction Not checkable as stated
Thomas Jones predicts insurance is the next major industry for tech disruption
“Yeah, I think my answer there is probably insurance, and the reason is, and you know, it's a big area, it's boring, it has a lot of data you know, the kind of young startup kids don't tend to focus on it, they focus on retail things.”
Thomas Jones Feb 9, 2015 ▶ 23:48
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