Following the Hot Topics interview with Anne Glover, CEO and co-founder of Amadeus Capital Partners earlier this year, Hot Topics’ Tom Lytton-Dickie caught up with Alex van Someren, Managing Partner of Amadeus’ early stage funds to discuss the transition from European tech entrepreneur to investor, successful exits and why he is happy where he is.
As a successful entrepreneur with a career in technology spanning 30 years, Alex van Someren brings a wealth of experience to his role at Amadeus. Having left school in 1982, he embarked on a technological career developing the BBC micro, a project developed by Acorn Computer to support the government’s computer literacy project. He then worked at Acorn before starting a consultancy business in London in the mid–‘80s where he was involved in a succession of businesses focused on product development of both hardware and software during the evolution of the internet.
In 1996, van Someren, along with his brother, founded encryption hardware company nCipher which went public on the London Stock Exchange in 2000. He continued to run it as a public company until 2007, during which time it returned over $200 million in cash to shareholders, before it was finally acquired by French defence and engineering business Thales, in 2008, for a further $100 million.
European tech entrepreneur to investor
For Amadeus, as is the trend with many VCs around the world, building a team of fund managers with past entrepreneurial experience is of fundamental importance. “To have a strong entrepreneurial background yourself is something which we believe at Amadeus is very important. It means that, as an investor, you understand the entrepreneurial journey a bit better and you’re more able to empathise with the entrepreneur than you might if you had never been on that side of the table yourself,” he said.
“I was building businesses for 30 years or more before I became an investor and so, frankly, I’ve made a lot of mistakes: therefore, I can help people avoid some of those.”
In terms of the size and stage of van Someren’s investments, it varies. “I normally write cheques in the £250K – £750K region. I invest in Seed through Series A rounds of funding, so I’m often interested in businesses that are pre-product. I’m generally involved at the innovation stage with a team, often not even with a viable product. If there is a product, it’s usually pre-revenue and it’s then about developing the business and finding the customers whose problems are solved by that product.”
The volume of investor involvement required varies depending at what stage the business is at, he explains, but given his focus on seeds and early stage funding, his work is “pretty hands on”.
“I’m speaking to most of my CEOs every week, and in some cases every day. I’m talking about their problems finding new customers, negotiating partnerships, recruiting teams, and of course supporting them in raising money. All those things I’ve had to do myself multiple times over, and so my insight might be useful to them,” he says.
Whilst it is a different experience from being a European tech entrepreneur, he says if you have been involved with multiple businesses and have experience of boards before, becoming a VC is not a difficult transition to make.
In terms of a preference, he refuses to be drawn. “I think that the collaborative process is enjoyable whichever side of the table you sit, if you get to work with people who you enjoy working with. Frankly, one of the principle criteria in deciding whether to invest in something is choosing people we want to spend another five years or more working with, he said.
Seed fund Success
Amadeus achieved the first exit from its previous seed fund when portfolio company oneDrum, a file sharing business, was sold to Yammer, the leading enterprise social network.
“oneDrum was a really excellent piece of technology. It enabled people to share documents in Microsoft office simultaneously and edit them, so rather like Google Docs does but for Microsoft Office,” explained van Someren. “We were fortunate to receive interest in the business from a couple of major players in Silicon Valley and ultimately after a competitive process the winner was Yammer.”
“We negotiated what was a great deal for the entrepreneurial team, employees, founders and investors so that’s excellent.”
He feels that other companies may also benefit from exiting to the US although believes “acquirers in Asia and Europe are just as likely to be excited by UK technology businesses as acquirers in the US”.
Van Someren recognises that large US enterprises have the added incentive of making an acquisition outside of the US to keep their cash offshore and away from heavy taxes in the ’States. ”It is very helpful to European technology businesses, and it’s perhaps something we have in our favour at the moment.” However, the US also remains attractive for European companies in terms of an IPO. “In the Amadeus portfolio we have a number of businesses coming towards IPOs in the next 12-18 months and some will probably do that on the US markets because the opportunity to list there gives significant economic advantages,” he added.
For van Someren himself, he has made a commitment to remain as an investor for the foreseeable future, rather than transitioning back to the entrepreneurial side of the table. “I’m very happy here. I’ve spent three years working on the existing seed fund, I’ve learned a great deal and it’s something I very much enjoy.”
“I feel very fortunate to be able to do it. I work with some super smart people and get some vicarious pleasure from their success, as well as economic returns for our investors, and a share of those because I’m an investor in the funds myself. ‘What’s not to like’, as they say?”