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I have given this episode a huuuge write-up as it’s such a vital topic. So if you don’t want to read 2,500 words, listen instead 🙂
Let’s simplify a Fintech’s journey into three schematic stages:
- Stage 1: “turning an idea into a product”
- Stage 2: “turning a product into a business”
- Stage 3: “turning a business into a grown-up business” (IPOs, M&As etc)
In recent months I have come to see as London Fintech’s greatest strength in-depth right now as Stage 1. We could call this a Fintech-Startup … building your plane, taxiing to the runway, then accelerating down the runway and trying to get the wheels off the ground (clients).
Stage 2 is the bleeding edge in London which many are struggling with. The Fintech-Scaleup, going beyond a handful of early-adopters, Crossing the Chasm to use Geoffrey Moore’s famous title.
Stage 3 is a rarefied level where very few are at (generally the ones with eight figure funding). You might perhaps call this moving from being “a Fintech” to a “Mature Business in the FS sector” – they gradually start looking, feeling and acting more like young corporates. They may IPO, they may remain private, they may sell themselves to an incumbent – but they are recognisably a mature business.
Historically a successful journey from inception to IPO/exit takes up to a decade. If you look at UK Stage 3s who aren’t at the exit yet eg Zopa was founded in ’05, Funding Circle in ’10, Crowdcube in ’10, Transferwise in ’11.
The bleeding edge phase changes of Stages 2 (“gas to liquid”?) and 3 (“liquid to solid”?) generally require accessing two elements – Capital Markets and Savoir Faire. It is the relative lack of these two factors perhaps that is proving a real “invisible barrier” for many London Fintech Startups and Scaleups right now.
In this episode we discuss why this is the case in London. How did it come about? What can we learn from the US? What advantages do we have under our nose?
Quite a lot for one episode!
I am extremely fortunate to be joined in this episode to discuss these issues by a man who has spent his whole career to date working with tech companies, and now Fintech companies, at all of the above three stages. Richard Goold is a partner at international lawyers Wragge Lawrence Graham who are the premier Fintech lawyers in London (they have the largest IPO practice on AIM for example).
Richard co-chairs the firm’s global Tech Sector Group which comprises 125 lawyers & travels a lot to San Francisco, New York and Boston.
He works with all stages of Fintechs from very early Stage 1 (who make use of the firms Jumpstart platform – a suite of free advice and documents) through to nine-figure deals for Stage 3s.
He started his career at the firm working with 3i on over 30 transactions in the days when 3i was the biggest investor in technology in Europe. Thus he has a deep historical understanding about why we are where we are right now.
We have a wide-ranging conversation – Continue reading