How Concept Ventures became the largest pre-seed technology fund in the UK

Reece Chowdhry

Reece Chowdhry is the Founding Partner of Concept Ventures. As an angel himself, Reece has invested in more than 80 start-ups, including 6 unicorns, and he’s been ranked as one of the Top Asian Tech Investors by Diversity UK. We spoke to Reece about his journey so far and how UKBAA has supported it, as Concept Ventures achieves the milestone of being the largest pre-seed technology fund in the UK

Founded in 2018, Concept Ventures was set up in response to the lack of institutional capital at the earliest stage of the UK ecosystem. The fund helps those companies doing their first round of funding, who are looking to raise under £1.5 million. Explaining Concept Ventures’ beginnings, Reece says:

“It’s very easy at Series A to back everyone because you can see the metrics, but at the earlier stage, we found there was not a fund in the UK properly set up for the pre-seed stage of the ecosystem. That is our core focus.”

With a good understanding of what early-stage companies need in their first 12 to 18 months, Concept Ventures has to date backed around 60 companies. Detailing their approach, Reece comments:

“Our aim is to back companies in our areas – software businesses – changing the way people work, play and learn. We’re really backing those at the earliest stage, that first 12 to 18 months. We’re specialists in that.”

As well as bringing together the experience of the Partners, who were all Angel Investors before the fund was created, Concept Ventures has been helped on its journey by UKBAA. Reece became a UKBAA member after meeting Managing Director Roderick Beer many years ago and he credits the support of UKBAA as the reason that Concept Ventures began their journey to become an institutional fund.

“I really genuinely think that without the UKBAA, we wouldn’t have gone on this journey as quickly as we did, and we wouldn’t have the network, knowledge and power that that the UKBAA has given us.”

Being highlighted as One to Watch at the 2018 UKBAA Angel Investment Awards, when Concept Ventures was known as RLC Ventures, gave the fund credibility and helped to open doors. Giving them a platform to have conversations with investors, the association with UKBAA helped expand their network. Reece enthuses:

“We were able to open more doors in terms of the angel world particularly. When we were speaking to other angels, they would all know the UKBAA and they would engage with us. We’ve got a number of deals, around 10% of our deals are generally from angels, so they’re a big part of our deal flow.”

Thinking about how far Concept Ventures has come in the past four years, Reece is proud that they secured the backing of the British Business Bank. He admits it was challenging process to get them on board.

“I really genuinely think that without the UKBAA, we wouldn’t have gone on this journey as quickly as we did, and we wouldn’t have the network, knowledge and power that that the UKBAA has given us.”

“I think the reason why they came on board and they were comfortable, was because they saw the success we’ve had in the portfolio and the way we did things differently. We’re really proud to say that if we invest in you, you’re twice as likely than the average to get your next round of funding. We know the journey for the first 12 to 18 months is very similar for most companies.”

Reece is also immensely proud of the team that Concept Ventures has built and the exits they’ve achieved so far. He also highlights their Venture Pledge, which sees them committed to giving a percentage of their carry back to causes of their founder’s choice.

“There are not many people actually putting their money where their mouth is at the partner level and the management level. It’s something we pioneered in the industry and I know a number of people have started to follow suit now. We’re really proud of that.”

One of the biggest challengers for any investor is assessing the founders they are potentially going to invest in. Everybody has their own way of doing that

“When you go through the process with Concept Ventures, we are digging very much into who you are as people and we have our own personality models that we’ve created over the years, which gives a very deep indication of who you are as people. That also helps us remove any kind of groupthink or bias from the process as well. If there’s one thing I’ve learned is don’t rely on your gut to measure those people. You inherently have a group of biases that you’ve grown up with and that’s one of the problems of the VC industry. The traits of greatness are personality traits like people’s vision, risk-taking, ability to take feedback and taking people on the journey, which could come in any kind of person.”

Looking ahead to the next 12 months, Concept Ventures wants to double down its focus on pre-seed investing and working with great founders to help them build big companies. Expanding on their vision Reece shares:

“We’re doing lots of events and we’re building a number of tools. Every month we’re releasing an article, which indicates what you should do in month one, or two or three, almost building a product out of that so anyone can go and say, ‘this is what the first 12 months of my journey should look like and these are all the tools and resources to do that’.”

A challenge that will no doubt impact the early-stage ecosystem is the on-going cost of living crisis, which has followed immediately on from the pandemic, which had a huge effect across the globe. How does Reece think that’ll affect what Concept Ventures and its portfolio is doing?

“In any kind of economic downturn where there’s social pressures, it often forces people into entrepreneurship and creating great companies. Time and time again in history, great innovation has come out of tough times. There is a lot of new support from the UK government, to build UK tech companies. That is very important to the whole ecosystem and the problems we face. If we didn’t have the support of the Government, like some other countries don’t, with EIS, with the British Business Bank and with our fund, we wouldn’t be able to create the next generation of companies that we’re building at the moment.”

Find out more about Concept Ventures at www.conceptventures.vc.

By UKBAA 07 Sep 2022