Banking on the cloud and SaaS rise in Europe

Entrepreneurial experience is something that lots of start-ups looking for investment resonate with, and Notion Capital has no shortage of it.

Working out what to do with yourself once you’ve exited from a successful business is a crossroads moment – do you start again or try something new?

For the team at cloud software business MessageLabs, when the business was acquired by Symantec in 2008 they had to make that big decision.

Rather than put their weight behind one new business, they picked a route which would allow them to be involved in as many exciting start-ups as they wanted – as venture capitalists.

By using their own money to create a maiden fund, Stephen Chandler, Ben White, Jos White, Chris Tottman and Ian Milbourn could go after the businesses they wanted to back – and Notion Capital hasn’t looked back since.

‘We wanted to be the investors we would have had when MessageLabs started,’ Milbourn says.

‘We built up a lot of contracts and networks over the last ten years as well as making many mistakes, so we learned how to do things.’

The player to coach journey, the way in which Milbourn describes moving from entrepreneur to investor, is one which includes a number of changes.

‘The hardest thing to get over is when you are an executive you can get really under the skin of the business.

‘Now we have to learn to stand back a bit and focus our attention on what is really important, like is the product fit for market.’

Learning to say no has also been a learning curve for Milbourn and the other members at Notion Capital.

Since setting up shop in 2008, the venture capital firm has built up an impressive portfolio including the likes of e-commerce delivery service Shutl, payments service The Currency Cloud and telephony service NewVoiceMedia.

Throughout its five-year existence the firm has had a focus on what it defines ‘internet-based services’ – namely cloud computing and ‘everything-as-a-service’ sectors.

‘Back in 2008, people were saying we were quite niche. If you looked at other peers they might have had a TMT element or something like that,’ Milbourn explains.

‘Now when we speak to investors no one has said cloud is niche as there are so many different verticals.’

More on Investor AllStars:

The firm’s new £76 million investment pot, Fund 2, has taken commitments from 41 LPs alongside further capital from the founders. A combination of the team’s track record in business building and running the first fund contributed to a successful process.

Notion Capital also played a role in the Salesforce Innovation Challenge, a $5 million initiative for start-ups alongside other backers such as MMC and Octopus.

When quizzed whether the VC will now begin looking to exit some of its investments having been around for five years, Milbourn is frank in his thinking on the subject.

‘Our view is that in Europe quite often companies exit too early. If we can see improvements each year then we would like to stay with companies on a long journey.

‘If you sort the company out then the exit will take care of itself, rather than forcing the issue.’

Milbourn admits that with LPs now part of the second fund this mantra will have to be altered slightly, but it is only 20 months into operation.

‘The entrepreneurial message we have resonates well in the market; we’ve all got the cuts and bruises and had the heart in the mouth moments.

‘Unless you’ve done that it is hard to relate to those you are backing – and we live by that brand.

Hunter Ruthven

Hunter Ruthven

Hunter was the Editor for from 2012 to 2014, before moving on to Caspian Media Ltd to be Editor of Real Business.

Related Topics

Cloud Technology