WHO IS BEACON?
A European-focused VC, founded in 2021 by proven investors and operators, and backed by tech founders, other over-performing European GPs, multi-billion global foundations and family offices. We are based in central London, UK.
Proven investment track record in European Enterprise Tech
Deep expertise in Enterprise Tech; go-to-market, structuring, scaling and exiting
Board level experience and robust “boots-on-ground” capability to help founders succeed
Additional team members (3) assist in deal flow, due diligence and GP operations
WHAT IS YOUR INVESTMENT CRITERIA FOR ACCESSING GROWTH CAPITAL?
Location: UK/EU
ARR: £1m+
Annual revenue growth: 300% and higher (with a MoM growth of 15%+)
Valuation CAP: max £30m
Tech focus: B2B SaaS, PaaS, AI, Dev Ops, Cloud/Edge services (industry agnostic)
Stage: post seed, pre-series A (bridge rounds possible)
Company age: no more than 5 years old
Team: domain expertise, serial entrepreneurs, proven track record
Ambition: growing to £100m ARR in 5 years
Investment check: first check between £750k-£1.5M, follow-on up to £5m
WHAT IS YOUR INVESTMENT CRITERIA FOR OFFERING FOUNDER LIQUIDITY?
Location: UK/EU
ARR: £5m-£15m on the UK/EU/Global market (with an incorporated UK/EU entity)
Annual revenue growth: from 50%-150% based on ARR
Valuation CAP: max £150m
Tech focus: B2B SaaS, PaaS, AI, Dev Ops, Cloud/Edge services (industry agnostic)
Stage: post series A to series C
Company age: no more than 7 years old
Team: domain expertise, serial entrepreneurs, proven track record
Ambition: exit in next 3-5 years
Investment check: £2-3.5m
WHAT IS BEACON’S INVESTMENT FOCUS?
We have a laser-sharp focus on European tech ventures that solve significant problems for the enterprise customer and help them succeed globally . We do not invest in ventures that target or serve directly the interests of consumers (B2C). We look for transformative enterprise solutions which can grow to billion-size businesses on the basis of strong recurring revenue potential and inherently scalable models.
In exceptional circumstances, we may consider investments outside our focus.
WHY DOES BEACON INVEST IN EUROPEAN ENTERPRISE TECH?
Our analysis indicates that the European Enterprise Tech industry is poised for its next growth phase and is gradually approaching US valuation levels. However, it is currently undervalued and lacks early stage capital (<£1M ARR) and later stage founder liquidity (<£10M ARR), creating a unique >£3t investor opportunity over the next decade
WHAT IS BEACON’S GEOGRAPHIC FOCUS?
We are focused on the EU 27 and the UK.
HOW IS BEACON DIFFERENT THAN OTHER TECH INVESTORS?
Beacon exists to serve founders in Europe better. At pre-series A we believe that founders deserve the level of support reserved for later stages. Post-series A, we aim to provide founders with the liquidity typically reserved for later-stage ventures. Beacon understands that small partial exits early allow founders the financial freedom to thrive in their personal lives.
We solve this through investing growth capital into the companies we back, as well as offering liquidity to founders (in our portfolio and beyond). We don’t think liquidity means you won’t be invested in building your company, quite the opposite! We are strong believers that the earlier you reach a comfortable level of liquidity that allows you to put a down payment for a home, the more long-term you will start thinking when it comes to building your company. Knowing that liquidity is a possibility at every round after a certain stage will align incentives with investors further and not have you chase exit opportunities that may be much smaller than your ambitions.
IS “POST-SEED OR PRE-SERIES A” REALLY A STAGE?
Data suggests there is an equity gap in enterprise tech in Europe that is prominent before Series A. The capital raised at Seed typically lasts 18 months, and building a robust minimum viable product ready for enterprise deployment takes longer than that, especially considering the long sales cycles in some sectors. Enterprise tech founders need more than the typical Seed capital to reach the expected Series A milestones. Trying to make it while being undercapitalised can jeopardise their future success. Beacon provides capital at this stage to ensure future success.
DOES BEACON FOLLOW ON IN LATER FUNDING ROUNDS?
Yes, capital is reserved for follow-on for every new investment we make. We typically aim to follow-on up until Series D.
CAN BEACON BE OUR LEAD INVESTOR?
Beacon has a breadth of experience as the lead investor. We have either led our investments or had a significant role in helping the founder bring the round together.
WHAT DOES BEACON LOOK FOR IN FOUNDERS?
We assess opportunities based on our 7 T’s:
Team
Target
Technology
Traction
Timing
Tenability of advantage
Terms
HOW LONG DOES BEACON TAKE TO ISSUE A TERM SHEET?
For pre-Series A investments, we typically need 3-4 meaningful interactions with the founders, including the CTO, before issuing a term sheet. A founder’s time is a rare commodity. We respect this and aim to use it with purpose. When the time arises to issue a term sheet, we will have built the necessary conviction to lead the round.
For secondaries, we typically do most of our due diligence with just access to a data room and/or monthly investor updates. When running these on the back of a round, it’s easier to work with existing materials. However, we’re equally happy to consider the investment outside of a fundraise and find that this comes, sometimes, at a more useful time for founders.
In both cases, respect for the founders’ time is a priority.
HOW LONG DOES BEACON TAKE TO CLOSE A FUNDING TRANSACTION AFTER ISSUING A TERM SHEET?
Our term sheets are subject to completing our due diligence which can take 2-5 weeks. The time varies greatly depending on the readiness of all parties, but it is an opportunity to start working in tandem and get ready for the post-investment period.
For secondaries, it can take us 1-2 weeks to close the transaction and most work is down to our legal team to review the documentation and get things ready for signing.
DOES BEACON DO SECONDARIES ONLY AS PART OF ONGOING ROUNDS?
No, we can do a secondary anytime. We have experience structuring these before, during (where we also participate in the round) or after an institutional round.
Founders’ liquidity may sometimes be a difficult topic to bring up with existing investors. At Beacon, on the other hand, we welcome the opportunity to discuss it with you. We strongly believe that the founder’s needs are just as important as the company’s.
We encourage you to reach out if you’re interested in learning more about how a secondary might work for your specific needs!
HOW DOES BEACON WORK WITH ITS PORTFOLIO COMPANIES POST INVESTMENT?
We deliver effective post-investment support that matches what your company needs at pre-Series A. There is one thing that we understand better than most investors: the goal of your post-Seed round is to find your Ideal Customer Persona – a single definition of an ideal customer cohort for whom you are solving the same pain via the same proposition. Once you achieve this, financing the next stage of growth will be considerably less dilutive for you. We will help you get there.
Founders build a direct and trusting relationship with the Beacon team. The intensity and frequency of interactions are typically driven by the needs of the business. Regular board meetings ensure structured, strategic discussions while calls and texts in between help with tactical matters.
The Beacon team is the single point of contact. We draw the necessary resources from our network to aid on aspects such as hiring, lead generation, sales comp, pricing, budgeting or the tech stack. The Beacon team is the Single Sign-On (SSO) to a network of expertise configured to the founder’s needs. The Beacon team is not just an investor — they are everything and more.
In any case, the best way to understand how we work is to speak to one of our portfolio founders. We strongly encourage interested founders to do so before accepting our term sheet
WHAT DOCUMENTS DOES BEACON REQUIRE FOR DUE DILIGENCE
To properly perform due diligence, full data room access is required by the Beacon team. The data room should contain:
Latest updates and presentations
Audited management accounts
Budget – Business plan
Capitalisation
Customers
Sales Pipeline
Product
Organisational chart
IP & Patents
Case studies
HOW CAN I SEND BEACON MY PITCH DECK?
You can reach the Beacon team at hello@beaconcapital.co.uk