A very belated view on the biggest year yet for Frontline.
Having entered the world of venture almost a year ago I took some time to reflect on how much has happened both to me and at Frontline. TL; DR lots.
2018 was the biggest year for Frontline across almost every metric worth measuring. As a starting point I wanted to see if who we say we are was reflected in the data.
- We go early
An astounding 60% of our investments were pre-product. We backed founders in the earliest days of product development and in many cases teams with nothing but a deck and a vision.
2. Platform is power
It’s table stakes now to be more than just a cheque. From our inception Frontline prioritised value add by hiring the first full time head of platform in Europe. We’re always experimenting here — but we know the fastest way to learn is via your peers so we optimise for intra-portfolio learning.
3. Accelerating expansion into the US
From day one Frontline have focused on helping our founders get to their biggest market opportunity earlier than their peers and with less bumps along the way. Over 70% of our Fund I companies have made that jump — so we’ve seen what works, what doesn’t and the surprises you’ll face along the way.
Going early means writing a higher volume of small cheques and sometimes making a big bet. Our smallest cheque in 2018 was €200k and our largest was €1.5m. Both were into pre-product companies. Across that range and beyond we will invest the right amount to suit what the company needs for their stage of development.
While we like to be the first institutional investor in our companies, we also see the value created for companies that bring the right syndicate of investors together. Each of the investors we’ve worked with bring their own unique value to the table — big, small and specialised; we will continue to work with the best investors around the world to help our companies get to the next level.
Going into year 6 of Frontline we saw a lot of activity across the portfolio. They raised a total of €110 Million in the calendar year. The same amount amount as in both our funds!
We prioritise pace of execution in our founders so feel we should hold ourselves to the same standards. Founders need fast decisions for better or worse so they can get back to growing their companies. All things going well, founders can expect to go from intro to term sheet in 4 weeks. This is something are always improving.
Woohoo. There’s me. Frontline went into 2018 as 9 and finished as 9. Thomas Olszewski left to become a founder and I swapped in to become a VC. We run a tight ship between London and Dublin but don’t be surprised to see that number grow soon… 👀
We’re seeing more companies than ever before. 85% of these deals are in our sweet spot for stage, but still one of the biggest reasons we pass on deals is they fall out of scope — B2C companies making up the bulk of that — so when it comes to reaching out to VCs — know your audience.
19% of the deals we saw had a female founder on the team. This is trending upwards YoY but we still have a lot of work to do to improve this metric and improve the diversity of founders across our portfolio. Initiatives like diversity.vc, Parity Partners and bias training are all contributing to more awareness and action. But we need to do more to put ourselves out there to the best female founders.
Of those 1355 companies, we met 1 in 4. We believe it’s hard to get enough information to make a truly educated assessment from a deck — so will continue to prioritise speaking to founders as frequently as we can.
If you’re looking to get spotted by a VC, being in an accelerator is definitely your best bet. Next up, getting to know angels and other VCs. Often we’ll pass deals that aren’t a fit for us up or we’ll hear from a great angel they’re writing a cheque into an exciting company. Part of your job as a founder is to understand the fundraising process. Part of understanding it is knowing who are the key players.
We get a lot of cold e-mails and we try to reply to them all. A well written cold e-mail is 10x better than a crappy intro. That being said — Frontline made our first ever investment from a cold e-mail to our firstname.lastname@example.org in December of last year. 6 years. Thousands of e-mails. 1 converted. It was a very good e-mail.
Start-ups today must be globally aware from day one. As a fund, we believe to be closely aligned to your founders needs you have to have a similar strategy. This means we will search for the best companies wherever we can find them. Be it in a university in Stockholm or Karlsruhe — or a scrappy founder with a global outlook in Cincinnati or LA. That being said — our home is in Dublin and London and we’ll continue to do the bulk of our investing in the great founders closest to us.
Lastly — the companies. The very best part of this job has been working with founders. In venture you spend many of your days talking to interesting people working on interesting ideas and on occasion you have the opportunity to make a small material difference helping them get closer to realising those ideas. In Frontline we’re lucky to work with some amazing founders. Some of who’s companies you’ll see above, others you’ll hear about soon.
Now admittedly this post was mainly about Frontline — a view into what we do and how we try to do it. Told through our metrics from last year. However the really interesting stories are behind those logos at the end. They’ll be the ones who make it happen for us and we couldn’t be more excited to be a part of their stories.