Pictured, left to right: Rose McCourt; Tara Reeves; Remus Brett; Saul Klein; Emma Phillips; Robin Klein; George Henry de Frahan
LocalGlobe is more than a family business. The London-based investment firm, led by father-and-son team Robin and Saul Klein, has backed more than 45 early-stage startups in the past three years and places emphasis on team responsibility. “I don’t think of myself as the boss,” Robin Klein says. “We largely take decisions collectively.” Investment options are openly discussed, and if one team member strongly believes a deal should be made, it can go ahead. “Providing they’ve listened carefully to objections from colleagues and have got mitigating responses, then we will back them,” he adds.
Since May 2017, LocalGlobe has been investing its eighth fund – a £75 million round – in UK startups. Robin says the firm can afford to take risks as no investment is bigger than four or five per cent of the entire fund. “Our business is about finding the outliers that become unicorns,” he says. “Focusing on loss ratios or our mistakes is the wrong way to look at this business.”
The Kleins started investing through the LocalGlobe name 16 years ago, and have also held partner roles at global venture-capital firm Index Ventures. The pair have invested in companies including TransferWise, Zoopla, LOVEFiLM, Improbable and Wonga. They left Index in 2015, built a team and began using the LocalGlobe name full-time.
“The idea was to create something that builds on the values we had established over the previous 13 years,” Saul explains. Eight people are employed at the company’s Kings Cross offices, and it is hiring more UK investment partners.
The way the company works has changed over time. “In the early days, we fell in love with a lot of companies because we loved what they were doing and were convinced that the world needed it,” Robin says. The process has become more refined, with each partner focusing on a particular sector. But there is a lot of common ground, Saul says: “Sector expertise is less important than expertise in identifying and supporting founders in their early stages.”
Rose McCourt, business operations manager
“It’s all about everyone being part of the team and being able to take on any other role, depending on the requirements. If you’re working on something, but someone else has more bandwidth, then you can hand it over to them. The inclusivity of our meetings makes this possible.”
Tara Reeves, partner
“You need a champion internally who believes the deal could offer a big enough return. Once we have invested, there’s no ‘I told you so’ and everyone is pulling for it. You have got to be able to deal with objections. We keep track of deals using Trello and have created a tag for hotly debated deals.”
Remus Brett, partner
“Every Monday morning we have our deal meeting. We’ll look at everything we’re about to invest in, from things that are in the legal stages to the introductions we had. We do it as a team, but will also invite external guests. It’s hugely beneficial to have additional eyes and minds on the businesses we’re looking at.”
Saul Klein, co-founder
“A lot of the challenges a founder has in the first two or three years of business are less about the sector and more about building a team. Although there are differences between sectors, they are not enormous. We’re less focused on the sector and more focused on the needs of the team.”
Emma Phillips, operations director
“WhatsApp is the quickest form of communication to get stuff done and everyone can see who has replied. We typically have one or two general partners, one or two from the investment team and one or two from operations in every group. Every level of the business is accounted for.”
Robin Klein, co-founder
“The startups that are outliers will generally come with risk. Their founders are invariably at the end of the reasonableness spectrum. They can also be demanding and hard to get along with. Not all founders are like that, but it is a characteristic that early-stage investors need to learn to deal with.”
George Henry de Frahan, partner
“We are quite collaborative and open. If there’s a deal I really want to do, I don’t need a full consensus. Not everyone has to be comfortable with it. But they do have to be comfortable with the conviction of whoever’s leading the deal. It’s up to me to convince everyone exactly why I want to do this deal.”
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