Aside from a bout of self-diagnosed “man flu” and being mildly irritated that the exit of one of his portfolio companies wouldn’t now close before the end of the tax year, Mark Pearson was in high spirits during our call a few weeks ago.
And perhaps he has every reason to be. After selling Markco Media, the parent company of MyVoucherCodes, last year, the U.K entrepreneur and ‘secret millionaire” is poised to make his next bet in the form of a new startup studio and early-stage VC fund.
“What excites me the most is I like to get quite hands-on and detailed and work with the companies I invest in,” he tells me. “The money’s one thing, but actually it’s the nurture and the mentorship, the helping you get over the hurdles. I always look at business and startups as ‘you’ve just got to win more battles than you lose’.”
The studio is important as I’ve always seen the real value that can be created by bringing together like minded entrepreneurs under one roof. Mark Pearson
Specifically, Fuel.Ventures, co-founded by Pearson alongside Paul Rous, an entrepreneur and ex-corporate financier who was previously at Goldman Sachs, is a new open-ended EIS early-stage investment fund targeting e-commerce startups. It plans to invest at the “super-early seed,” seed and A round stage.
However, it’s the corresponding Fuel.Studio, which aims to help create and incubate between 5 and 10 startups per year, that has Pearson most animated.
He says that the idea of doing a studio model — which, with unchecked hubris, he likens to creating a London-based Rocket Internet or Betaworks — was born out of his experience with Markco Media, where he previously housed five of his portfolio companies alongside the main business.
“The studio is important as I’ve always seen the real value that can be created by bringing together like minded entrepreneurs under one roof. This enabled what I see as key behaviours for success to be amplified between the individuals and companies within this studio set up, such as blue sky thinking, collaboration, problem solving and healthy competitiveness.
“There is immense value created by putting together leaders with expertise in their respective fields of technology, sales and marketing. This creates a key market-leading advantage for the businesses housed and created within our studio setup.”
In addition, by creating a hub of companies, there are “resource and capital efficiencies” to be made, such as in the areas of HR, accounting and legal.
Personally I find the Silicon Roundabout area to be very overrated. Mark Pearson
“Personally I find the Silicon Roundabout area to be very overrated. As well as being home to some successful tech companies, it has also become a magnet for time wasters and wannabes, who are actually not willing to put in the time and effort to build real businesses.”
Meanwhile, although the decision to focus on e-commerce means that Pearson is staying within his comfort zone, he says the sector is “booming”.
“There has never been a better time in the history of the internet and e-commerce to be investing in and launching new companies, and in turn, creating substantial value in a rapidly growing commerce sector.
“With European e-commerce forecast to increase from $166.4 billion in 2014 to over $248 billion by 2017, increased e-commerce user adoption, the proliferation on mobile handset and tablets, and the opportunities opened up by 4G have created huge potential for investors with the right investment approach.”
I am a good spotter of bullshit and am able to filter this out quickly to enable me to find the hidden gems Mark Pearson
The most notable is Ve Interactive, an e-commerce “performance and conversion platform” that Pearson says was recently valued at over £1.2 billion and in which he invested £500,000 early on. Others include Paddle, Calq, Shopwave and Linkdex, while Playlists.net recently exited.
“I am a good spotter of bullshit and am able to filter this out quickly to enable me to find the hidden gems that will become the next big business,” says Pearson.
“I take pride that I have the experience of building highly successful companies of my own and taking them to exit, but best of all companies I have spotted and invested in early have eclipsed even my own successful track record. My investment portfolio is already worth more than double my own personal exits, with plenty more growth in the next few years. This is the reason why Fuel.Ventures fund and startup studio is my next major focus”.