https://www.wired.co.uk/article/wired-work-smarter
"Venture capital is a boutique business - it's about relationships, emotion and instinct. It's hard to institutionalise," Sonali De Rycker, a partner at Accel, says. "But we asked ourselves: how can you help your founders go global if you haven't done it yourself?"
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There are few VCs with Accel's global reach - the company has offices in Silicon Valley, London and Bangalore as well as a partnership in China - and fewer still with its reputation. Successful exits include Facebook, Etsy and Supercell, while current investments include BlaBlaCar, Deliveroo and Dropbox. In January 2017, Accel topped analyst firm Nanalyze's list of best-performing VCs. Accel, which has global assets of almost £10 billion, ranked in the top three alongside Sequoia Capital and Kleiner, Perkins, Caufield & Byers.
Accel was founded in Silicon Valley in 1983 by Arthur Patterson and Jim Swartz. Its philosophy was based on the Louis Pasteur quote: "Chance only favours the prepared mind." "The prepared mind means we must be proactive," says Accel's London-based partner Philippe Botteri. "We need to talk to our network, research the key trends shaping the digital world for the next five to ten years and try to find the category leader."
"It's about speed of decision-making," De Rycker adds. "But we like to know what we're getting into and not just moving fast because we're caught up in a frenzy. We have the blueprints of what we like and if that matches the blueprint of the company and there's excitement, we move fast."
What are they looking for?
"AI features in every VCs' prediction for 2017," De Rycker explains. "We believe a lot in human-assisted AI rather than black-box AI. Data and processing speed have mostly driven AI - but now the algorithms are progressing."
Recent examples include Qubit, which sifts through customer data using machine-learning algorithms to identify opportunities. Accel leads Qubit's series B and series C rounds, as well as Shift Technology's 2016 series A round.
"We're also looking at next-generation infrastructure," says Botteri. "Whenever you see more automation with less weight - such as the trends in battery size that's driving the drone market - that's worth keeping an eye on."
Where are you looking?
"All of Europe has been growing, but Paris has grown the fastest," Botteri says. "It's driven by the talents around machine learning emerging from the École Polytechnique. It's not by chance that Facebook has its AI research centre in Paris."
"I'm waiting for the first great company from Denmark," adds De Rycker. "The companies we have in Sweden total £16 billion. Supercell was just six people in Helsinki, but look at them now. There's government support and a culture of equality. If you have a great business it's more likely to last because you're transparent with your employees, and loyal people don't switch jobs.
I have invested in Russia - when Crimea was invaded I was biting my nails - but I want to back great entrepreneurs."
What are you avoiding?
"In regulated markets such as healthcare, you need to know what you're doing," warns De Rycker. "If you're doing everything right and there's new legislation, suddenly you don't have a business and everything has to change. Never say never - but handle with care."
What's looking good?
"Exits are the lifeblood of our business," says De Rycker. "The Snapchat IPO was a bellwether - there are three filings in the coming weeks and we have companies with IPO plans. There is huge pent-up demand on the buying side for growth stories."
What worries you?
"In our business, we are looking at microeconomic trends that are changing over ten years, and we invest in markets that are growing exponentially. So unless it's a 2007-style crash, any headwinds are only supplying a few per cent change to markets that are growing by hundreds of per cent," explains Botteri. "Having said that, Brexit does have implications. What are the potential impacts on recruiting the best talent from abroad? Will the City still have its passporting to European finance capitals? What happens to data regulation? Will people need specific data centres for the UK? All that will add more cost and friction."
ACCEL HAS 3 OFFICES AROUND THE WORLD
- Accel's London funds have invested in 162 companies
- £11.6bn has been raised globally
- There is a £29.5bn market cap for exits in Europe
