The first million is the hardest

You may have heard the recent news that Cambridge Enterprise portfolio company Fluidic Analytics raised £5.3m in series B investment to advance the development of their rapid proteomics technology.

The fundraising itself was totally routine, but for us it represented a big milestone. That’s because Cambridge Enterprise Seed Funds contributed £1m. It is the largest single investment we’ve made in our 21-year history and our first investment to break the £1m barrier.

Investors from larger funds may scoff at our excitement. But when you consider our humble beginnings 21 years ago, when we were limited to £250,000 total investment in any one company, being able to invest £1m in one go is huge. Even more so when you consider that we are able to do this now as a result of growing our evergreen funds through blood, sweat and tears (and these are just some of the things that our companies use to measure medical conditions) and the (more than) occasional successful investment.

The real benefits of us having more financial firepower are several. First, and most obviously, we can invest more at the seed stage, which allows companies to make more progress and add more value before having to go raise more investment. This is particularly important if we are the sole seed investors. Being able to grow companies better means we can have a greater impact in the sector overall.

Second, if we are syndicating with other investors, we can use our additional financial muscle to try to convince them to follow our philosophy of treating founders more fairly and avoiding terms that dis-incentivise them. It’s a lot easier to bring a co-investor round to your way of thinking if you are investing as much, if not more, than they are.

Third if we have companies raising multiple rounds of investment, we can follow our money through more of these rounds and convince incoming investors to also follow our fair treatment of founders policy.

Hitting the million-pound milestone signals maturity and success like nothing else. With this in the bag, who knows what we can achieve next.

Image: British fifty pound notes.