1. UK Venture Capital
Landscape 2019
From the eyes of an
International Investor

2. Eric Martineau-Fortin
Managing Partner
Nick Stocks
General Partner (London)
White Star Capital 2
In this first edition of our annual UK-focused report, we aim to
share our passion and enthusiasm for the UK’s tech sector and
entrepreneurial talent.
Since it was founded in 2007, White Star Capital has invested
across Europe and North America, leading rounds in fantastic
companies such as Butternut Box, Meero, Tier Mobility, Freshly
and Drop Loyalty. From the very beginning, we insisted on
having boots on the ground in the UK given its position as the
focal point of European venture capital.
Although politically many things have changed, the UK still
holds this position, and it has actually become even more
pronounced. In this report, we share why we have always been
excited about the UK market, and why we believe the future
still holds promise despite the current uncertainties faced.”
“There are a number of specific characteristics about the UK
ecosystem that has allowed it to become Europe’s leading
technology hub.
The UK has long been known as a global hub for financial
services, and also the gateway to the US. The nation also
has one of the most forward-thinking regulators, a number
of world-leading education and research institutions and a
propensity for tech – having one of the highest tech adoption
rates in the world. It is no wonder why major corporates have
set up their European headquarters here.
However with the current later stage funding gap, and Brexit
on the horizon, we also dig into the potential impacts of leaving
the EU. The UK has one of the best talent pools in the world,
and we must, at all costs, ensure this remains the case, and
ensure that this talent has the funding to continue building the
sectors of tomorrow.”
“The UK is producing some very
high quality entrepreneurs and
start-ups, and it is so exciting to
see companies like Monzo and
Revolut entering the US market.
I expect many more to come and
look forward to being the bridge
for when this happens”
“The strength and resilience
of the UK start-up ecosystem
following the decision to leave the
EU has been extraordinary and
has very much highlighted that
it will take a lot more to remove
the UK from Europe’s helm of
entrepreneurship!”
“The UK is quickly becoming
a unicorn factory. And as the
exits begin to mount, this
will only fuel the creativity
further as new investors and
entrepreneurs enter the field.”
Jean de Lencquesaing
Senior Associate (London)
Alex Wilson
Associate (London)
Allen Duoji
Analyst (London)

3. White Star Capital
Section 1 UK Venture Capital: An Overview 04–14
Section 2 Ecosystem 15
Market 17–18
Talent 19–21
Capital 22–30
Government 31–36
Section 3 The Future of UK VC 37
Brexit 38–42
Nurturing Talent 43–46
Sectors of Tomorrow 47
3
Contents

4. White Star Capital
1UK Venture Capital:
An Overview
4

5. White Star Capital UK Venture Capital: An Overview 5
The UK Venture Capital
Ecosystem in the Spotlight
Globally for number of
high growth companies2
1st
Higher than expected vs
other global tech hubs3
2x
Globally for number
of unicorns
3rd
For Venture capital
funding in Europe1
1st
Fastest country in Europe
to start a business (5 days)6
3rd
Globally for smartphone
penetration7
1st
(1) Dealroom.
(2) Information Age.
(3) Haendlerbund.
(4) Based on ratio of total venture capital funding in 2018 to GDP for USA, China, France, Germany, India and Canada and Japan.
(5) Total e-commerce turnover/GDP.
(6) Inc.
(7) New Zoo.
1st
In Europe for
number of exits1
1st
In Europe
for e-GDP4,5
VC investment is

6. 2019 H12018201720162015201420132012201120102009
$0.6bn
109
134
193
285
359
408
498
539
659
587
326
$0.7bn $1.1bn $1.6bn $1.3bn
$2.1bn
$4.1bn
$4.7bn
$5.8bn $5.4bn
$4.9bn
UK Deal Value (US$) UK Deal No.
2017 2018 H1 2019
US China Europe¹ UK France Germany Canada Japan
$0bn
$25bn
$50bn
$75bn
$100bn
2019 looks to be a record year for VC
activity following the decline in 2018
UK activity in 2019 is expected to be
well above the record levels of 2017
UK VC investment in H1 2019 is
currently 63% of European deal value
Deal volume and value
Deal volume and value
White Star Capital UK Venture Capital: An Overview 6
Source: CB Insights
(1) Europe excluding the UK.
• UK VC activity declined in 2018 from the
record heights experienced in 2017
• Investor uncertainty around Brexit may have
been a contributing factor, as well as subdued
investor risk appetite following the large
amount of capital deployed in the year prior
• However 2019 seems to be painting a very
different picture, with 2019 funding already at
85% of 2017’s activity and H1 2019 funding
2x H1 2018

7. Most of the activity is driven by the growth
in Series A and Series B rounds as the
ecosystem has matured
White Star Capital UK Venture Capital: An Overview 7
Source: CB Insights
Share of Deals by Stage Type (2018)
Note: growth rate reflects 16-18 % CAGR
China Germany Japan France UK Canada US
Seed/Angel
share of deals
35% 47% 47% 53% 52% 54% 38%
+6% (6)% +4% (10)% (11)% (10)% (10)%
Series A
share of deals
34% 30% 30% 30% 27% 27% 26%
(2)% +3% (3)% +5% +8% +7% +1%
Series B
share of deals
18% 16% 14% 13% 12% 10% 17%
(4)% +4% (3)% +5% +2% +1% +4%
Series C
share of deals
9% 4% 7% 3% 5% 5% 9%
(1)% (2)% +2% (1)% +1% (1)% +1%
Series D
share of deals
2% 3% 3% 1% 2% 3% 5%
(1)% +1% (1)% +1% +1% +2% +2%
Series E
share of deals
1% 1% 1% 1% 2% 1% 4%
+1% (1)% +1% (1)% +1% +1% +1%

8. Seed Series A Series B
$0m
$18m
$35m
$53m
$70m
2018201720162015201420132012201120102009
Growth in popularity of venture capital as
an asset class has tightened competition
and increased valuations
Early-stage round valuations in the UK have increased by 13% since 2009
Alongside China and France, the UK has the fastest growing valuations
Evolution of Median Pre-Money Valuations in UK
Pre-Money Valuation for Major Start-up Hubs
White Star Capital UK Venture Capital: An Overview 8
Source: Pitchbook
China Japan Canada US France UK Germany
Seed
$8m $6m $5m $7m $3m $4m $6m
+9% +14% +6% +9% +1% +9% +4%
Series A $50m $45m $26m $20m $18m $18m $17m
+13% +14% +6% +16% +12% +19% +19%
Series B $250m $70m $47m $60m $65m $64m $50m
+15% +22% +7% +15% +14% +29% +16%
Note: growth rate reflects 11-17 % CAGR

9. …driving larger round sizes
UK is experiencing a significant expansion in round size,
but not as quickly as other key hubs
2016-18 CAGR of Early-Stage Round Sizes
White Star Capital UK Venture Capital: An Overview 9
Source: CB Insights
Japan
France
UK
Germany
China
Canada
US
$2m19%
14%
16%
10%
11%
20%
10%
21%
17%
10%
16%
14%
9%
15%
10%
13%
(1)%
(1)%
1%
4%
5%
$8m
$15m
$1m
$7m
$10m
$2m
$9m
$21m
$1m
$7m
$15m
$2m
$5m
$15m
$1m
$4m
$14m
$1m
$3m
$6m
Seed Series A Series B

10. As international investors seek to deploy
more capital, mega rounds are becoming
a regular feature
81% of all mega rounds in the UK have been led
by international investors
UK Mega Rounds ($100m)
Share of Mega Rounds by Number Share of Mega Rounds by Value
UK Venture Capital: An Overview 10
Source: CB Insights
200 103
250 100 250 230
160 165 500 130 575
108 1200 526 130 175
500 275 110 118 144
280 109 131 100 315
2015 2016 2017 2018 H1 2019
H1 20192018201720162015
33%
13%
40%
13%
50%
38%
13%
60%
10%
30%
29%
29%
24%
18%
40%
7%
27%
27%
UK France Germany Rest of Europe
H1 20192018201720162015
44%
11%
23%
22%
78%
17%
5%
80%
6%
14%
51%
18%
22%
10%
36%
7%
26%
31%
White Star Capital

11. Fintech continues to lead the charge
with 25% of all UK VC deals in 2018
FinTech
Investment Activity
Start-ups
Start-ups
Start-ups
Start-ups
Investment Activity
% of UK Deal No.Deal Value ($m)No. of Deals
Digital Health
Artificial Intelligence
Investment Activity
Investment Activity
e-Commerce
UK Venture Capital: An Overview 11
Source: CB Insights
H1 2019201820172016
30
39
34
11
102.6296.6160.8229.7
6% 7% 7% 4%
H1 2019201820172016
35
50
46
13
169.5260.7277.4279.1
7% 9% 9% 4%
H1 2019201820172016
92
130 131
65
138017701390542
19% 21% 25% 22%
H1 2019201820172016
55
82
74
45
429.4683.7528.6272.2
11% 14% 14% 15%
White Star Capital

12. UK Venture Capital: An Overview 12
The UK is now home
to 17 unicorns1
...
$13bn+
Share of Fintech
Unicorns
50%
Number of new UK
unicorns in 2018
6
Source: CB Insights
Unicorn defined as a private venture-backed company raising a round of financing at a valuation of US$1bn.
Note: Excludes BGL, Radius Payment Solutions and Global Switch
Manchester
$3.3bn
Durham
$1.3bn
Edinburgh
$1.2bn
Cambridge
$1.7bn
Bristol
$1.3bn
$1.5 – 1.7bn
Oxford
$2.0bn
Capital raised
by UK unicorns
London
$3.5bn
$2.0 – 2.1bn$3.5bn
$2.0bn$2.5bn
$1.5bn
$2.0bn$2.3bn
$1.0bn$2.4 – 2.8bn
White Star Capital

13. White Star Capital UK Venture Capital: An Overview 13
…and has the highest
concentration of unicorns1
in Europe
SwedenPortugal
EstoniaSpain
Netherlands
Switzerland
Belgium
Romania
Malta
$3.5bn$1.0bn
$1.0bn$1.4bn
$1.0bn
$7.0bn $1.0bn
$1.0bn
$7.1bn
$1.0bn
Germany
$1.0bn
$1.0-1.1bn
$1.0bn$3.5bn
$3.5bn$3.5bn
$1.7bn
$1.0bn
France
$1.2bn$1.6bn
$1.1bn$1.1bn
UK is also home to the largest number
of potential unicorns in Europe…2
Source: CB Insights, Tracxn
(1) Unicorn defined as a private company raising a round of financing at a valuation of US$1bn.
(2) Selected “Soonicorns” from Tracxn database. Tracxn defines Soonicorns as companies that have the potential to
scale to a$1bn valuation based primarily on funding, valuation and the company’s disclosed growth metrics.

14. Source: CB Insights
UK Venture Capital: An Overview 14
UK has the highest proportion of
European exits, but valuations are over
25% lower than China and the US
Date Target Acquirer Valuation
Jan 2001 $312m
May 2011 $367m
May 2013 $310m
Nov 2013 $624m
Jan 2014 $527m
Jan 2014 $500m
Oct 2015 £400m
Dec 2015 £240m
May 2017 £140m
Sept 2018 $400m
Jun 2016 £102m
Sep 2017 $1bn
Sep 2018 $400m
Jun 2019 $877m
Date Acquirer Valuation
Oct 2010 £1.5bn
Mar 2014 $7.1bn
Apr 2014 £1.5bn
Jun 2014 £4.3bn
Jun 2014 £919m
Nov 2015 £540m
Dec 2015 £240m
May 2017 £140m
Sep 2018 $5.8bn
Oct 2018 £1.5bn
UK Venture Backed Exits
MA is the primary exit route
Selected VC-Backed MA ExitsSelected VC-Backed IPO Exits
MA Exits
365
VC-Backed
IPOs
24
UK’s Share
of European
Exits
27%
White Star Capital
H1 20192018201720162015201420132012201120102009
9
15
29 28
31
35
43
61
59
57
29
Strategic MA Private Equity IPO Total
117 2625 2624 5235 49 3151

15. White Star Capital
2Ecosystem
15

16. Ecosystem 16
The White Star Capital model
for a venture capital ecosystem
At White Star Capital, we believe there are 4 key
constituents to the VC ecosystem
Market
Government
Talent
Capital
Naturally occurring,
underlying aspects of the
landscape
Key Characteristics
• Technological adoption
• Digital penetration
• Size and growth
• Tailwinds or headwinds
Controllable, human-led aspects
of the landscape
Key Characteristics
• Tax incentives
• Government led incubators
and hubs
• Regulation
The abundance of strong
founders and employees and the
underlying initiatives supporting
them
Key Characteristics
• Education
• Major corporates
Financing available in the market
Key Characteristics
• Angel investors
• Presence of funds across
sectors and stages
• Access to international funding
1.
3.
2.
4.
White Star Capital

17. White Star Capital Ecosystem: Market 17
The UK demographic is
brimming with the right
characteristics…
Fastest growing population
in Europe for its size3
Growing market
1st
Wealthiest country per
person in the world4
High spending power
5th
The UK is the 3rd most
populated country in Europe
Huge market
66m1
Home of the language spoken
by 20% of the world2
Great accessibility
English
(1) ONS
(2 )Telegraph.
(3) Our World In Data.
(4) Statista.
(5) The Culture Trip.
(6) Heritage.
Top 10Most culturally diverse
countries in the world5
Diverse market
3rd
Most economically free
country in Europe6
Openness to innovation

18. (1) Internet World Stats.
(2) New Zoo.
(3) Euromonitor.
(4) Payments Cards and Mobile.
Ecosystem: Market 18
…and above all else, the UK is widely
regarded as a nation of early adopters
UK Canada United StatesBrunei
Darussalam
South
Korea
NetherlandsLuxembourgGermanySwedenDenmarkEstoniaBermuda
98.4% 97.9%
96.5% 96.0% 96.0% 95.9% 95.6% 95.1% 94.9% 94.2%
92.7%
89.0%
AustraliaCanadaSpainFranceBelgiumUSAGermanySwedenNether-
lands
UK
69%
82% 79% 79% 79% 77% 76% 76% 73% 72%
FinlandGermanyCzech
Republic
USANether-
lands
IrelandDenmarkUKChinaSouth
Korea
11.0%
24.0% 23.7%
17.0%
14.7% 14.2% 13.7% 13.7%
11.7% 11.0%
3%
e-CommercePoS
BrazilSpainUSSingaporeNorwayHong
Kong
GermanyUKIndiaChina
36%
65%
26%
6% 5%
23%
5%
20%
4%
25%
4% 4%
3% 3%
12%
10%
20% 19%
13%
Global
Internet
penetration1
10th
Global
smartphone
penetration2
1st
Global
e-commerce
penetration3
3rd
World leader
of PoS and
e-Commerce
spend using
mobile wallet4
White Star Capital

19. Ecosystem: CapitalEcosystem: Talent 19
Excellent pool of academic talent
– 50% of UK unicorn founders
attended UK universities
4 of the top 10 universities in the world are in the UK1
Herman Narula
CEO
Emily Orton
CMO
Hagan Bayley
Founder, Director
Lex Greensill
CEO
Rishi Khosla
CEO
Rob Whitehead
CPO
Simon Knowles
CTO
Tom Blomfield
CEO
Jason Austin
President,
Vice-Chairman
Joel Perlman
Co-founder
#5
#29
#6
#31
#8
#38
#10
#51
#18
#54
Selected UK Unicorn Founders
Source: CB Insights
(1) QS World University Ranking.
White Star Capital

20. Ecosystem: Talent 20
63% of Series C+ founders worked with
UK based companies prior to launching
their start-ups
Kristo Käärmann (CEO)
Transferwise
Deloitte (UK)
Paul Rippon (Dep. CEO), Jonas Templestein (CTO),
Gary Dolman (ex-CFO), Jason Bates (ex-COO)
Monzo
Starling Bank
Lex Greensill Jason Austin
Greensill
Citigroup (UK)
Morgan Stanley (UK)
Alastair Paterson (CEO)
James Chappell (CTO)
Digital Shadows
Detica BAE Systems
Nigel Toon (CEO)
Simon Knowles (CTO)
Graphcore
Icera
Nicole Eagan (CEO), Poppy Gustafsson (co-CEO),
Emily Orton (CMO)
Darktrace
HP Autonomy
Robert Whitehead (CPO)
Improbable
Bloomberg (UK)
Nik Storonsky (CEO)
Revolut
Credit Suisse
Peter Lipka (COO)
Improbable
Goldman Sachs (UK)
William Todd (CTO)
Nutmeg
Brewin Dolphin
Stephen Fitzpatrick
Ovo Energy
JP Morgan (UK)
Rhydian Lewis (CEO)
Ratesetter
Lazard
Mansoor Hamayun (CEO)
BBOXX
Rolls-Royce
Christopher Rieche (CEO)
Iwoca
Goldman Sachs (UK)
Ralph Steffens (CEO)
Truphone
BT
Selected Founders
Source: CB Insights, Tracxn, Linkedin
White Star Capital

21. White Star Capital Ecosystem: Talent 21
Technology hubs have developed
throughout the country to support this
huge talent pool
Source: Technation
Edinburgh
Oxford
Manchester
Major Corporates
Major Corporates
Major Corporates
Innovation Hubs
Innovation Hubs
Innovation Hubs
Universities
Universities
Universities
Selected Investors
Selected Investors
Digital Tech Business Count: 9,045 (Scotland)
Digital Tech Business Count: 38,530 (SE England)
Digital Tech Business Count: 13,665 (NW England)
LondonCambridge
Major Corporates
Innovation Hubs
Universities
Selected Investors
Digital Tech Business Count: 19,090 (East England) Digital Tech Business Count: 51,690
Major Corporates
Innovation Hubs
Universities
Selected Investors

22. Source: Pitchbook
Note: Estimated deal activity from 1-Jan-2016 to 30-Jun-2019. Estimates for investors exclude rounds reported as follow-ons.
Ecosystem: Capital 22
50% of seed deals are crowdfunded and
over 80% of later stage deals are led by
international investors
VC
Incubator/
Accerlerator
Crowdfunding
Platform
180
158
109
25272931353840
180
20
12
6 678991010
180
10 8 3 33
44445
6
4 4 4 3 3 3 3 3 3
Other International
Investor
US Investor
US Investor with
Operations in UK
UK Investor
Seed
Series A
Series B
Series C+
White Star Capital

23. H1 20192018201720162015201420132012201120102009
9 5 22
25
54 52
85
76
103
59
33$67m
$54m
$100m
$117m
$162m
$184m
$190m
UK Deal Value ($m) UK Deal No.
$23m
$18m
$4M$4M
Ecosystem: Capital 23
As the ecosystem matures and exits mount,
the angel community has grown
Alex Chesterman
Zoopla (Founder, CEO)
Tide, Uniplaces, The Plum
Guide, Perkbox
Taavet Hinrikus
TransferWise (CEO))
Bolt, Carta, Habito,
Onfido, Yoyo
Shakhil Khan
Student.com (Co-Founder),
CoinDesk (Founder)
Spotify, Monese,
DueDil, Thread
Duncan Jennings
VoucherCodes
(Co-Founder, CEO)
Thread, Dice, Motorway
Ilkka Paananen
Supercell (CEO
Co-Founder), Sumea
(CEO Co-Founder)
Omio, Cytora, Eastnine, Wolt
William Reeve
Goodlord (CEO), LOVEFiLM
(COO, Founder)
Onfido, Tide, Uniplaces
Sherry Coutu
Interactive Investor (Founder,
CEO, Chairman)
Topia, DueDil, YPlan,
Recurly, Perkbox
Jon Moulton
The Better Capital Fund
(Founder, Managing Partner)
Atom Bank, Property
Partner, Signal, Hometree
Charlie Songhurst
Katana Capital (Founder Partner),
Microsoft (fmr. Head of Corp. Strategy)
Classpass, Convoy,
Onfido, Tractable
Paul Forster
Indeed (CEO Co-Founder)
Nested, Cytora, Market Invoice,
Habito, Ravelin
Jonathan Milner
Abcam
(Deputy Chairman, Founder)
Horizon, Geospock,
Phoremost, Healx
Selected Angel Investors
Angel Investor Activity
Sources: Linkedin, Crunchbase, CB Insights
White Star Capital

24. Ecosystem: Capital 24
Seedrs and Crowdcube have been a financing
conduit for over $1bn of seed stage investments
Crowdfunding has quickly become a recognized source of capital…
…and the UK leads the next most active region by almost 3x
There are 2 key platforms driving this trend in the UK
Source: Crunchbase, CB Insights
H1 20192018201720162015201420132012201120102009
$7m
$22m
$69m
$60m
$159m
$163m
$69m
Deal Value Deal No.
$120k$2m
4 2 7
15
45
58
155
127
55
CanadaJapanChinaGermanyIndiaFranceSpainUK
2018
127
155
47 47
20
43
16 16 12 14 9 6 7 2 2 0
2017
UK Crowdfunding Activity
Crowdfunding by Deal No. Across Europe
Major Successes
CEO: Jeff Kelisky
Total Funding: £49m
Selected Investors: Augmentum
Raised on Platform: £621m
raised on platform
CEO: Darren Westlake
Total Funding: $49m
Selected Investors: Balderton,
Draper Esprit
Raised on Platform: £689m
raised on platform
White Star Capital

25. Source: CB Insights, Entrepreneur
(1) Fundable.
Ecosystem: Capital 25
The UK’s propensity for technology
has played a major role in the growth
in popularity of crowdfunding
Crowdfunding offers 3 main benefits over classic VC financing...
• Start-ups with strong consumer facing
propositions tend to benefit the most from
crowdfunding given the added uplifts for
branding and marketing
• Examples include Monzo and Revolut
(Mobile), Festicket and Thread (Internet),
Blow (Consumer products services)
• Crowdfunding has provided an additional
channel for the tech-hungry UK consumers
to exercise their thirst for digital adoption
These benefits are particularly
advantageous for consumer
technology For every 100 new
Facebook friends,
the probability of
success increases
by 40%1
Speed
• Crowdfunding can often be a quicker
process than engaging with angel
investors and VCs
• However, the most successful
campaigns will often still involve
some investor interaction
• Once the campaign has launched,
securing a partial amount of funding
from known investors can act as
a strong sign for investors on the
platform
1.
• Marketing is critical to a successful
crowdfunding campaign – for
crowdfunding successes like Monzo
and Brewdog, it has been a great
channel for customer acquisition
Marketing2.
• Offers an opportunity to gauge
product market fit early
• Entrepreneurs have the chance to
iterate based on real feedback
much earlier than they otherwise
would have been
Product validation3.
Number of
Crowdfunding
Deals by Industry
Since 2009
Mobile
Telecommincations
18%
Food
Beverages
17%
Consumer
Products
Services
10%
Other
17%
Internet
38%
White Star Capital

26. Austria DenmarkBelgium NetherlandsSweden SpainSwitzerland France GermanyUK
81 53
41
29 22
13
85
183
377
128
24%
17%
12%
7% 7% 7%
4%
3% 3%
2%
Ecosystem: Capital 26
UK-based CVCs have only contributed to
4% of deals in the UK over the last 5 years
UK leads Europe for value of CVC activity with $9bn+ invested
But a small proportion of this deal activity is led by UK based CVCs
Source: Crunchbase, CB Insights
AustriaDenmarkBelgiumNetherlandsSweden SpainSwitzerlandFranceGermanyUK
0.9 0.8 0.8 0.5 0.4 0.4
1.4
2.7
3.7
9.7
Deal Value for European CVC Activity
Over the Last 5 Years ($bn)
% of Total Deals involving CVCs from Local Corporates Deal
Number for European CVC Activity Over the Last 5 Years
White Star Capital

27. Ecosystem: Capital 27
UK CVCs invest in a number
of different sectors
UK leads Selected UK-based CVCs
Source: Crunchbase, CB Insights
Unilver
Aviva
Daily Mail Group
Santander GlaxoSmithKline
BPJaguar Land Rover
Saatchi Saatchi
Founded 2002 – 25 UK deals
Selected Investments:
Blis
Gousto
Founded 2015 – 9 UK deals
Selected Investments:
Shepper
Neas
Founded 2011 – 15 UK deals
Selected Investments:
Yopa
Zipjet
Founded 1985 – 19 UK deals
Selected Investments:
Mission Therapeutics
Bicycle Therapeutics
Founded 2011 – 6 UK deals
Selected Investments:
Mission Therapeutics
Victor
Drover
Founded 2014 – 4 UK deals
Selected Investments:
Curve
Market Invoice
Foundedin2016–11UKdeals
Transport Mobility
Selected Investments:
By Miles
Festicket
Founded in 2012 – 12 UK deals
Selected Investments:
Citymapper
Farewill
White Star Capital

28. Source: CB Insights, ABPI
Holland Fintech
(1) Since 2009.
(2) Phrma, Biopharmaceutical Research Development: The Process Behind New Medicines.
(3) Assets Publishing Service.
Ecosystem: Capital 28
• Life science and healthtech start-ups often have product development timelines
lasting many years
• In this time, they can burn considerable amounts of cash before generating revenue
• Given the more strategic focus of CVCs, they can provide truly “patient capital” given
their understanding of the timelines involved in bringing new products to market
• In addition, they can provide specialist support regarding patents, laboratory space
and distribution channels that the classic VC may not be as effective in doing
• Compared to most other sectors, fintech carries some of the most stringent
regulatory requirements
• In addition, there has been an increased focus on B2B fintech solutions, now
matching the activity in the consumer focused areas
• Understanding the financial landscape from both a B2B and B2C perspective is
critical for the launch of any financial product, and has often been the downfall
for a number of start-ups in the space
• CVCs are highly valued in this space due to the sector specific operational and
regulatory expertise they come with
Fintech, life sciences and
healthtech seem to benefit the
most from CVC funding
Above all else, CVCs provide access to resources
Life sciences, healthtech and fintech
in particular benefit the most
• Access to the operational expertise pool of major corporate
• Access to distribution networks to reach customerss
• Access to experts and IP to drive further innovation
• Access to acquirors
of CVC
investment
has been in
life sciences,
healthtech
and fintech1
31%
It takes on
average
10 years to
develop a
new drug
and costs
c.$3bn2
CVCs are the
2nd most
active group
investing in
UK fintech3
White Star Capital

29. Ecosystem: Capital
Source: CB Insights
(1) Based on median share of seed stage rounds from 1-Jan-2009 to 31-Dec-2019, that go on to raise a total funding amount of $15m+, $50m+ and $100m+.
(2) Assets Publishing Service.
(3) AFME.
(4) The Guardian.
Ecosystem: Capital 29
There is a clear funding gap
in the growth stage space
—UK start-ups show the lowest conversion rate to later stage rounds
% of Seed Start-Ups
That Raise $15m+,
$50m+ and $100m+1
UK
“ The UK continues to be a world-leading place to
start a business, but some of the UK’s highest
potential, most innovative start-ups can struggle
to scale up because of a lack of finance.”
HM Treasury
Financing Growth in
Innovative Firms
“ European companies receive far less funding from
VC funds than their US counterparts. This scarcity
of funding limits the options for fast-growing
companies seeking sufficient scale to compete
globally.“
Afme Finace for Europe
The Shortage of Risk Capital
for Europe’s High growth Businesses
USA IndiaChinaEurope
Excl. UK
13%
2%
1%
33%
19%
11% 10%
3%
2%
19%
7%
3%
8%
3%
22%
Raised $15m Raised $50m Raised $100m
“ Early-stage start-ups are extremely well catered
for now... But it’s the later development capital
stage – once the business has proved the concept,
they’ve got revenue and they have clear sight to
profitability – they are the sorts of companies that
are being funded less and less”
Luke Davis
Founder of Crowdfinders
and IW Capital
White Star Capital

30. Ecosystem: Capital
Source: Pitchbook, Crunchbase, CB Insights
Ecosystem: Capital 30
Growing interest from the US has helped the
UK to alleviate the later stage funding gap
Most Active US Investors
Patsnap
Graphcore
Monzo
Deliveroo
Funding Circle
Autolus
Kymab
Checkout.com
Bulb
Revolut
Deliveroo
Funding Circle
Improbable
Onfido
Oak North
Funding Circle
Farfetch
Farfetch
Carwow
Lendinvest
Graphcore
Wave Optics
Digital Shadows
Revolut
Deliveroo
Duc
Made.com
Notonthehighstreet
Treatwell
Monzo
Deliveroo
Photobox
Checkout.com
Mimecast
GoCardless
Currency Cloud
Most Active US Investors Based in UK
Most Active UK Investors
Other Active Investors
White Star Capital

31. Ecosystem: Capital
Source: BGF, British Business Bank, Linkedin
Ecosystem: Government 31
The British Business Bank has also played
a major role in bridging the later stage
funding gap
British Patient Capital
PORTFOLIO
OVERVIEW
LOCATION
TICKET SIZE
British Growth Fund
Previously a separate subsidiary to the
British Business Bank
Aims to enable long-term investment in
innovative companies
LP for a number of UK VCs
Founded following a consultation into
barriers to accessing capital
London
£5–50m
Founded by Barclays, Lloyds Bank, RBS
and Standard Chartered in the wake of the
2008 financial crisis
Provides patient capital for SMEs in UK
Backs the long-term goals set by
management by forgoing short-term profit
expectations in its portfolio
14 locations around the UK
£1–10m
Total Funding:
$100m
Total Funding:
£22m
Total Funding:
$32m
Total Funding:
£25m
Acquired by
News Corp.
Total Funding:
£35m
Total Funding:
£17m
Invested to date
£1.1bn
Amount to be
Invested
£7.5bn
White Star Capital
Total Investments
Since 2011
£1.5bn
Total Investments
Outside of London
74%
Total Funding:
£57m

32. Note: Draper Esprit plc has a co-investing agreement with Draper Esprit VCT, formerly known as Elderstreet Investments
Source: Linkedin, The Association of Investment Companies
(1) The AIC.
Ecosystem: Government 32
The VCT scheme has made it easier
for investors to also invest in seed
stage companies
What is VCT?
What are the requirements?
What are the investor benefits?
Who are the key investors?
How much has been invested?1
• A VCT is a company that has been approved by HMRC and invests in or
lends money to unlisted companies
• Have 80% of its investments in qualifying holdings
• Investment must be for the company’s organic growth and development
• Invest in the companies within three years of raising new money
• Tax free capital gains
• 30% income tax relief on subscriptions for up to £200,000
• Investments must be held for a minimum of 5 years to be eligible for tax
reliefs
• Tax free dividends
07-19 CAGR: 8%
2019201820172016201520142013201220112010200920082007
267
220
154
338 354
267 269
420 429 457
542
728 731
AuM: £1bn
Selected Investments:
Quantexa, Achilles
Therapeutics, Ovivo.
AuM: £1bn
Selected Investments:
Graze, Lovefilm.com, tails.com,
Zoopla.
Selected Investments:
Revolut, Graphcore, Lyst,
Trustpilot, Push Doctor.
White Star Capital

33. Ecosystem: Government 33
Source: www.gov.uk, Startup Funding Club
SEIS/EIS schemes have made it easier
for start-ups to access capital from early
stage funds
What are EIS and SEIS schemes?
What are the requirements?
What are the investor benefits?
Success to Date
Enterprise Investment Scheme (EIS)
• Set up to make it easier for investors to invest
in companies by providing tax reliefs
• Under the EIS, companies can raise up to £5m
a year and a maximum of £12m in their lifetime
EIS
• UK registered and operate a qualifying trade
• 250 employees
• £150m gross assets
EIS
• Receive 30% of their investment back up to £1m
• No capital gains tax provided investment is held for
no less than 3 years
• Loss relief of up to 22.5%-33.5% of initial
investment
Seed Enterprise Investment Scheme (SEIS)
• Set up to make it easier to raise capital when a
business has just begun to trade also through tax
reliefs
• Companies can receive a maximum of £150,000
through this scheme
SEIS
• UK registered and operate a qualifying trade
• Trading for 2 years
• 25 employees
• £200k gross assets
SEIS
• Receive 50% of their investment back up to £100k
• No capital gains tax provided investment is held for
no less than 3 years
• Loss relief of up to 22.5%-33.5% of initial investment
Amount of
EIS eligible
investments
£15bn+
Companies
receiving funding
under EIS
26,000+
Amount of
SEIS eligible
investments
£608m
Companies
receiving funding
under SEIS
6,500+
White Star Capital

34. Ecosystem: Capital
Source: www.gov.uk, Taxfoundation
Ecosystem: Government 34
UK government offers a number of tax
incentives to support start-ups
The UK has one of the lowest corporate tax rate structures in Europe
…and a number of schemes to reduce startup costs
RD Tax Credits
SMEs can be eligible for a 230% tax
deduction on their RD costs, up to a
limit of 14.5% of the surrendered loss
Employment Allowance
SMEs can claim employment allowance
to reduce the amount of National
Insurance paid yearly by up to a limit
of £3,000
Annual Investment Allowance
SMEs can claim 100% tax relief on any
assets that qualify as PPE, up to a limit
of £500,000
Renovation Tax Relief
SMEs holding residence in buildings
that have been empty for a year or
longer may be eligible for 100% tax
relief on renovation costs
CanadaFranceSwitzer-
land
UKUSSpainEurope
(Average)¹
WorldItalyLuxem-
bourg
BelgiumGermany
29.7% 29.6% 29.2% 27.9%
26.5%
Varies depending on
state/locality/province
Dependent on
amount of profit
25.4% 25.0%
33.0%
19.0% 17.9%
33.0%
38.0%
White Star Capital

35. Source: Crunchbase, www.gov.uk, Assets Publishing Service
Note: Statistics as of 2017
Ecosystem: Government 35
The UK has its own innovation
agency: Innovate UK
What is it’s purpose?
How does it help UK businesses?
Activities to Date
• To accelerate UK economic growth by stimulating and supporting
business-led innovation
• Drive growth by working with companies to de-risk, enable and support innovation
• Connect businesses to the partners, customers and investors that can help them
turn ideas into commercial successes
• Fund businesses and research collaborations to accelerate innovation
Value of total
projects funded
£3.8bn
Invested in
business-led
innovation
£2.2bn
Jobs created
70,000
Added value to
UK Economy
£16bn
Flexible integrated circuits
Raised £23.4m
Natural pesticides
Raised £14m
Autonomous vehicle software
Raised £23m
Infrastructure
systems
23%
Manufacturing
and materials
25%
Open
Programme
18%
Emerging and
enabling tech
11%
Health and life
sciences
23%
White Star Capital
Expected
use of £500m
budget

36. Source FCA, crowdfunderinsight
(1) FCA.
Ecosystem: Government 36
The Financial Conduct Authority (FCA)
is one of the most forward thinking
regulatory bodies in the World
Who are the FCA and why are they revered globally?
Project Innovate constitutes 6 services,
and has helped 686 companies
• The FCA are the regulatory authority for financial services in the UK
• Following the 2008 financial crisis, the FCA shifted away from a reactive
supervisory model, to a preventative one
• Involved in this shift, was building in a mandate to promote innovation
and competition in financial services
• Through Project Innovate, in particular the Regulatory Sandbox, the
FCA have launched a number of initiatives to support fintech start-ups
in the UK
1. Regulatory Sandbox
Provides support for innovative firms who are ready to test.
6 out of the 15 start-ups from Cohort 1 have raised a combined amount of £135m1
.
2. Request Direct Support
Providing tailored regulatory support for innovative firms.
79% of companies receiving direct support reported excellent or good
experiences1.
3. Advice Unit
Providing feedback to firms developing automated advice and guidance models.
88% of Advice Unit companies reported good or very good experiences1
.
4. Global Financial Innovation Network
Part of an international group of 38 financial regulators and organisations.
8 firms chosen in May 2019 to take part in its first cross-border testing pilots.
5. Regtech
Facilitating collaboration around new technologies that support better regulation.
6. Engagement
Encouraging FinTech innovation within firms based in the UK and internationally
Developed a regional engagement programme to ensure support to reach
start-ups outside of London.
The FCA’s
Sandbox has
resulted in a
40% reduction
in time to
determine
authorisation
application
“The FCA’s
support for
fintech has
been globally
leading. It’s a
way of working
that’s getting
emulated
across other
countries…”
Reshma Sohoni
Co-founder
Managing
Partner
Seedcamp
White Star Capital

37. White Star Capital
3Future of UK venture capital
37

38. Future of UK Venture Capital: Brexit 38
Brexit is the largest topic concerning the
future of UK venture capital, with customs,
trade and tax a major focus
What are the potential situations following Brexit,
regarding customs, trade and tax?
Withdrawal Agreement
Impact to Start-ups
No Deal Scenario
Impact to Start-ups
• For customs and tax purposes, movement
of goods which started before the end of
the Transition Period1 will be allowed to
complete their movement under EU rules
• If a Free Trade Agreement (FTA) is reached,
then goods which are ‘originating’ in the
UK / EU will receive duty relief, but there
will be a loss of duty relief under EU FTAs
on imports into the UK
• The UK could lose the benefit of the Parent-
Subsidiary and Interest and Royalties
Directives, under which payments between
EU resident associated companies who
meet the relevant conditions can be
made free of withholding taxes
• Supply chain focus will become even more
critical for start-ups based in the UK, not
just around where goods are moving to,
but also where they are manufactured
• Potential impact from additional licensing
requirements
• Later-stage start-ups that are developing
more complex company structures will
need to review their strategies
• In a no deal scenario, the UK would revert
to World Trade Organisation (WTO) rules on
trade
• The UK and EU will trade as 3rd countries,
on WTO terms, which means they would
have to face the EU’s external tariff on the
shipment of goods between the UK and EU
• As a result, some British-made products
may be rejected by the EU as new
authorisation and certification may
be required
• Impact on profitability due to tariffs on
shipments
• Start-ups now more than ever will need to
consider where they are geographically, in
order to streamline procurement to reduce
the impact of tariffs
• For example this could mean setting up an
import hub in both the UK and EU for sales
in those territories – which would be at a
substantial cost to start-ups
Source: news sources, Baker Mckenzie, European Commission
(1) The time between the day the UK officially leaves the EU and December 2020. The Transition Period will be used
to negotiate the future relationship deal with the EU.
White Star Capital

39. Future of UK Venture Capital: Brexit 39
Data protection and rules around
intellectual property (IP) should
largely stay the same
What are the potential situations following Brexit,
regarding data protection and IP?
Withdrawal Agreement
Impact to Start-ups
No Deal Scenario
Impact to Start-ups
• GDPR will not directly apply to the UK,
however the Data Protection Act 2018 will
remain, which incorporates GDPR into UK
legislation
• With regards to international data transfer,
the UK would be recognised as holding an
adequate level of data protection until the
Transition Period
• At which point an “adequacy decision” will
be made in which the EU will continue to
officially recognise the UK as providing an
adequate level of data protection
• The ‘UK part’ of existing Trade Marks will
be cloned into a UK equivalent, but pending
patent applications will have to apply for an
official UK Trade Mark
• Limited impact expected, particularly as
current IP will be converted automatically
at zero cost
• Businesses are prohibited from
transferring personal data to non-EEA
countries unless they have in place one of
a number of safeguards (under Article 46
of GDPR) to ensure EU data is adequately
protected when processed in those ‘third’
countries
• This will also include personal data, but the
UK may still be able to get an “adequacy
decision” – but the interim period would still
require these contractual safeguards
• Start-ups will need to have a clear
understanding of these safeguards and
implement them with the utmost care when
expanding operations to Europe
• This will be necessary to avoid any
controversies around data which can have
a significant legal impact and damage
brand reputation
Source: news sources, Baker Mackenzie, Herbert Smith Freehills, Pinsent Masons
White Star Capital

40. Future of UK Venture Capital: Brexit 40
But there will be some challenges
ahead around the passporting
of services
What are the potential situations following Brexit,
regarding services?
Withdrawal Agreement
Impact to Start-ups
No Deal Scenario
Impact to Start-ups
• No change to service agreements during
the Transition Period
• When the transition period comes to an
end, the UK will no longer have access to
EU networks and databases e.g. European
Securities and Markets Authority (ESMA),
the European Banking Authority (EBA) and
the European Insurance and Occupational
Pensions Authority (EIOPA), unless special
provision is made
• An FTA with “enhanced equivalence”
could replace passporting – but this will
be slightly inferior to the current situation
• When the Transition Period ends, it is
unclear whether the UK will radically depart
from EU financial services legislation, or
stick to the international standard setting
process that has existed since the 2008
crisis
• This will make contingency planning,
particularly for fintechs, very difficult and
will likely pose even further regulatory
burdens on an already highly regulated
industries
• UK authorities have allowed EU companies
with employees relying on ‘passports’
to enter the country via schemes such
as temporary permission; whereas EU
member states vary country to country
as to how UK companies can access the
EU-27
• General services would see the UK
trading with Europe under the WTO’s
General Agreement on Trade, with some
sectors requiring additional requirements/
standards and potentially even prohibition
• Possibility of a complete loss of
passporting rights, meaning start-ups
would no longer be permitted to sell any
of their services across the EU without
a license in each country
• Applying to each country for a licence
would be a huge operational, financial
and legal burden
Source: various news sources, Baker Mackenzie, European Commission, DLA Piper Blogs, Norton Rose Fulbright
White Star Capital

41. Future of UK Venture Capital: Brexit 41
Access to funding and sustained
uncertainty as the nation continues
to negotiate are also key concerns
Continued uncertainty and less capital available
for funds and businesses
Fundraising Second
Referendum
• Potential for over half
of foreign investment
comes from the EU
• In particular, the EIF and
EIB lent €659m to UK
SMEs in 20171
• Many funds may struggle to raise capital
• As a result, there will be less capital in the
market for start-ups
• Not only could this reduce the UK’s ability
to innovate, this will make entrepreneurship
less attractive
• A second referendum has
been consistently debated,
with a number of politicians,
businesses leaders and
impact groups supporting
the campaign
• Continued uncertainty within the
ecosystem with potential impacts to
available funding and access to talent
Source: Financial Times, Startups
White Star Capital
£

42. Future of UK Venture Capital: Brexit 42
Loss of talent remains the
largest post-Brexit risk
What are the potential situations following Brexit,
regarding immigration and therefore talent?
Withdrawal Agreement
Impact to Start-ups
No Deal Scenario
Impact to Start-ups
• Until the end of the Transition Period, EU
citizens and UK nationals will have the right
to travel freely with a valid passport or
identity card
• At the end of the Transition Period,
individuals who have resided in the UK
during the Transition Period, will be able
to exit and re-enter the UK with a valid
passport or identity card
• Those who arrive after the Transition
Period, who had not resided in the country
prior, are not covered by the scope of the
Withdrawal Agreement
• Limited impact to start-ups until the end of
the Transition Period
• The impact beyond the Transition Period is
unclear and is to be negotiated but will likely
be similar to a No-Deal situation
• Individuals here before Exit Day1
, will keep
their right to remain in the UK and will be
protected by the new EU Settlement Scheme
• Individuals arriving after Exit Day can come
to the UK for visits, work or study, but for a
maximum of 3 months
• Individuals who apply and obtain a “European
Temporary Leave to Remain” will be allowed
to stay for up to 3 years maximum. A fee will
be associated with this however the amount
is undefined
• There will also be an opportunity to stay
longer than 3 years under the new skills-
based system
• Due to the increased administration and
costs (although undefined at this stage),
this could potentially result in some
reduction to the UK’s attractiveness as a
destination for labour
• Start-ups may wish to take on these
responsibilities, but this may be
undesirable at the early stage given the
leanness of teams and the acute focus
on cost efficiencies
Source: European Commission, Baker Mackenzie
(1) Exit day is defined as the day in which the UK officially leaves the EU.
White Star Capital

43. Future of UK Venture Capital: Nurturing Talent 43
If access to talent is the UK’s biggest
worry post Brexit, how is it currently
being nurtured?
• Cambridge Enterprise Seed
• University research spin outs
• Student entrepreneur support
• 86 companies funded
• 4.3x return
• Award winning fund
• Imperial Enterprise Lab
• Student funding competitions
• Mentor, hackathons, speaker
• ~40 businesses yearly
• £17m raised
• 1916 people engaged
• King’s20 Accelerator
• 20 startups funded each year
• Experts in residence
• £13m raised
• Award winning
• £7m revenue
• University of Bristol
• University of Manchester
• London Business School
• London School of Economics
and Political Sciences
• The University of Edinburgh
• Oxford Sciences Innovation
• Oxford University Innovation
• Funding, mentorship and support
• 125 businesses
• Raised £1.9bn
• 2x return in last 3yrs
• Launch £10,000 programme
• Funded by an alumnus
• 8 week training boot camp
• Hult prize won by UG
• 57 start-ups incubated
• £7m venture revenue
• Warwick Ventures
• Spin-out focused
• 100 spin outs
• Raised £100m
• 4 exits
• Research and Enterprise Services
• 1-1 support to help formation
• Awarded £100,000 grant
• 4th in Scotland for company creation
• 31 active spin-outs
Source: University Websites
Other
Universities
White Star Capital

44. Future of UK Venture Capital: Nurturing Talent 44
UK founders from the top 10 universities
by capital raised have raised over $23bn+
Source: CFE Research, Pitchbook, Sage
(1) Oxbridge is a portmanteau for Oxford University and Cambridge University.
Rank University Companies
Capital
Raised ($bn)
Success
Stories
1 331 £5.23bn
DarkTrace,
Graphcore
2 348 £5.70bn
Monzo, Nanopore,
BenevolentAI
3 161 £3.04bn
OVO Energy,
Borrowell
4 221 £2.62bn Improbable
5 197 £2.28bn
DeepMind, Zoopla,
Oak North
6 136 £2.19bn
The Hut Group,
Skyscanner, Greensill
7 119 £1.95bn
Blend, Atom Bank,
Currency Cloud
8 60 £1.70bn
Signal,
Classic FM
9 102 £1.10bn
Secret Escapes,
The Hut Group,
Entrepenuer First
10 86 £0.86bn Radius
Oxbridge1
are the leading entrepreneur producers in the UK
Oxford University is the only UK
representative in the top 10 global
universities to create unicorns1
White Star Capital

45. Future of UK Venture Capital: Nurturing Talent 45
But globally, there are no UK universities in
the top 50 schools for creating entrepreneurs
Source: CFE Research, Pitchbook
(1) Medium.
(2) Centre for Entrepreneurs.
(3) HEPI.
Rank University Companies Capital Raised ($bn) Success Stories
1 1,015 $29bn Snap, Doordash
2 799 $25bn Grab, Katerra
3 819 $21bn Hello Fresh, Dropbox, Classpass
4 1,012 $21bn Lime, Zynga
5 693 $20bn Lyft, Workday
6 757 $16bn Deliveroo, Snapdeal
7 638 $12bn 23andMe, Groupon
8 458 $11bn Pinterest, Good Eggs
9 454 $11bn Nubank, Cabify
10 406 $11bn Funding Circle, True Fit
US universities are the leaders in creating entrepreneurs
..and this is a topic of concern among
the thought leaders in the UK
“The development of enterprise and
entrepreneurship is grossly neglected’ in the UK”3
Peter Jones
Entrepreneur and CBE
“Six of the top 25 universities around the world
are within a 100 miles from London…There’s
extraordinary talent that is relatively underserved
versus the US…in areas such as financial services,
biotech”1
Leila Zegna
Co-founding Partner
Kindred Capital VC
“American universities also offer their students and
graduates a variety of incubation options… Clearly
distinguishing between students and graduates is
essential …Many incubators owe their very existence
to entrepreneurial graduates”2
Centre for Entrepreneurs
UK leading entrepreneurship
foundation
Alumni were engaged
with, felt valued and would
donate to their university
28%
50%
US
vs.
UK
White Star Capital

46. Future of UK Venture Capital: Nurturing Talent 46
In light of Brexit, what more can the UK
do to maintain its position as Europe’s
start-up centre
Education Alumni
University Incubators
Government
WSC suggests…
WSC suggests…
WSC suggests…
• Only 40% of universities offer1
entrepreneurship related degrees
• 72% of UK alumni do not feel
valued2
• 47% of universities offer incubation
programmes to graduates2
• They often only focus on spin-outs
• The future of the EIF’s involvement
in the UK is uncertain
• This could further increase the
funding gap by c.€659m3
• Focus on honing our alumni
community to be more accessible
and engaged for inspiration and
mentorship
• Creative thinking can be taught
- disruptive learning initiatives
with a “real-life” focus should
be introduced
• All universities should have an
incubator programme, honing the
talent they excel in
• They must focus on creating
start-ups and not spin outs
• Schemes such as the EIS and SEIS,
and institutions such as the BGF and
British Business Bank have been very
successful
• There should now be a shift in focus
to later-stage vehicles and making
investing at this stage easier
• More capital should be designated to
institutions like the British Business
Bank to help drive further growth
(1) What Uni.
(2) Centre for Entrepreneurs.
(3) Startups.
White Star Capital

47. Future of UK Venture Capital:
Sectors of Tomorrow
47
Beyond Brexit: Robotics, Wellness and
Crypto show real promise as sectors to
look out for in the future
Source: CB Insights
Which sectors are receiving the most
Seed and Series A funding today?
Robotics Drones
63%
Growth in Seed and Series A funding since 2016
$128m
Amount invested since 2016
258%
Growth in Seed and Series A funding since 2016
$127m
Amount invested since 2016
85%
Growth in Seed and Series A funding since 2016
$114m
Amount invested since 2016
273%
Growth in Seed and Series A funding since 2016
$43m
Amount invested since 2016
Health Wellness
Blockchain / Cryptocurrency
Beauty
White Star Capital