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Podcast: Getting started in venture capital with Sprout’s Jonny Blausten


We’ve not really looked closely at the venture capital market on this podcast before, but we thought we’d take the opportunity when it came up to speak with Jonny Blausten, who is co-founder of Sprout, a VC firm. Sprout acts as a conduit for investors to access some of the best venture capital funds out there.

Venture capital involves investing in relatively early stage companies, and frequently companies that are not currently making a profit. As such it represents a higher risk approach to investing which can also offer investors some very large returns. However, many start ups never make it to profit, so how to make sure you are invested with those companies that have the best chance of making you some great returns?

One approach is to do it yourself, via platforms that can provide investment into early stage private companies. Remember, these are companies that are a long way from their IPO stage, and may even not have formally gone to the market for Series A finance. We are talking early green shoots businesses here.

But it can be very difficult to identify successful early stage companies. This is especially so in areas requiring technical expertise, for example the technology sector or biotech. On of the best ways to do this is through venture capital funds where managers are looking at hundreds of companies for the right opportunity.

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The other thing to bear in mind is that capital invested with VCs should really be left to fruition over a typical investment cycle of at least 5-7 years. These are long term investments, and VC funds typically lock up the cash for this period. Wealthy investors will allocate only a small proportion of their investment capital into venture capital.

Venture capital is also not for those who cannot afford at least £100,000 and up to be invested in the space. As Jonny explains on the podcast,

Sprout, like a number of other firms in the space, has been working to make venture capital more accessible, and certainly this has helped to bring down the barrier to entry. The trend towards further ‘democratisation’ of VC will indubitably lead to cheaper deals in the future. Sprout helps investors get access to top tier funds that would otherwise have prohibitively high minimum investment levels.

On the podcast we discuss the benefits of the VC asset class for investors, including during periods of high inflation and economic downturn.

About Sprout

Sprout acts as a conduit for investors who want to get into some of the best VC funds, but lack the expertise in terms of being able to identify good opportunities and entry points. Jonny and his team are constantly sifting through the universe of new VC funds looking for the right assets. He works with both HNWIs and also fund managers and institutional investors.

We also take time to compare venture capital against private equity, and whether venture capital suffers from the same cyclical characteristics as private equity. We also talk about the differences between investing in listed venture capital and going down the traditional closed-ended fund route.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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