## **Investing in Startups: A Conversation with Octopus Titan | Interview with Alex Macpherson**
Welcome to this exclusive interview with Alex Macpherson, Chairman of Octopus Ventures. In this interview, Alex Davies, Founder of Wealth Club, sits down with Alex Macpherson to discuss the world of venture capital trusts (VCTs) and the investment opportunities they provide for investors.
Octopus Titan, the UK’s largest Venture Capital Trust, has gained recognition for its investment style focused on early-stage, technology-led businesses. With a portfolio of high-growth companies, Octopus Titan aims to generate impressive returns for its investors.
But how does Octopus Titan build on past successes and find promising startups to invest in? Are there increased risks associated with backing pre-revenue businesses? How does Octopus evaluate investment opportunities, and is it becoming harder to find them? These are some of the questions Alex Davies explores in this captivating interview.
Watch the full interview here: [2022 Interview with Alex Macpherson](https://www.youtube.com/watch?v=fq4KfgSbtE0)
***Important note: The opinions expressed in this video are the interviewee’s own and do not necessarily reflect the view of Wealth Club Limited. This interview, like our service, is not advice and the products featured are not suitable for everyone. Venture Capital Trusts are higher risk and less liquid than mainstream investments. If you’re unsure if an investment is right for you, please seek professional advice.***
**Keywords/Tags**: invest in startups, venture capital trusts, VCTs, venture capital, tax-efficient investing, octopus investments
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#### **Transcript**
**Alex Davies:** Hello, I’m Alex Davies, founder of Wealth Club. Today, I’m with Alex Macpherson, Chairman of Octopus Ventures. Hello, Alex.
**Alex Macpherson:** Hello, Alex.
**Alex Davies:** First of all, could you just tell me a little bit about who Octopus is?
**Alex Macpherson:** Octopus is a fund management company that looks across different sectors. Founded in 2000, we focus on venture investments, healthcare, property, and renewable energy. In total, we manage about £7 billion worth of assets.
**Alex Davies:** Fascinating. Now, Octopus Titan recently announced a raise of up to £200 million. What can investors expect from Titan?
**Alex Macpherson:** Titan aims to invest in exceptional high-growth businesses that are based on technology or technology-enabled. As we build our portfolio, we aim to grow those businesses. We also aim to provide a regular 5p dividend yield from the fund, along with special dividends when exceptional returns are achieved.
**Alex Davies:** Excellent. Can you give me a few examples of the investments held in Titan?
**Alex Macpherson:** We have a portfolio of 53 businesses at the moment, and we continue to add to it. One notable example is Secret Escapes, an online travel business that we initially invested in back in 2011. We’ve supported their growth from the UK to Europe, across European countries, and most recently, to the US and Asia. We aim to back exceptional teams that can build global businesses, and investors in Titan gain access to this growth.
**Alex Davies:** When making an investment, what kind of companies are you looking for?
**Alex Macpherson:** When considering technology and technology-enabled businesses, we prioritize the quality of the team and their vision for the opportunity. We aim to back unusually talented entrepreneurs who have the ability to build multi-million or even billion-pound businesses.
**Alex Davies:** How do you find these companies?
**Alex Macpherson:** We have a network and resources that allow us to explore various avenues. Our past experiences and network of serial entrepreneurs have been invaluable. For example, we’ve previously partnered with the management team from LOVEFiLM, who went on to create further successful businesses. This network gives us an edge in finding promising investment opportunities.
**Alex Davies:** Could you share some recent investments or highlights?
**Alex Macpherson:** While I hesitate to pick favorites, I can highlight a business called Appear Here. Their concept revolves around providing short-term rental space for online businesses, enabling them to engage with customers face-to-face. We recently invested in this business, which currently operates in the UK and is expanding into European countries.
**Alex Davies:** With the significant amount of cash being raised, do you have enough investment opportunities?
**Alex Macpherson:** Absolutely. Entrepreneurship has seen an explosion in the UK and Europe over the past few years. The number of financed businesses has significantly increased, providing ample opportunities. We focus on businesses at different stages, not just early startups. We look for opportunities with proven products, exceptional teams, and a clear understanding of their market.
**Alex Davies:** Could you talk a bit about your exit strategy and any notable exits you’ve had?
**Alex Macpherson:** We take a long-term approach to holding our investments. Last year, we had exceptional exits, such as SwiftKey to Microsoft, Magic Pony to Twitter, and Vision Direct to Essilor. These exits were significant nine-figure deals, and we had partnered with these businesses from their earliest stages. When investing, we consider potential acquirers and aim to maintain a stake in the business to maximize its growth potential.
**Alex Davies:** Is the market becoming more competitive due to the influx of capital?
**Alex Macpherson:** While the venture capital trust program has shifted more toward high-growth businesses, we primarily compete with international funds, as well as UK and European funds for these opportunities. Our reputation in the marketplace allows us access to a wide range of deals. It’s important to select the best opportunities rather than invest in every deal available.
**Alex Davies:** Have you faced any failures in your investments?
**Alex Macpherson:** Unfortunately, failures are part of the investment landscape. We’re always careful and diligent in our selection process, but not every investment works out as planned. It’s a risk inherent in investing in early-stage businesses.
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By leveraging its extensive network, Octopus Titan continues to identify and nurture exceptional startups with the potential to become successful global businesses. Interested in the world of venture capital trusts and tax-efficient investing? Watch the full interview with Alex Macpherson [here](https://www.youtube.com/watch?v=fq4KfgSbtE0).
*Source: [YouTube – Interview with Alex Macpherson](https://www.youtube.com/watch?v=fq4KfgSbtE0)*
*Source: [Wealth Club](https://www.wealthclub.co.uk/)*
(2022 interview here: https://www.youtube.com/watch?v=fq4KfgSbtE0) Octopus Titan is the UK’s largest Venture Capital Trust. Its investment style – targeting early-stage, technology-led businesses with big ambitions – has generated some eye-catching exits to date (although past performance is not a guide to the future). So how does Alex the VCT management team go about building on past successes and keep on finding good startups to invest in? Does backing pre-revenue businesses increase risk for investors? How does Octopus evaluate investment opportunities and are they getting harder to find? Ultimately, what should VCT investors expect from Octopus Titan? Alex Davies, founder and CEO of Wealth Club, interviews Alex Macpherson to find out.
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Important note:
The opinions expressed in this video are the interviewee’s own and do not necessarily reflect the view of Wealth Club Limited. This interview, like our service, is not advice and the products featured are not suitable for everyone. Venture Capital Trusts are higher risk and less liquid than mainstream investments. If you’re unsure an investment is right for you, please seek professional advice.
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