OPUS launches Day Zero to back startups at the earliest stage

0:00Mike Butcher:Hello and welcome to Path Founders, the new tech media publication for tech entrepreneurs and investors with me, Mike Butcher. Today, we're looking at something interesting happening in early stage venture investing coming out of the UK. Day Zero, which describes itself as a new venture investment platform, is launching in partnership with the global founders network, Opus. Now, for those of you who don't know, Opus is a sort of global membership club for founders and operators, which also operates a physical location in London and communities around the world. To unpack how this works and why it's launching now, I'm joined by Sam Tidswell-Norish, who's founder and chair of Opus, partner at Access Holdings and a member of the Day Zero Investment Committee.

0:52Mike Butcher:Sam, welcome to the Path Founders podcast. Thank you, Mike. It's great to be here. And yeah, dream come true. I've been reading Mike Butcher for as long as I can remember. Well, thanks very much. Yes, unfortunately, I'm as old as the pyramids. But what I want to know is Opus has been around for a couple of years as a community and has also got a location in London. And it's really interesting how it's built out in sort of quite an interesting, organic way Just before we get into this new venture, tell us a little bit about Opus and how it came into being. Yeah, well, firstly, thank you for asking and the interest.

1:31Opus was born out of what I felt was a personal need at the time. As someone who's built businesses, I found it really hard. And the only things I ever achieved, I realized, were because of other people. that access to knowledge access to networks um was was game-changing when i had it and so i wanted to try and create it for others as well as for myself to be selfish um and so we built opus as a community of founders to share knowledge network experiences and to help each other kind of supercharge our respective journeys and as we did that it grew quite quickly and in just a few years, we've built out a kind of wider ecosystem of tens of thousands of founders against a model that has media at the top and then community.

2:25And today we launched Venture further down the bottom.

2:29Mike Butcher:How would you describe Opus as a community versus other types of communities aimed at founders and operators? I love community, period. I think community is incredibly important part of society and the economy and so I think any community that's doing this is doing a good job, an important job. But communities are really, they feel magical if they're done well but they don't come together by magic. You need infrastructure and you need to build with intent. This platform, this community cost a fortune to build. I put a lot of money in myself, We raised money and we really committed to building that infrastructure for founders.

3:14We have technology that sits in the background that enables that connectivity. We have a team of over 20 people working daily on this. And as it compares to others, we're right at the early stage. We say we're from idea to series A. not many people go after that part of the the market and build communities there because it's a it's a bit more um opaque it's a little bit more fickle founders move in and out of that space quickly as companies either scale or fail and so we're really there to to give people a you know a support when they need it most i think because that is the hardest part of getting started.

3:58Mike Butcher:Well, it's very interesting that you've obviously built this community out and the hub over the last couple of years. So now you're launching day zero. And I gather you're going to be focusing on pre-seed investments. Unpack it for us. What geographical footprint will it have? Will it have a thesis? Are you going into verticals? And what is it really? Is it a fund? Is it a syndicate? How is it going to operate? Yeah, great question. The last few years have been really hard in venture. I've spent a lot of time in venture as a GP and investing in early stage businesses. Fundraising has been hard for venture and there's been less liquidity for venture capital firms.

4:47And what that means is less VC firms have been built recently. The other thing is that less VC firms have been built that are truly differentiated and help build real value within the portfolio. And as we built our opus, I realized quite quickly that we had this really unique operating business that was providing unique origination. So top of funnel, our ability to see opportunities is pretty extraordinary. Sometimes we see them before they even exist. We've put companies together and I've had a chance to invest in them personally. But I thought, well, how do we open that up to more people? And how do we open that up really without minimum investments to invest in a VC fund today?

5:36The minimum check size is relatively high and it's relatively inaccessible. So with that unique origination and making it accessible, we also felt like we had an ability to help founders create value as well through that knowledge and connectivity that Opus provides. And that's really why we built it. We felt like we had a right to exist because of the points of differentiation. So what are we investing in? We're investing in pre-seed and seed. So as early as first look, we'll invest up to 250k checks into those businesses. We'll invest in companies across EMEA, so Europe, Middle East and Africa.

6:22We do have an allocation for the rest of the world. We're a generalist investor by trade. So we'll look at anything technology oriented, but we do have a specific bent towards creative industries i think of that as sports media entertainment financial services and the future of finance and health services the future of health but we will invest in anything outside of that as long as it's within a technology category as well

6:53Mike Butcher:and how is it going to operate in a sort of technical sense is it a is it an actual fund Does it have a fund size or is it more like an angel syndicate or and do you and where do you feel it will go from from that base? Yeah, good question. Candidly, I and my team are appropriately impatient. The thought of I've raised quite a lot of money in my career and in the private equity and venture space. The thought of raising a 50 million dollar fund in this environment wasn't very appealing. um would it be possible possibly uh would it be fun absolutely not um and so what was the shortest path to us being able to invest um as soon as this month and the answer was we'll set it up as a syndicate we have a pre-commitment allocation so it's a bit like raising a small fund um that we have set aside um with people that are close to the community and then uh deal by deal we'll offer it out to the angel investors in our community our investor community and we have about 500 people in that network um we welcome all opus members to invest through it and and others as well um with very low low minimums and ultimately what that means is we have a venture capital team and an investment committee of incredible people who will be diligencing these deals sourcing and diligencing them on behalf of everyone else, anyone who wants to invest.

8:27For me, that's amazing. I'm not a very profound venture investor. I've tried and I'm definitely not a winner. But now I have a team of people who are going to be doing it much better than I ever could. And so we're inviting other people to benefit from that, too.

8:44Mike Butcher:And presumably it's it's not a closed model where you're sort of effectively trying to kind of, you know, ring ring fence deals or in just inside the opus. It's how you work with other funds, for instance. Yeah. Firstly, we may see stuff before other funds. We may not. And we may invest before other funds. But we'd like to show everything we see to other VCs, other family offices in my network and other high net worth scenario investor community and angels down to anyone. And it's a very open model. I'd like us to see this is a kind of collaborative effort. We want to show everyone the deals we find if we think they're interesting and people are obviously within their right to say no.

9:40But rather they rather they say, no, that we don't try sharing stuff at all.

9:44Mike Butcher:And do you think that's going to be an incentive for people to join Opus or how does it how close is the fund or the venture platform to the Opus membership and organization itself? Or are they fairly separate or are they symbiotic? Yeah, it's a really good question. And that's something that I and the team have spent a lot of time on. So first and foremost, they're totally separate. separate entities, separate teams, but there is a strategic partnership between the two. And they're both very beneficial for one another. Opus is a founder community, and capital is a lifeblood of building a business.

10:25And I wanted to bring the investor community closer to the founder community, like a Venn diagram. That's where the real richness is. It's hard for me to go and speak to VCs and family offices and investors and say, yeah you should come spend time with our family community but they kind of look at you like you got three heads and that's that much easier if I say day zero an investment platform is inviting you to something inviting you to do something and and it's yeah I wouldn't want to say it like this publicly although this is public so I'll say it um it's a it's being a wolf in sheep's clothing We get to be amongst the investor community and help it bring that community closer with the founder community.

11:11And Day Zero is working in partnership with Opus to deliver angel investment courses and fundraising boot camps. We've done four fundraising boot camps and put hundreds of people through this 10-hour course that we do. So there's loads of ways the Opus community and founders benefit. it. And you might ask, well, if you're a founder building an early stage business, do you really want to be an angel investor? Yeah, sometimes it's hand to hand combat. And yeah, you're just thinking about where your next meal is going to come from. Yeah, true. But learn how to be an angel investor. So you can put yourself in the shoes of people you're asking for money from.

11:50That's that's some of the way in which we're thinking about this.

11:54Mike Butcher:right I see so um it's clearly it's it helps that you've got if you go to other investors say listen uh as well as Opus we've we've done an early check into this company do you want to see it you've got skin in the game and I guess that's validation for them right yeah exactly exactly um and the idea is um you know if people want to be precious about it they'll be precious about it They'll say, well, I'm a member of Opus and I didn't get investment from DayZero. The two are totally separate, as they should be. And that's why there's a separate investment committee. The reality is every single day, the Opus team and the DayZero team wake up trying to help founders build great businesses.

12:39And this is, we believe, just one way to do that better. Right.

12:44Mike Butcher:So in the announcements about this, you are saying that you're looking on creative industries, financial services, technology and life and health technology. I presume that might be a sort of wellness kind of stuff. Why those three sort of categories? Yeah, the categories that we believe are fundamental to the economy, firstly. And if we look at the UK particularly, we've always had a very strong financial services industry, a very strong healthcare industry, and creative industries, sports, media, entertainment, culture, are becoming, I think, increasingly important in an AI-infused world, the in-real-life movement.

13:29And so we feel like those three things are different but complementary pillars that are going to continue to be important in the economy. And most importantly, we believe we've got an edge in each of those industries. We have venture partners who are supporting those who've been titans of industry in those areas. So they feel like natural areas to focus on. But when we say focus, the areas that we're perhaps more specialized in, we're still investing generally across anything technology oriented.

14:04Mike Butcher:Right. I see. So you're sort of doubling down on some strengths that you can see inside your own community. Is that right? Yeah, exactly. I noticed also that you've got quite a lot of people involved. You say that you've got something like 50 ,000 founders, investors and operators. Is that right? Yeah, yeah, yeah. So in our wider community, we have we have it's actually more than that at this point. Subscribe to various parts of the platform. And then we have just over a thousand founders specifically within the membership community, which is a bit harder to get into and a bit of a higher bar.

14:43But yeah, we're kind of here for everyone.

14:46Mike Butcher:Well, another aspect of this is that you're bringing on board some pretty interesting names that come out of the UK ecosystem. You've got Jeff Lynne, who's co-founder of Cedars, Gabby Hohane, who's a partner at Stride VC. And I also noticed that Princess Beatrice is joining you on your platform. How do you feel that kind of star power is going to power the platform, as it were? Yeah, it's a good question. So all of the people have been chosen for individual merits. You know, we put together a patchwork quilt of really talented experience, all with different knowledge bases, experiences and networks.

15:31Jeff, we are super fortunate to have chair this. He's got a unique set of experiences, really building the first, the ultimate of Europe's crowdfunding platforms, CEDAS. having successfully exited that. Gabby is our independent venture capital investor on the investment committee. He's going to be there to tell us, well, we drunk the Kool-Aid and we're wrong, to bring further VC grade discipline. He's a brilliant investor and a wonderful person. Princess Beatrice brings a totally different angle to this. She's spent a lot of her career immersed in AI, working with some of the largest firms on the planet and most forward-thinking firms in that space.

16:16And she was part of the formation of Opus. First and foremost, she's a wonderful friend, an extraordinary mind, and someone who I think is going to add real impact to the work that we do.

16:28Mike Butcher:So, well, you're launching the platform. This is sort of day one of day zero, as it were. What's the sort of future vision? Where do you see this going in a few years time? Will it end up being a VC fund, for instance? Yeah, it's a good question. I built a venture and private equity firm previously, and we took it from zero to nearly 10 billion of AUM. And every chapter of that journey, we asked ourselves, have we earned the right to move to the next level? And that's the question we're asking here. It took us a few years of building Opus to feel like we've earned the right to start putting capital to work because we've built something differentiated.

17:13I think we will work hard to build a really unique syndicate that invests in really unique businesses and equally has a powerful partnership with Opus. And at some point we may think that the traditional fund model is appropriate or we might not. This is a fast moving space. The alternatives industry and venture and private equity are only a 50, 60 year old industry. It wasn't long ago that Barbarians at the Gate was kind of coining some of the first things that the industry knew. And so we'll see where the industry goes, we'll see what the most appropriate funding models are. I'd love to think that we could be at the forefront of new models to support founders.

18:01Jeff pioneered crowdfunding. What could we pioneer that supports founders, raise the money they need to build the businesses that change the world?

18:11Mike Butcher:Do you see any parallels that have come out of the US, other kinds of networks like AngelList or something like that? Yeah, great question. There's so much we can learn from the US, a lot about what to do and some what not to do. But it's a really advanced field in venture capital and how they support founders. It's truly capitalistic. But there's a lot that I've taken in my everyday learnings. The first thing I would say is this concept of kind of mullet capitalism that I read about a while back, which was firms that have built an operating business, call it a media business, and then built a venture business on the back of it, leveraging the operating business as their kind of right to win.

19:00That was something that I took directly from learnings on the West Coast, Sound Hill Road, and how some of the VC firms that built their businesses into Opus ahead of launching Day Zero. And I get to spend half my time in the US and I have a partner running full time part of a private equity firm. I can't wait to take more of those learnings and not just learnings from the US, learnings from the Middle East and Africa. Africa requires a very different type of model to invest in businesses there. So does the Middle East. There's a lot of capital in the Middle East, but not so much capital for early stage.

19:43And so each of these markets might require a nuanced approach. And it just requires us being really thoughtful about what the best model is at the right time.

19:52Mike Butcher:Yes, I think that was very interesting that you're focusing on EMEA and especially, you know, the Middle East Africa, because I think that a lot of initiatives out of Europe are quite sort of Europe myopic when, And in fact, actually, you know, we're only a couple of hours extra plane ride away from a very interesting ecosystem. So that's very interesting that you're you're going into that. But Sam, that is fantastic. It's great to see this come out. It's great, interesting news coming out of the UK and Opus. Sam, thanks very much for joining Path Founders and we'll be watching your initiative closely.

20:29Mike Butcher:Thank you, Mike. You're very kind. Congratulations to Path Founders and thank you for having me. I've been a huge fan of yours for a long time. Well, unfortunately, Flattery will get you everywhere. But thanks so much. Thanks, Mike.