Member Info for steph

Just shows good stock picking by GROW. Not credible GWOW dis not add significant value by organic growth of the portfolio and by recycling the cash mountain upstream they got in 2021. Thus we must be worth more than the March 2020 NAV of 555.

As reported 80% of core portfolio has runways of over 18 months. So they have a year to either cut the burn rate and extend the runway length or find new funds. NO way should they be fundraising in the last 6 months of runway. It should be all sorted by then. Even though I think the market will look a lot better in q 3 and 4 this year I’d cut the burn rate until new funds secured at a good price -just to be safe. then with new fundraising secured can accelerate growth again. Looking for some confirmation of this in our April 2023 year end update.

Encouraging evonetx could get a series b2 funding round at all -even though we don’t know the valuation it implies. .

There is a pitchbook cap table by funding round all the way back to 2015 that probably gives the answer for anybody who is a pitchbook member.

I tried to find out the valuation at March 7 2020 on the last round of 30m usd and today 24m on 7 feb 2023.

Baring some spectacular unreported share specific progress that would tell us if the funding rounds are getting stingier or are about the same as pre 2021.

Assuming the 2020 and 2023 fund raising buy similar percentages of the same company perhaps not.

GOod there is a round b market at all. You would think not given the panic.

Evonetix sounds interesting. Tech for sure. Good on Cambridge.

yes it does. GROW and TRST bottomed out at same time and have had the same partial recovery since. I suppose it is natural they would be the same. Same sector just on different sides of the public private divide.

My thesis for what it’s worth on why we dipped so far is that the pubic private worlds normally move at different paces due to differences in liquidity and type of investor. Private tech valuations rarely change downwards in aggregate. Indeed I think they never have.

However in exceptional circumstances where a sector and market dip is expected to last for several years they will move together and the bits of the private start up tech that is liquid will move in an exaggerated way as if to make up for the lack of liquidity across the whole sector. Money wanting to come out of the sector will sell GROW mainly because it is the only bit that can be sold in the short run. This creates an arbitrage opportunity. The trick is to know when the dip is over and the market about to turn. Fast and deep down should mean fast and high up on the other side.

In some ways for me good to look at longer term trends on GROW nav calculations. That for me is reassuring that we did not get too far ahead of ourselves in 2021. It was a good year and we achieved a lot of cash realizations that might have taken longer in a “normal” market. Hopefully GROW have reinvented that cash mountain upstream well away from the 2021 froth and ridden that wave nicely. What we should have are many slow burn investments now upstream that will allow for excellent NAV/share results for the next few years.

I wish we never had this dip below 6 quid. I thought when we were over 11 that a dip below 6 was almost impossible. How wrong I was.

We had multiple shocks. Real war in side Europe involving a nuclear power was a black swan event I though was in the sub 2% risk level. Now here we are.

Inflation threatening to return to 1970’s levels with interest rates to match. Again a 2% risk level event and here we are.

The massive overspending by all governments during COVID affecting sovereign default risk. Again what I though a remote risk.

Those 3 black swans have happened but they are not as bad as it turns out as they might have been. The biggest risk of all is that the ECB stopping printing money and giving in part the benefit of the printing to the indebted souther states. Luckily Italy stable as Italy goes but any large sovereign default risk in the eu is exit time for holding any stocks. Tiny Greece nearly bought down the whole financial system.

I watch 10 year bond yields for Italy and Spain for signs of stress. So far ECB has raised rates without triggering a run. However global interest central bank rates need to start coming down soon to give the ECB cover to do what it needs to do. US not being very helpful going up to 5% rates. Whole world to some degree must follow. If 4% plus rates persist for years ECB against a rock a

Yes. March 2020 had valuations on Trustpilot and UIpath exactly what they are today in the retail market (and above wheat we have in our 8.39 NAV per share calculation).

Even if we assume all valuations after March 2020 were froth and there was no real organic growth we can go back to solid ground and still have an implied SP well above current.

FOr me current SP silly and the market will recognize the value sooner or later.

If we go back to march 31 2020 year end results our NAV/share was 555. Assuming no improvement from there at all ww should be and sp of 555.

There is no evidence of a single GROW portfolio share about to go under. 80% have runway lenghts of ove 18 months. NOt great but not stressed and they will be throttling back on fat growth and cost cutting right now to extend the runway length with the funds they have.

Nor is there much evidence of forced downrounds in the sector although there is speculation this may come if the market for rounds does not improve over the next few months.

We have the most market information on our 3 traded shares. Forget CAZOO -was never a large investment for GROW.

Ui path had a valuation of about 10bn March 2020 based on round e. It has a valuation of about 10bn today. It did get ahead of that on the round f and valuation indicating a value of 35bn. OUr current nav has ui path written down to September 30 2022 values which is less than today.

Trustpilot had a valuation March 30 2020 of about 390m about teh same as it is today. YEs it went up to 1.1 on IPO but on our books it is less than 390m as of Spet 30 2022. SO no change.

ON the remainder of our GRWO portfolio only a few got off rounds during froth 2021 and GROW has discounted those pretty severely -up to 80%. NO reason to believe they are misaligned with market today.

So unless you believe that there is large hidden problems neither in the news or inside GROW’s reporting our NAV per share is at least march 2020 levels and probably the 8.40 reported. NO rational reason to be below 555 sp.

https://techcrunch.com/2022/12/07/worry-not-down-rounds-are-still-rare-by-historical-standards/

Of course there could be a delayed effect but maybe GROW portfolio will weather this storm with no significant downrounds at all.

Then the SP at below half nav and the markdowns of valuations of up to 80% from the actual last round might start to look silly precautions. NAV based on actual last rounds is around 12 quid right now.

Plus of course organic growth allow many shares to “catch up” with 2020-21 last round valuations even in a tighter market. 60 to 70% sales growth hides many sins. .

Zero improvement in SP over exactly 5 years and no dividend either in the best performing asset class of all. That is daft.

Loads of cash realized in that period and recycled upstream. Portfolio that we have retained is much larger by all metrics and closer to net profit than it was. More start up fund participation by all metrics.

Even saying 2021 was a silly year why not have at least a pre covid February 2020 SP? Is interest rates rising to 4.5% really so dramatic a change? We have grown since Feb 2020 so impact of higher interest rates offset by organic growth -surely? . We did a significant number of realizations in 2021 and have recycled that money upstream where it was not affected by froth.

https://pitchbook.com/news/articles/vc-startups-investors-power-dynamics

Great data set. Look at page 6 which shows period 2004 to 2017 for different asset classes vs VC returns. Good period as includes financial crash.

https://files.pitchbook.com/website/files/pdf/2022_Global_Fund_Performance_Report_as_of_Q2_2022_with_Preliminary_Q3_2022_Data.pdf

VC outperformed all other asset classes in 2004 to 2017 period but also showed the most volatility up and down. that is aligned with classic economic theory. You get compensated for high volatility by high returns.

Applying that to GROW we are abnormally low. IN 7 years since float volatility between 2.4 and 11.8 but hardly any SP growth. Either Grow managment spectacularly stupid destroying value compared to sector averages or we are at a low and likely to play a bit of catch up over the next 2 years.

For my money I like the GROW portfolio. I think it is better quality than sector averages. I think we are due a big jump shortly as general markets for VC and private tech stabilize and the panic that drove us all the way down to 2.40 recedes.

https://www.theguardian.com/world/2023/feb/03/putin-russia-blackmail-europe-gas-supply-ukraine?CMP=Share_iOSApp_Other

https://www.theguardian.com/business/nils-pratley-on-finance/2023/feb/03/slowing-economic-growth-and-a-ftse-all-time-high-can-coexist-heres-how?CMP=Share_iOSApp_Other

https://www.google.com/search?q=manna+drone+delivery+video&client=safari&channel=mac_bm&sxsrf=AJOqlzWtcS5Z7DDf7-LxLyiqsAlliYwb7A%3A1675434282324&source=hp&ei=KhndY_aAEZDcgQaf-aroBA&iflsig=AK50M_UAAAAAY90nOvtVvs_OJscFFEkC-BJ_7e5Z4ccs&ved=0ahUKEwj2vfWJx_n8AhUQbsAKHZ-8Ck0Q4dUDCA8&uact=5&oq=manna+drone+delivery+video&gs_lcp=Cgdnd3Mtd2l6EAMyBQgAEIAEMgUIABCGAzIFCAAQhgMyBQgAEIYDOgQIIxAnOgUIABCRAjoICAAQsQMQkQI6CwgAEIAEELEDEIMBOgUILhCABDoICAAQsQMQgwE6CwguEIMBELEDEIAEOggILhCxAxCDAToFCAAQsQM6CwguEIAEELEDEIMBOggILhCABBCxAzoRCC4QgAQQsQMQgwEQxwEQ0QM6CAgAEIAEELEDOggILhCABBDUAjoLCC4QgAQQxwEQrwE6CwguEIAEEMcBENEDUABYlmZgg3JoAHAAeACAAZUCiAH3JJIBBjAuMjEuNZgBAKABAQ&sclient=gws-wiz#fpstate=ive&vld=cid:762ce02f,vid:wCNPCwcfMZI

Sage

Yes valuations for us not just ideas based as in dot com. Should, therefore, be a shallower dip and faster recovery after this valuation scare.

I actually like Manna a lot. THEy can make money so long as the regulations to not require spotters ( a deal breaker) is prevalent. For now that means no Canadian or US sales. I imagine if Ireland than the rest of EU but air traffic control may be local. My cousin was involved in a Canadian drone company and the spotter regs just killed the economics. One operator per 10 or 20 drones works so long as you are reasonably busy and have at least 10 completed drops per hour. Drops need to be under 5 euros and still make money. Good video on Manna

Liked the ability to deliver 4 Irish beer s with foam head right to the dock of the cottage. I’d pay 3.5 euros for that convenience.

Manna not particularly overvalued compared to the forward potential. They have some technology that makes them unique. A working commercial model in need of money to scale.

But unlike dot com most of grow’s portfolio are solid tech companies with real sales (and thus an established and verified market nich) and gross profit on those sales.

DOt com was companies with an idea not sales. That lesson has been learned. CAZOO the closest to a dot com with exaggerated growth plans but at least real sales on what it had. CAZOO the exception in our portfolio. Most are properly engaged with the market they claim.

https://pitchbook.com/news/articles/VC-markdowns-fair-value-LPs

Article talks about 3 to 4 years after dot com bubble for valuations to fully reprice.

Of course 2021 was a bit of a bubble but nothing like dot com bubble.

“We have become a speculative vehicle”

Some truth to that. We move up and down as quick and in time to pure speculative plays like bitcoin. Even discounted last round valuations have not been trusted as a marker of value by the retail market we are in. I suspect if GROW were more transparent company by company confidence would be higher. Even for me it is a bit of a black box trust us approach I find annoying. Nobody trusts anybody right now.

Never thought unlisted tech would ever behave that way but here we are. Badly need a return of last round bidding to reestablish values that the retail market trusts. When last rounds return for my money we will jump back to pre 2021 values plus organic growth since then. North of 12 quid for sure. Could this happen as soon as later this year or will it be 2024 who knows. Only with post interest rate induced crash last rounds and IPO’s will this extreme volatility end.

without this inflation scare we probably would have been over 12 quid

cazoo up 30%

very much a risk on day

If this was before covid incurred national debts I might agree but FED, BOE, ECB and even BOJ are in countries that have racked up sovereign debt that is very sensitive to interest rates.

Plus other private sector parts of system have gotten used to low rates. There are systemic risks the central banks are sensitive to have rates much above 3% for any length of time. They will be keen to get them back down as soon as they can make an excuse to do so. ECB keen to print money to help southern EU stay solvent. As soon as an excuse can be made wil do that but can’t do that while raising interest rates. Just looks silly.

The long period of ultra low interest rates and printing money has created a new normal that is not going to be thrown off by this temporary need to spike the rates. 1, 10 and 30 year bond rates are indicating the market thinks 3 is the new normal and pretty quickly.