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Meet the Oxford Capital team – Stephen Hampson, Investment Director

Stephen Hampson 3 cropped cooler

1. Can you tell us a bit more about your role at Oxford Capital? 

I work on assessing new investment opportunities and alongside many of our portfolio companies. Both sides of the role are equally interesting. We have an exciting portfolio of companies led by some super-talented founders.  We also have great quality deal flow, plenty of adventurous companies looking to grow the next big thing.  I really enjoy seeing new technologies that can make a difference, looking for capital to make their ambition a reality.

2. What have your learnt working with early-stage companies throughout the Covid-19 pandemic?

Early-stage companies tend to be very adaptable and can respond quickly to changes in the environment. They are also good at seeing the opportunity in difficult situations. Remote working has changed the team dynamics, but it has also opened the possibility of recruiting from a wider area. New hires no longer need to be local.  This can enable companies to find talent to enable them to grow faster.

3. Which sectors do you think offer the most potential in the current environment?

I’m a big fan of energy efficiency and the decarbonization of industry. Companies in this space will do well over the long term but there are plenty of good opportunities. For example, improving the food supply chain to minimize waste and precision agriculture. We are seeing some very strong digital health companies too, making assessments and care more accessible.

 4. What are the big differences between the New Zealand start up scene and the UK?

There are plenty of differences (mostly notably market size), but probably more things in common. Ambitious companies looking to go global. Both have a strong talent pool to draw from. New Zealander’s are exceptional at starting companies and have the ability to turn their hands to anything. Perhaps in the UK there is a larger pool of talent to draw from, so combined with more ready access to larger markets, it is easier to be more successful in the scale-up phase. Of course, there have been plenty of New Zealand startups that have overcome the remoteness of the South Pacific and have dominated global markets. Xero for example.

 5. What most interests you about working with early-stage companies and the processes behind this?

The early stage is a very creative process. Generating the right product market fit, determining the right business model to maximise value creation and organizing the business to capture value. Inevitably there is a constant stream of problems to solve and decisions to make in very uncertain environments. What could be better.

Quickfire round

 1. Favourite pastime/hobby

Football. Or more accurately watching football these days. And reading academic literature on business models.

2. Favourite holiday destination

Anywhere with sunshine or Manchester. It gets cold up North though, you need a hat!

3. Favourite meal

Pudding, chips and mushy peas

4. Favourite film/TV show

Coronation Street

Estimated reading time: 2 min

 

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

  1. You could lose all the money you invest
    1. If the business you invest in fails, you are likely to lose 100% of the money you invested. Most start-up businesses fail.
  2. You are unlikely to be protected if something goes wrong
    1. Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker here.
    2. Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated firm, FOS may be able to consider it. Learn more about FOS protection here.
  3. You won’t get your money back quickly
    1. Even if the business you invest in is successful, it may take several years to get your money back. You are unlikely to be able to sell your investment early.
    2. The most likely way to get your money back is if the business is bought by another business or lists its shares on an exchange such as the London Stock Exchange. These events are not common.
    3. If you are investing in a start-up business, you should not expect to get your money back through dividends. Start-up businesses rarely pay these.
  4. Don’t put all your eggs in one basket
    1. Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well.
    2. A good rule of thumb is not to invest more than 10% of your money in high-risk investments. https://www.fca.org.uk/investsmart/5-questions-ask-you-invest
  5. The value of your investment can be reduced
    1. The percentage of the business that you own will decrease if the business issues more shares. This could mean that the value of your investment reduces, depending on how much the business grows. Most start-up businesses issue multiple rounds of shares.
    2. These new shares could have additional rights that your shares don’t have, such as the right to receive a fixed dividend, which could further reduce your chances of getting a return on your investment.

 

If you are interested in learning more about how to protect yourself, visit the FCA’s website here.