What Formula One Teaches Us About Startups and Success with Adam Parr, former Chief Executive of Williams F1

[00:00:00] Susannah de Jager: Welcome to Oxford+ the podcast series that takes you deep into the myths and truths of the Oxford investing landscape. I'm your host, Susannah de Jager and I've spent over 16 years in UK asset management.

[00:00:18] My guest today is Adam Parr. Adam is a barrister and businessman, former chairman and chief executive of the Williams Formula One team. Since leaving Formula One, Adam's main activity has been venture capital and he has co founded, invested in, and chaired several businesses, including Quantum Black Visual Analytics, now a part of McKenzie and Company, and Oxford Semantic Technologies Limited, an A. I. spin out from the University of Oxford, which was acquired by Samsung earlier in 2024. Adam also chairs the Downforce Technologies Limited and the Downforce Trust, a UK charity which he co founded in 2020 and which is dedicated to accelerating action on climate change. The Trust has helped launch Downforce, an innovative technology measuring natural capital, and SRI 2030, an initiative to promote climate smart rice cultivation.

[00:01:10] Adam is a DPhil candidate and a business fellow at the Smith School for Enterprise and the Environment at the University of Oxford and a research associate at the John Porter Diplomacy Centre, Hertford College, Oxford. He's an author of two books about Formula One, The Art of War, Five Years in Formula One, and co author with Ross Braun of Total Competition, Lessons in Strategy from Formula One. He holds a master's from Cambridge University and a PhD from UCL in London. He has lived and worked in Europe, Japan, South Africa, Australia and now lives in Oxford with his wife and two children. Mishcon de Reya have advised Adam on a number of his investments and portfolio companies over the years including most recently advising on the sale of Oxford Semantics. I'm so pleased to have Adam here today because his perspectives from business but also internationally mean that he can bring a totally different lens to what we do in Oxford, what can be improved upon and what's working really well.

[00:02:10] Adam, thank you so much for joining today.

[00:02:12] Adam Parr: Good morning. It's very nice to be here.

[00:02:14] Susannah de Jager: You've got a really interesting background with lots of differentphases of your career. I'd love to hear a sort of whistle stop version of how you came to Williams.

[00:02:23] Adam Parr: Well, I was assigned to go and work in Australia by Rio Tinto, sent out there because it was quite interesting, we just had a failed merger of our iron ore business with another company called BHP and the head of the iron ore business wanted us to put some blue water between us and the competition and so I was sent out there to help him do that and when I got to Australia, I was asking myself, how can we improve our performance every single day of the year? And I thought of Formula One as an industry that just does that. So I had a friend actually here who now lives in Oxford. She was a friend of Frank Williams and I got his, email address, dropped him a message and he very sweetly flew out to Perth in Western Australia after the Melbourne Grand Prix and we had tea together and chatted and got on really well and a couple of years later, my wife and I just had our first child and everyone was rather tired. The phone went at about 10 o'clock at night and it was Frank and he said, Adam, it's Frank, I just want you to think one day about running the team for me and I said, okay thanks, Frank and that was the end of that conversation and then about two years later than that, or three years later, Frank called me and said, right, it's time, come and work for me. So I did.

[00:03:32] Susannah de Jager: And in the meantime, did you think on it? I presume you did. I mean, it's not the kind of thing one ignores when you get a phone call like that.

[00:03:38] Adam Parr: I did think about it, but I didn't really think it was very real and I was very involved in my career in Australia, in Rio Tinto. I was loving what I was doing, running these huge operations, the size of Germany, in Western Australia, so I was pretty involved in my day to day life. I kept in touch with Frank, I went to a couple of Grand Prix's in Melbourne, up in Suzuka in Japan, had an amazing time, getting to know him and the team a little bit, but I didn't really think it was going to happen. I moved back to London before he called me, and then a few months later he gave me the call up. The biggest thing about it though was that I did no due diligence. I had no idea what I was getting into. I wonder now if I had been a bit more thoughtful whether I would have taken it on.

[00:04:18] Susannah de Jager: What would you have done to due diligence it, now with the benefit of hindsight?

[00:04:24] Adam Parr: From the outside, Formula One is a very glamorous, rich sport, and actually nowadays it is probably more glamorous and more rich than it was then, but when I joined Williams at the end of 2006, the team had just had its worst on track performance ever I think and on top of that, we'd lost our big engine partner, which was BMW, a couple of years before. As a result of that, we'd lost some of our big sponsors. So when I joined at the end of 2006, the company was actually in quite serious debt and was really underperforming on the track. It was really struggling. What I didn't know on top of that was that the financial crisis was 12 months away and our biggest sponsor was Royal Bank of Scotland, which of course was probably the biggest victim of that financial crisis so my due diligence wouldn't have figured out the financial crisis, but I certainly would have realised that there was a lot of work to do.

[00:05:14] Susannah de Jager: So you were in London, you take this call, did you move straight away up to Oxford?

[00:05:19] Adam Parr: I moved pretty quickly up to Oxford and then my family joined me. We bought a house a few months later. It was not possible to commute really from London to just outside Wantage where the factory is. I wanted to be somewhere nearby and in fact, would go in six days a week when I was not traveling for a race, so it was important to be nearby.

[00:05:37] Susannah de Jager: And you obviously had a lot to focus on internally, but with that move into Formula One and into what is a well established cluster of Formula One in Oxfordshire, was it very inward looking, or is there a lot of outward looking engagement as well?

[00:05:55] Adam Parr: So Formula One is a very peculiar world. I compare it, if you've ever been to the Cirque du Soleil...

[00:06:00] Susannah de Jager: Which I have.

[00:06:00] Adam Parr: Which you have and it's a wonderful experience and if you think about those people, they live together, they travel together, they work together and they go around the world and they do their shows and Formula One's like that. You live and work and travel. The difference is the people you're living and working and traveling with are your worst enemies. They're the people who are literally set to destroy you, that's their mission and so it's a very peculiar, very inward looking world in that sense.

[00:06:25] But there is an outward looking element of it because you are traveling around the world. You're going from Shanghai to Bahrain to Melbourne to Sao Paulo. So you see the world and of course everywhere you go you're engaging with sponsors, with fans, with the promoters of the races. So in a way you are incredibly international and outward looking, but at the same time you're incredibly inward looking. Your kind of survival depends on balancing those two things.

[00:06:52] Susannah de Jager: So it's very interesting because obviously clustering and centres of excellence have lots of benefits. Talent would be one, concentration of facilities, maybe some shared kind of components. However, actually, it's not very harmonious, obviously, because you are in competition. So, as the person running Williams, can you speak a little bit to the experience of being based in Oxfordshire near your competition and what the benefits are, first?

[00:07:23] Adam Parr: Absolutely. Well, there are very significant benefits of being in that cluster you described. So for example, while I was in F1, you had teams like Sauber in Switzerland, Toyota in Cologne. It was really hard for them because if they wanted to recruit anybody, they had to move them typically from Oxfordshire or Bedfordshire out to Switzerland or Germany, so the whole family had to move. So obviously in a team like Williams, you had access to a much bigger talent pool from within F1, which was a big advantage. I'm a big believer in competition and of course, that's what makes Formula One so dynamic is the immediacy of the competition and also the kind of breadth of it. The fact that it's competition for sponsors, for drivers, for talent, for innovation, everything. The cycle time is so short, the learning time is therefore equally short. So I think that the intensity that you feel living in an area where it's all happening is very important.

[00:08:16] Susannah de Jager: Given the situation you found yourself in where it was quite under pressure, did you ever see the flip side of that where you became a sourcing pot for other teams that were doing better?

[00:08:27] Adam Parr: Yes, that does happen, of course. But the other aspect of being in a team is that if your team is winning, everyone's a hero and everyone's a champion and if you're losing, the assumption is that everyone's rubbish. So it takes quite a discerning competitor to recruit people from a team that isn't nailing it. So you have a sort of advantage in a way. They're not advantages that anybody wants, but you'll find that people are much more likely to be poached from a Red Bull or a, in my day, a McLaren. So success has a halo around it, which you have to be very careful about when you're recruiting because just because someone is in a winning team, of course they are actually a world champion and that's fantastic, but obviously not everyone's contributing equally to that success.

[00:09:05] Susannah de Jager: And innovation, clearly Formula One is right at the forefront of lots of areas. But you're also very close to Oxford University, which is a centre of innovation. Did you interact with the university much, or is it actually just, they're there doing their thing, we're doing our thing, they're very separate?

[00:09:23] Adam Parr: Totally separate. I had no contact at all with Oxford University while I was at Williams.

[00:09:28] Susannah de Jager: Do you think that's a missed opportunity?

[00:09:30] Adam Parr: On the surface, yes, but I want to tell you a little story, which I think is really interesting. So Jonathan Miller, who was a doctor and a playwright and a wonderful, talented guy, he was asked if he believed in reincarnation and he said, just have a look at a cockroach. If you look at a cockroach, it's so obviously very, very busy just being a cockroach, it's unlikely that it's also a reincarnated human and I think in there is a truth, which is that when you're doing F1, you're just so busy doing F1, that it's really hard to engage with other industries or sectors and people often ask me, Oh, could I do a partnership? Or I've got a new product idea, should I launch it with an F1 team? And I say, you're going to really struggle to get an F1 team to engage with you unless it's going to make the car faster, pretty much now.

[00:10:13] Susannah de Jager: Yeah, fair enough.

[00:10:14] And so now you are very focused on the broader innovation ecosystem. You have pivoted out of your full time Formula One career, and that's your whole focus. Obviously, you were in a very innovative industry. What are the particular skills that you now really see, gosh, I didn't know it at the time, but this is so relevant outside of what I was doing.

[00:10:35] Adam Parr: In terms of venture capital and investing and setting up businesses, I think that at least for the first phase of that, there's a really strong parallel with Formula One because you're in a tunnel, you're in a race against time because time is money and money is time in a startup. So hitting milestones of product development, commercialisation is absolutely crucial.

[00:10:57] It's very intense and it's very focused and rather, as I said about a Formula One team, they have to focus on being a Formula One team. A startup has to focus on being, basically on two things, developing its product and selling it and partnerships, all sorts of other lovely stuff that you might want to do, is a luxury you cannot afford. So I think that absolute focus at the beginning is really important, that sense that time is money.

[00:11:20] The thing about Formula One, just again to share an anecdote, I remember one year in Formula One where we had, in those days, probably 18 races and let's say the first race was in Melbourne, the last race was in Brazil. The slowest car in Brazil would have been the fastest car in Melbourne. So, had it raced in six months earlier, the slowest car would have won the first Grand Prix and that was 31st of March to end of November. That's the pace of development in Formula One. So, the difference between success and failure can be a few months in a startup.

[00:11:50] Susannah de Jager: How do you build a pipeline? Is it very organic, do things come to you now because you've done a bit of this or are you actively searching out particular type of ideas?

[00:12:01] Adam Parr: Right now, I'm not searching out ideas. I'm very focused on my current portfolio, which is probably more than I can handle anyway. Ideas came organically. Maybe I could give you two or three examples, so my first investment was in a company called Ingenie, which was set up by a chap called Richard King. I met him at a concert, I think it was a Rod Stewart concert, and we were just chatting and he said, I've had this idea, I really want to do it and I said, come and see me, it was about young driver insurance. It was one of the first products to use, not a black box, but actually a smart box, where the insurance premium was based on how someone drove, so we were able to reduce their premium based on them driving well. It was a great idea, so Richard came up to Williams, we had a chat and then I put together three or four investors to fund him and that was a fantastic example.

[00:12:47] The next one was a company called Quantum Black, and that was three founders and they at that time had three staff in a basement in Shoreditch and they'd all had something to do with Formula One, and one of them, Giacomo, I'd met him, he was doing a Harvard Business Review case study and he interviewed me. So anyway, they said, look, we want to grow this business, can you help us with investment and help us think about how to do it? So I raised the money and worked with them and brought in a new CEO, well, chair initially and then CEO and that company was acquired by McKinsey a few years later and it was a very satisfying investment, not financially particularly, but just in terms of what it then went on to achieve.

[00:13:27] Susannah de Jager: And when you get brought in to a conversation. Like that, obviously you've described being very helpful by bringing in other investors, obviously your interest brings its own credibility with that. How involved are you beyond that?

[00:13:41] Adam Parr: It really depends. So with Quantum Black, I was quite involved in helping them get going and find the right leadership, et cetera. With Ingenie, very little, because Richard had a chair called Steve Broughton, who was, enormously competent as well and from the industry. So they just got on with it. I provided a little bit of strategic advice from time to time. But other companies, I've been the founding chair, and one of them, Oxford Semantics, for example, I chaired for eight years, right from birth through to its acquisition this year by Samsung.

[00:14:09] Susannah de Jager: And which do you prefer?

[00:14:10] Adam Parr: I think chairing a company that you're very invested in and working with a team that you really like and founders that you really like is very satisfying and I enjoyed that, but you can't do too many of those because it's pretty full on. So I think it's horses for courses, it depends what the team need, where you can add value and what you feel like doing, what you're interested in.

[00:14:29] Susannah de Jager: So you chair and you also co founded the Downforce Trust, which is dedicated to accelerating action on climate change. I am aware of this, but I think even when I first heard it, it surprised me a little bit, the connection between high performance motorsports and innovation for climate change or climate tech. Can you talk a little bit about some examples that come out of Formula One? Because I think it's really interesting and people don't understand it well enough.

[00:14:57] Adam Parr: Sure. Well, there are two different elements to this. So one is actual technologies coming out of an F1 that could help with the climate crisis. They are relatively limited, but they're not insignificant. So for example, over many years, the development of the internal combustion engine just got more and more efficient. But I remember that again, in my time in Formula One, we compared the fuel efficiency of our F1 car with a Toyota Prius and we beat it hands down, because in that sport, the use of energy is absolutely fundamental. Something, a little known fact about F1 engines is that part of the way to maximise the power of an internal combustion engine is to get as much air as possible into the cylinder and F1 engines have a vibration, a wave, that goes through them, that expands the metal. So you get a slight expansion of the cylinder. at the moment when you're putting the air in, which gives you more capacity. So it's extraordinary, the lengths that people will go to, to optimise an internal combustion engine and of course, we introduced hybrid technology, turbocharging, heat recovery during my time. So it was extraordinarily efficient and some of those technologies, particularly battery technology, has gone and been a significant player in electric vehicles and I think we were all pioneers in that.

[00:16:11] That's a kind of direct transfer of technology. But I think what I've tried to do with my work is much more about taking the ethos of F1, which is the value of time, getting on with it, trying things out, not worrying about failing. Beg, borrow and steal is another thing. People in lots of industries and in life in general don't like taking other people's ideas.

[00:16:30] They want to invent everything themselves and that's amazingly time consuming and wasteful and of course in F1, if you see someone doing something smart, you nick it as fast as you can and there's pride in good copying. That's another thing where, as a trust, we're saying, well what works? So, to give you a couple of examples, nuclear energy works and it's low carbon, not everybody loves it, but who cares? And it's really interesting, you know, we started funding a group in the House of Lords, who basically tweak legislation as it goes through the Lords to make it more nuclear friendly. They're called Legislators for Nuclear and actually, they're from a green background. They're environmentalists and they see this as a way of being smart. But what they're doing is they're going with the grain. In the UK, all three major parties agree that nuclear power is necessary. We're not trying to advocate for change, or convince people about something, we're just saying, let's do this smarter and quicker. Another example is my work on rice. I have a team of people working on a way of growing rice. Now, rice is the second largest source of methane after cattle in agriculture.

[00:17:31] Susannah de Jager: I did not know that!

[00:17:32] Adam Parr: No and the reason for that is that when you flood a rice field, the way that the living organisms die creates methane. So there's a way of growing rice, which was developed in the 1980s by a Jesuit Frenchman in Madagascar, a missionary, and he figured out that if you plant the plants in wider spacing, so 25cm grid, and you keep the field damp but not flooded, you get twice as much rice and then, after he died, people figured out you also get half as much methane. So, there's a way of growing rice which produces twice as much rice, it uses half as much water, it produces half as much greenhouse gases and it gives the farmer a much better return because they also use 90 percent less seed. So this is called going with the grain, right? We're not trying to invent something new, we're trying to get that expanded out there.

[00:18:16] But there's a certain irony in using that expression because changing the way we farm is really difficult. Even when it's obviously better, farmers all over the world are very reluctant to change.

[00:18:26] Susannah de Jager: I can only imagine. So that's exceptionally interesting and you've said a number of things here about approaches from Formula One, which really make a lot of sense. So I liked the point you made around Beg, Borrow, Steal, Failure, not having a fear of it.

[00:18:42] When you speak to people that come from an academic background, do you find that's quite hard to get them to accept because there's an almost, you know, it is academic, you do have that perfectionist tendencies often in people. Do you find it's a bit like oil and water or do people take the advice?

[00:19:00] Adam Parr: It is oil and water. In fact, if you had to take three principles of F1, time is money, so time is crucial, fail quickly, and beg, borrow, and steal. Those are the three things that a good academic will never ever do. They rarely are very conscious about time, they're much more conscious about getting it right and they want to be original, they have to be original, so you couldn't imagine three more different principles and failing fast is not an option for academics, they hate failing. And I say they are, I'm also an academic, we hate it when our work is criticised and found to be incorrect and a career is built on that. So I think, you couldn't imagine a more opposed world.

[00:19:40] Susannah de Jager: And so given that there are new entrants coming in to particularly Oxford with the Ellison Institute of Technology, that as we understand it to date is going to have very different funding system and not require people to publish necessarily, it is going to be disrupting some of those forces you talk about. I'd love to know what your view is on that.

[00:20:03] Adam Parr: I absolutely welcome anything that translates academic research into impact because there's not a lot of point in doing great research if it never makes any difference to the world and I don't think that's what academics want. I think they want their work to make a difference and to have an impact. But the promotion system is very much oriented towards points for getting your articles published in recognised journals, and that's how the university is rated. So it's a system that we're trapped into, where it's better to pump out articles than it is to see one really significant piece of work taken right through to hitting the world stage and one thing I observe about climate change and biodiversity and everything else we're trying to achieve is that, the world only changes through three things, physics, chemistry, and biology. That's the only thing that's just gonna change the atmosphere. You can have the best workshop in the world, you can set the best target in the world, you can have a COP that sets wonderful commitments, it doesn't make any difference. A great academic paper doesn't make any difference. Even a law like the Climate Change Act of 2008 doesn't make any difference. Only chemistry, physics, and biology makes a difference. So at some point whatever you're doing has to translate through to one of those things.

[00:21:13] Susannah de Jager: It's interesting, isn't it, how hamstrung we can become by historic structures and I hear this from many people when I interview them or have conversations in Oxford, that the academic wheelhouse is not optimal for impact, as you say and I always think of this analogy that promotion outside of universities is also quite often takes people from their jobs and puts them into managerial positions and a great example would be coders or they talk about, promote your best salesperson to managerial and you've lost your best salesperson and gained a bad manager and it feels a bit like in asking academics to be focused on academic publishing, we really are losing the application of our greatest minds to the issues that we should be asking them to focus on.

[00:22:00] Adam Parr: I think that there's two different issues here. So one is, is there a role for academia and for academic research and to have great minds doing that? And the answer is absolutely there is and we've got a lot of people on this planet. So people need to keep busy We can afford to specialise and have people in universities doing great research and including research that has no bias immediate impact. Where I think we do need to improve our game is to take research which should be having an impact and then make it have an impact and I have, yougiven some thought obviously to how we do that, but the system is not supportive of that. I mean, it's positively inimical to achieving that at the moment. On the question of outside academia, people being promoted into roles for which they're totally unsuitable. I mean, that is a great truism and we've all seen it ourselves, right?And I think that also affects another problem, which is that quite often promotion, the only way to succeed and to feel you're making progress in your career is to be promoted, when actually what you love and what you're good at is doing the same thing.

[00:22:57] Susannah de Jager: And there are some innovations around this. So actually in a podcast, a different one that I listened to around this, it said that there are some companies, particularly where they have lots of coders or technologists that will have rankings. So seniority, you can opine maybe on executive strategy, but without automatically having to manage a team of X many number of people, if that's not what you enjoy or you're good at and how important that is for retention of particular types of talent and keeping them focused on what they enjoy.

[00:23:29] Adam Parr: If I may mention an example of that, we were having lunch with the Chief Technology Officer of Samsung as part of this transaction that we just did and he mentioned that at Samsung they have precisely that, which is they have a career path for their top technologists, scientists, etc. So they can have the same rank and status as the kind of vice presidents, but they're not leading teams necessarily, they're doing their thing.

[00:23:51] Susannah de Jager: Yeah, because it's very one dimensional and it doesn't serve all types of people and I suppose what we're therefore agreeing on is that perhaps in academia there should be a different track that doesn't impose the traditional structure of publishing on everyone.

[00:24:10] Adam Parr: Yes and that does exist in other universities, and to some extent exists even within Oxford. I think Saïd Business School has the capacity to look at people's careers from an impact perspective, as well as publications. I think Blavatnik School does as well, the LSE does it, so it's not an impossibility, it's just that quite a lot of faculties within the University of Oxford don't do that and maybe they need to have a look at that.

[00:24:33] Susannah de Jager: Interesting.

[00:24:34] Adam Parr: As part of my PhD research here, I've been looking at a chap called Sir Cheney Culpepper and Sir Cheney was at Hertford College, which is where I am, exactly 400 years ago and he studied here and then he went to become a barrister, like me and there's an interesting letter he wrote to one of his friends and the head of a thing called the Hartlep circle, Samuel Hartlep, who was part of a, had a group of reformers in the 1640s mainly, who were trying to make the world a better place, actually, partly because of climate change, which was a big feature of that period. Samuel Hartlep had no money whatsoever. He lived in London, and he was offered a place in Oxford and Cheney Culpepper wrote to him and said, just please don't go and hide yourself away in Oxford. We need to change the world and he said, your job is to order men, not books. So when I read this doing a D-Phil at Oxford, I thought, that's a bit close to the bone, maybe I need to reprioritise as well.

[00:25:28] Susannah de Jager: And I think we need both. Again, you need the focus on the what and the how and then it needs to be outward looking in the how in the real world and a big part of that clearly is funding and access to capital and you've spoken about bringing in co-investment. You've had a number of exits where you've been purchased by a larger firm, did you feel that you had other options available to you or was that either very much the most natural pathway or the, I don't want to say easiest, but the clearest pathway that you could exit?

[00:26:05] Adam Parr: I've had four exits, all of them to big companies, so strategics, and in all cases, I think it was a pretty compelling case, and there are a number of factors you take into consideration. So first of all, obviously, is it a fair deal for where you are as a business? The second is what it means for the founders and the team, what's their future going to be? Are they excited about it? Because it won't work otherwise. The third thing is, what's going to happen if you don't sell to that company? Now, if we take the example of Quantum Black, we'd been working with McKinsey jointly on data analytics, and they had decided, correctly, that they were going to make data science a really fundamental part of their consulting business. So they were going to do it with or without us and I think that had we said, look, no, we're not interested, we would have had a phenomenal competitor arrive in the market and not only that, but they knew our business inside out, they knew our people inside out. So I'm not suggesting they would have done anything inappropriate, but it would have been very difficult.

[00:27:04] The most recent one with Oxysemantics, that was a tough call because we were doing knowledge graph technology that has suddenly become absolutely core because of Gen AI. It's a really good complement to Gen AI in the way you integrate and store data. So I think we could have said we've got a great future as an independent company, but again, because it's become such a core technology, suddenly companies were coming into a market that we were pretty specialised in and Samsung were a client, we had a great relationship with them for over eight years, so the fit was really good and I think in both those cases, we know that Quantum Black is now more than a thousand people. It was 42 when we sold the business and I think that we'll see similarly with Oxford Semantics. It's going to be a hub for Samsung's AI work in Oxford in that sense, there's a kind of bigger picture here. So I'd like to think that all of the exits that I've been involved in have been really natural and made sense. That's the idea.

[00:28:03] Susannah de Jager: Those ones sound exceptionally organic, as you describe. It may therefore be a little unfair to ask you this next question, but do you perceive that if that weren't the case, that the UK has what companies need to scale here, or do you think that actually it's very difficult without a large partner to do that?

[00:28:22] Adam Parr: I think it's very difficult. The VC path wouldn't have suited what we did, right? So the fact that the founders that OSE, Oxford Science Enterprises and OUI were major investors and we had some people like me involved, that's what allowed us to do those decisions. Whereas I think if we had a proper VC sort of ethos, it would be very difficult to an exit, because they wouldn't regard it as big enough. They'd probably say, look, keep going, be more ambitious, get bigger and then let's see where we get to. But the problem with that is where's the growth capital? And as you know very well and you've said and your interviewees have said on this podcast, it is not easy to find growth capital in the UK. But it's not just capital, it's just really hard. I've now had, let's say half a dozen businesses that have got to eight or nine digits, let's say, right? Which is to go to zero to eight digits is not a bad achievement. To do it more than once is unusual. So I'm very proud of that, but I'm not sure about my ability to take a business from, say, 50 million to 500 million. Well, I'm absolutely not sure about it. That's not easy. It's a very different dynamic and there aren't many people in this country who've done it.

[00:29:31] Susannah de Jager: Absolutely true and the examples we do have, such as DarkTrace, got a lot of money very early on and it's almost an entirely different model, where you pump money in early to facilitate hypergrowth and there's a sort of a time frame by which the founders of a business will often get worn out and that if you don't have year one, two hyper growth, the chances that at year ten people aren't pretty much lined up going where's a exit that suits everyone rather than let's do another 10 years of growth is just quite small. Would you agree with that?

[00:30:11] Adam Parr: I don't know whether in the UK we have enough examples to have a statistical basis for judging that. What I know is that it's very grueling being a founder, it's hard work, it's lonely. Raising money is really tough, so if you're going for that Silicon Valley model as opposed to what I call the Charwell Valley model of raise and spend and raise and spend, it's just a constant cycle of being on the road and selling your soul, really, which is hard work and if you've got to do that for a few years till you reach break even, which is kind of what I've been involved in, or profitability, that's one thing. If you've got to keep doing it for 20 years, that's a different type of human being, right? That's really tough.

[00:30:55] Susannah de Jager: Got to be quite single minded and for those listening, you won't know this, but we're the day after budget day and it just got more punitive as well for founders, which I'd love to know your views on that.

[00:31:08] Adam Parr: Well, capital gains tax has gone up and I think the problem is that neither this government nor the past government has a great ability to differentiate between different types of people. So whether it's entrepreneurs who slog their guts out, sweat equity, take a pittance for salary for years, create jobs, etc. whatever capital gains they make should be taxed at 10 percent or something, in my view. That is completely different from someone who has cash invested in the stock market and buys and sells shares from time to time and makes a profit. I mean, that's just a totally different world.

[00:31:41] Susannah de Jager: And one other thing that I wanted to ask you about was the London Stock Exchange has a new platform called Pisces. So Pisces is going to be facilitating in as yet unlisted companies, access points where people, founders and early investors could potentially sell some of their equity at a liquidity moment. Do you think that will change some of the forces that early stage companies are faced with?

[00:32:08] Adam Parr: I think it's very helpful and in two of my startups, we gave early investors an exit point really early on and they got a 5x return or a 2x, whatever it was. But for angel investors, that's quite important and it's quite good to free up the balance sheet a bit and have people on the shareholder register, who can actually do follow up investing, rather than people who've helped you get going, but really don't have the deep pockets that you need later on. So, I think it's great to be able to do that and interestingly, because of the enterprise investment scheme and SEIS, which the government hasn't messed around with, I don't think

[00:32:41] you can give people a very good return. I mean, under those schemes, as you know, there's no capital gains tax if you sell after three years. Plus, you've got the tax advantage at the beginning, so you could give someone very comfortably a three or four times return tax free without actually having to give them very much money for their shares and I think that's a real opportunity, whether it's through Pisces or we should have a little marketplace in Oxford where people can, offer their shares and people can pick up shares. I think you could have a very good, yeah, I think very good market in secondaries. It does require a bit of effort and you know, well, and I think what I was thinking is if you had a fund that bought secondaries, but would also have the ability to put in some money for primaries and help in future rounds, you could get a very good return, because there are a lot of businesses that are sort of most of the way through the valley of death, but everyone, all the investors have been in there for five, ten years, and they'd be very happy to get double their money back and just move on.

[00:33:37] Susannah de Jager: And I think your point is really valid as well that when one is plotting the path forward and strategising whether it might be an exit to a large partner or whether it might be listing here or on the Nasdaq or taking the private capital route, there are particular cap tables that will lend themselves to those plans and if you've got people that are too differentiated in what their goals are, it's obviously not optimal for strategising an exit that's maybe optimal for the founders or indeed for the technology itself. So I think there's a really good opportunity in that as well.

[00:34:14] If you were talking directly now to somebody that has a venture, and I note, don't call Adam, he's got enough in his portfolio, but what would be your top tips to somebody when they're navigating Oxford for how to find investors, how to stress test their idea?

[00:34:33] Adam Parr: A couple of things. The first thing is if you're an academic and you're looking to do a spin out, I think it's very beneficial to find someone, a co-founder who is not an academic, it's a business person. But who'swilling to work full time with you on this, and quite early on, sort of almost before OSC, there was a little bit of a pattern of people, founders, academic founders, teaming up with somebody who really wasn't up to the job, who'd never been a CEO, or even anything like a CEO, but has been sort of brought in by OUI and done a bit of sort of spreadsheet work and a bit of business modeling and then suddenly they found themselves as CEO and they were not qualified for that.

[00:35:08] The CEO of a startup is a tough job, so find the right person. I'm a real believer that you need a partner, don't do it alone. The second thing I say is this is get it in writing. So whatever arrangements you're gonna have between you in writing clawbacks, if one of you caves after 12 months. You don't want to find that your business partner says, after six months, I've had enough of this and walks away with 30 percent of the equity of the business. So you need to document it properly. The next point I make is around IP, so what is your IP and how have you secured it? What are your barriers to entry? There's no point in doing this if somebody else can just copy what you're doing straight away. So, and especially if you're an academic and your world is publishing, you've got to secure your patents before you publish, it's simple things like that. So, if you can get those three things right, the next thing I would say is be realistic about the competition. There are so many cases where people think, I've got a good idea, but they don't really look at whether someone else is doing it or has tried and hasn't succeeded

[00:36:07] So really, be honest about how difficult this is going to be and then you're going to raise money. Now, if you're in the Oxford ecosystem, I'm a real believer in OUI and OSE. Now, with the new arrangements, they take such a little proportion of the equity, you know, 20%, which they split between the university and OSE now.

[00:36:26] I think teaming up with them brings a lot of credibility and they also bring a lot of help. You know, a lot of benefits of doing that, but get your ducks in a row first and then the last thing I will say is success is largely about resilience and time. You have to move quickly, things will take longer than you expect and you have to be resilient. So looking at your own character and the character of your co founder or founders is really important. If they're quitters, you're in trouble because this is not going to be, Hey, wow, you know, we reproduce a product, everybody loves it, everyone buys it, we make a fortune and three years later, we're sitting on a beach in Hawaii. It's not going to be like that. It's going to be the exact opposite of that. So character, resilience, patience, but a sense of urgency. It's tricky, tricky balance.

[00:37:13] Susannah de Jager: Well, thank you very much. I think that's a really good note to finish on and this has been for me a very interesting conversation and I'm sure for those listening.

[00:37:21] Adam Parr: Thank you very much.

[00:37:22] Susannah de Jager: Thanks for listening to this episode of Oxford+ presented by me, Susannah de Jager. If you want to stay up to date with all things Oxford+, please visit our website OxfordPlus. co. uk and sign up for our newsletter so you never miss an update. Oxford+ was made in partnership with Mishcon de Reya and is produced and edited by Story Ninety Four.