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UpsideDown VC is a venture capital firm founded in the United Kingdom, focused on supporting early-stage companies at the Friends & Family to Seed stages. The organization aims to provide capital while allowing founders to retain full ownership of their businesses. This approach is particularly beneficial for founders who seek alternative funding solutions that do not conform to traditional equity models.
The firm utilizes a hybrid financial instrument known as the Convertible Future Earnings Agreement (CFEA), which allows investments based on future income potential rather than standard equity stakes. This innovative model addresses the funding gap for businesses that do not fit the typical unicorn growth narrative, enabling founders to access capital while maintaining control over their companies.
UpsideDown VC is committed to investing in companies that demonstrate proof of demand and possess strong potential for income generation or exit. The firm is currently targeting a portfolio of approximately 120 companies over the next three years, focusing on the SaaS and Consumer Goods sectors.
UpsideDown VC invests in early-stage companies through a unique financial instrument called the Convertible Future Earnings Agreement (CFEA). This model allows founders to receive funding based on their future income potential, rather than traditional equity models. The firm primarily targets businesses in the SaaS and Consumer Goods sectors, focusing on those that show proof of demand and have strong exit potentials.
The CFEA structure provides downside protection for investors while offering flexibility for founders. This approach is particularly appealing to non-unicorn founders who wish to avoid dilution at the earliest stages. UpsideDown VC's investment strategy is designed to bridge the gap for businesses that do not conform to the typical unicorn growth model, allowing them to thrive without sacrificing ownership.
Check sizes range from £50K for pre-seed investments to £100K for seed-stage investments, with a focus on companies that meet specific underwriting criteria. These criteria include a minimum annual income of £30K and a front-end debt-to-income ratio below 28%, ensuring that the firm supports founders with stable financial backgrounds.
Jonathan Sun — General Partner
Jonathan is a co-founder of UpsideDown VC and has a background as an Edtech founder at Horizan. He has extensive experience in community building and understands the challenges faced by non-unicorn founders.
Sam Merullo — General Partner
Sam is also a co-founder of UpsideDown VC and has a successful track record as an exited founder of ScootFleet Group. He previously served as General Manager at Lime UK and has a legal background from Allen & Overy, along with experience as a family office venture investor.
George Quentin — Team Member
George is a mobile engineer at Dojo and an angel investor. He has been involved in the London New Tech community as an organizer, bringing valuable insights into the tech startup landscape.
Founders interested in pitching to UpsideDown VC should visit their website at UpsideDown VC for funding inquiries and applications. The firm prefers pitches that include detailed information about the business model, proof of demand, and future income potential. Founders should be prepared to discuss their financial metrics and how they align with the firm's underwriting criteria.
Response times may vary, but founders can expect to receive feedback on their applications. Warm introductions are encouraged, as they can enhance the likelihood of a successful pitch.
What are UpsideDown VC's investment criteria?
UpsideDown VC focuses on early-stage companies in the SaaS and Consumer Goods sectors. They utilize the Convertible Future Earnings Agreement (CFEA) for funding, which allows founders to retain 100% ownership. Founders must demonstrate proof of demand and meet specific financial thresholds, including an annual income of at least £30K.
How can founders apply for funding?
Founders interested in funding from UpsideDown VC can visit their website at UpsideDown VC for inquiries and applications. The firm encourages founders to present their business models and demonstrate their potential for income generation.
What makes UpsideDown VC different from traditional VCs?
UpsideDown VC employs a unique funding model that allows founders to retain full ownership of their companies. The CFEA structure provides flexibility and downside protection for investors, making it an attractive alternative to traditional equity financing.
What is the typical check size for investments?
UpsideDown VC typically invests between £50K and £100K, depending on the stage of the company. Pre-seed investments utilize the CFEA, while seed-stage investments are made using standard SAFE notes.
What is the geographic focus of UpsideDown VC?
The firm primarily invests in companies based in the United Kingdom and Europe, targeting early-stage businesses that align with their investment strategy.
What kind of support do they provide to portfolio companies?
UpsideDown VC offers operational support and guidance to founders, leveraging their team's experience in addressing the unique challenges faced by non-unicorn founders. This includes mentorship and access to resources that can help drive growth and success.
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