Venture Builder

Quake is a ‘Venture Builder’. We create, launch and scale high growth SaaS businesses in the B2B technology sector. We work in partnership with entrepreneurial visionaries to bring great ideas to market. Our skills and expertise help achieve success fast.

Breaking new ground in tech investment

Exciting businesses begin with exciting people. People with vision, belief and ability. Our team partners with talented, hard-working, tech-loving entrepreneurs that want to achieve amazing things and require our help to get there.

Our ventures

Who we work with

Experience +  Knowledge = Results

The Quake playbook is a roadmap to success for our ventures. We heavily bootstrap our start-ups with a lean team to mitigate risk and maximise ROI.
Our experience and knowledge extends into commercial, marketing, technology, operations and investment. We work daily with our portfolio to provide value that delivers growth.

How we do it

Building tech start-ups

<h4 dir="ltr">Quake Ventures are proud to announce the launch of Fluxr - The automated feedback platform for recruitment agencies.&nbsp;&nbsp;</h4>
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Quake believes that high growth recruitment agencies benefit from a consistent feedback loop from their clients, candidates and consultants. But feedback cycles are often irregular, with data gathered in silos. The process is normally slow, costly and time consuming for many agencies.&nbsp;
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Set to launch in June 2024, Fluxr makes it easy to gather and process feedback from these critical stakeholders. It automatically surveys an agency's clients, candidates and consultants, pulling feedback into one central platform. Integrated with market leading recruitment CRM 'Bullhorn', Fluxr automates the data collection process 'out of the box', reducing the need for separate systems and hours of admin time.&nbsp;
The Fluxr platform guarantees consistent data collection from all stakeholders. Using AI and sentiment analysis, recruitment leaders can quickly identify and fix problem areas in their agency. Fluxr enables recruitment agencies to focus on making placements whilst knowing that consistently high standards are being met across all agency relationships.
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Since 2022, Quake Ventures have pioneered feedback technology with 'Ten Space' - the first to use WhatsApp for feedback surveys; perfect for mobile and desk-less workforces. With knowledge of the recruitment vertical, Fluxr is the logical next step in their journey to support recruitment agencies with high-impact, low cost SaaS products that help agencies scale and grow.
Joining Quake as Fluxr CEO and co-founder is Martin Happle. Martin's shared passion for recruitment tech led him to Quake to pursue the launch of a recruitment SaaS product. Martin's background in recruitment and HR technology and his deep knowledge of customer challenges makes him a perfect co-founder for the venture.&nbsp;
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Quake has raised seed capital from a private investor to launch Fluxr. Quake partner Alec Middleton commented -&nbsp;
<blockquote>
&nbsp;
&nbsp;"Quake's advantage in the recruitment industry and our knowledge of survey tech will be a critical springboard for Fluxr's success.&nbsp;
We know that recruiters struggle to gather reliable, high-quality feedback from all areas of their organisation and Fluxr will help agencies avoid the turbulence of taking steps forwards then immediately backwards in their growth journey.
We've known Martin for a while now and the quality he'll bring as CEO and co-founder means that our early stage seed capital is in safe hands. 2024 is set to be a great year for Quake and Fluxr as we embark on another great venture with an exceptional launch team."
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</blockquote>

Quake launch 'Fluxr' - the feedback platform for recruiters

Quake is a Venture Builder. As a new category in tech-investment, we&rsquo;re often asked what it means. In this article, we explore what a venture builder does and the impact it has on the success of start-ups.
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What is a Venture Builder?
A &lsquo;Venture Builder&rsquo; is an organisation that creates and develops startup companies. Venture builders are involved in the ideation, creation and growth of new ventures.&nbsp;&nbsp;
Venture builders develop an idea into a product, a product into a business and a business into a success. They use their in-house team and their network of contacts. They play a proactive role in the startup ecosystem by providing funding (or the route to funding), but also take part in the creation and development of new ventures. This approach can increase the likelihood of startup success by combining financial support with strategic guidance, operational support, and risk mitigation.
Venture builders take a founder-level equity position in their ventures. Like VC&rsquo;s they tend to back ventures that are aligned with their knowledge and internal team. The initial idea could belong to the venture builder, or it could be the idea of an external party, but the amount of equity is normally significant.
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How do venture builders build and support their portfolio?
Venture builders are there for a specific part of the life of a business - to get it past the difficult teenage years! Venture builders will each have their own methodology based on their experience and the ventures they tend to get involved in. The ambition of the venture builder is to build a portfolio of viable businesses over a short period of time. Their approach will often include the following.
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<ol data-block-id="fa2dc3cf-51c4-4624-8369-eb39ba6f635a">
<li>
Ideation and Team Formation&nbsp;
</li>
</ol>
The idea comes from an entrepreneurial mindset crossed with industry knowledge. The venture normally starts in one of three ways;
<ul>
<li data-block-id="049688ea-6fc1-41df-a147-0662e8021897">Internal sourcing: The Venture Builder has the idea. It&rsquo;s their vision, they start the validation process and expand it with additional co-founders</li>
<li data-block-id="049688ea-6fc1-41df-a147-0662e8021897">External sourcing: An industry expert has the idea. They approach the Venture Builder to form a partnership based on shared ideologies</li>
<li data-block-id="049688ea-6fc1-41df-a147-0662e8021897">Hybrid sourcing: A combination of both where internal and external individuals form part of the starting team with a shared &lsquo;idea&rsquo;</li>
</ul>
Whatever the starting mechanism, the idea and people are critical to gaining momentum. The ideation phase will help to solve questions such as;
<ul>
<li data-block-id="e9902a5a-e598-47ba-8b12-b2e39eb7254b">What value will the business deliver to customers?</li>
<li data-block-id="95bb48f1-50f2-44cd-97a8-b427fd87ed83">What customer problems will it set out to solve?</li>
<li data-block-id="201c9957-135f-4297-a3bf-127a5841885e">What customer needs are we satisfying?</li>
<li data-block-id="92f8a473-320f-4f68-a9d8-320f2ad4d8e6">What products and services will solve these problems?</li>
</ul>
Commercial activities during ideation may include cost structures, revenue streams, marketing and sales channels, partnerships and key activities. Technological activities include experimenting with new technologies, understanding product requirements and prototyping. Experienced venture builders will leverage existing technology, code, systems and frameworks to propel the prototyping.&nbsp;
At the end of the ideation phase, the venture builder will be confident in moving forward with their idea and consider the level of risk associated with the next stage to be appropriate.
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<ol start="2" data-block-id="120a2df5-47b6-4062-9702-7fe2a7274bc8">
<li>
Producing a &lsquo;Minimum Viable Proposition&rsquo;&nbsp;
</li>
</ol>
&lsquo;MVP&rsquo; commonly stands for "Minimum Viable Product." It is a concept and strategy used in product development and startups to create a version of a new product with the minimum features necessary to satisfy early users and gather feedback for future development.&nbsp;
But venture builders are not just concerned with the product. They are trying to build a proposition too. The proposition is critical to having something credible to sell to early stage customers. The proposition will include brand, website, marketing materials and some marketing activity.&nbsp;
The MVP stage is a critical phase in market testing. The team needs to get in front of real prospects and pitch the proposition and product at the same time. Every pitch will produce learnings that result in iteration of the proposition as a whole (and how it's being sold).
The MVP phase concludes with the launch of the business. There will be customers (or users) and some awareness of the brand. The founding team will be getting busy and there will be a need to start hiring. There could be a requirement to raise capital at this stage depending on the level of work required&nbsp;
Overall, the MVP approach is a practical and strategic way for startups and product teams to validate ideas. It helps gather real-world data and refine their product and proposition based on user feedback.
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<ol start="3" data-block-id="aa0c3666-bcd1-4a0f-b656-84ea71dbebeb">
<li>
Establishing &lsquo;Product Market Fit&rsquo;
</li>
</ol>
Establishing product-market fit is a critical milestone for any technology company. It occurs when a product satisfies a significant market demand. Some critical pieces of PMF include;
<ul>
<li data-block-id="68248fff-f969-4795-936f-3ff8088e5f9f">A deep understanding of the market, the customer and the value&nbsp;</li>
<li data-block-id="68248fff-f969-4795-936f-3ff8088e5f9f">Constant customer conversation</li>
<li data-block-id="e600e2dc-5b3e-46a6-ba8d-f8bbd9d6f37b">A product that is developing at pace and solving an increasing number of problems for an increasing number of customers.&nbsp;</li>
<li data-block-id="47bd9743-01f6-4dd4-a4b8-d56f7cdf6041">A consolidated value proposition&nbsp;</li>
<li data-block-id="54983d07-a8be-432e-bab1-93abbc51e545">Customer references and testimonials are plenty</li>
<li data-block-id="54983d07-a8be-432e-bab1-93abbc51e545">The Net Promoter Score is up and customers are part of your sales team</li>
<li data-block-id="0b353f90-7289-49b6-a670-a64865b83e91">Partnerships are becoming established and companies want to collaborate with you</li>
</ul>
Achieving product-market fit validates the business model, reduces the risk of failure, and provides a foundation for scalable growth. It ensures that resources are invested in a solution that people find valuable . This leads to increased customer retention, positive word-of-mouth, and sustainable revenue generation.&nbsp;
Without product-market fit, a company may struggle to attract customers and scale operations. Product-market fit is a key determinant of a company's long-term viability and success in the marketplace.
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<ol start="4" data-block-id="abdafc61-3bda-4af5-8a92-340e7c8dc4ee">
<li>
Scale &amp; Grow
</li>
</ol>
Scaling a technology business involves expanding its operations, customer base, and overall impact. It is a challenging part of the journey - trying to retain the important qualities that established product market fit, appealing to more customers and developing new aspects of your product to sell across your portfolio.
The experience of the venture builder plays a critical role in the following functions;
<ul>
<li data-block-id="f1e3eff5-1730-4b4c-846d-d74935bd1741">Management Information - Accessible data for fast decision making</li>
<li data-block-id="c6f64976-6142-4f93-9c93-6a3998cdd979">Scalable Marketing - Ensuring a steady flow of leads for the sales team&nbsp;</li>
<li data-block-id="b17c05bc-22c5-40a2-981e-d82facf29ee3">Robust Sales - A tried and tested sales process that delivers results&nbsp;</li>
<li data-block-id="521d95af-8aec-4556-8a96-b3edeba1d8f9">Scalable Product - That customers fall in love with and can trust&nbsp;</li>
<li data-block-id="ddb6ae5b-db98-467b-a213-97567d378e47">Building Teams - Building highly engaged teams that deliver for the business</li>
<li data-block-id="c5454c4a-51e4-41f0-969c-9e8805788a33">Financial Governance - For growth and additional capital when needed&nbsp;&nbsp;</li>
<li data-block-id="3ad9db17-6219-468e-96e3-5fbded1e5de0">Preparing for exit - Consistent growth metrics that are attractive&nbsp;</li>
</ul>
Perhaps the most important part of the growth phase is the continual work required to be consistent whilst being innovative. The model must scale and must be replicable for more customers. The business must also scale at pace, demonstrating impressive year-on-year growth, not just incremental growth.
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<ol start="5" data-block-id="8da5b457-7b73-4c69-88ef-d6002c07ed06">
<li>
Scale-Up (Goodbye Venture Builder)
</li>
</ol>
As the start-up phase comes to an end, the venture builder must consider its position in the future of the business. A &pound;5m ARR business with an offer of &pound;25m presents a good point for the venture builder to exit. By this time the venture builder has become a custodian of the business. The business is running well and PE or VC money might be required to scale the business to &pound;20m of ARR. Their exit is required for the health of the company.
Successful exits require careful planning and consideration. The choice of strategy depends on various factors, including the business's financial health, the owner's objectives, market conditions, and the level of control the owner wishes to retain. Here are several ways in which a venture builder may play a role in this:
<ul>
<li>Exit Avenues: Exploring a variety of exit avenues, such as mergers, acquisitions, IPOs, or other strategic partnerships</li>
<li data-block-id="6d71f7e7-cfbb-41eb-a0b8-2520c04b9e41">Identifying Opportunities: Venture builders stay informed and monitor the market to help identify exit opportunities</li>
<li data-block-id="f7bc61cf-1aef-4021-8c58-59d300144208">Preparation:&nbsp; Refining business models, optimising operations and enhancing the value proposition</li>
<li data-block-id="29db5544-6f98-43a0-b00a-bdd12e1027d7">Strategic Partnerships: To enhance the startups' value and attractiveness in the eyes of potential acquirers</li>
<li data-block-id="1316de1b-0c73-4d8a-983d-552bbbbf48b4">Dealmaking: Negotiating favourable terms and structuring deals for all parties</li>
<li data-block-id="421a7efa-5346-4129-add5-e189be9b1507">Due Diligence: Ensuring that all necessary documentation and information is readily available</li>
<li data-block-id="d6099eb7-0b2e-4be6-9a4e-2a654acb0c6a">Alignment: Venture builders work to ensure alignment between founders, stakeholders, and potential acquirers or investors</li>
<li data-block-id="f7f70f6d-811a-479e-9d09-61c09d83835c">Maximising Valuation: For more favourable exit outcomes</li>
<li data-block-id="6f1ab8eb-f0d1-4155-9cb4-7089d9e7d4d3">Mitigating Risk: Addressing legal, financial, and operational issues that may arise during the exit process</li>
</ul>
The venture builder's role in the exit strategy is to actively guide and support the startups they create. By leveraging their expertise, networks, and resources, venture builders contribute to the success of the exit strategy and maximise value for all stakeholders.
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Why venture building? What are the benefits of the venture builder model?
More than 90% of all start-up businesses fail. The Venture Builder model offers many benefits for entrepreneurs. It's a way to execute ideas in an agile manner, backed by the experience of a team that have real knowledge of their craft.
Venture builders can quickly turn ideas into viable businesses. Streamlined processes, experienced teams, and available resources accelerate the development and launch of startups. They can reduce the time to market allowing startups to enter the market faster with shared resources, expert guidance and a focus on efficiency.
By spreading resources across multiple startups, venture builders reduce the risk associated with individual ventures. If one startup faces challenges or fails, the impact on the overall venture builder is mitigated by the success of other portfolio companies. Similarly, the risk of failure in the external sourcing approach is less for the external party because of the flexibility offered by the venture builder model.
Being part of a venture builder's network exposes startups to a broader ecosystem of potential customers, partners, and investors. This network effect can contribute to the growth and success of the startups. Venture builders can experiment with various business models, adjusting strategies based on market feedback and changes in the business environment. This flexibility allows for more adaptive and resilient startups.
Overall venture builders increase the likelihood of success. The collective experience and shared knowledge contribute to a more robust foundation for growth. Founders can focus on their core competencies and passion areas while the venture builder handles operational aspects. This enables entrepreneurs to dedicate more time and energy to innovation and market strategy in a supportive environment for entrepreneurial success.

What is a ‘Venture Builder’, how does it work and why does it matter?

Building a SaaS technology business and maximising it's potential for investment or sale is a challenging journey. In this article, Quake's financial director Dave Duggan explores the metrics that matter and why keeping focus on your numbers can dramatically change your valuation prospects.&nbsp;
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<h4 dir="ltr">Applying SaaS metrics to your business</h4>
The right SaaS metrics, calculated the right way, at the right time, can equip business leaders with objective insight and guidance. Not dissimilar to flying an aircraft, they provide you with a suite of primary instruments (the metrics), which deliver critical data from which you can make immediate changes to your control inputs. Whilst the business equivalent of control inputs are not so clear or straightforward (being strategic or operational adjustments), metrics can be the catalyst for confident decision making.
Having said this, unlike other financial metrics which are well standardised, calculation criteria can often be open to debate. Each business model is unique, which makes it imperative to take a step back, and ask yourself two key questions:
1) Is the metric applicable to your business at its current stage?
2) Which financial components are required to correctly calculate the metric?
Cherry picking figures which deliver best in class metrics can be tempting, however if they do not reflect the operating model, this can be a recipe for disaster. True performance will be masked, and you may be storing up problems which become harder to unravel at a later date. As a sense check, metrics that do not reflect underlying P&amp;L performance can sometimes be a red flag, though this is not always the case.
&nbsp;
<h4>How to use your numbers effectively&nbsp;</h4>
Once the above has been considered, and you&rsquo;ve calculated your desired metrics, there are two key uses of the outputs:
1) Actionable insights for running your business:&nbsp;
The metrics should be telling you something, by helping&nbsp; to guide investment, efficiency gains, or further analysis. This is especially important at the growth stage, to help establish if your unit economics are scalable.&nbsp;
2) An honest appraisal of your business:&nbsp;
Lenders, VCs, and potential acquirers will perform their own financial due diligence. They will drill into your numbers and assumptions, and challenge you on their findings. Bear this in mind when discussing figures externally, as you don&rsquo;t want to be caught out and jeopardise your hard earned term sheet.
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As an example, let&rsquo;s pick a metric which is not SaaS specific, but has a significant influence on many of them - Gross Margin.
As we all know, Gross Margin = Revenue less Cost of Sales, expressed as a percentage of revenue. The question is, for a SaaS business, what should be included in your cost of sales? Obviously hosting charges, but it should also reflect all the costs attributable to delivering and supporting your product. On which basis, your delivery team (if you have one), and elements of your customer success and technical support teams need capturing, to provide you with a &lsquo;fully loaded&rsquo; Gross Margin (in addition to all the peripheral costs of employment, such as local taxes). All of a sudden, your Gross Margin might look nothing like the highly automated unicorn you read about, which has a 20x valuation, and has formed the basis of many valuation assumptions.
Gross Margin is also a critical component to customer acquisition cost payback calculations, and as we have seen, the payback period will vary significantly depending on how you calculate Gross Margin.
It&rsquo;s also worth noting that metrics shouldn't just be historical. Ideally, your forecasts should also incorporate them, highlighting areas where efficiency gains or investment may be required, allowing you to adjust strategy and hiring plans with greater confidence.
&nbsp;
<h4>What key metrics are important?&nbsp;</h4>
Some of the key metrics we like to understand at Quake are as follows:
<ul>
<li>Customer Acquisition Cost (CAC) per &pound;1 new ARR</li>
<li>Customer Acquisition Cost (CAC) payback period - critical in early stages, especially when bootstrapping</li>
<li>Churn (&pound; and logo), stratified by vintage and customer segment</li>
<li>Net Retention, stratified by vintage and customer segment</li>
<li>Gross Margin (helps establish scalability, and as mentioned, influences payback calculations)</li>
<li>ARR growth rate&nbsp;</li>
</ul>
Whilst the above list is non exhaustive, they cover the key areas of efficiency, scalability, and product stickiness. Benchmarking is useful, and there are an array of useful resources online, albeit reiterating the theme of this article, everything needs to be considered against the context of your business model, and lifecycle stage.&nbsp;
In summary, it helps to have a baseline understanding of your key SaaS metrics, as they are a true reflection of your operating model. Even if you&rsquo;re not financially minded or despise spreadsheets, a little time spent trying out some calculations can provide you with some of the most objective insight you&rsquo;ll ever have of your business.
Have fun!
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Breaking new ground in tech investment

Venture Builder

Experience + Knowledge = Results

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