Shaking up the early-stage Landscape

Hello there,

Generally speaking, startups featured in PreSeed Now are receiving their first ever media coverage, but that’s not true of today’s. Landscape launched in late 2020 but is still very much an early stage startup with the aim of making life better for other early-stage startups.

Building a business serving VCs and founders has its challenges, and I wanted to dig into that. Today you can read all about how their mission has evolved since they first launched as ‘Glassdoor for VCs’. There’s also some news about a previously undisclosed funding round in there too!

Generally I keep around half of each issue just for the lovely paying members who help keep this newsletter going and growing, but I’ve decided to unlock this one for everyone.

If you find Landscape interesting, hopefully you’ll find PreSeed Now useful. If you’re new around here, why not subscribe?

– Martin

How Landscape is evolving to ‘build better venture’

It’s rare that I get to see a startup’s journey from before it’s even begun. But at the start of 2020, just as the first Covid-19 lockdowns were looming, a Manchester-based entrepreneur called Joe Perkins came to me to discuss an idea: what if there was a Glassdoor-like resource, but for founders’ reviews of VCs?

I thought it could be great if it was executed thoughtfully. And pandemic be damned, Perkins quickly executed on it. Landscape launched a few months later.

Now it’s seven months since the startup announced a bold new offering called OpenScout, so I thought it was worth catching up on everything Landscape is doing to rethink the early-stage, er, landscape with what is still a very early-stage startup itself.

There are now three sides to Landscape: the review platform, which Perkins says now features more than 2,000 reviews of VC interactions with founders; a private community where anonymous but verified founders get to swap information via Slack, and OpenScout, which is rethinking how VC scouting works.

The business value of VC reviews

Landscape’s review platform has become a useful tool for VCs to check how founders view them; I’ve heard multiple investors bring up their Landscape reviews in conversation over the past year. It’s also a handy PR tool for the startup. Landscape published a list of Europe’s top 20 seed investors, and Perkins says there will be more lists to come.

But turning something that clearly fills a market gap into a successful business isn’t always straightforward.

“When we started the review platform, we tested a revenue stream that was essentially charging VCs for a kind of premium access, so they would get insights or reviews,” explains Perkins.

“They'd be able to see totally anonymised data on things like where they ranked versus other VC funds in the country for things like approachability and for things like supportiveness, terms... They'd be able to see specifically how female founders viewed them versus male founders, they'd be able to see quite a bit more kind of behind the scenes data.”

However, while some VCs paid for this, Perkins says they were more interested in the data “out of curiosity” rather than as a commercial advantage. As a result, Landscape dropped its subscription product and rethought the role of the review platform to its business.

“The review platform really is just a value add tool for the ecosystem and it does act as a bit of a lead magnet for us, which is now pushing people into OpenScout… I think that will be the key commercial driver of Landscape as a business.”

‘Be prepared’ for OpenScout

OpenScout aims to transform scouting. This is the process by which individuals seek out potential deals for VCs, and then get paid if a deal closes. What OpenScout does differently is it connects VCs from numerous funds with deals from a wide range of scouts.

While many VC firms have their own scouting initiatives, OpenScout allows dealflow to potentially find the best home, rather than the one a scout personally happens to have access to. It also allows a broader range of people to prove themselves as great scouts. As long as they meet plenty of great startups, it doesn’t matter if they aren’t the kind of person a VC would normally consider as a good fit as a scout.

As the website’s pitch puts it:

Perkins says those who have applied to be scouts to date include prominent current and exited founders, journalists (potentially some serious ethical concerns there if they continue to work as journalists!), awards organisers, academics, and even angels.

Landscape takes a 20% cut of the success fee a scout gets from the VC upon closure of a deal. “All incentives are aligned between the scout and the investor to get the best deals done,” says Perkins.

Perkins explains that around 75% of the deals going through OpenScout to date are pre-seed and seed. “Pre-seed is obviously a bit early for most VCs, so we’re looking at opening an angel club, where we share some of the top deals with a really curated list of value-add angels.”

Taking a cut of an online transaction in an ecommerce marketplace is an instant thing, but money moves a little slower here. Because investment deals can take months to close, it’s difficult for Perkins to judge just how successful OpenScout will prove to be, both as a source of deals and as a sustainable business model for Landscape.

And even if it works brilliantly, there are industry-wide challenges on the horizon…

Stormy skies 

What Landscape is doing clearly fills a need for greater openness and transparency in tech investment. But it must be a little concerning to be building a business in this field just as the storm clouds are gathering over the economy and startup valuations alike. 

If it is, Perkins isn’t showing it. He points out that there’s plenty of undeployed capital that has been raised by VCs, and a rationalisation of the market–and an end to frothy valuations–is no bad thing in the long run.

I’d add that if Landscape can figure out a successful business model in the lean times, it could be poised and ready to make the most of the market when activity really picks up again.

Landscape won’t necessarily be alone, though. A US-based site called VC Guide caused controversy in 2020 thanks to its loose approach to review moderation. It appears to have tightened up founder verification as of this month, but will it face the same problem with monetising the reviews as Landscape did?

Investment fuel to ‘build better venture’

As a startup itself, Landscape needed to raise investment. But how do you raise when you have an investor review platform that needs to maintain a reputation as an impartial resource? Any good reviews for a fund with a stake in Landscape would instantly look suspicious, even if they were completely legit.

Landscape avoided this by raising a previously unreported £500,000 round solely from angels last summer. Perkins says the platform doesn’t accept reviews of angels for the reason that a bad review of a limited liability partnership like a VC fund is a very different thing to a bad review of a high net worth individual - the latter is far more likely to end up in the courts as a libel case.

That raise has helped Perkins scale Landscape up to a team of seven. The startup is now closing out another angel round as it looks to fulfil its new mission. 

“The mission has evolved from ‘raising transparency’ to ‘building better venture’. Most of the things that we build and most of the things that we're doing are with the mission of helping great founders get funded by great investors, whether that's allowing them to understand who a great investor is through our review platform [or] allowing them to access those investors through the OpenScout platform and get inbound interest.”

In many ways, I see a similarity between what Landscape is doing and what I’m doing with PreSeed Now - we’re both figuring out business models for products addressing needs in the early-stage investment space, and while my approach might be more straightforward with a simple newsletter format, I could probably make more money as a scout on OpenScout!

That’s all for now

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