Leadership Lessons from a Lifetime Investing in Tech

Amadeus Capital Partners, the UK-based venture capital firm you co-founded, has been doing deep-tech investing since 1997. Your portfolio has included AI startups since the earliest days. How do you approach emerging technologies?

Amadeus invests in focused AI tools that solve tangible business problems. Our first AI investment spun out of voice recognition research by Steve Young, a professor of information engineering at Cambridge. We sold the company, Entropic, to Microsoft in 1999. Many generations on, the tools are still part of their voice recognition suite. VocalIQ, another company Steve launched and Amadeus invested in, was sold to Apple in 2015 to improve Siri.

We’re early-stage investors; we don’t operate with the scale of capital required to support the development of the foundation layers of the generative AI boom. Instead, we zero in on important niches and capabilities that create value and make AI safer and more usable: dialogue management, conversational AI, model integrity and efficiency spaces where the UK is arguably producing better thought leadership and capabilities than anywhere in the world.

It’s exactly the same in quantum, another emerging field. Do we have a quantum computing company in the UK that’s likely to take on the world? Not yet. Why? Because it requires enormous capital to build complete systems. Yet there are layers of the technology that the UK can own: networking, error correction, application software, and potentially sensing. For Amadeus, that means being well-informed, well-connected, and competitive in those spaces.

How did you come to start Amadeus?

I previously worked in the London office of another venture firm, Apax Partners. I greatly enjoyed the role and was involved in a successful investment in a virtual reality company. The business went on to list on the London Stock Exchange but was in a relatively fragile position. When they asked me to be COO, I accepted in order to help stabilize the company post-listing. While the company did well, I ultimately realized that an operating role was not where I wanted to focus long term, nor did I see myself spending my career developing video games.

With that realization, I began thinking about how to re-enter the venture industry and started looking at my options. The timing was fortuitous—Silicon Valley was red hot with Netscape’s IPO, and American banks were turning to London in search of deals. The local venture community, however, was tiny, with only about 12 people actively backing technology companies. I started talking with people who might help me raise money and was told, “You’re backable, but we don’t fund individuals. You need a partnership.”

I then went on to partner with Hermann Hauser, a founder of Acorn Computers, which at the time was one of the UK’s defining technology companies. He’s one of the most brilliant technologist visionaries I’ve ever met. His ability to understand how a technology landscape will evolve or how a potential company would fit into an ecosystem is exceptional, and his network is equally phenomenal.

We make a very strong team. He looks for technically brilliant ideas; I look for the business cases and run Amadeus as an organization.

It has worked for 28 years because, while our skill sets are so different, our value systems are very aligned. How we treat people matters as much to him as it matters to me.

How has your approach and the investing environment changed over those 28 years?

Early on, people were curious about this idiosyncratic firm. We were fortunate enough to attract a lot of corporate funders, including Microsoft. Our first fund was hugely successful because it was the dot-com boom, and we seemingly couldn’t make a mistake for the first two or three years.

That led to a problem. People started throwing money at us. We raised a much larger second fund just before the dot-com crash. It was too large, and we went too fast. So we had a really good first fund and a bad second fund.

We got through that nuclear winter of the dot-com bust in part because beyond dot-com we were investing in deep tech and that was more resilient, and we stuck with it when the whole world went back to consumer internet. In 2010 or 2011, our deep-science deals didn’t necessarily look great next to Groupon or the latest food delivery service, but we continued focusing on IP-intensive medtech, software, and hardware. We’ve been investing since in AI, quantum computing, and cryptography, so our subsequent funds have done well.

We stayed small, about 30 people. There isn’t the scale of limited-partner (LP) capital available in Europe to grow large early-stage funds. And small funds perform better in general. It’s hard to grow a venture fund and deliver performance; the fact that we’re still here and on our sixth fund is a huge accomplishment.

You were in the Charter Class at Yale SOM. How did that come about?

My parents were both biochemists and my brother is an engineer. I was doing a degree in materials science. I believed in the power of science and experiment to change the world. As I was trying to decide whether to do a PhD, my director of studies said, “There are people who like people and there are people who like things. Which are you?”

I said, “I’m a scientist, but I’m also a people person.”

He told me, “Then don’t do a PhD now; go and get experience elsewhere.”

I’d been told American business schools were very good. I was at Clare College, Cambridge. I applied to the Mellon Fellowship, which exchanges students between Clare and Yale, providing recipients two years of funding to study anything they want. I had assumed Yale had a business school, but when I got the fellowship, I discovered, “Oh my God, it doesn’t.” There was an operations research department which, given my science background, I thought that would be an interesting alternative.

Then, lo and behold, the announcement came out that the Yale School of Organization and Management was accepting applications for its first class. I liked that it was management, not business. It wasn’t the profit motive that interested me per se. I wanted to impact the world, and I thought that I could do that through great management.

I was told much later that there was a crisis admissions meeting about me because I didn’t have a GMAT score and the test wasn’t being offered in the UK before decisions needed to be made. My fellowship didn’t require getting a degree, so I’d said I didn’t mind just auditing. They decided, “Well, she’s going to come anyway. We might as well let her formally join the class.” I was the only foreign student. Only when I got there did I understand how participative the teaching was, versus the lectures I was used to, and that auditing would have been unrealistic.

I had two other cultural clashes immediately. One, the professors wanted to be called by their first names—I never got used to it. The other was that they expected us to do assignments in teams. I thought that this was cheating; working together that way was a whole new concept for me.

That turned out to be one of the most important things I learned. I’ve come to realize that it’s only teams that have impact in the world. Yes, teams need leadership, but the teamwork is what really matters.

What else did you take away?

Bill Donaldson’s ideas about entrepreneurship were hugely important. The fact that I came round to being an entrepreneur and investing in entrepreneurship is probably due to Yale SOM.

And I was used to environments where 1 in 10 were women. At Yale SOM, a third of the class was women. To suddenly be around a bunch of smart, ambitious women was life enhancing. The whole experience gave me a sense that anything was possible, which raised my ambition level.

As a materials scientist who then studied management, what did you want to do?

Growing up in Liverpool in the ’70s, I visited amazing factories doing innovative, important work. I particularly remember the Pilkington Glass Factory, where they developed the float glass process that revolutionized glassmaking.

Liverpool had a proud history, but the work was disappearing. Many of the nationalized industries were badly managed. There were lots of labor disputes and significant strife; it was a difficult time for Liverpool and the UK.

I thought that if only managers would learn how to respect the workers and listen to their ideas, there would be fewer disputes and working conditions would improve. I wanted to work on a shop floor.

Did you?

I did. I was determined. Still, it wasn’t easy. I remember the guy interviewing me for a job at British Steel saying, “I need to give you a role-play. Your boss tells you to lay off a third of your workforce. How would you go about it?”

I said, “I would understand the reasons why and if I agreed with them, I’d do it.”

I didn’t get that offer.

Cummins Engine Company in Indiana was the only company that would give me a chance, and they insisted that I work for a year in another role to get to know the business first. I had a wonderful first boss and learned a lot. After a year, I asked to go to the shop floor.

He said, “You still want to do that?”

I did. I became a shop foreman in a plant making connecting rods for diesel engines. My boss there was another amazing guy. To this day I don’t understand why he took on a 24-year-old British woman as a foreman, but he did. I learned so many life lessons from that year and a half.

For example?

You build trust slowly, but you can lose it in an instant. I actually did have to downsize and used it as an opportunity to get rid of a troublemaker. The 20 people remaining on the line saw it for what it was: a transparently political choice. They made absolutely clear I’d lost their trust. It stuck with me that every single decision you make has to be consistent with who you are.

When it was time to move on, my boss asked what I’d learned. I said, “I used to think that the people on the shop floor were the salt of the earth and honest as the day is long and that all the problems come from management. I now know that there is an ‘asshole quotient’ in the world and it is evenly distributed at every level of an organization and through all walks of life.”

He said, “There it is. The most important lesson in life. Take each individual as they come.”

His framing, just react to the person; forget background, credentials, status, money, or anything else, has helped me in a world where there’s so much categorization and tribal behavior, which is designed to divide and accumulate power. Whereas what I hope to do is treat every person with respect.

How did you go from Cummins Engine shop foreman to London VC?

There were several steps, but essentially, I was ready for analytical work and city life. I got a consulting job in Boston. I liked solving problems with small teams. I got increasingly interested in equity as a way to help build businesses, but I didn’t like being on the sell side.

Consultants are always moving to the next project, so you end up asking everyone, “What are you doing next?” When I asked some venture investors what was next, they looked at me cross-eyed and said, “Next? There’s no next. We get to meet smart people and ask any question about what they’re trying to do, and they answer because we’ve got the money. We choose who to work with and then help them change the world. Why would we want to do anything different?”

I asked, “How do I get into it?”

That led me to the Apax job.

What have you learned about the business of venture investing?

It’s essential to understand who your customer is. In venture capital, the customer is the investor, the LP. Entrepreneurs don’t like to be considered the product, but they are, and we’re the product as well.

The obligation to get returns is paramount. Without returns I don’t have a company and entrepreneurs don’t get backed. You need that north star, but it’s a value-creation mentality, not a trading mentality.

The toughest and most important thing is realizing that just 2-to-4 companies in a portfolio of 25 will deliver all the value. We have to double down on the companies we believe in, which means cutting our losses with investments that aren’t working.

That’s something we didn’t do well early on. Then, if we stepped back, the company went bust because there was no one else. Today, there’s an entire venture ecosystem. That’s healthy. It lets us simply make an investment decision: “We don’t believe in this configuration of people, product, and market anymore.” Others may see something different and step in.

This is a field where it’s crucial to continually find new ways to see things, to learn constantly. That’s true on several levels. When we were looking at investing in DNA sequencing, Hermann, this accomplished investor, entrepreneur, and technologist, took biochemistry courses at Cambridge to improve his understanding of biological sciences. In the early years of Amadeus, I did the classes and practical work for a degree in psychotherapy.

How did that play in?

It has been like a secret weapon. I didn’t feel that I had all the skills to manage the people issues that I was encountering with founders, teams, and boards. Venture capitalists are perpetually in risky situations where personality and character matter, where our ability to manage ourselves is tested. When things went wrong, I needed to be able to stay calm, stay focused, and not blame—to work as a team to make the best decision in the moment without making difficult circumstances worse.

I also spent 20 years volunteering as a counselor in a local mental-health charity. That kept me connected with real people in the real world. It kept me grounded despite so much time in high status, elite, money-oriented worlds working with lots of egos and some very successful, troubled people.

Doing the psychotherapy degree was also a way to understand myself. We have to invest in personal growth, be actively curious about who we are and how we become the most effective, happy version of ourselves; otherwise, we plateau or decline. It’s something I’ve done over many years and will do more now as I’m thinking about how to withdraw from the workplace.

I’d add that it’s something that Yale SOM supports. It might not be highlighted in the literature, but it’s in the fabric of the school.

In reflecting on your years at Amadeus and in this industry, how do you assess your impact?

People joke that I’m the mother of the venture industry in the UK—or the grandmother.

I remember being a curious, determined, very uncertain person trying to raise a first fund. I didn’t think of myself as powerful or a leader then, but neither did I see myself as odd. I saw an opportunity, so I just got on with it. Someone was going to.

Looking back though, I was odd. I’ve slowly realized that the fact I was a woman doing venture in the mid-’90s does matter. For many years, in nearly every picture, I was the only woman. I’m so glad that those older pictures now look so odd.

I’m very proud that I’ve developed women throughout my career. This is an apprenticeship business. As a leader, one of the things I’m good at is bringing out the best in people. Supporting talented women at Amadeus and at portfolio companies, providing them the opportunities to come into their own, is a way to have an impact.

I was astonished when I got an invitation from the King to become a Dame. You can’t lobby for it. Somebody has to put you forward and then they have to gather support. You don’t know who has done it. In a way, because it’s so anonymous, it made me think, maybe I have had an impact.

You’ve also held roles that shape investing policy and practice. You were chair of the British Private Equity and Venture Capital Association, chair of Invest Europe, and a non-executive director of the Court of the Bank of England, among others. Would you talk about that work?

For a long time, European LPs allocated their venture exposure entirely to Silicon Valley. Nobody thought that Europe could produce results. And it’s very hard for me to admit, but they weren’t wrong. The top-decile performance in the U.S.—it’s phenomenal. European venture capital now delivers top quartile, which is great. But to get to top decile, we have to address structural issues.

Venture capital is at the lowest rung of a ladder of financing that helps companies to scale. The middle rungs of that ladder don’t exist in Europe. Companies that do break through and raise money, typically internationally, often tend to get sold early. They don’t have the same opportunity to grow independently to the heady heights of an IPO that delivers top-decile venture returns globally. I’ve been fighting to attract growth capital into the system since 2015.

Andrew McAfee, a professor at MIT, has astounding charts comparing the decacorns [venture-backed companies with valuations above $10 billion] born and developed in Europe versus the U.S. over the last 50 years. There are 14 in Europe. There are 241 from the U.S. And in terms of the total market capitalization created by those companies, the U.S. companies are worth 70 times as much. It’s absolutely staggering.

We essentially have no major tech companies, with a rare exception being ASML [the Dutch semiconductor lithography firm]. We’ve allowed them to be sold. Mario Draghi released a very complete report on the issues facing European competitiveness in 2024. The UK is only a little better. It’s a macro crisis for the region.

That perspective has only been reinforced by my insight from being a member of the Investment Committee of the Yale Endowment—one of the most experienced venture capital LPs in the world—since 2019.

I’d note that when David Swensen asked me to join the committee, I was grateful to do it both as a way of giving back to Yale and to reconnect with David whom I became friends with when I lived at Berkeley College where he was a freshman counselor. We had stayed in touch intermittently over the years. That relationship is another example of how much I owe to Yale SOM.

That’s remarkable. Given your broad perspective, are there specific steps that would make a difference for investment, innovation, and competitiveness in the UK and Europe?

London is still innovative and one of the strongest financial sectors in the world, despite Brexit, one of the biggest acts of self-harm that our political classes have ever allowed to happen.

We also have one of the strongest university systems. Four of the top 10 universities in the world are in the UK. A lot of the strength is around technology and science. We’ve got one of the strongest science bases and one of the strongest financial service sectors. Do they work together effectively? No.

A simple step would be to have the UK pension funds, the third-largest globally, invest more in the technology future that is coming out of our university system. It is currently allocating 0.03% to venture capital. Twenty-five years of pension reform has de-risked investments to the point that they don’t deliver value.

There’s a lot of rhetoric about needing technology sovereignty. But the domestic money is not investing in a way that would make that a reality. Overcoming risk aversion would let companies grow here, deliver returns, and help develop the tech ecosystem in the UK and Europe.

The details of the investment ladder are a little different in Europe. Individual investors are willing to take risks, so there is a very good early-stage ecosystem. But nearly 40% of venture capital is funded by the state—either individual nation states or the EU Commission. There is so little private institutional-scale capital willing to take on the risk that the rest of the investment ladder is missing. The investment and tech ecosystems have been starved, squeezed, and de-skilled.

Bringing about change to the UK and Europe has been slow, difficult, and sometimes demoralizing, but it’s finally on the political agenda. I think and hope other people will continue to take it up and fight to break away from this destructive aversion to risk—not just in technology entrepreneurship but also in the institutional financial sector.