Profile: Sarah Shackleton, Seraphim Space

The Drawdown (TDD): You were at DPI for 14 years, and joined Seraphim Space in March 2022, what prompted the move?

Sarah Shackleton (SS): I felt that I'd been at DPI a long time and when I was approached for the role at Seraphim, it was a really fantastic opportunity to join an industry leader in a transformative sector. I wanted to take on new challenges, get in at the ground floor and be integral in helping build the business.

Also, it has been fascinating to learn about the space industry; I had no idea how broad it is; I thought it was just satellites. But now I understand how many different companies, technologies, and products there are, and how they’re addressing lots of different problems the world is seeing today. Particularly around climate sustainability, security in general, and more specifically, food and cyber security.

When I left DPI, somebody said to me, “I always thought you were a frontier investor, but now you’ve actually gone to the final frontier.”

TDD: Seraphim recently created the COO role, how will you take advantage of having a clean slate?

SS: Previously, the partners were covering different aspects of the role, but it was taking valuable time away from their core focuses, and the firm was reaching a size where it needed somebody focused entirely on the back and middle office. As firms grow, these functions become increasingly vital because they need to be run efficiently, and in a way that encourages productivity, as well as to control risk. Risks can arise if you don’t really have your finger on the pulse of those parts of the business.

When you first come into an organisation, it's important not to completely try and change everything from day one; you have to understand what processes are in place already. Since joining, we've started implementing a portfolio monitoring system, where we gather all of our portfolio company data in one place on a consistent basis. There’s also an audit trail to make sure data is consistent, correct, and accurate. In turn this helps us streamline our reporting process. There’s a fair bit that’s manual, which is typical for an organisation that’s quite young.

A key focus area has been ESG and other policy implementation. We’re working with consultants to develop an ESG due diligence tool. We’re hoping to collect a lot more ESG data, because that’s a key theme around space investing as well. We want to assist portfolio companies in developing new enhanced processes to reach their ESG objectives in their own operations and throughout their value and supply chains as well as highlight how our portfolio companies are mitigating the risks that are associated with delivering those impacts.

We're also looking to change our regulatory permissions to become a full scope firm, which will require a fair amount of compliance work.

TDD: Are there any other tech solutions you are looking to implement?

SS: Digitalisation is an area the whole industry is looking at. The tools around financial and data monitoring are becoming increasingly more sophisticated and fit for purpose in the alternative investment space.

In the future, I imagine we will be looking at expense tools, and ways to allocate costs to different cost centres, so that a manual process is not required to allocate those at the end of the month.

Increasingly, project management and process management tools will be of interest as well because a lot of what we do is process driven. Finding a way to do that in a streamlined way rather than relying on email and spreadsheets will really free up people’s time. While spreadsheets are at the core of what most of us do, they can be inefficient and prone to human error.

TDD: Are there particularities to a space fund? For example, in terms of ESG or regulations?

SS: I don't think there's anything significantly different compared with many other businesses. But space is less understood, which means it is important to communicate what the actual implications are to investors, and also to the market in general. When people think about space and ESG, they tend to think about the negative impacts. In reality, the misperception of the negative risks far outweighs a lot of the positive impacts that space can deliver.

TDD: What was challenging in the first six months?

SS: It’s really been about getting on top of a new organisation and a new type of investing. The biggest challenge for me was understanding the space sector. Seraphim has an accelerator business, which deals with very early-stage companies, working with them to help commercialise their technology and find venture capital funding, which is something I have never been involved with before.

I have also been getting involved with aspects of the finance function, which at DPI was handled by a CFO, so that has been interesting. Another challenge is the difficult macro and geopolitical environment we find ourselves in. But we’re positive and actively communicating to the market and our investors that all the key tenants for growth in the space sector continue to make it robust and the strength of the underlying revenue growth and bookings of the underlying portfolio companies continues.

TDD: What are your goals for the next twelve months?

SS: We want to start using the portfolio monitoring system, our ESG due diligence solution and the information we gain out of those tools, both from a marketing perspective, but also from an analytical one. We want to better understand where our portfolio is currently at, where they need help, and how we can deliver it. Especially in terms of recognising situations early, being able to flag them, and figuring out the best way to address them. And our investors are very focused on operational due diligence, which falls under my duties as well.

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Communication is Key

Shackleton co-chaired the African Private Equity and Venture Capital Association Compliance & Best Practice Committee and is passionate about compliance not being a tick-the-box exercise, but an interactive process. “The proportionality of the approach is important because you cannot be completely risk free with anything you do in life,” she comments. “So you really have to get the balance right, think it through whether you have identified the risks and addressed them correctly.”

For her, the communicative and human elements of operations are important factors in addressing risks. “It requires a lot of internal interaction, spotting the right risks and ensuring consensus among all stakeholders. Simultaneously, you need to make sure that the process of implementation of policies isn’t burdensome for people, but rather engages them.”