Phoenix Court is poised to go through massive institutional change, with a raft of senior departures, described by the firm as “amicable”, but which are likely to send shockwaves through the European VC ecosystem.
Pathfounders picked up chatter about the departures and the pivot in strategy ahead of a planned public unveiling on the new approach next week and secured an exclusive interview with cofounder Saul Klein.
Billed as part of a broader institutional reset, the firm exclusively confirmed to Pathfounders that Catherine Lenson (General Partner), George Henry, (General Partner), Mish Mashkautsan (General Partner) and Julian Rowe, General Partner (on Latitude) have left the firm, which describes the departures as “amicable transitions”.
In regards to those leaving a spokesperson said: "Catherine, George, Julian and Mish will be moving on from the firm. These are mutual, amicable transitions, and we're genuinely grateful for their substantial contributions to Phoenix Court over the years. We wish them very well in what comes next."
Pathfounders reached out to several of those named for their comment, but none replied at the time of publication.
The senior team that remains - and which Klein says is set to expand - will be a senior operating team which now has day-to-day responsibility: Rhian Saleh for operations, legal and compliance; Paul Bishop for finance; and Ziv Reichert for investing and AI.
Phoenix Court says it has formalised its board with two independent non-executives, Diana Barran and Darren Shapland, alongside Robin Klein and Saul Klein as Chair.
Klein says the new structure gives him “more time to keep investing,” while maintaining strategic oversight at board and investment levels.
This line is incredibly significant.
Outside observers have told Pathfounders that it is the killer combination of Saul and Robin Klein that has helped keep the firm in the top percentile of European VCs, and now benchmarking against top US VCs.
One London-based VC told Pathfounders: “Unsurprisingly, nearly all the returns and upside from from LocalGlobe are coming from that core [the Kleins], right? That's probably not controversial or surprising. Is it useful to have all these other people kind of around them, or not? So there was a change coming… A few people have kind of peeled off knowing that they were not going to be able to, they were not effectively making the cut right in, in that kind of new configuration. And so, you know, it's a, it's kind of a back to core.”
Asked if the decision made reflected on the performance of those dparting said he was categorically not disappointed with their performance: “I look at the performance of the business, and one thing I've learned about venture, again, this is not something that is is is popular in in the ecosystem… people use this term ‘so and so led a deal’. Or ‘so and so’ had the deal attributed to them. Anyone who knows the inside of a firm knows that things like the Midas list are absolute fucking bullshit. You know? Because the way firms game attribution is they move attribution around to sort of suit fundraising cycles. And the reality is that there's been little to no empirical data or consensus around what we would say track record.”
“At the end of the day, everyone who has been part of this business, particularly… these four individuals, have made incredible contributions to the business. And we're really looking forward to working with them in the future… And by the way, that's true of my dad. Who stopped leading deals eight years ago, but is still super active. Working with companies that he's worked with over the years. It's true of me.”
However, Klein did point out that in the last eighteen months, as the firm has had more of an operating team he’s been able to invest more: “I’m back in the game. Which is fantastic. I'm loving it. And actually having a team that is operating the business means I am less in the weeds of the business. There are great people you know, who'd operate and trust the biz, and I can really focus on the things I love, working with founders… and do doing some of more strategic work.”
LPs in the fund are thus likely to be relieved that Saul Klein is not stepping back from full-time investment engine. But it’s also clear that Phoenix Court is trying to reduce dependence on the two founders for day-to-day operations.
Some weeks and months ago partner Ash Aurora and Suzanne Ashman also left the firm. The latter was this week confirmed as head of the UK government’s Sovereign AI fund.
The firms outlined to us that Phoenix Court is now switching from a founder-led venture firm, steered for many years by father-and-son co-founders Robin and Saul Klein, into a shared-ownership institution, with employees receiving equity, profit share and carry.
Alongside that will be a ‘legacy’ strategy, Phoenix Court Works, the firm’s neighbourhood foundation, becoming the single largest shareholder in the firm, and the team becomes the second-largest shareholder.
The firms runs 5 funds: Phoenix Court (multi-stage platform), LocalGlobe (Pre-seed and seed); Latitude (breakout-stage fund, Series B+); Solar (scale-stage fund); Basecamp (fund of funds); Phoenix Court Works (foundation).
It’s the latter which will now have the single largest shareholder stake in the firm. Phoenix Court Works is is funded by 10% of profits and 2% of fund carry and partners with local organisations in Somerstown and North London, with 80% of impact delivered within one mile of of the PC office.
Klein said: “We believe that innovation you know, can produce really positive impacts in the world. And if it's just about the economic impacts, and not about the social impact as well, it's not either or, it's both, then what's the point?”
“We’ve been very clear with our LPS throughout..” said Klien. “There were three controversial ideas we put out there to our LPS from day one. And we consistently, every quarter, communicated these ideas and sort of tracked against them. The first controversial idea, which is 20 years old, is that this part of the world [Europe] could produce great returns and great companies. Now, that's not a debate… I think that case has been made, not just by us, but by Balderton and many others.”
“Secondly, we are going to invest for the long term…. We're going to have a balance sheet. We're going to invest in infrastructure, physical infrastructure. Phoenix Court’ digital infrastructure, software, data systems, which now is like exceptional in terms of AI tooling that we use in our workflows, for ourselves, for portfolio companies, etc, and in people. We’ve had great people work with us over the years… Some people have moved on to start companies, and others, as you know, are moving on, as part of you know this, this transition, and I think again, we've really demonstrated that this long term investments… has really paid dividends.
“And then the third piece, which is the most controversial of all, is that we said that purpose and profits are not necessarily separate. We founded Zinc [an impact accelerator] with that thesis in mind. Making the foundation a beneficiary of profit share has meant that we've been distributing grants within a mile of our office in one of the poorest neighbourhoods.”
Saul Klein also plans to position the firm for its “next decade” of investing.
In a document aimed at LP investors and seen by Pathfounders, Klein describes the last quarter as “the most consequential quarter we have had as a firm to date,” writing that Phoenix Court is “crossing the rubicon and formally transitioning from a founder-led venture business to a shared ownership model.”
The document outlined how the firm’s portfolio now has £2bn of recently audited unrealised NAV (Net Asset Value, or the value of the portfolio after accounting adjustments) against £926m of cost, with 109 portfolio companies across what it calls three “clock speeds”: fast AI, stable “thoroughbreds” and long-cycle science investments.
It says 59 portfolio companies generate more than $25m in annual revenue, 35 generate more than $100m, and 10 of its 12 Solar pilot companies generate more than $200m.
It has also made its first carried interest distributions from its institutional platform, following the Faculty exit to Accenture and Melio’s Q4 2025 exit to Xero.
Faculty alone represented £76.5m of Q1 DPI across the platform, on top of £56m from Melio in Q4 across LocalGlobe, Latitude and Solar.
From founder-led to shared ownership
Phoenix Court’s central claim is that this is not what outside observers might characterise as a ‘crisis’ of leadership so much as the next phase for the firm, especially amid the flux of the AI-era.
“When Robin and I started Phoenix Court in 2015, we deliberately incorporated as a Ltd company rather than an LLP — to invest for the long term and align with founders, LPs, our team and neighbours simultaneously,” writes Saul Klein in the note to LPs.
“From 1H 2026 onwards, every Phoenix Court FTE will receive profit share, carry and equity, like the founders we back. As founders, our equity steps down meaningfully, and Phoenix Court Works (PCW), our neighbourhood foundation, becomes the single largest shareholder and our team the second largest,” Klein writes.
“We strongly believe this provides the basis for long term multi-generational alignment across all of our stakeholders and motivates us all to maintain and develop an engine that continues to produce 99th percentile outcomes so LPs, founders, our team and ultimately our neighbourhood all win together,” he adds.
Most venture firms are structured as partnerships, whereas Phoenix Court has been built as a limited company, allowing equity ownership to be distributed more broadly.
“That is what ‘ecosystem first, business second’ looks like when it is structural rather than rhetorical,” he writes.
The move appears to be designed to signal continuity beyond the founders, and perhaps to indicate to LPs that Phoenix Court can outlive the Kleins as founders.
Commenting to Pathfounders, Klein said: “We're not just sharing the distributions with our LPs. We shared distributions with all of the team.. my dad and I took a proportion of our carry from those vehicles and distributed it to everyone in the team.”
The move stands in contrast to the instituational malaise experienced by many VC funds, usually structured as LLPs, with only GPs getting carry. Many later find themselves unable or unwilling to raise further funds, simply swirling down the plug-hole of managing existing investments, however they turn out.
Phoenix Court’s argument to LPs is that the ownership changes are now possible because of its success to date.
The firm says that, according to Dealroom data, it has, for the second year running, ranked first among around 4,000 active VCs in EMEA for picking “thoroughbreds” at the Seed stage, and 13th globally for backing revenue-rich companies at Seed, making it the only non-US fund in the global top 15.
Klein writes that Phoenix Court is “operating at a level which puts it in elite company,” adding that the firm is “in the 99th percentile globally at picking thoroughbreds and unicorns at seed.”
The headline portfolio metric is the £2bn audited unrealised NAV against £926m of cost. In plain English, Phoenix Court says the portfolio positions it bought for £926m are now valued on paper at £2bn. That implies around 2.16x gross value on cost, though, crucially, much of that remains unrealised. Venture firms live or die by DPI (the actual distributions to LPs) not only by NAV marks.
But Klein says there is not halt on progress: “ We've got $2 billion of follow-on capital available in our portfolio.. in the next 90 days.”
Hence why Faculty and Melio are significant.
Phoenix Court says the sale of Faculty to Accenture “handily returned” its 2015 fund, LG7, its first institutional vintage. It also triggered the first carried interest event in the firm’s institutional history.
“With Faculty, we were Marc, Angie and Andy’s first institutional investors ten years ago and backed them at every opportunity over that decade, as we did with Matan at Melio,” Klein writes.
The firm distributed proceeds to LPs in LG7 and LG Opportunity in March, and also distributed a proportion of LG7 carry to alumni and current team participants. It also paid a carry bonus across all full-time employees, something it says it had previously done twice with Wise Latitude SPVs.
Klein is keen to frame Faculty and Melio not as isolated wins, but as the start of a larger cash-return cycle.
“Faculty and Melio are precursors to substantial future harvests, not standalone events,” he writes, implying that after years of building exposure to companies such as Tide, Zego, AtBay, Canva, Cuvva and HiBob, Heonic Court is entering a new era.
Venture+ and the platform arms race
Phoenix Court is also preparing to launch Venture+, a new layer of AI-driven founder support that appears to combine corporate access, international expansion, AI tooling, applied research and policy work. In short, match-making between its startups and corporates.
“If 99th percentile picking is the engine, we believe that Venture+ is what the next decade needs to make our platform more powerful for founders and the teams we back,” Klein writes.
The most interesting example given was in Asia. Phoenix Court says it built an AI tool that mapped an unnamed Japanese conglomerate’s 10 business units and 900 subsidiaries against the Phoenix Court portfolio “in weeks” to support Asian expansion. That work has, says the document seen by Pathfounders, already generated a live introduction between two portfolio companies and one subsidiary, the firm says.
Similar work is underway with a Korean automotive group and other Asian and European corporates.
Effectively, this implies the new approach of using proprietary AI to enable market access its portfolio.
Phoenix Court also says it extended an AI tool originally built around photonics portfolio work to support recommendations to Downing Street on the UK’s photonics strategy domestically and with an eye to other areas of the UK, and the cluster of companies spread between Zurich and Munich, as well as Asian markets such as Japan and Korea.
The internal note is also a restatement of Klein’s long-running macro argument, which he has recently been leaning into with three SubStack posts, which appeared between January and April this year.
He argues that the UK is structurally stronger than its current mood (beset, as it currently is, by political strife) suggests, and keeps sabotaging itself through short-term thinking.
In the Q1 note, he writes that “sentiment is low but structure is strong,” arguing that the UK is now “the world’s third largest innovation economy” with more than 1,800 ‘colts’ and ‘thoroughbreds’, compared with fewer than ten in 2002, and more than £100bn of capital architecture in place.
