[00:00:00] Juliet: What did VC funding enable your business to do that you wouldn't have done without it? Hmm.
[00:00:03] Steve: Innovation that we simply wouldn't have been able to do otherwise. Um. We get to work with some of the most spectacularly interesting concepts and materials on the planet. Many of which are still highly secret but it, it bought us the ability to do that.
[00:00:20] s9 intro: Welcome to the investment season of how to start up a podcast for anyone starting or scaling a company hosted by me, Juliet Fallowfield, founder of B Corp certified PR communications and podcasting consultancy, Fallowfield and Mason, where we teach you how to own your PR in house. Raising investment can be a daunting process, especially if you've never done it before. So for our ninth season, you'll hear from successful founders and entrepreneurs on what we should be doing now, next or never when considering investment.
[00:00:48] Juliet intro: It has been reported that the value of UK venture capital deals in quarters one to three of this year fell by 43 percent year on year, while the number fell by 25. 9 percent in the same period. However, [00:01:00] VC deals are still being struck by innovative businesses. In this episode, I speak with Steve Tidball, co founder and CEO of Volobak, the material science driven clothing brand.
[00:01:10] Juliet intro: Having co founded it in 2015 with his twin brother Nick, the brand has raised over 10 million in outside funding, led by the London based venture firm Venrex, with participation from Airbnb co founder Joe Gebbia and Headspace CFO Sean Brekker, among others. This has allowed Vollaback to create the world's first solar charged jacket and the first computer programmable clothing.
[00:01:34] Juliet intro: Given the uncertainty around raising VC investment, Steve offers his valuable advice on the best ways to pitch to a VC fund and shares how his business has used VC investment to scale.
[00:01:46] Juliet: Hi Steve. Thank you so much for your time on how to start up today. And before we get into everything about pitching to a VC, it would be great if you could introduce yourself and a bit about the business that you've started.
[00:01:57] Steve: Okay, of course. Yes. Hello. Um, so I am the [00:02:00] CEO and co founder along with my twin brother of a brand called Volabak. And very simply we make clothes that look like they're from the future. And what that means, essentially, is we not only use the world's most novel materials, but we make clothes that solve some of the most pressing challenges we face as a species, from climate change and resource scarcity to space exploration.
[00:02:21] Steve: Um, and I come from a background of branding, but I've rapidly moved into a world of, oh, building a business is trickier than just building a brand. And so that's my background and we've been doing it for about six years. Um, we've won quite a lot of awards. We have some very cool customers and it has been, uh, I describe it as like going on a rollercoaster without wearing any of the safety harnesses.
[00:02:41] Juliet: I would 100 percent agree with that analogy and congratulations because you have built the most incredible brand and on the outside it looks, excuse the pun, but seamless and perfect. But I know behind the scenes you will have been slogging your guts out to get this where it is today. And presumably working [00:03:00] at that level isn't cheap and you would have had to go after investment.
[00:03:03] Juliet: So could you give us a little bit of background as to how you've gone on after funding or how you've even funded it?
[00:03:09] Steve: Yes, so, um, I started the first 15 years of my career. I worked in advertising as a creative director for some of the world's largest and coolest brands. Um, one of my heroes at the time, um, was the guys who built Innocent. One of them started in advertising, and I heard about an email he'd sent originally when he was pitching for Money for Innocent.
[00:03:28] Steve: And he just emailed his entire network, and the email said, who knows rich people? And so I thought, well, that's a great idea. I'll just do that. And, um, One of the fantastic things about advertising is you do build up an incredible network of people. It is filled with highly, highly talented, skilled people, many of whom have very wide networks.
[00:03:46] Steve: Um, I'd spent 15 years building my network in that industry. So we, we, we came with some credibility. And so we were lucky enough to be introduced to some incredibly inspiring, clever and also Wealthy people,[00:04:00] um, I actually ended up pitching, um, a couple of my bosses. I worked as part of a really, really enormous network that looked after companies like Apple.
[00:04:07] Steve: And so you had some of the world's greatest marketeers in there. Um, they were excited by the idea. They introduced me to their friends. Um, but we really started , it was such naivety.
[00:04:17] Juliet: You wouldn't You wouldn't
[00:04:17] Juliet: do it any other way though. If someone said, if you told me then what I'd have to do to get here today, I wouldn't have done it. Ignorance, this,
[00:04:24] Steve: I think that's brilliant. I think you have to be, if you're not embarrassed by your early days, then you probably weren't trying hard enough or running fast enough. And so we really hadn't figured out quite what money we'd need. We hadn't figured out any of the timings. We didn't have relationships with any factories.
[00:04:40] Steve: And we had some incredibly well meaning, um, investors who, potential investors, we went to see at first, who said, you might need some numbers in here. You might need sort of spreadsheets.
[00:04:51] Juliet: And was this day one? Was this right at the beginning?
[00:04:54] Steve: Um, so we've gone very brand heavy. Um, in the end, we raised a relatively small amount of money, like a couple of hundred [00:05:00] grams just to make a few products, just to prove the principle. Just to say, look, if we make clothes that feel like they're from the next century. There might be something interesting here.
[00:05:10] Steve: Now, I, we didn't necessarily make the clothing that we should have made, but what we did make is we made clothing to get attention. And so our very first product was a pink hoodie, quite bright pink that zipped up over your face. And it was called relaxation hoodie. And it was based off of some quite interesting.
[00:05:29] Steve: scientific principles based on this color was designed to, you know, slow down your heart rate and your brain waves. Um, and it encouraged you to breathe through your nose and it came with a pink noise soundtrack. It was really quite odd and original. Um, but it ended up a comedian took it on Jimmy Fallon.
[00:05:44] Steve: Um, and you know, that's, that was the largest TV show in the world at the time. And the cost of that marketing was 47 pounds to send them a couple of hoodies. Um, and that was enough to convince more people. Oh, hang on, there might be something here because , those first two pieces of clothing we designed would never have [00:06:00] got through any focus group in a million years.
[00:06:02] Steve: But that's not what we were trying to do. We were trying to set out to solve challenges that no one was thinking about. And at that time we were thinking about, you know, could a piece of clothing interact with your sympathetic nervous system?
[00:06:13] Juliet: That sounds expensive, but like
[00:06:14] Juliet: from a funding perspective, so you really need capital from the get go.
[00:06:18] Steve: We really did. I mean, once we proved that principle and then we got into the world very, very quickly of material science, yes, you need capital because what you really need is you need the infrastructure within your company to be able to go after and develop the world's most interesting materials to go after.
[00:06:35] Steve: products, some of which will be commercial in their nature, and some won't, and you won't actually know. And we also, in the early days, had to be willing to tolerate a fairly high level of failure. Which, if anyone who's running a clothing business, you don't, that's kind of not what you want to tolerate.
[00:06:51] Juliet: Well, anyone running Any
[00:06:52] Juliet: startup has to get very comfortable with failure very quickly and just accept that it's part of your everyday. Um, but with funding, I mean, there's a lot [00:07:00] of glossy, hyped up words that it comes to investment. I work in a coworking place. I've never gone after investment.
[00:07:05] Juliet: So I look at it from the outside in, and you hear angels and friends and family seed round, and then you have VCs and funds, and it's an awful economic climate. Lots of jargon . When it comes to VC, could you give us your perspective on what is a VC?
[00:07:21] Steve: Well, first of all, you have to start with the idea that they're human beings.
[00:07:25] Juliet: Are they though?
[00:07:28] Steve: I think they all are, but I think what marks them out as slightly different is that they have a typically much more strict investment philosophy and they are on the whole, or the very good ones, are exceptional pattern recognisers. They're phenomenal at saying... What you're doing here fits into a pattern that I know and understand already and so whereas if you look at angels for instance Which is typically wealthy [00:08:00] individuals They might invest more on passion projects or gut instinct or something They just like the look of or it's just something that kind of they kind of buy into um VCs are different.
[00:08:09] Steve: I don't think you're ever going to get a venture capitalist who goes. Oh, yeah. I just really like it It sense to me, but my gut feel says it's okay. They just don't really work like that Um, it was interesting like when we first started on our investment journey, I too had never heard the word venture capitalist Literally never heard of it.
[00:08:27] Steve: So I didn't even know to approach them because I didn't even know that existed. So I simply went after my bucket, which was people with cash, rich people, because you go, I'd go to find some of them. Now as it, as it happens, you do end up finding some venture capital people and there's lots of them invest privately as well.
[00:08:45] Steve: Um, so, about sort of six years ago I absolutely could not have come on this podcast because I've been like well I don't know the difference between you know a seed round and friends and family and a venture capital round Um the thing that i've learned over the last six years though, and I definitely learned in in a sort of [00:09:00] a much longer career in advertising before, because I'm in my mid 40s now, is that you're simply chatting to some other human beings over the other side of the table.
[00:09:09] Steve: And it's really about understanding what does that human being need to hear and see in order to do the thing that I want. So human nature doesn't really change particularly across these different, um, silos. that we think about people in, they just, they just, when it comes to venture capital, they just have a much stricter philosophy.
[00:09:28] Steve: So you'll, you'll find people who only invest in AI or only invest in agri tech or whatever it is, whatever it is that they're into or sustainability or a climate fund. And however good your idea is, if that fund doesn't match what you're doing, it's utterly irrelevant.
[00:09:43] Juliet: A lot of people talk about friends and family rounds, seed rounds, series A, blah, blah, blah. Can you go straight to VC from the get go, or do you have to follow a bit of a system of who you go to first for investment?
[00:09:55] Steve: um, there's no hard and fast rules. I think you can definitely go to, um, Venture [00:10:00] Capital first. Um, I think certainly Silicon Valley has a, a far better track record of those things than perhaps trying that in London. Um, so you will follow a traditional pattern, typically. Um, and it's because those, those are, you have to think about them as ecosystems that interrelate.
[00:10:16] Steve: Almost like those cartoons where you have a little fish being eaten by a slightly bigger fish being eaten by an even bigger fish. And you sort of, can swim your way up the food chain. But of course, you can absolutely... circumvent that whole system and go straight to venture capital. So let's say for argument's sake that I, let's say that I've invented the new, you know, you know, chat GPT and it's 10 times faster and 10 times more predictive.
[00:10:39] Steve: Great. I mean, I can go straight to any venture capital firm in the world and go, I've got this, here's the data that backs it up and you will get a, you know, a big bag of money handed to you.
[00:10:47] Juliet: that's because VCs are the biggest cheesers in this whole pie. They're the ones with the biggest chunks of money that they
[00:10:53] Steve: Well, no, I mean, you can, you can swim up the river from there and you can get into private equity, um, who are even bigger players. I mean, VC absolutely [00:11:00] represents a relatively small part of the entire investment world. I'm going to get it wrong, but I think it's something like 3%. It's really small. And these are, these are the people who are willing to take typically earlier and relatively speculative risks.
[00:11:16] Steve: from my experience by the, or certainly for the people I chat to, by the time you get into private equity, it's, they're, they're not willing to take the kind of risks that venture capital will want to take. And then typically if you come down from venture capital and you get into angel investing, you actually get people taking much larger risks, but not always knowing that they're taking enormous risks.
[00:11:34] Steve: So venture capitalists will always. Typically, I'd say, have quite a good, uh, understanding of the amount of risk that they're willing to tolerate because they have a really firm understanding of the amount of return they're looking to get. Um, so, I've always believed that rules, you know, dare to be broken, um, I would say, though, that If you are going to go straight to venture capital, which is obviously what a lot of people do in the valley, you're, you're, you're climbing into bed straight away with some [00:12:00] incredibly powerful people.
[00:12:01] Steve: And unless you have really stunning brain power or willpower or experience, It is quite likely that things might be wrestled out of your control quite quickly, and it's been fascinating to watch the sort of the, the crash and burn of some of these, you know, highly spectacular, um, companies in Silicon Valley where extremely young people have been given, whether it's Theranos, um, or the Sandbank and Freed stuff, you know, relatively young people have been given extraordinary amounts of money and then left to kind of go. Um, so I do think we have to differentiate probably when we're talking about these worlds between maybe Silicon Valley and the rest of the world.
[00:12:40] Steve: Because if you're in London and you're constantly watching what happens in the Valley, It's like setting up a tech company and looking at what Facebook are doing. There might be absolutely no correlation because you're, you're just so fundamentally different. So I think recognizing, you know, where you actually sit today today and what you might need.
[00:12:56] Steve: So it might be, it might feel very cool to say I'm going off to venture capital [00:13:00] funding, but it might just be impossible. And actually you might just need a hundred grand and you might want to do a crowdfunding raise for instance, which might raise it far quicker.
[00:13:07] Juliet: And for you, at what point in your six years of your brand did you realize and recognize that you needed to go after VC?
[00:13:16] Steve: Um, well actually it was entirely organic. Um, we had taken only in private investment to that point. Um, and one of those in private investors introduced me to someone who happened to be in venture capital. Um, and we got on really well. So we didn't actually make a conscious choice of now we're going after venture money.
[00:13:34] Steve: We simply had a warm introduction to someone who I got on incredibly well with. Um, I then took some advice from a friend of mine who's sort of within the industry, but not connected to my company, essentially, and said, look, you know, we're, we're thinking of essentially transitioning from being purely angel funded, essentially, to having venture capital money in.
[00:13:53] Steve: And I said, you know, do I need to be thinking about this differently? And he said, well, not really. They've just got to pass the flatmate test. [00:14:00] Which is, would you be their flatmate? You know, when you come back after a hard day at work, are they going to have eaten your sandwich? And is the bathroom going to be a mess?
[00:14:08] Steve: Because if it is, then they're not the people you want. And that was probably one of the best bits of advice I've ever had. Because so many people will be so quick to say it's about the term sheet, it's about the valuation, it's about control, it's about all of these other things, but ultimately, the way I look at it is you're going to spend quite a significant period of your life with this person.
[00:14:29] Steve: They're going to be involved in some of the biggest decisions you've ever made. And I just don't think you're going to look back and go, Brilliant, I'm glad I got all the things I wanted on the term sheet. When actually you're stuck in a difficult conversation and you have fundamentally opposing personalities.
[00:14:43] Steve: That's going to
[00:14:44] Juliet: them for a while as well. It's not, it's not like a colleague or a team member that you might have to manage
[00:14:48] Steve: you
[00:14:48] Juliet: business. You're stuck with them.
[00:14:52] Steve: through to some kind of exit. So, uh, and I think you always have to be really conscious of that, uh, uh, up front because again, when you take money for, let's say you take money [00:15:00] from your mum and dad, right? Your mum and dad are not going to be forcing you to IPO. Um,
[00:15:05] Juliet: Well, you know, Well, you know, depending on who they
[00:15:06] Juliet: are, but yeah.
[00:15:07] Steve: and dad are.
[00:15:08] Steve: Um, but you're, you're likely to come under less pressure. Whereas when you sign up with people who are in venture capital, you know, they have, they have periods of time in which they have to return money to investors. They have , you know, an amount that they want to return. They've only got a set number of businesses with which to return that money.
[00:15:27] Steve: So they're highly motivated that you become one of the companies that does it. I
[00:15:31] Steve: mean,
[00:15:31] Juliet: to succeed, which can be a good thing and a bad thing, but you need to like them. You need to communicate with them. Is there a preferred way to pitch to a VC that would be different from another investor?
[00:15:42] Steve: I mean, there's some very basic human stuff, which if you can present yourself. And the story about your company in an incredibly coherent and compelling way, you have their attention. And if you can do that in the first 30 seconds, you've really, really got their attention. I [00:16:00] think if you can't do that, I think it's incredibly unlikely.
[00:16:03] Steve: You or your business, and ideally both, have to connect with that person where they go, Ooh, there's something here. Because ultimately, If they do like you and if they do like your business, there's going to be so many things down the line that they have to check. You have to go, you have to meet their partners.
[00:16:18] Steve: You have to go through due diligence. You have to, you have to do all sorts of, there's all sorts of hoops that you'll have to jump through, but you're never going to get close to those hoops. If in that first, let's say 30 seconds is too aggressive, although I think it is actually true.
[00:16:31] Juliet: No, I think it's one breath. And this is how we train our PR clients with pitching to an editor. If they, they need to be able to describe what they're doing in one breath. It's not an elevator pitch anymore. You've got such a short attention span of people.
[00:16:43] Steve: I would agree with that, which is why very early on I sort of wrote the line closed from the future, because you just go, I want to know what that is. It has enough in it where you go, ooh, but also enough left out that you go, so what is that? And so it kind of forces that intrigue. [00:17:00] And I think that's really, really critical because you then, you know, once you've got past that first kind of, you know, this person is sane, likeable, I trust them, and the idea is good, then you have to really be able to spell out incredibly clearly what it is you're attempting to do, why that's going to work, and on what timescale that's going to work.
[00:17:19] Steve: So, you know, one of my tips would actually be, it's Really, really valuable having trained in another industry first, and specifically in advertising, we're trained to basically create really compelling messages.
[00:17:33] Steve: In really short periods of time with as few words as possible. And then once you've got their attention, yes, sure there's probably a hundred page deck behind it or a 15 page deck that then illustrates that. Um, but it's just like a great headline and an ad or a great trailer for a film, you have to leave them wanting to know
[00:17:50] Juliet: Well,
[00:17:50] Juliet: it has to get you to the next step. And it's, there's so many similarities to pitching to an editor here because that first email should not have the entire brand biography, the founder story, 10 million high [00:18:00] res. The first email just needs to get your reply. The reply just needs to get you to the pitch.
[00:18:04] Juliet: The pitch needs to get you to a coffee. And eventually after all of those steps are followed through, the coverage will come out, but you're not going to get coverage from that first email. It sounds like with investors, that first. 30 seconds, that first impression where they sort of almost on your team.
[00:18:16] Juliet: And they're like, I like this person. I want to support them. Like, right. What's next? And then you give them the next nugget
[00:18:21] Steve: I couldn't agree more. I do actually think there is such a huge cross over between the sort of the communications industries and the ability to then pitch to these people.
[00:18:30] Juliet: Pitching is pitching, and a lot of people have said when you're running a startup, whether you like it or not, 80 percent of your job is sales and it's just being able to communicate your business.
[00:18:39] Steve: Let's say I'm a venture capitalist and I turn the tables for a minute. And let's say someone comes in and they can't actually really tell me who they are or what they're attempting to do. Well, I just think, well, how on earth are you going to build a website that says what you do?
[00:18:50] Steve: How on earth are you going to create advertising to create awareness that tells people what you do? If you can't tell me in, you know, ten words or under. then how on earth are you going to actually communicate to an audience? , there's very [00:19:00] few companies in the world where you don't effectively have to use a short number of words to tell the world , what you do.
[00:19:05] Steve: Whether you're Disney or Apple, it's, it's the same rules for absolutely everybody.
[00:19:09] Juliet: you're preaching to the converted. This is brilliant. Thank you for validating my business model as well.
[00:19:13] Steve: And I think once you've understood that, then, you know, there's, there's plenty of books on sort of understanding what. venture capitalists are after. Really the key thing is understanding that they are after a return in a set period of time and that they're taking bets. And their bets say, you know, one out of 10 of their businesses will fail or nine out of 10 businesses will fail.
[00:19:35] Steve: However, if they get the one Facebook or Google or whatever it is, then they're okay. And do you, you re, it's really, really worthwhile understanding their worlds because otherwise you're, you're just pitching so blind. . It's like it's going to be incredibly difficult unless you really understand what they're after.
[00:19:52] Juliet: flipping it the other way, how much attention should a founder pay to a VC's fund portfolio or performance record? Like how much due [00:20:00] diligence should the founder do on the VC?
[00:20:02] Steve: So I think it's really interesting because Lots of founders will go after, you know, the most spectacular fund, the one that's got Airbnb, Google, Uber, you know, 10 years ago are on its books. Um, my personal belief is that it's more critical that you have a brilliant relationship with the key stakeholder in that, in that venture capital firm that you're actually going to have a relationship with. Because ultimately, let's say a venture capital firm has backed Google. Well, that's just a one of a kind company. It's very unlikely that you are Google. And so, their, their track record there is, is both interesting, but also irrelevant. , let's say you're building the next Google, and you're building something incredibly similar.
[00:20:42] Steve: Well, that's vital. Because then you go, here is a partner on my team that has amazing track record experience in building a company just like this. So I think that can be really valuable. Um, but I think that's a very, very different story from, oh, here are ten really impressive brands. But none of them are anything like us.
[00:20:58] Steve: You have to question how [00:21:00] much value is that person going to add? Because what they're going to be really good at is having seen the journey of 10 brands that are nothing like yours. Then you're relying on, is there amazing crossover knowledge to be gained from those brands? Well, possibly, if you're doing some kind of overlay strategy where you're taking the kind of the concept from one market and putting it to another market, and maybe they've got deep expertise in that market that you're taking from, brilliant.
[00:21:22] Steve: So I think there's so many questions you have to ask yourself beyond, oh wow, they've got eight unicorns on their books, I'm going to be a unicorn. It's really, really not how that works because there's, there's so much, you know, um, chance in it. We're, we're lucky enough. Like one of our investors is, um, uh, Joe Gebbia who helped build one of the three founders of Airbnb.
[00:21:40] Steve: But, you know, if you look at, um, what happened, during, maybe COVID. And that they had to take on like 2 billion in funding really rapidly. So Airbnb could really quickly have gone from a story that, you know, it's massive success story to how actually it folded during COVID because they're renting out people's homes and no one can travel anywhere.
[00:21:55] Steve: And you'd then be judging a VC. Who had invested in an Airbnb and it looked [00:22:00] like, it would have looked like Airbnb had failed, but of course it hadn't, it would have been, you know, subject to a Black Swan event.
[00:22:04] Juliet: But also amazing That he's someone that can help you in a crisis because every startup's going to have a crisis.
[00:22:09] Steve: That's the one thing you're guaranteed of.
[00:22:11] Juliet: Yeah. A
[00:22:12] Steve: And the other thing I would say, um, that I think is probably one of the most useful things I've done is, um, read the written histories of some of the most famous brand builders in history, uh, and read them over and over and over again. Um, so I've done that a lot with Disney, Apple, and Nike are my three particular favorites.
[00:22:29] Steve: What it shows you is. On the outside, these are these, you know, massive goliaths of American industry. And on the inside, it is crisis follows crisis follows crisis. So I think really understanding that early is really key, because otherwise you go in and go, Oh my God, I've got a crisis. You go, well of course you have, because you've got a business, so that's what it's going to be. And so I think that's the other thing that we learn really early, that I probably advise people to do, is really go and read how those businesses work. [00:23:00] A, because it will really help you decide, do you want to jump into business?
[00:23:03] Juliet: So in terms of looking for support from people, if you have VC funding, how involved could they be? Could they be people to help you out in a crisis?
[00:23:11] Juliet: Are they there to act as almost like a mentor or is every single person different in this relationship?
[00:23:16] Steve: Yeah, I think it's utterly dependent on the type of fund and the type of person that you pick. So I have friends who run businesses and the, you know, the VCs are literally in the businesses. Um, but these could be, you know, giant, giant businesses where they're, they're sort of, you know, operating hand in hand.
[00:23:30] Steve: Um, there will be other venture capital that's relatively hands off. So I don't think there is a one size fits all simply because the VC business is so varied from country to country, from industry to industry. Um, so. I think that's a really key thing to understand when you're choosing people. And that really does come back to the flatmate test.
[00:23:50] Steve: Because ultimately, let's say that they decide that they need to be really hands on for a time period, um, for various, maybe the business is going through a crisis, maybe there's some kind of black swan event you know, in culture or [00:24:00] in, um, you know, banking and you need hand. Um, If they're a good flatmate, that's okay.
[00:24:04] Steve: They can come and work in your office and that's going to be okay. But let's say they failed the flatmate test, and they were a hands off VC, and then trouble hits and they become a hands on VC, well that's going to be less than ideal, I would imagine.
[00:24:16] Juliet: Someone else said this about, um, would you go for a beer with them after work or would you invite them to your wedding? So the flatmate beer and wedding thing, I think it's all very similar
[00:24:23] Steve: I
[00:24:24] Steve: think they have to be, because I think, you know, um, if you think about it in sort of lifespans, they're almost going to be there at the birth of the business, and at the marriage, and at the death.
[00:24:33] Steve: That's the reality. So when you, you know, when you do finally exit a business, for instance, it will be with very heavy steering and involvement from any venture capital fund that's involved.
[00:24:42] Juliet: This could be a very naive question to ask. If you take on BC's funding, do you have to exit at some point for them to get the return?
[00:24:49] Steve: Um,
[00:24:49] Steve: there has to be some kind of event. Um,
[00:24:51] Steve: it could be a partial sale, a full sale, an IPO, uh, an industry buyout. Um, so they will have to return their money at some point. I mean. I'm [00:25:00] not an expert in the history of venture capital. There may be businesses that lie outside of that. So if you take SpaceX, for instance, I think there'll be a fairly high level of confidence in anyone, you know, investing in that, that maybe that's not a three year return, however, that the return will be so spectacular.
[00:25:17] Steve: Maybe they'll wait for 20 years, for instance, but then especially in the Valley and in LA, you do get funds that very specifically go after really long range ambitions.
[00:25:26] Steve: Where they're
[00:25:27] Steve: highly, highly capitalized and they can have a much longer time horizon where they go actually over 10 to 20 years.
[00:25:32] Steve: They're probably more outliers. Um, I think most people are looking three, five, seven years. It's those kinds of things. Um, knowing that upfront is so important though, because
[00:25:42] Steve: you are, you are effectively getting into bed with that aim.
[00:25:45] Juliet: Well, someone said to me very early on, and this is something we say to our clients as well, um, two different conversations. What does success look like to you? Why are you doing this? It's like, well, I did it 'cause I was made redundant and I just wanted to keep a roof above my head, and now I want to run a business.
[00:25:58] Juliet: And they're like, well, well, is it a [00:26:00] lifestyle or you gonna sell it? I was like, I have not even considered that. I, I woke up. Started a business, hit the ground running, which is not the normal way of doing it. And it's not the advised way of doing it. But I think if you're really honest with what you're doing this for, what is your end goal here, and it just shapes all of your decisions throughout your day to day, and it really, really helps.
[00:26:18] Juliet: But especially when investment people are going to be asking you, aren't you, they're going to be saying, what are you going to be doing in two years, five years, 10 years, but do you know the answers to those questions?
[00:26:29] Steve: Um, yes, because I've been asked them lots., um, So I've thought about it really long and hard. Um, which is, you know, when I get to the end of my life, I want to look back and say that I've built something truly extraordinary that changed the industry I was in. That's it. Like, that's, that's quite big, but I think, I think,
[00:26:44] Steve: I think we're going to get there.
[00:26:45] Steve: Um, the reality is we're already doing things that no one else has ever done before. And, and for, you know, a relatively small startup in the middle of London, um, working in an industry that I had no experience in, that's already quite... interesting that we could be looked at by some of the biggest players and that we're [00:27:00] changing stuff.
[00:27:00] Steve: Um, so yes, that's my, that's my single thing. It's not necessarily, you know, the end slide on a VC pitch of like, when
[00:27:06] Steve: I'm on my deathbed, I want to have done this, but it orientates me.
[00:27:10] Steve: It's the thing where I go, you know, you have to have some kind of North Star or Grand Canyon or whatever it is you're aiming for.
[00:27:15] Steve: And you know that you're heading in that direction. Um, but
[00:27:18] Steve: at the same time, there has to be a scalable business there.
[00:27:20] Juliet: And what did VC funding enable your business to do that you wouldn't have done without it? Hmm.
[00:27:24] Steve: Innovation. Innovation that we simply wouldn't have been able to do otherwise. Um. We get to work with some of the most spectacularly interesting concepts and materials on the planet. Many of which are still highly secret and we've not brought out. Um, but it, it bought us the ability to do that. Um, before we were essentially very nicely relying on charm to get things done.
[00:27:51] Steve: And the reality is charm will get you so far, but at some point you're going to need some kind of capital. Um, and so my brother and I would, you know, fly out to [00:28:00] factories, literally get down on bended knees to sort of, you know, persuade various, you know, sort of, um, people in Portugal or, uh, Italy to make things for us or sell us their fabrics or even work with us.
[00:28:10] Steve: And When you have some money, innovation becomes easier and innovation is valuable to us because it sits at the core of our company. What we're trying to do is we're trying to merge clothing and technology. I think there's an incredibly valuable space there. I think we're doing something completely unique and novel and therefore that has value, but there is also a capital requirement.
[00:28:32] Steve: quite clearly to do those kind of things, and especially if we're asking clothing to do things that it hasn't done before. If we're asking it to try and turn invisible or protect you from diseases or resist a flaming meteor, um, I can't just turn up to Canada Goose or Lululemon and hope that it's going to do the trick.
[00:28:48] Steve: It isn't. And so, that requires money and the backing of venture. allowed us to do that, which
[00:28:55] Steve: fundamentally changes the nature of our company. It makes it more valuable, [00:29:00] essentially,
[00:29:00] Juliet: Huge congratulations because what you're doing is so exciting to see this disruptor coming through. That's the thing when you're doing something that hasn't been done before, you make your life so much harder for yourself, but when it
[00:29:10] Juliet: works, it's so much more rewarding. Actually on that, um, what we do is have a question from the previous guest to ask the next guest.
[00:29:17] Juliet: And we would like to ask you a question for our next guest as well.
[00:29:20] Steve: Oh gosh. Okay.
[00:29:21] Juliet: So Laura, who we interviewed before, she is the founder of Monk, which I was describing it as an ergonomically delicious ice bath. And it's a thing of beauty, but obviously incredible mental and
[00:29:33] Juliet: physical health benefits. Um, her question was in those dark days when you have obstacle after obstacle thrown at you, what do you do to pull yourself out of that bad mindset?
[00:29:45] Steve: I run. I run barefoot as fast as I can in nature because I have a fundamental belief that your subconscious brain is far more capable of solving challenges than your conscious brain is. And so I [00:30:00] try and pull myself out of a conscious state and move myself into a subconscious problem solving state.
[00:30:06] Steve: What this actually consists of, in reality, is, um, yeah, I run barefoot. I try to run with as few clothes on as possible, which is, you know... normally possible in England during the summer. Um, and I run until, I run, I run until I'm running so hard I can't actually think anymore.
[00:30:21] Juliet: You switch your brain off.
[00:30:22] Steve: just switches your brain
[00:30:23] Steve: off.
[00:30:24] Steve: And then typically I find that my mind will probably solve some of those challenges that I thought were impossible.
[00:30:30] Juliet: it's another form of meditation in a way.
[00:30:32] Steve: Yeah, I mean, I do, I do do a lot of meditation as well. But what I've found and the reason that's my specific answer to that question is what I've found is that it's very easy to have a fight or flight response to those kinds of crises where you can interpret, let's say a cash crisis or someone quitting or whatever it is, you can interpret that as, or your body can as a tiger is chasing me, you know, the classic fight and flight response.
[00:30:53] Steve: But of course the tiger isn't chasing you. Actually what's happened is something bad that's affected you emotionally that may affect your business.[00:31:00] Um, but it's very rare that you are under actual physical threat. So the reason I move into a very physical space is to remind me this is what something physical actually feels like.
[00:31:10] Steve: So it's
[00:31:10] Steve: a kind of trip wire in your brain to go, no, no, no, you're just under an emotional threat, not under a physical threat. So that's what I like to do.
[00:31:17] Juliet: And also the endorphins presumably from a good run help
[00:31:20] Juliet: as well.
[00:31:21] Steve: So it's a very, um, positive coping mechanism.
[00:31:24] Juliet: . And what would your question be for our next guest? And it could be anything around starting a business or investment.
[00:31:29] Steve: Oh, her question was absolutely fantastic. Um, I would like to throw my deathbed question back, actually. I would like to know when this next person who's answering this question knows that they've reached the end of their life, what are they going to look back on and be proud that they built? Because I find it such an orientating question.
[00:31:51] Steve: Because the answer to that question can't, I don't think it can be, Oh, well, I sold my business for a hundred million. I think it has to be something more interesting and more [00:32:00] profound, with some kind of human truth attached to it.
[00:32:03] Juliet: I completely agree. I completely agree. Because it's, it's definitely on the bar chart of job satisfaction, where I used to negotiate a base salary and a bonus. There's so many other things that matter now.
[00:32:13] Juliet: People, reward, brain activation, conversations I get to have, freedom, autonomy, all the stuff. And then obviously you need revenue to exist.
[00:32:21] Juliet: And when we became B Corp, we learned, obviously you have to be profitable. to Be able to put people on planet above profit, but you need profit there. So it's
[00:32:28] Juliet: important, but it's not by any means. At all the most important. Now I'm really impressed with that. I will let you know, um, what they say. But thank you, Steve. Thank you so much for your time. It's been really interesting to chat to you..
[00:32:41] Steve: Thank you ever so much.
[00:32:42] Juliet intro: If you'd like to contact Steve, you can find all of his details in the show notes along with a recap of the advice that he has so kindly shared.
[00:32:49] intro: Thank you for listening to How To Start Up. I hope these conversations offer you some confidence, encouragement and reassurance that you're on the right track. If you enjoy this podcast, I'd be [00:33:00] so appreciative if you were to rate, review and subscribe as it will really help other people starting a company discover
[00:33:06]