#106: Breaking Barriers: Jeevan Sunner's Journey as a Female VC

Are you curious about what it takes to be a female venture capitalist in 2023?

Join us as we sit down with Jeevan, a successful woman in the industry, to discuss the world of female entrepreneurship and venture capitalism. With her insights on the tech focus areas of 2023, the challenges of attracting women into the VC world, and the importance of warm referrals, Jeevan offers a unique perspective on the startup investment landscape. Get a glimpse into the life of a female VC as she shares her journey and valuable lessons learned. Tune in now to learn what it takes to become a venture capitalist in 2023 and expand your knowledge on the exciting world of startup investments.

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Jeevan Sunner
Christian Soschner

📖 Memorable quotes:
(49:33) “Linkedin Made Investors in Silicon Valley Accessible”
(49:55) “Communication, Accessibility, Relationship building, and Information sharing make social media super powerful.”
(55:40) “Take your time and do your due diligence on investors to understand whether their values are aligned with yours and whether you see that 10-15 years partnership happening.”
(59:30) “We are flexible in the way we collaborate with founders. It can be a more passive approach, or for first-time founders more hands-on”
(01:09:00) “When it comes to dilution, we rather have a smaller slice of a bigger pie, than a massive slice of a smaller pie” 

⏰  Timestamps:
(00:00) Unlocking the Secrets of Venture Capital: An Insider's View 
(03:15) Brave the Winter of England with Jeevan in December 2022 
(05:44) The Journey to Becoming a Top Venture Capitalist in 2023 
(11:00) Spotting the Next Big Tech Trend in 2023 
(14:20) Empowering Female Entrepreneurs and VCs to Create Change 
(20:00) Breaking Barriers: What it Takes to Attract More Women in Tech VC 
(23:00) The Power of Warm Referrals and How VCs Evaluate a Pitch deck 
(26:00) Timing is Everything: When is the Right Moment to Approach a VC? 
(30:30) A Day in the Life of a Busy Venture Capitalist 
(39:30) Decoding Job Titles in Venture Funds: What They Really Mean 
(44:15) The Human Side of Investing: Why Relationships are Key 
(46:15) 2 Vital Lessons for Founders from a VC's Perspective 
(48:55) The Rise of Social Media in the Startup Investment World 2023 
(50:35) Podpower: The Importance of Podcasts in Building Relationships in 2023 
(52:25) Jeevan's Must-Listen Podcast List for Entrepreneurs and Investors 
(56:50) Expectations Beyond Returns: What VCs Look for in Founders 
(01:04:30) The Investors' Role in Board Functions and Aligning Interests 
(01:09:50) Finding the Perfect Match: Product/Market Fit 
(01:13:50) Jeevan's Most Exciting Deal: Behind the Scenes 
(01:16:25) The Art of Closing a Deal: A VC's Perspective 
(01:17:55) The Challenges of Closing a Deal and the Path to Success 
(01:20:45) Predicting the Future of VCs: 2023 and Beyond 
(01:25:00) The Final Word: Jeevan's Advice for Entrepreneurs and Investors 

Transcript

are you curious about what it takes to become a successful venture capitalist

0:06

in 2023 then tune into this episode of

0:11

beginner's mind there might just be a difference in what the VC might optimally want and what the founder

0:17

optimally wants but again if the founder and the investor are both working for

0:22

the long term and they're looking to build a big business together um the way we always put our playfarers

0:29

this is a pie and we'll all much rather have a maybe slightly smaller slice of

0:36

of a bigger pie than have a massive slice of the small pie today my guest is

0:43

Chivan Sana who is a rising star in the world of venture capital having

0:48

graduated from UCL in Pharmacology and honing her skills at

0:53

pwc's intervention and restructuring Department before transitioning into the

0:59

Venture World Chivan is now a part of Playfair Capital One of London's leading

1:05

seed stage investors where she works closely with portfolio companies sources

1:11

and Lead Steels and colleagues playfares dni initiative female founder office

1:18

hours join me as Chivan shares her wealth of experience and insights on the Venture

1:26

World landscape what it takes to succeed in this field and what's the future

1:32

holds for the industry in 2023. she even gives us a

1:37

behind-the-scenes look at the tech investment landscape the importance of warm referrals the right time to

1:45

approach UBC and the role of social media in building relationships don't

1:51

miss this opportunity to learn from the past in the Venture industry in

1:59

Traditions live streamed and then I have to find my way back to the Myriad of

2:05

windows that are open and let's kick it off it's a really great achievance what

2:12

is the correct spelling of your name I'm Australian and I'm not very much used to British name still no never is a

2:21

where is the name coming from is it a typical English name no not at all so my Heritage is Punjabi

2:29

um so Punjab is it's a small state in the uh in the north of India um so both on my on both of my parents

2:36

side my Heritage is Punjabi so it's a it's a traditional Punjabi name it means life

2:41

um and my full name actually means happy life that's a great name it's fantastic

2:46

happy life I like it I like it it really spells man I was worried at the

2:52

beginning when uh when we got in touch I thought how should I spray your name I just know the Austrian versions and it's

2:58

great to hear that the correct meaning is happy life it's it's I I quite like it I think it's

3:05

quite nice always you're in England currently how is life in England these days

3:10

very cold so I'm just looking out my window right now and it's snowing we have about four inches of snow

3:16

um but otherwise it's um it's it's great we can't complain we

3:21

had a lovely summer um so now I suppose we're just paying paying that back

3:27

I'm curious so here I mean it's the time of the year here in Austria when everybody and families are preparing for

3:35

Christmas Eve in week how does that affect the life in England this is also

3:40

a big thing in your environment I'm absolutely so

3:46

um at Playfair we're shutting down the office uh for a couple of weeks over Christmas just to give everyone the time

3:52

to shut down um switch off really um relax and get that full break before

3:58

we come back in January um and and go again so I think a lot of

4:04

people are doing the same um some of our startups are also doing the same thing as well and I think it's

4:09

just a really nice chance for everyone to get to spend a bit of time with family

4:14

um of course London is a very diverse City so a lot of people living in London

4:19

either are from around the UK whether that's uh Cambridgeshire which is where

4:25

I'm where I'm based right now or whether that's the North or even whether that's abroad so

4:30

um I think it's quite a nice chance to give people the time to go back spend time spend a bit of time with our family

4:36

with their friends um relax for the period before coming back in January or fresh yeah absolutely

4:42

I think it's necessary to get two weeks off to meet family and friends and also

4:48

enjoy the other parts of life except work life but let's make this podcast about work life the final thing before

4:54

Christmas you mentioned your funds play fair capital and I'm really happy that

4:59

you are here today to share your stories um I'm coming from the founder side so I

5:04

started my first attempts in entrepreneurship back in the 90s was the animation acquisition then later on got

5:10

in life science in 2006 in mostly startup companies so translating science into business and usually when founders

5:18

take the pitch deck and send to AVC everything that happens behind the scene

5:23

is pretty much a black box and it's really great that you are happy today here to share your stories about what's

5:30

going on in the VC life and my first question to you is what does it take to

5:37

become a we see what's what motivated you to go into this direction

5:42

yeah that was a great question I think like a lot of people it's super cliched but I definitely fell into VC it wasn't

5:49

something that at the age of 15 I sat there and I thought my life ambition is to be a uh be a VC

5:56

um so very much fell into it um I think for me it was I was very much influenced by by my family who are very

6:03

entrepreneurial so growing up my parents had um brick and mortar businesses across

6:10

retail or food and beverage or health and health and medical and from the age

6:17

of eight I remember going around and spending time with them and getting to meet people that they worked with and

6:23

getting to meet customers um and I'm sure an element of it was cheap labor of course on my parents

6:30

behalf but they really encouraged me to think about you know they just asked my opinion so when they'd say oh we're

6:37

thinking of trying this out we're thinking of optimizing this you know what do you think and be really used to

6:42

encourage me to have an opinion and to get involved and I really love that and I think firsthand I saw watching them

6:49

and their Journey just how passionate and really obsessive people can get about the things that they're that

6:55

they're building they become almost like um that their babies their children like

7:00

family members um and so I've I've always worked I've always been around people I suppose

7:06

through my family who have felt that way and who have um I suppose had the self-believe and

7:13

um self-belief but also also at times delusion to believe that they are the

7:20

ones who are going to change something for the better and they're not going to wait around for someone else to make that change happen but they're going to

7:26

make it happen themselves and they believe in themselves and they back themselves to go and make that happen

7:31

um I found that very inspirational growing up um and I suppose a lot of the founders that I work with nowadays are very much

7:38

like that and people who um are obsessed want to make a change

7:44

want to make a real life impact in the world and they want to go make it themselves and they want to go do it yesterday they don't want to wait around

7:50

and I find that energy just so inspiring and I love being around that and I

7:57

absorb that and it's infectious and um I think it's just a it's a great

8:02

environment to be around absolutely I couldn't agree more what was your career path then you got your

8:09

first imprint by your parents and what what came next yeah so got that imprint

8:17

um but still very much didn't know what I wanted to do um so I thought you know let me just do

8:22

something that I'm good at I always enjoyed Sciences I was always a bit of a nerd when it came to the Sciences so I

8:29

decided to go and study pharmacology at UCL um spent a lot of time in and out of

8:36

labs and both Healthcare and also clinical settings and Pharma as well

8:42

um and I really loved the idea of being on The Cutting Edge of research I like the idea of being involved in the

8:49

uncovering of a new drug for a disease type that has impacted and

8:56

hurt and caused pain to hundreds thousands millions of people uh globally

9:02

so I I love the idea of that I love the idea of the of the Innovation that was happening in Pharmacology

9:07

um I especially loved psychophanicology so um anything to do with I suppose the

9:14

central nervous system and particularly neurodegenerative diseases as well I found very interesting

9:19

the reality of it for me didn't quite match the theory so the reality was and

9:27

this is very personal to me uh was spending a lot of time in the lab it was quite insular it was very focused

9:34

around one particular subject and I didn't always feel like it was super

9:39

commercial so things worked in the lab and I struggled to see how that would

9:45

scale and impact real lives and the real world

9:50

and I suppose through that over a number of years I became somewhat disillusioned as a process and even though I still

9:59

love Health Tech I do a huge amount of kind of

10:04

um look into a lot of our health Tech uh deal flow at play fair um so it's still an area that I'm really

10:10

interested in but it's just not the area for me to spend the rest of my career

10:15

personally yeah I think but I think it's it's the it's the usual

10:22

ratio so I wrote it down a couple of years ago that basically I think 99.9

10:28

percent of lab ideas don't translate into products later on it's just the nature we think of science to have a lot

10:35

of ideas to publish a lot of or produce a lot of new know-how not necessarily everything must be a

10:42

product at the end of the day so it's a really fine line um between it's a small percentage of uh

10:48

of the ideas in the lab that translates into uh later in products uh what what excites you the most in Tech currently

10:58

um that is a that's a that's a great question um I think we're going through a massive

11:04

change in BC but also with all these macroeconomics

11:09

macroeconomic factors around us with all the change that's happening

11:14

um with the war and obviously off the back of the pandemic I think there are a lot of really exciting Trends coming off

11:20

the back of that I personally spend a lot of my time looking at um as I said Health Tech

11:26

um construction materials so for me I'm I'm personally very interested in

11:33

um mental health and understanding how um at a time where there is a shortage

11:38

of therapists um and off the back of a pandemic which we know has caused increased levels of

11:46

mental health issues in people um I'm really interested to see how technology can improve that I'm really

11:53

interested to spend a bit more time understanding how we can make materials

11:58

more sustainable and how we can deal with shortages of materials so again

12:04

during the pandemic but even off the back of the pandemic um there was a real a real shortage of

12:10

some of our um some of the things that we we had very much taken for granted in construction or in roads and mobility

12:18

and understanding how we can become more self-sufficient but also in a sustainable way I think that's that's

12:24

super interesting as well um and then I suppose you know generally we look at uh we're we're super early

12:30

stage right so we're pre-seed and seed and so I always say that we see things almost before the public even hear about

12:36

them uh we're almost three four five years ahead of the trends and our Founders like you know two three four

12:41

years ahead of us in that sense which is really cool and so a lot of the stuff that we're seeing right now are

12:47

generative AI in the use of gaming or you know we see a lot in relation to web

12:53

3 for example so I'm quite interested to see how how that plays out um Quantum Computing of course and just

13:01

um the the super the uh the way super computers are going and the applications

13:07

of that and how that will change the way that we live and work I think that's super interesting

13:12

um and I suppose there's a lot of volatility still in the blockchain

13:18

crypto space so still don't know which way that's going to go it's very much on the fence and

13:24

um very curious to see where where that lands in the next year or so um and and just to continue following

13:29

that that market as well you're pretty deep into into investing uh here you

13:34

have a lot of ideas and see a lot of things during the blockchain there are some and and uh lucky events lately so

13:41

let's see where that goes um let's talk about the

13:47

socio-political topics first um in my environment I get a lot of articles on my table about uh Tech

13:54

venture capital and that there are not many women in that area not really so

13:59

it's basically a from what I read on the internet a male dominated environment and I would like

14:06

to ask you a question is it really that way but what is the reality in your environment are there should there be

14:13

more women in Tech your answer is yes very much so

14:20

um there's been lots of data and reports on this I think shifted did an article

14:26

earlier this year um I don't remember the exact number but I think the number was

14:32

um in the in the tens of how many women we have in decision-making abilities in

14:37

BC that's a massive issue that women don't have a voice at IC level at level

14:46

um we are those unconscious biases that we always

14:51

talk about in relation to female Founders become Amplified in in in in my

14:56

view um and it's not just in relation to female Founders but more

15:03

generally different people from different backgrounds um different genders bring a different

15:09

Viewpoint and around a table around and I see you want as diverse a Viewpoint as

15:15

possible so that you've considered every option you've explored things that maybe

15:20

your colleagues have missed and to not have women equally represented when

15:28

women form half of the world's population you're missing a lot of a lot

15:34

of viewpoints you're missing a voice at the table are you missing opinions that could be valuable

15:40

um and not just in relation to topics that relate to women but everything because as I said if women

15:47

form half of the world's population then um most most things that impact

15:53

um men will also impact women as well so I think it's a massive issue I think

15:59

it's a massive issue in BC um of course it's a massive issue on the founder side as well and it's very well

16:05

reported that um one to three percent uh depending on the report you read generally goes to

16:12

all female founder teams so that of course is a massive issue as well but actually even if you go all the way back

16:18

on the lp side as well um you see that same gender divide as

16:23

well so there is a disproportionate number of

16:29

um of uh men in decision-making roles on the LPS side

16:35

and so suddenly you see this chain where that starts at the lp level that flows down to the VC level that flows down to

16:42

the founder level and across that chain you can see that there is a real lack of female representation

16:48

um and in my view that's that's a that's a problem that we have to look Inward and we have to think as an industry about how we how we're going to solve

16:55

that how are we going to attract more women how are we going to nurture more women in this ecosystem how are we going

17:01

to bring them up so we don't just have women joining um and then leaving after a couple of

17:08

years how do we retain them how do we um and you know how do we do that across

17:13

the entire chain I think that's so that's a that's a real conversation that we should be having as an industry because

17:18

um it's it's a failing on on our part in my view I mean I'm happy that this Society

17:25

evolved since 1900 so we have a lot of more opportunities these days than uh my

17:30

grandparents uh back then what are the reasons in your opinion why why there is

17:37

a lack of women we see this is what what is the main problem by why did that happen

17:43

um there's a number of reasons um firstly the at the source of it the

17:50

um are proportionally less uh female as stem graduates so less women are

17:57

choosing science technology engineering and Mathematics

18:03

um as a future career path and so if the majority of VCS come from that

18:10

background um well actually you're not having women typically come and study and move up and

18:17

even CBC as a career route so that's the first thing I think the second thing is it's a somewhat cultural thing um

18:25

if BC is seen from the outside to be a bit of a boys club and it seemed to be very male dominated

18:31

um actually just attracting people who look different sound different um might be difficult it might be

18:37

off-putting to people who actually want to be in a place where they can see people who look like them and talk like them I think the third thing also linked

18:44

with that is the lack of senior women in VC

18:50

means less mentorship from people again who look like you and talk like you

18:55

um people who can advocate for you Champion you and give them that advice and give that support in a way that

19:03

maybe other people might not quite understand because they've not had the same experiences as you

19:08

um I think those are kind of the creep in my view the the key three things

19:14

um but to be honest I'm I'm already in the industry so I I suppose what I'd

19:20

love to hear from are people who aren't people who are either aspiring VCS or people who have never considered BC as a

19:26

career route and I'd love to understand from them why why not why is it that what what are the barriers to getting

19:33

into the industry what are they struggling with um and I think actually that's that's that's that's how we start we start by

19:40

um uh looking outward and saying you know what's going wrong here um otherwise we

19:47

um I think are at risk of having almost a a positive reinforcement by um asking the people who've already

19:53

drunk the Kool-Aid and who are already luckily uh doing what they want to be

19:58

doing um let's assume um a fairy crosses your way and gives

20:05

you the ability to change one thing to attract more women or to have more women in the Venture world what would this one

20:12

thing be that you choose

20:17

it's a very good question it's also the problem is it's a cycle

20:22

because the more women you have in the industry I feel like the more women you are naturally attract in the industry

20:28

um and it's a bit of a cop-out to say to have more women

20:34

um so yeah it's a bit of a cop-out to say have more women in the industry um if there's one thing that I change

20:39

it's it'd be on the lp level it would be LPS um making real active

20:47

decisions about the team composition in the VCS that they are backing

20:54

um it's it's LP saying it's not okay for you to not have a woman in a

21:00

decision-making role in your in your team and we we we don't think that is a

21:06

sensible business decision and therefore we can't back that and if the people holding the ultimate

21:13

power uh were really putting their foot down and

21:18

standing strong against that I feel like that would have a trickle-down effect on

21:23

a lot of VCS who then have to to some extent enforce some of that in order to

21:29

be able to go out and fundraise raise their rounds raise their funds sorry

21:34

um and be able to get LPS on side so that's probably the one thing that I'd change if I could I think it's a great

21:40

idea I was just thinking about risk taking I think having a balanced team

21:45

um of men and women in a fund makes absolutely sense in terms of risk I believe man usually tends to make two

21:53

risky bets and I think it's just statistics that's uh of the statistics I

21:59

read say that when it comes to investing basically on the long run women are better than men so it's less risky in

22:06

the funds than I have I have seen that I've not dug into the data around that but I've seen

22:11

the headline and I'm happy to go with that I I know it from my life so it's uh sometimes it's good to speak with women

22:19

um to get talked out of the stupid decisions so it's uh men like taking

22:24

risk let's let's jump to the topic of the the podcast what happens behind the scenes

22:29

um when the founder pushes the button and sends the pitch deck to ABC uh I

22:35

mean when we look at uh when we give it a narcissistic angle I think the founder then thinks I sent now the pitch deck

22:42

and the team at the Venture fund sits

22:47

there doing nothing waiting for the one pitch to arrive and then they get the pitch deck and they happily contacts the

22:54

founder because they didn't have anything to do what's the reality of of ABC how does the normal date look like

23:02

so the reality starting with the pitch deck coming in is firstly where does the pitch deck come from unfortunately

23:09

um so you know we know that in BC we have a problem around um around you know warm referrals and

23:16

warming troves through networks which can often mean that if you are someone who is in that Network it can be easier

23:24

statistically to get in front of a VCU than someone who isn't so I suppose the first thing as a Founder to think about

23:30

is how are you reaching out to the VC is it a uh is it a cold Outreach on

23:38

um on on LinkedIn is it a generic message or is it actually something that you've really thought about how you're

23:43

going to come across them whether that's sending a really personalized message on social media whether that's trying to

23:50

find a connection through mutual friends um whether that's trying to go places

23:55

that you know that the VC is going to be whether it's an event or a panel session uh whether that's taking part in a

24:03

pitching event that you know that the DC is going to be part of the panel of that pitching event it really differs in

24:10

terms of where where that where that interaction happens unfortunately um so I mean at playfail we've we've

24:16

actually really tried to address that and change that so we have a open type

24:22

form on our website any founder from anywhere can come and upload their deck on our

24:30

website and two members of our team to to ensure that we

24:36

um have a slightly some objectivity baked into the decision making two members of the team will go through the

24:42

pitch deck and decide whether we're going to follow up with the founder and the purpose of that is to really get

24:48

around this issue of um of of selection bias if that introduction or that pitch that comes

24:55

from one single Source um so yeah I'll play fair we're trying to we're trying to change that

25:01

um but yeah unfortunately that that's generally what happens um and then I suppose it's just a case

25:07

of whether um the investor in the 15 slides that

25:12

they have in front of them um can see enough to decide whether to take a call and really that is the aim

25:19

of a pitch deck um it's not to convince it's not to show and showcase your

25:24

entire business in 15 slides the the purpose and the aim of a pitch deck is

25:30

simply to get that fast call with the VC and it's to give them enough information to go on to get that first call

25:37

um there's loads of uh articles blogs resources online about how to create the perfect pitch tag so I

25:43

won't go into that go into that today uh there are two questions

25:48

um that I would like to ask you now I mean uh you you answered the second already that we don't go into how to

25:53

structure pitch like I have also a video on my YouTube channel with uh a woman who consults um

25:59

uh startups up to IPO level how to structure that so there's enough information on that but the fact the

26:06

second question that I would like to ask you is a debate that I'm having now

26:11

for 16 years and there are always these two opinions on the market so one says

26:17

Founders should start building relationships to BCS before they need the money so they should invest a time

26:23

go to events uh gets to know the VCS understand the story and the other uh

26:29

school of thought is uh don't do that uh just approach receives when you need money uh when it needs the capital

26:35

what's your opinion on that what is the best way for Founders to get in touch with VCS should you wait until they

26:42

really need Capital until they have an investment case why should they start earlier or anything in between

26:48

yeah the age hi do you enjoy this episode then take a quick break and show

26:55

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you for being a part of this community short question um

27:34

uh so what do I recommend my Founders do when I'm working with them on a fundraise is uh to start making soft

27:43

connections and at least start having calls with investors

27:50

12 to 18 months out of the fundraise in order to start building a warm pipeline

27:55

of investors that you can go and you can message when you do go on to to launch your fundraise

28:02

um that can be really distracting that can take up a lot of time during a time that a Founder just wants to put their head

28:08

down and focus on the business so my suggestion is always go for a coffee have a half an hour call with it with

28:15

the fund style the vision sell the dream get them excited and then let them know

28:20

that you will get in touch with them when you go on to launch the fundrais because if you're not fundraising there

28:26

is no value in spending hours with a fund in in um at a time where you're not you're

28:33

not you're not raising and at a time that you're 12 months out from your next race so have that call put them on the

28:39

warm investor list send them updates on a monthly or quarterly basis to keep

28:45

them excited and to keep them up to date with what's happening um and then by the time you do go out to

28:50

fundraise you have hopefully a list of investors that you've already engaged that are already somewhat excited that

28:57

are up to date with what you're building and you can just cite your fundraise with that level of momentum

29:03

and instead of going out to the market code you've got 10 15 20 25 funds that

29:08

you can go to um and that really helps get the ball rolling as you're filling up the

29:16

pipeline and that's literally how I think of a fundraise almost as a pipeline of other funds

29:22

um and to really start getting those conversations going so that's what I would recommend doing

29:28

um what I instead see Founders quite often do is um you know that that approach almost

29:34

falls in the middle of the of the two scenarios that you gave and what I instead see is found is actually being

29:39

quite binary about how they go about this approach so either they'll talk to no investors and then suddenly they'll

29:46

go and decide to do a launch of fundraise and they've not spoken to an investor in 18 months or if they've

29:51

bootstrapped they've never spoken to an investor and so um they don't know what

29:58

um what a good or acceptable round size for the metrics that they have and the

30:04

point that they are in their company life cycle looks like because they've not had those conversations with investors or they've not practiced their

30:14

their storytelling which is super important when you're going through a fundraise that's one end of the the

30:21

scale and then right on the other end of the scale is Founders that spent hours and hours and hours in their week

30:27

speaking to investors and getting pulled into conversations and sometimes even getting pulled into a process with

30:34

investors at a time that they don't want to be and at a time where it's not the best use of

30:39

their time because they should be focusing on the product or they should be focusing on customers or other

30:44

opportunities so as with everything else these things aren't binary so don't be binary and find a good middle ground

30:51

where you can take elements of both and make it work for you this is great

30:57

advice created by some I like it um when I look at at your day so

31:03

reaching out to investors I think it also helps understanding how the day of an investors looks like how you'll split

31:08

up your day how does how does your usual day at play for Capital look like

31:21

definition so we don't fundraise from external LPS um and straight away that is what uh an

31:29

investor normally at a fund would spend anything from 10 to 30 to 50 of their time doing depending on where they are

31:36

in the fun life cycle either actively fundraising or closing out a fund or

31:41

reporting to our peas so we don't do any of that which is great and usually um the source of Envy from some of my

31:47

friends in in VC um so what do I spend my time doing so I I really roughly uh split my day into

31:57

um working on new Investments uh portfolio and everything else so the

32:02

first bit I'd say I'll probably spend about 70 of my time on new Investments so that is everything from sourcing

32:11

um taking pitch meetings um doing deep dives into certain markets or Industries or companies uh writing

32:19

memos preparing for ioc doing incs creating term sheets

32:27

um doing legals going through negotiations and that entire process really

32:33

is the bulk of my my day um and depending on where I am with a

32:38

particular company I'll be at different points of the process so there are some weeks where

32:44

um I might have 30 first calls and I was about 70 will solely be first cause and

32:53

it will solely be at the sourcing part I'll be the very early part of that that process um there are some weeks where I'm

32:59

pushing an investment opportunity forward and so most of that 70 is spent

33:04

on writing a memo and doing diligence and preparing for IC and I might still

33:09

have a couple of first calls back in the post in the sourcing or the first core part of the process but most of my

33:16

energy and most of my time and resources really being spent on getting obsessed with this one company

33:22

um it can be quite difficult to shift between the two because the two have completely different mindsets

33:29

um one requires you to be very open and very inquisitive and to learn

33:36

um and the other requires a level of depth and diligence and attention to detail and focus

33:43

um I quite like going in between the two so I quite like doing both but I think I always think it's um what sometimes

33:49

maybe Founders don't always appreciate is um you might be meeting an investor when

33:55

they're at um they're about to take a company to IC tomorrow or the day after

34:01

um and so that an element of their brain space an element of that energy is focusing naturally because you're

34:08

somewhat emotionally invested at that point of the process in how's our IC gonna go how can I prepare for that I

34:13

see am I missing anything is there anything I've not thought about and it's just always worth having in the back of

34:19

your mind that similar to a Founder um where you have so many different things going on

34:25

even this investment process for an investor can mean that you're in completely different states

34:31

mentally or physically in in every way um so that's 70 probably of my week

34:38

I'd say probably the remaining majority of like the 30 is uh portfolio so I sit

34:44

on four boards um currently um at Playfair um we are a very uh High conviction low

34:53

volume fund so we make six to eight Investments a year and the reason for that is we like to preserve time

34:59

resource um Capital to spend with our company's

35:05

post-investment so every investor at Playfair um generally holds a maximum

35:13

of six to eight uh board seats at any time um and the reason for that is so that we

35:19

can focus and we can dedicate ourselves as investors to our company's post investment so the four companies that I

35:26

work with um you know I might spend time helping them with their fundraise or helping them with their financial model or

35:33

preparing for board meetings or going to board meetings uh or helping them with hiring and taking some interviews for

35:39

them um it it can really be it can be really really be anything

35:44

um and so a lot of that is very ad hoc um but generally I'd probably say about 30 of my time spent on that

35:51

um and then there's kind of everything else which I've not really accounted for but a lot of funds at early stage funds

35:59

particularly um are probably made up of teams of five to ten people and so in a way that

36:05

they're almost startups themselves they're almost small companies themselves so then there's everything else there's

36:10

the brand building and the network building making sure that Founders out there know that they can come to play

36:17

fair when they are raising funds and they know who we are there are the the

36:22

network building bit which is meeting investors who could be a good potential

36:28

fit to follow on in some of our portfolio companies um the result the the there's there's

36:34

all sorts of ad hoc stuff that takes time and energy

36:39

um that is more about being an ecosystem player um our female founder office hours

36:44

events for example take a huge amount of time to organize um but we feel like that's really important to support female Founders and

36:52

to just be a really really good ecosystem player with the view that if you do good things and you make

36:58

connections with people and you're a valuable player in the

37:04

market like good things come back to you and it doesn't necessarily need to be

37:09

transactional those things don't need to happen tomorrow you know you don't do to get

37:15

but actually you do because you want to in the good faith that things will come back to you at some point and I think

37:21

that's quite a nice way to that's quite a nice way to be it's good to yeah it's good to hear so

37:27

you understand steps they play for Capital approaches being more and let's call it active investor

37:32

and help the founders moving forward also creating connections to other funds and it's less like a passive investor

37:40

that just throws money into a company and waits a couple of years until something comes out did it gets the right understanding very much yeah very

37:48

much and and and I don't and I don't um every fund has their own way of doing

37:54

things right and they have their own thesis and um you know if you look at the power law

37:59

of BC actually it makes sense for early stage funds to be making lots of bets

38:07

um in considering just how risky early stages with the chance at one or two or

38:13

three might go on to to have a have a substantial excerpt so I suppose our model is really adopting a later stage

38:20

model almost like a series a style model and applying it to the early stage

38:26

um I suppose with the confidence and the belief that our diligence means that

38:32

we're spending that a little bit more time with Founders and we're able to pick out the better opportunities and then

38:38

equally the post-investment time that we spend um we hope makes

38:43

um even even if it makes the slightest difference in optimizing that company's chance

38:49

um of building a successful business we we feel that's worthwhile um so yeah I suppose our model very much

38:55

goes against the kind of typical early stage with investing um

39:00

but also just a lot more fun right it's just so much more fun like

39:07

um I I I absolutely love the work that I do with my portfolio companies

39:12

um it's genuinely what energizes me um the founders that I work with I am so

39:20

inspired by them and I learn so much from them and I hope they learn from me but I learned from I learned so much

39:26

from them um so I think I'd struggle to be at a

39:32

fund where uh we're super hands off because I think that's the part that to some extent I enjoy the most no I think

39:39

it's definitely helpful for the founders uh to have a sounding board or to have a VC who really helps moving the company

39:45

forward and also is active on the market building relations to follow on investors for example it also takes a

39:52

lot of burn off the founders so they can then really focus on moving the company forward and having a trustworthy we see

39:58

in the bot um what I struggle with sometimes is the many job titles that are in DBC world so

40:05

grew up basically in the 80s and 90s uh the hierarchy was pretty much flat so you had the executive board and then

40:12

directors and then everybody else and when I look at fans there are a lot of different job titles in that can we

40:18

share a bit of light on what the roles mean in in your fund yeah so um our fund

40:27

um everyone does everything so we like to see um ourselves having a very flat structure so absolutely everyone sources

40:34

everyone takes first calls um everyone everyone pretty much does everything

40:39

um which is great and it's really good for Learning and um it's a really good opportunity for

40:44

everyone to experience every part of being an investor to become a

40:51

well-rounded investor instead of you know just focusing um on on just one one area

40:57

um I'd say the biggest difference is um that the investors I've been in the team

41:04

for longer or have have been investors longer naturally

41:09

um we'll have more portfolio responsibilities so um Chris our managing partner

41:16

um I think has got forgotten off the top of my head but probably seven or eight uh portfolio companies so he's actively

41:23

working with which is a lot so um he absolutely takes first calls and he sources and he's super involved in

41:29

all of that but he naturally will spend a little bit more time on that on the portfolio side because of the companies

41:35

that he works with um and then the flip might be for um the team that are newest newest of

41:42

the fund um so that's that's how it works at play for her um I think it really depends Fun by fund

41:49

and I always say to Founders that it's important for you to understand what the fund structure is at the fund

41:56

that you're talking to so there are loads of funds that have a similar approach to play for where

42:02

everyone that you speak to um is likely to have a uh a voice at the

42:08

table um that's great um that makes things nice and easy

42:13

there are other funds where you might be speaking to and it's typically more junior members of the team and they're

42:21

super excited and they're really passionate and they're championing the company internally but ultimately they

42:26

don't have they're not part of the IC they don't have that decision-making power to their enthusiasm is not necessarily

42:34

an accurate representation of the enthusiasm of the IC who are the ones that will decide whether that Fund

42:40

invests in your company or not and so that can sometimes be quite misleading because I'll have Founders who say I've

42:47

been talking to so-and-so for weeks and they're really excited and my first question will always be you know what

42:54

what how does it work you know who has a decision-making abilities at the fund and how does that Pro how does the ICU

43:00

process work because that will give us a good idea of how the fund feels and whether what that investor feels and

43:06

whether what the fund feel are aligned or whether they're not um having said that

43:13

I think sometimes Founders can also go the opposite way and um underestimate the influence of junior

43:20

team members as well funds where there is a hierarchy and structure

43:28

um junior team members have typically more time and they have more energy and

43:34

um uh will spend longer trying to understand the thesis of your business

43:40

and they might have more time to dig into the market size and do research on the competitive landscape and ultimately

43:46

time to just get to that point where they are excited about your business in a way that perhaps the partner that

43:51

you're trying to get in front of might not have that time and so having that opportunity to

43:58

impress someone and someone being open and receptive to it who then goes into the company

44:04

internally and gets everyone else excited about it that's great right that's someone saying that I'm going to

44:11

Champion you I'm going to sell you to my IC and to my fund

44:16

that's really valuable as well yes I think this is absolutely an important points that you mentioned to

44:24

um find a partner or a team member in a venture fund who's really excited about the opportunity basically it's selling

44:30

it's a selling job and it's not something that you just throw the pitch

44:36

Tech on the table and say okay now pick it up and invest so it's finding the person who really clicks with the idea

44:41

this is I think really at the key Point that's often missed and when I read through books I think a reality see that

44:48

in a book in a description look how people react to your opportunity 100 at the end of the day this is a

44:56

people business we're humans and um the investor that you're talking to

45:02

is a is a person and you want to get them personally excited about what

45:09

you're building so that they then can get excited or see an opportunity to

45:16

invest in the company that's that's step one that's emotional engagement that's emotional excitement

45:22

um and quite often I see some of the best Founders um at least the founders are really good at

45:28

fundraising have extremely high EQ that people who can pick up on cues and

45:34

they pick up what people are motivated by what people are excited by and they're able to tap into that and say

45:39

okay well let me tell you more of this um or they're able to look at team

45:45

and they're able to say well that's the person who's covering this sector or that's the person that's most interested

45:51

in the space that I'm working in so I'm going to go after them and that's a really smart strategic way of doing it

45:56

because instead of going to someone who despises Health Tech you want to go find someone who lives for health Tech

46:04

um and it's not hard to do that if you go on someone's LinkedIn or if you go on the team page on their website it will

46:11

probably say whether they're interested in health Tech or not so I think doing that a little bit of work and doing that

46:16

bit of research and homework as well as really tapping into the emotional cues of how people are

46:23

engaging with you just gives you such a good read on the right person that you should be

46:28

speaking to and the right person that you should be um pushing in order to get that meeting

46:34

or get that follow-up meeting and yeah sometimes maybe finders forget

46:40

that these are basically two important learnings here so one is uh getting to

46:46

know the people getting to know understanding also their emotional cues what are they interested in what drives

46:51

them what motivates them and I think the the second important part is

46:59

doing that utility chance on a fund as well so finding out uh what what is the

47:05

area of interest of the fund how is the fund setup does the fund has have money instead of wasting time and just uh

47:10

going through a list of 100 VCS and uh pushing a standard email on somebody's

47:17

table yeah I I think I understand that it can be quite difficult to do some of that research so VC is typically an

47:23

opaque industry if you go on the website of most funds they are not going to tell you if they are actively fundraising or

47:30

not right now um they're not going to tell you if they're in between funds and the first close is happening in q1 next

47:37

year and there's many reasons for that um but they're not you know getting that information is pretty tough

47:44

um you can only work with what you have but through social media and through VCS

47:49

becoming more and more content driven you actually do have a good amount to work with or at least a lot more than

47:56

Founders 20 years would have had to work with you do know what Investments a particular investor has

48:03

made before um you you can figure out what type of

48:08

sectors and industries and spaces they're really interested in um

48:13

and VC investors are increasingly building more of a personal brand outside of the

48:21

fund brand again through social media so suddenly a fund doesn't necessarily

48:27

mean um the individual there might be an

48:33

individual within that fund who's super passionate about what you're building and you ideally want to go find that

48:38

person you want to find the best person possible within that fund to be speaking to

48:44

um and I think treating every single investor within a fund as an individual with different interests areas different

48:50

things that they get excited about different areas of passion instead of just seeing them as a fund

48:57

can optimize your chance of getting in front of the right person and if you can optimize that you can optimize the

49:03

chance of getting them excited which can then optimize a chance of you getting funding and these are the little things

49:08

that really make a difference in the long term yeah absolutely agree and they like the role social media plays these

49:14

days when I think back in the 90s it was really difficult to look inside a company and get an understanding of what

49:21

drives and motivates people inside now we have for example LinkedIn and Linkedin is a great tool when people

49:27

post content um to get a better understanding about the right fit uh do we have the same

49:33

beliefs do we share the same ideas do we have the same vision and it's much better how do you see the role of social

49:39

media these days in investing I think it's massive it's yeah I I spend

49:45

a stupid amount of time it's so bad it's so bad

49:51

um I I use LinkedIn on like a Friday evening and the weekend um I'm I'm on it all the time um it's

49:57

replace Instagram for me um I think that LinkedIn has allowed

50:03

it's just made the world in a way a lot bigger but at the time a lot more a lot smaller it's made people

50:11

um It's Made investors in Silicon Valley accessible to some extent um it's it it gives you a platform a

50:19

scalable platform to share your views with thousands of Founders at once in a

50:25

way that you would never have the opportunity or the time or the resource to do on a one-on-one level

50:31

so the communication the accessibility the

50:37

relationship building um the information sharing

50:43

all of that is super powerful um in an industry that's all geared around

50:49

making connections yeah um Let me let me ask you to sort of interrupt you let me ask you one

50:55

question uh another question to the role of social media uh you also mentioned that you have a podcast it's called when

51:03

unicorns unicorns fly um what's your opinion on podcasting in

51:09

this industry does it make sense to come on podcasts uh to speak uh to people and post content in video content on the

51:15

Internet or is it not so necessary does it make a difference I mean I'm here today

51:22

I'm already a Believer um yeah I mean I I had I had my own podcast for

51:28

um for uh a year and a half called when unicorns fly and the purpose was to bring

51:34

um valuable content to early stage Founders from subject matter experts across marketing or PR or legals or

51:41

different functional uh Industries I absolutely love podcasts I I think

51:48

it's a really easy way of being able to share content and again get access to people that you wouldn't otherwise have

51:54

access to um super scalable high impact um for the people that are engaged at

52:00

least um I think podcast listeners real podcast listeners are some um can be can be really dedicated and if

52:07

you can build that following you can get you can build a really good audience of uh of of people who are interested

52:15

um in receiving that content um but I also just think if you're

52:20

trying to reach people who are already really busy time strapped cash strapped

52:26

um free podcast episodes for half an hour

52:32

45 minutes an hour it's a really easy way for people to just slot that into their lives or it's

52:37

a lot easier than the commitment of picking up the 500 page book and deciding to try and get through that so

52:44

yeah I think the distribution um the accessibility the the scalability

52:49

of podcast is really cool um and just on a personal level I I listen to a lot of podcasts myself I

52:56

which one do you listen to which ones um I'm a massive fan of Tim

53:02

Ferriss so um I think the guest that he gets on a great he does a lot of research before he does the episodes and

53:08

goes in really really deep and I think some podcasts can be slightly superficial and the type of the level

53:14

that they they remain at so I think I love just how deep he goes

53:19

um I always say my guilty pleasure is uh the Diary of a CEO

53:25

um which is run by Stephen Butler uh um a UK based entrepreneur an investor

53:32

um I just think again that they're quite the caliber of guests that he gets on I just think are great so I particularly

53:38

level the founder uh episodes and um he's had some he's had some really cool people on there

53:44

um and then yeah I I I kind of I really enjoy some of the the uh non-vc related

53:51

ones as well or the non-entrepreneurial ones so um you know some of the the podcast

53:56

series the uh the the nine episode series uh whether it's journalism or

54:03

True Crime which is a personal favorite of mine um or just understanding different Industries so my partner's really into

54:09

music he's an absolute music head so um you know I love just just hearing about

54:15

what's happening in other Industries as well and I think again podcast is a really there's a really low barrier to

54:20

entry almost you just go on Spotify you subscribe um that commitment isn't really needed in the same way so big fan of podcasts

54:27

personally yeah I couldn't agreement that's why I have a podcast I guess um what I like in podcasting these days

54:34

is uh like having a conversation with you for example a couple of years ago it was basically impossible to meet

54:40

virtually so I think 10 or 15 years ago because the technology didn't simply

54:45

exist and finding out the belief set of another person was really hard work and

54:52

to see is it really a great fit does it make sense to put people together in a team because basically we seasoned

54:57

Founders are a team for several years it's like a marriage basically and today when you get on a podcast we can have

55:04

one and a half hour conversation I can share it on the internet and everybody who is interested in playing for Capital

55:10

and uh things maybe you might be the best investor for a company can just click into the episode get the feeling

55:16

for you it gets a better understanding of what motivates you and then can decide does it make sense to reach out

55:22

or are we completely on a on on two different planets 100 I always say that founder

55:29

founder investor founder fund fair is so important um and I I can understand that when

55:35

you're trying to raise um for your company and your Runway might be six months nine months you're

55:41

probably thinking God why would I care about founder investor fit I need cash and smart capital is great but you know

55:48

it kind of is what it is and how useful are these anyway um but in reality this is going to be

55:54

someone who's with you on that Journey um they might join your board which is

55:59

where all of the Strategic levels on that company of that company should really

56:04

happen um they're going to have a massive impact on the direction of your business um if they're a good investor you're

56:10

going to want their Direction you're going to want their advice and their support so absolutely taking the time to do your

56:17

due diligence on the investor as well and understanding whether their values are aligned with your values and whether

56:24

you see that 5 10 15-year partnership happening um and whether that enthuses you

56:29

actually feels you with Dread uh tells you a lot about whether you actually want to work with them right and I

56:35

always encourage you understand that nice also agree to what you say it's also my recommendation when uh Founders

56:41

at Yang is an entrepreneur not necessarily in age um select a funds just I'll say

56:49

you will work with that fund probably for the rest of your life so the connections that you create now you will

56:56

also have in 10 years so really Choose Wisely and not just because of capital

57:02

and having said that my next question to you is the expectations and managing the expectations between funds and founders

57:09

what do you expect from your Founders is it just that you want to throw your

57:15

capital in and say uh okay that's it come back in five years and bring me 10x back

57:20

but what are your expectations to farm this um

57:26

that's a really big question um open question open question I think

57:33

so there's I'd split it almost into two ways one is outcomes and outputs and the other is working Styles how you how you

57:39

work together so outputs and outcomes of course I wouldn't have invested in that company

57:45

if I didn't see a VC scale exit or return at some point in the future so

57:51

that is what I go in hoping for it's not necessarily what I go in expecting

57:57

because I'm realistic and I appreciate that I sit in early stage VC which is

58:02

high risk and um predicting what's going to happen in 10 years time

58:08

um would would make me uh I don't know a reader of the future so which I'm

58:16

definitely not so anything can happen um and so when it comes to the outcome

58:21

the outcomes and the outputs really it's trust it's a journey with many processes with

58:28

many Milestones let's break it down whether we want to break it down in terms of

58:34

what the product roadmap and the product development is going to be to get to that end vision of where the product

58:39

should be or whether it's looking at commercial our commercial success is a proxy of our growth whether that's

58:46

revenue or engagement or customers or users or whether that's fundraising and each fundraise round is almost a

58:53

milestone and we say we're going to break the journey down in that way however that happens as long as the

58:59

price as long as we trust in the process and as long as we're building a good process and we have the right milestones and

59:07

with tracking whether we're on track and we're doing something if we're not on track

59:13

the outcome will take care of itself and at the end of the day all we can do is try

59:19

there are so many things that are outside of the hands of the founder and a little bit of luck is needed as well

59:25

um but as long as you you create that framework and you follow that framework and you flag if you're struggling and

59:32

you get help when you need help and you get support when you need support that will almost take care of itself so my

59:39

expectation is definitely not that every single company I work with will become a billion pound company

59:45

that's unrealistic and would mean that Playfair has the best um portfolio in in the history of uh

59:52

Venture Capital globally which would be great but I think you have it

59:58

um so yeah that that's that's one part and then the other part is how do you work

1:00:03

together with the founder as a fund as an investor and on that side it again I'm really

1:00:09

open to how the founder wants to work with us so um we have second time third time

1:00:16

Founders in our portfolio who have been there done it they've made other mistakes they want Capital they want our

1:00:22

help they know what they want our help on but otherwise they very much just want to crack on do their thing

1:00:27

um get moving absolutely fine we're not going to get in the way we're not going to slow you down we're not going to stop you we're not going to make you take

1:00:34

help if you don't need it or if it's going to get in the way that's fine um but equally for the founders that are

1:00:40

maybe first-time Founders or do want more help and do want their investors to be more Hands-On

1:00:46

um and have the ethos of why would you turn down free help um we want to be there for them and we

1:00:53

want to have time resource dedicated to be there for them um

1:00:58

and so for them I always just ask at the outset you know how do you want us to work together right like this is a

1:01:05

working relationship how active do you want us to be where do you want support what are the areas that you want support

1:01:11

and having that conversation at the outset sets the expectations from their side

1:01:19

and our side on what they want from us and what we want from them

1:01:26

um and I'll put my hands up and say that I've not always done that there have been times where I've worked with

1:01:32

Founders and I've not had that conversation at the outset and

1:01:37

it only makes it only delays the inevitable conversation which is let's sit down and align and set expectations

1:01:45

and decide how we're going to work together um so nowadays I I try to do it at the

1:01:50

outset right in the very beginning um and just set the solid foundations and start things as you need to go on in

1:01:58

the strongest way possible no that's a very clever move to manage the expectations before people starts to

1:02:05

work uh rather than uh in between I think it clarifies a lot of uh problems

1:02:10

early on that later on as you said uh naturally peer met Founders who said they would like to have a Hands-On VC so

1:02:18

that we see get really involved into the business which I think is probably more on the essential side of my personal opinion uh the biggest funds become the

1:02:26

bigger the portfolio becomes I think it's naturally that's also a venture fund is accompanied by itself so it's

1:02:33

also internal management and I'm more from the set is the same and I like to have a VC as a board member as a moral

1:02:42

compass when I just look at what's happening now in the world with FDX for example where I when I go for the news

1:02:47

very very often see that there was absolutely no oversight so when I retrieve her headlines I would say

1:02:53

having a VC on board who makes aware of uh very defined lines sometimes is

1:03:00

that's in a startup that's really creative and building something new it's something that's really difficult to figure that out

1:03:06

um absolutely makes sense when I think about it I don't think I was going to say I don't think that was a fine line

1:03:12

with FTX I think they saw the line and just decided yeah this is something for

1:03:17

the chords to decide so I'm I'm not I'm not in the league but there's a there's probably

1:03:23

fraud involved so happy happy friends absolutely but I think to your point 100 and um being a VC doesn't

1:03:30

um having a good relationship doesn't necessarily mean that every conversation that you have is going to be an easy conversation it's not always patting

1:03:36

someone on the back and saying great job I mean you hope it is but that's not reality the reality is that you want an

1:03:44

independent person objective person who challenges you in a healthy way gives

1:03:51

you another opinion challenges at the right time and steps back at the right time

1:03:57

um and gives you that advice when you need it or where you ask from it

1:04:02

um but doesn't isn't isn't a yes person isn't someone who's um afraid to voice our opinion to you

1:04:11

um and that's the type of person that you're looking for and that's um that's quite difficult that takes

1:04:17

years for people to build that that right balance of getting all of those attributes

1:04:23

um and I think the easy route is sometimes to find someone who saves

1:04:28

I'm hands off I'm not going to join your board I won't I won't be that present

1:04:34

um and that that's great that might be what you're looking for

1:04:40

um a healthy challenge and a sounding board um someone who's engaged and wants to be

1:04:47

there and is easy to get hold of is the exact opposite of someone who's just I'm passive I'm off

1:04:58

um what I need less is having a friend in a board meeting I would rather have

1:05:05

someone uh let's say a sparring partner who is giving me the Bunchy punches in a board meeting uh rather than letting me

1:05:12

run into an open life so many people see that so I think this is what you mentioned is getting challenges getting

1:05:17

challenged by by the investors is really a great thing absolutely and we can be friends when we

1:05:23

go for a pint after after the board meeting and we can catch up on on life and everything else but

1:05:30

um in that in that time it's not personal it's you want someone who as you said gives that healthy challenge

1:05:36

and becomes that inspiring partner but in a positive way in a way that you're all growing

1:05:41

um and answer some of your parts you're stronger and you're better rather than working as individuals

1:05:47

but sometimes to also have someone who's pointing in the right direction to say okay this is your Northstar because

1:05:52

there's a lot of noise in companies employees customers suppliers everything is coming to back together the company

1:05:58

is growing and it's really easy to get sucked into the Daily Business and just forget about the mission and having the

1:06:05

board meeting who really brings that team back and say look guys this is your mission focus on your mission move the

1:06:11

company forwards it's great help when we talk about the the relationship between Founders and investors uh you mentioned

1:06:19

it's not always uh happy family how is the reality is the interest between

1:06:25

Founders and investors always Reliant or are there also some some critical Parts where you would say Okay sometimes it's

1:06:32

uh pulling into two different directions I mean as an early stage investor I'd

1:06:38

say that generally I can't think of many situations where you

1:06:44

wouldn't want to be aligned with the founder I mean there are definitely times where you would you could be but why many times where you wouldn't be if

1:06:52

the board is functioning as it should be you're making decisions collectively

1:06:57

um about the future direction of the company and you should be supportive of those decisions that the founder is

1:07:05

execution on because those are the decisions that you've made collectively as a board

1:07:10

um in reality can slightly be slightly different to that so in reality

1:07:18

um VCS might want to be more revenue or

1:07:23

commercial or metrics focused and Founders typically tend to be more

1:07:28

product focused I mean that's one stereotypical example but that can

1:07:34

happen quite often and again that works well in a board in a mix board where you

1:07:40

have different voices where the founder is saying well these are the Milestones this is what we need to achieve to build

1:07:47

a product that our customers are willing to pay for but the vcues are saying okay

1:07:52

great you can build the best product in the world but um how do you prove product Market fit

1:07:57

if ultimately no one is willing to pay for it and having both works really well together um I wouldn't say that's misalignment

1:08:03

though again I'd say that's just Health that's just healthy um different maybe differences of opinion

1:08:10

um I think really the only misalignment that I can I can think of that can

1:08:15

arises at the subsequent round um when founders want to go and do

1:08:20

another big round and preserve their dilution um and do it at the best valuation

1:08:26

possible and the fund might want to follow on into the into the round and if

1:08:31

they're putting more capital in the business um they're almost in this strange space between not wanting to get diluted on

1:08:38

their existing shareholding but perhaps also wanting to increase their ownership and so they want that Capital that

1:08:44

they're putting into the company to be optimized at of course the lowest price per share which means a lower valuation

1:08:52

um that is that where where the VC sets will generally depend on

1:08:58

um whether they're just protecting their current stake or whether they're actively trying to increase their stake

1:09:04

um perhaps you might see more misalignment in um in in what you want if if the VC is

1:09:11

is looking to actively increase um their position um uh but that's really the only time

1:09:17

that I can think of that um there might just be a difference in what the VC might optimally want and

1:09:24

what the founder optimally wants but again if the founder and the investor are both working for the long term and

1:09:30

they're looking to build a big business together um the way we always put our playfarers

1:09:36

this is a pie and we'd all much rather have a maybe slightly smaller slice of

1:09:43

of a bigger pie than have a massive slice of the small pie yeah so if we're

1:09:50

all thinking about growth and we're all thinking about scaling and we're all thinking about what this thing could become

1:09:56

um hopefully those misalignments don't get in the way of us building this massive

1:10:02

business short time I couldn't agree more I always like the example of Amazon it's

1:10:07

better to have one percent in Amazon than 100 percent of nothing so it's uh basically a great point you mentioned

1:10:14

this uh product Market was mailing because uh I think especially in scientific companies it's a lot of

1:10:20

possibility to build the best product ever for no Market actually

1:10:25

um how do you manage uh to hold your Founders accountable to uh not fall too

1:10:32

much in love with the product but uh spends their passion more with finding out for the customer needs but how how

1:10:39

do you do that yeah um with great difficulty normally

1:10:45

um I always try to align commercial and product Milestones so if we're trying to get to

1:10:53

exponent with the product um what's a commercial rationale for

1:10:58

spending time and resource on building that product um and what does that give us on the

1:11:04

commercial side um so for example we're trying to build a product for a pilot that we are

1:11:12

lining up with a customer and we need these two features because that is what

1:11:17

will enable us to unlock that pilot pilot fine because the commercial

1:11:22

rationale in that instance is that you secure the pilot and hopefully you support you you secure funds off the

1:11:29

back of that pilot and you're able to evidence that there is a customer that is willing to pay for that pilot and so

1:11:35

in that case it's really easy because the product Builders um a direct requirement to unlock that

1:11:43

commercial milestone I suppose where it gets really difficult is where you're building and it's not

1:11:50

quite clear for what or to what commercially you are

1:11:55

building and that's a scenario that um sometimes as a VC you you might have

1:12:02

to step in and say um in an Ideal World

1:12:08

um we would build the best product we possibly could today but with limited

1:12:13

time with limited resource with limited money what is the bare minimum because that is

1:12:20

what an MVP is what is the bare minimum that we can do to service customers and

1:12:25

be able to start showing product Market fit and in my view product Market fit

1:12:31

and we use proxy as a product Market sorry we use a revenue as a proxy or product Market fit to say well if

1:12:39

customers are willing to pay for this product you're evidencing that there is a need we don't know the scale of the

1:12:45

need but there is a need and therefore um there is space in this market again

1:12:52

we don't know the size of this product so that makes sense but to build a product in a black hole

1:12:59

in a vacuum without being able to evidence that there is a need from customers

1:13:07

is tough to continue back supporting

1:13:13

um particularly if the company's resources are disproportionately being spent on product build and products uh

1:13:20

resource um I suppose there are exceptions to that so there are companies that have

1:13:27

totally rejected that advice from VCS previously and said actually product LED growth is the way that our company that

1:13:34

is what's going to work for our company um and and and that and that works

1:13:41

um and um it's it's a super tough model because

1:13:47

you are it's difficult to fundraise off the back of um very little to no commercial

1:13:53

attraction um but it's been shown to work before so I think in that case as if you see it's

1:13:59

well this is my recommendation this is what I've seen this is what I suggest But ultimately the founder knows what's

1:14:05

best for their business the founder knows that they're at the helm they're at the helm they're the captain of the

1:14:10

ship um and ultimately it's their decision on which approach they want to take yeah

1:14:16

Steve Jobs was a genius in product Market fit I think he had a talent of understanding people's needs before they

1:14:23

even knew it before they really I mean smartphone iPhone only it's an iPhone in a saturated market and uh he

1:14:29

successfully demonstrated that you can place a product in a saturated Market when you know what customers need and

1:14:35

what they're looking for I think it's the most important thing finding the MVP um let's talk about a deal what was the

1:14:41

deal that uh you were most excited about

1:14:46

um I'd say probably the first investment that I made when I joined playfat um there's always something special about

1:14:52

the first one so um it's a company called material Evolution they're one of our portfolio companies

1:14:58

um it is a materials manufacturing and um uh machine learning technology uh

1:15:06

technology company they are building novel materials that are sustainable

1:15:13

um that are better in many many ways than uh material is already available on

1:15:20

the market and they just have a massive Vision they have just such an exciting thesis which is

1:15:27

um they're starting with cement their thesis is that cement accounts for eight percent of

1:15:33

global CO2 emissions it's it's dirty it's bad for the ecosystem it's bad for

1:15:39

biodiversity it's bad for water um there's so many um negative implications of

1:15:45

manufacturing this material and yet it's something that we really need as a society because

1:15:51

um it's it's super scalable and um it's a lot easier to transport and

1:15:59

um a lot of the buildings over the past 50 60 years have actually moved to use

1:16:04

of cement as a core part of their building building product so these guys

1:16:10

um want to tackle a a massive Market with a massive problem

1:16:17

um using technology that actually has the ability to fundamentally revolutionize that that market

1:16:25

um and to me that's really exciting it's it's not a step change um it's not a nice to have

1:16:31

um it's making a fundamental impact in the world and to real people and that's super exciting to me

1:16:38

did I understand right you said cement the common is about cement and cement uh

1:16:44

is responsible for two thirds of CO2 emissions of eight percent of CO2 8

1:16:51

so it's not 66 it's eight percent it's really amazing

1:16:56

okay that was a misunderstanding for mine sorry for that um how did you find the company

1:17:03

so this was a company that um Chris um a contact a friend of Chris at the

1:17:11

Heritage group um uh emailed over to him and said I think this is something that might be

1:17:16

quite interesting for you to look at um and that was that was

1:17:21

um evidence of a time where people knowing what you're interested in as a

1:17:28

fund what you're interested in personally as an investor works really well because they're able to recommend something that um you know

1:17:36

they've already invested in the company and they were following in following on in the following investment were able to

1:17:43

say well this is something that we we are we we believe in this might be something that's interesting to you

1:17:49

that's how we came across them um I think we might have first come

1:17:54

across them the timing is a bit unclear in my head um Liz took part in our female found office hours event and met one of my

1:18:01

other team members called Simon so I'm not quite sure which one came first

1:18:06

um but actually it's quite interesting to show how quite often there can be multiple routes to meeting a fund and

1:18:13

multiple ways to get in front of a fund so yeah that was that was pretty cool yeah I think it's hard work for Founders

1:18:19

to to get the pitch deck on the daily first and it must not necessarily be just one meeting it can be many many

1:18:24

touch points like in a sales process let's look on the other side of the table but at the hurdles that vcsu

1:18:30

should have to overcome when it wants to get in a deal like uh your first deal is it is it just a clear flow there are

1:18:37

nowhere else so are they also typical uh points where you'll say it's not that easy to get get the deal nailed down

1:18:45

um I mean there can be a bunch of hurdles right so the first thing is actually getting to the IC and deciding that you want to make the offer to

1:18:51

invest um parking that that's that's just the investment process uh more generally

1:18:57

um hurdles might be um you are not able to agree on terms for example so

1:19:04

um the founder and the VC disagree fundamentally on what they believe the valuation of the company should be and

1:19:11

some linkage dilution the founder is willing to take for that fundraise um

1:19:16

there might be disagreements in some of the other terms um it might be just a timing thing it

1:19:22

might be that um the VC gives the term sheet and the

1:19:27

founder isn't 100 sure whether this is the fund for them and they want to wait until

1:19:33

um they're able to get to the end of the process with some of the other funds that they're speaking to and as a VC

1:19:38

it's then um it can be a little bit tricky

1:19:44

um because the the founder is is in a difficult position

1:19:49

um I mean other hurdles you you still have

1:19:54

uh due diligence legal due diligence commercial due diligence to go through and hopefully it's never an issue but

1:20:01

um uh that could be something that comes up in due diligence at at the last uh stage

1:20:08

of the process um that means that the fund is no longer able to invest I mean that's never

1:20:13

happened at Playfair thankfully um but that could that would be a massive hurdle in actually being able to

1:20:19

close out the fundraise so I always say that nothing's done until the

1:20:25

shareholder agreement and the long forms are signed and they're done um I don't I try not to celebrate too

1:20:30

early um but generally if the VC is honest and transparent and the founder is honest and transparent

1:20:37

um and you're in it for the right reasons and you see a path to working to each other with each other and you feel

1:20:43

that this is the right fit um that really in theory shouldn't be any hurdles

1:20:49

um the practice the Practical uh execution of that can be a little bit different sometimes I like the two words

1:20:55

that you mentioned honest and transparency I think this is very important in business 100 yeah super important and really

1:21:03

important for us to play far as well yeah that's true that's true let's move to the fun part of the conversation uh

1:21:10

one of my favorite podcasts is the all-in podcast um dates for investors from the United

1:21:15

States they're usually every week talk about uh what's going on in the world and uh one of their investors is really

1:21:23

good in predicting the future and since we are at the end of the year uh I would

1:21:28

like to hear your predictions for the receiver of 2023. um how do you see the world evolve for

1:21:36

venture capital in the next year it's just a guesswork it must not be a current it's just uh correct it's just

1:21:43

fun gotta make sure you don't hold me into this um I think obviously we are going into a

1:21:49

recession um in the UK and a lot of the world was going into a downtown so I suppose a doom and gloom of it will be

1:21:57

um I think that people will be slightly more cautious of deciding to become a

1:22:04

Founder so we might see less companies being founded at the early stage we

1:22:10

might see the volume of uh new companies go down

1:22:16

um we might see VCS becoming a lot more cautious and

1:22:21

um their risk appetite being a lot far far less than it was in 2021 and 22 in

1:22:28

investing in new companies or even following on in their existing companies um and we might also see VCS actually

1:22:35

struggling to fundraise from their LPS because a lot of LPS are corporates or

1:22:40

governments and of course says that knock-on effect if those bodies are

1:22:45

struggling um with liquidity or they suddenly don't want to be

1:22:52

Overexposed to a high risk asset class like Venture Capital that trickle on

1:22:58

effect means that VCS are going to struggle to raise funds in a way that

1:23:03

they might not have struggled with over the past couple of years so that's all the doom and Bloom having said that

1:23:09

there's a huge amount of dry capital in the market um VCS have raised this year

1:23:17

startups are still raising um and particularly at the early stage we're still seeing a lot of activity

1:23:23

happening um we're still investing a lot of other funds that I speak to most other funds

1:23:29

that I speak to are still investing um so as I as always there's money out there

1:23:36

for the companies that are in it for the right reasons that are a good strong

1:23:42

investment opportunities and those companies are going to face less competition for talent with tech layoffs

1:23:49

and less companies being around they're going to face less competition from new entrants

1:23:55

um they're going to face less competition for Capital from other startups so

1:24:02

I suppose if you're um a good if you're building a good product

1:24:08

with a real Market need in a massive uh with a massive opportunity to to

1:24:13

revolutionize the space that you're working in I'm really optimistic that there's space for you to fundraise and

1:24:21

there's every opportunity for you to fundraise and as a VC I'm really optimistic that we are going to invest

1:24:27

in a lot of companies that aren't exactly that um maybe a little bit less than we would

1:24:32

have in the part in the previous years maybe we're going to see a little bit less volume um but we're still absolutely going to

1:24:38

be doing it um so yeah I'm uh cautiously optimistic um but very

1:24:45

optimistic nonetheless yeah I couldn't agree more there's always opportunity on the market and I think the best companies started uh

1:24:51

during recessions and downturns uh I think Microsoft April in the 70s and uh yeah WhatsApp Uber in 2008 something

1:25:00

around that yeah that's right yeah exactly which even have two

1:25:05

questions left but let me ask you uh another question first uh did we miss

1:25:10

anything in the in the podcast that you would like to talk about nothing I think that's everything I

1:25:15

think you're a very thorough um I'm really good question sir thank you very much it's fun talking to you so

1:25:22

then yeah it's great to hear that what I like in 2022 is um that the globally that's the founder

1:25:30

and Venture Capital ecosystem has really grown since the 90s there is so much opportunity on the market so many

1:25:36

players on the market and 30 years ago it was completely different it was difficult to get in touch with VCS most

1:25:43

PCS were only in Silicon Valley basically inaccessible to the rest of the world due to the lack of Internet

1:25:49

technology and now we have LinkedIn we have social media we can have a

1:25:54

conversation you are in the United Kingdom I'm in Austria you can share your stories it's such a great time it

1:26:00

does people should be more optimistic and looking in a bright future yeah 100 I mean one playful um was launched in

1:26:08

2013 By a Founder Fede we were um one of very few early stage funds in

1:26:14

the London ecosystem and now um thought I could I could count 20 30 40

1:26:22

um which is great right and and that's pretty cool yeah I couldn't agree more I couldn't agree more let me ask you the

1:26:28

final question what piece of advice helped you the most in your journey as an investor it's actually

1:26:34

um something that my dad would always say to me when I was young and so I applied to everything in life but I

1:26:40

think it's particularly helpful um in VC so uh the saying that he always

1:26:45

uses is um it's nice to be important but it's important to be nice and I think that's

1:26:51

really applicable to BC because there is this really strange in a way power

1:26:56

dynamic between um investors and Founders as an investor

1:27:01

you're a gatekeeper to Capital and it's your responsibility to responsibly allocate that capital and Founders come

1:27:09

to you wanting something that you can give them that will enable them to

1:27:16

survive and thrive um and it's really important that

1:27:22

you know even though you're in this um position of of relative power and

1:27:28

importance um that you use that responsibly and you

1:27:34

don't allow that to um change how you treat people and how you engage with people and every

1:27:40

interaction you have with with respect and you're out to make friends and not enemies

1:27:46

um and just generally that you don't lose your sense of self um

1:27:51

so yeah I think I think that's that's that's always been really important to me but I think it's it's even more important to me in VC where I feel like

1:27:58

that um the risk of that happening is is slightly higher because of the position

1:28:04

that you're in um so yeah I always just try to remind myself that with uh with every interaction I have no that is great

1:28:11

advice being kind staying kind uh having respect respect for the approach to people is a really important advice

1:28:20

one degree mark sure it was great talking to you I enjoyed the last one and a half hours

1:28:28

um I wish you and your family and the team at play for Capital uh happy holidays and a fantastic start into the

1:28:34

next year and I hope we can catch up uh someday in uh London yeah absolutely and

1:28:40

thank you so much for inviting me I I didn't even realize it's been [Music]

1:28:46

an upgrades to have you on the show enjoy your weekend bye yes you too bye thanks for tuning in if you found this

1:28:55

episode informative and engaging don't forget to hit the like And subscribe

1:29:00

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