DeepTech Seed Capital and Acceleration
Kevin Monserrat

"The process of becoming an entrepreneur is a lot easier, but the process of winning in this market is a lot harder."

- Kevin Monserrat

Kevin outlines what he looks for in a start-up

Talk Takeaways

Kevin Monserrat talks about the iterative approach they take in Consilience Ventures in helping startups raise funds through microfinancing.

About

Kevin Monserrat – former Head of Ecosystem of Microsoft Scale Up Europe. Kevin holds a Master’s Degree in Business Innovation and Entrepreneurship from INSEEC Business School, France. Additional expanded studies were upheld in the Master’s program at the University of New England, Australia as well.

Born in France on March 25, 1988; Kevin made a grand accomplishment at the early age of 14 yrs. old, winning the French National Boxing Championship. Afterwards, he went on to serve as one of France’s youngest Fireman one year later. In 2006, Kevin was appointed to Aix-en-Provence, France’s largest Fire Station. This station responds to an average of over 200 emergency incidents per month, providing Kevin with over 400 answered incidents over the duration.

Kevin had to overcome personal tragedies at a young age, which taught him how to be highly resilient and independent. His professional development stems from this, and is coupled with his international experience (living and working in United Kingdom, USA, and Australia). This collaboration has made him an excellent Ambassador for Junior Chamber International; where he has held posts as Active Challenge Member and online Marketing Consultant.

Kevin is also a passionate spokesman of Immigration challenges, where he recently supported the Maltese Government in Malta. The success of the Erasmus Plus project was based on Kevin’s ability to decipher situations and bring together; certain teams in order and begin to discuss solutions.

Kevin developed a positive reputation with the Private Equity / Hedge Funds, such as Global Alternative Investment Manager (GAIM) and Alternative investment (CAIA) and helped to identify problems and recognize solutions.

Kevin continues to enjoy sports, particularly gym, fitness and mentoring startups from LBS, Oxford, HEC. In summary, Kevin has reviewed 700+ start-ups and mentored over 40 scale-ups in both marketing and fundraising strategy.

The full #OPNAskAnAngel talk

Jeffery:
Welcome everybody to OPN Ask an Angel. Today we’re with Kevin. Kevin’s awesome. As you can already tell, we’re having a great discussion about everything. Kevin comes across as being a British UK guy except for he’s a French guy who’s landed in the British UK side and he’s kicking ass. But over there and you’ve got a cool model and lots of great things going on. But, Kevin, I’m gonna turn it over to you. Maybe give us a quick introduction on your background on yourself and what you guys are up to and then one thing about you that nobody would know,

Kevin:
Right? So let’s start with the thing that everybody would know. After a few worlds, French grew up in north, kind of on the outskirts of Paris. First job was firefighter, then went to went on to many of the things such as a photography, logistic transport, and kind of we’re having my 1st 20 years in France. But when I looked at the clock and I looked at what I wanted to do with my life, I knew I didn’t want to stay in France because I was trying to do something else. I didn’t really know what that was. And I was super lucky because one of my best friend who was much older than me was married with a new amazing woman from Indianapolis in the U S. and she’s American. She comes in France I think it was around 28. 29… So 2008. 2009. And then what I was telling her was like well I’m looking at doing something else and I wanna — I want to see what the U S is like and then she says, well, why don’t you go and stay sometime in Indianapolis, you know, have you know, my family and my friends taking care of you. You go there. I did not speak English. I was just barely speaking French, I suppose. Anyway, so I learned up. I landed in London and in Indianapolis in 2010, and started to work for Remax in the US so in real estate and did this for a few months. Started to kind of pick up. You know, the keywords, to sell houses and some stuff. But it was very much kind off mind opening because the US mentality for me was completely different than the work environment I was used to. So I’ve literally kind of I came. I came completely changed when I was back to friends, and I knew I didn’t want to stay there still, So I went to Australia, applied to business school, went to Australia, and again, I was a bit far away from from the family and stuff, but it was amazing experience we’re working with. We’re studying alongside amazing students from all over the world. Ah, and you get addicted to it. You get addicted by being surrounded by people who come from all diversity background also off classes. And, you know, you just get, you know, so addicted to it. So in 2014, I land in London. It was for me two hours from where my family was. And I’m studying. I’m studying economics. And after two months studying, one of my lecture comes in and say, well, I’m starting a business right now. We are a media company working in in the financial services industry. You want to come and do it with me? So I started kind of taking off a small startup, basically taking the business off the ground, trying to raise a bit of money, building the network, doing business development, marketing. Kind of touching everything when you are doing a small startup and I under building a great network off active allocators. So typically, family offices, hedge fund managers, emerging hedge fund managers and so on. So I end up building this network, which was kind of almost like a gift for me because I knew nobody in London when I learned in 2014, I didn’t hear because I was following my — a love, or I will. I didn’t come here because I didn’t know what to do. I just came here and I was just building this amazing network bit in Monaco and in London. And so lucky as always. You know the case when you know in your career luck, he’s always, you know, a big part of your success. I met a guy who says, Look, I’m taking over the CEO of Microsoft Ventures role and I’m like, Wow, that sounds like an amazing place to be especially when you want 2015, when there are not a lot of incubators and accelerators. I mean, they’re just starting. I mean It becomes to flourish like mushrooms. It becomes to start like mushroom. But it’s still the very beginning. And there were no a lot of corporate venture arms and off corporate accelerators as well. So they need. He grabs me and say, Look, I’m looking for somebody who wants to come and build a network, uh, built the Bryans, build a network and support the portfolio companies for Microsoft. And that’s how I ended up in Microsoft at the end of 2015. Super lucky. Um, backed by an amazing man who just believe that I could do the job. Really? So I build a network for myself or for for four years at the back of this. So worked pretty much with, um, 200 companies for five years, Um, get to work alongside the leading VCs and get to understand a bit more about how that world works because I’m new to it. Right? I mean, starts in 2015, 2016. I’ve never rise money from VCs before. You know, I barely understand how that works. And for four years, I had the chance to put a microscope on how the city works, how they create their deal flow, how they do how they do their due diligence. how how what makes them choose the company. And I learned this for four years intensively. I just do crazy hours and, you know, and, you know, and working during the weekends and meet everybody I can, because for me, this is kind of a massive extension, you know, of my business degree, if you like. I’m learning so much from some of the best Angel Investors. VCs. And then, I enjoy it. You know, I create the ecosystem. I bring people together. I connect the dots that’s what I do. And then all of the sudden one of the research I’m involved at, one of the research piece, I’m involved, that Microsoft kind of led me to work with London School of Economics the Open University and let’s start innovation here in the UK And the goal of that research was to study the impact of incubators and accelerators, which is again it was for me, amazing opportunity to learn the limitations of incubators and accelerators because they’re so much of them right there is about. Back then there was 125 incubators in in in the UK and about 250 accelerators and so get to study how they all work and how you know, what’s the old limitations, what the different business models that goes with such models and whether they make money or not right and whether they are in line with the with the success of their portfolio companies and how they start to make money and all of the sudden for me then this picture became complete. I knew precisely how company would raise the 1st 50k check and what kind of terms that we should go for and where to find that money and what kind of investor you don’t want to take the money from right up to kind of, working with companies that close 110 120 million from large U S investors doing series B round so off covered all of this. And, you know, spend a lot of time into the details of that and also looked at how those companies were emerging and supported by the economy by the ecosystem as a whole. And that’s how we came up with my co-founders, but about creating a private start up ecosystem in private market network, as we call them, which is considered ventures.

Jeffery:
Amazing. So you were also the youngest firefighter as well. Were you not?

Kevin:
I was one of the certainly one of the youngest off my region and certainly one of the youngest, you know, in France.

Jeffery:
I like it. So you challenge everything. That’s that’s the best way to go about it. So in the in all this experience you had, including Microsoft, it sounds like you really started to build flavor for early stage investing. and how it works. It’s not fair to say

Kevin:
Yeah, which is an amazing space to be right now

Jeffery:
it is. And it seems like every day there’s something new popping up and everybody’s going after the space like never before, which is pretty amazing. I think there’s gonna be a lot of consolidation and weed out over the next two years because as everybody moves into space and realizes that how tough it is, things will start to kind of feather their way into other areas, right? Just like the marijuana space went really quickly and then dissipated down. And now, like every sector starts to get a lot of attention, and then it spreads out when it realizes that it’s tough this isn’t an easy space. So is there. There is one line that you guys mentioned it, and I think it It really defines kind of where you guys are now. And it was said, Cash is king, and maybe you can define a little bit more on what you mean by that in the world of a startup.

Kevin:
Yeah, I can’t remember exactly where you saw this. We certainly think that cash is not the king. I really think that actually, talent is scarce and cash is abundant, right? We’re not going to go down to what’s going on right now with the rescue plans off us governments around the world, right? We’re not going to be talking about quantitative easing, but you know in reality right now, when you look at, um, let’s look at a macro first, right? Governments right now know that the only way to grow their GDP it’s by investing in entrepreneurship and innovation. Right? Because that’s the real economic tissue, right? It’s 95% 97% of the economy is small and medium businesses right. Because off the advance of Internet and, you know, and other companies the other technologies that are built on the Internet, then it becomes so easy to create new companies. So software, you know the cost of software, you know, is going down dramatically, right? It costs nothing to create software anymore. The hosting costs nothing. I mean, all of this becomes super cheap, right? So its actually not very complicated to put some sort off on MVP together and then pitch it to a VC pitch it to a nearly stage. You know, investors such as an angel. So and if you have something coherent and and if you obviously get some some buy in from those people, they will write you a check. But the problem is, it’s how you go from that to something that is a real business that will succeed so you can get your 1st 150K or 250k check. But if you don’t get surrounded by the right people very early in the process, no matter, no matter how much cash you have, you know you’re just going to be wasting the money right. And the problem is that I think a lot more than before. As much as entrepreneur becomes democratized, the competition is also much more fierce. It’s a lot harder to win because there’s so many people coming up with ideas and so many so much capital floating around. So the process of becoming an entrepreneur it’s a lot easier, but the process off winning in this market, it’s a lot harder right, because there’s so much money going to your competition and then the market moves so fast that if you don’t spend the money rightly with the right person after the right market, then you’re not. You’re not going to last right and you’re not going to be the last, right? You know, people talk about being the first at the end. What matters? It’s being the last in the market. Whether you start the first or you start the second or the fearful the 10th, Who cares? The point is, do you really, you know, build something which makes you last? Are you the last one you know, in the monopoly, right, when there are only three players because there is the rule of three right there is always three you know, global players, right? You’ve got you know you’ve got It’s the case for the trying cos it’s the case for the telco. It’s the case for the banks. It’s you know, and all of those countries you always have, you know, three rulers, right? And all of the rights there’s obviously gone. So, you know, finding the money from an angel Investors it’s obviously good because it gets you going. But the reality is that this is not a game of money anymore. This is a game of being with the right people at the right time, using the having the right discipline to do some trial and error, learn quickly, fail fast, restart again, doing do it again and win, you know. So, um and if you don’t bring the right people around you, you’re not going to be able to succeed.

Jeffery:
No, I love that. And I think you, when we were touching on cash is king. I think it kind of reference the fact that cash is abundant out there and you got to figure out a way to maneuver and work your way through everything to get to that wind. And you define it quite well that you’re not gonna get there if you don’t have the right team and a great line that came — It was interview I did a couple weeks ago, and the gentleman said I would invest in a B product with an A company or an A Team, and it’s so true because that A Team will make that B product in an A product. But if you have a B team and an A product, you don’t have the same success, and it’s not gonna be able to turn itself the same way that you hope it will. So Team is a big proponent to growth and to figuring out where you need to be in a market.

Kevin:
Yeah, I guess the nuances that it’s not all about the team, the team and has a network. And this, this is that that layer that’s, you know, the team is the first layer of the onion. But the network of that team you know, the 2nd 3rd layer of the onion is as important because it accelerates your cell cycle. It accelerates your credibility. It makes you avoid some mistakes that they’ve made before. You know, when we — you know, in our network, when we talked to somebody who has done that for 40 years, he’s got the answers to the questions that you didn’t you didn’t even ask yourself. That’s power, you know, of leveraging somebody who’s done it for 40 years. Who’s seen all of the technology stacks evolving and who understands, exactly, and because the things are always the same in the end, you know, there are always the same, so once they have developed this pattern to think, you know, think about something they’ve they’ve seen in the past. They will tell you. I’m not sure I’m right. And that’s usually how you see how smart they are. They tell you with humility. Look, I’ve done this for 40 years. I’ve seen this working, but I’m not certain that that’s the right answer, you know? And that is super, super powerful, as opposed to somebody who’s off university with a nice degree from one of the leading university. Right? And he’s gonna tell you Oh, yes, I’ve got my MBA. I’m 25, 30 years old, and I’ve got the answers to everything. Well, you’re gonna have some bruises in some scars and that’s just the way it is. And you’ve got to learn

Jeffery:
Agreed. So to follow on that — you made a comment, which I can tell you that in all the interviews I’ve done, I haven’t heard this comment yet. Which is crazy, because in the workspace that we’re in, it tends to happen quite often that you hear this, but you said fail fast. So your whole thing was trial and error and then fail fast. Can you give us an idea for the audience on what you mean by fail fast? Because I think people tend to think it means I’m working on something. It’s not working. Shut it down and start something new. And I’m not sure that that’s the terminology we’re going for. But maybe you could explore that a little bit more.

Kevin:
Yeah. So entrepreneurship and innovation is an iterative process, right? You never get it right. You never get it right. You know, there’s unless, you know, unless you are super lucky. You are one of the very few. But, you know, the pattern is that you’re not going to get it right. That’s the foundation of innovation. The risk that you are taking is obviously unknown, and your job as an entrepreneur is to try to reduce that risk, you know? So all we do is entrepreneurs is, and as investors is, we look at opportunities. We don’t have a crystal ball. We don’t know whether this is right or wrong. We see behaviors. We do our study. We understand market dynamics. We understand micro and macro trends. That’s what we look at and those things. Um and but um, you know, if you do triangle there, you know, there is what you control and on the top of that is what you don’t have any control off, you know, So we focus a lot more. You know what? We don’t what? What we control? Because if you can’t, if you control it, if you If you really focus on what you control, then you’re you’re much more inclined to succeed, you know, with the things that you don’t control. Yeah, so, you know, fail fast here means how quickly can you learn that’s pretty much what it is. How quickly can you learn if you really learning something which is wrong about what you’re doing, what it is that you are? What are your actions that you must take in order to make a decision. And, you know, if you are trying to sell stuff and then you don’t really see people buying. Then you probably are not something you probably know in the right business, you know? So fail fast here means, and that’s very much one of the big challenge that you know entrepreneurs are facing. It’s because it’s a lot easier today to find money from angel investors and early investors than from customers. Yeah, a lot easier, super easy in fact, especially when you are here in the UK when you have massive, you know, uh, you know, attack in massive tax incentive where you know, you know, the investor In the end, the CIA s and I s investor is only taking 30% of the risk. You know, bottom line is 30% of the risk. You know, you invest 100k worse, you lose. You know, it’s not even 30k —

Jeffery:
(Inaudible)

Kevin:
…so so that’s you know, and that’s against, You know, it’s great because it helps people to help, you know, people to get going, and he creates jobs. But the problem is that all of the sudden startups then become almost like, um um, you know, lifestyle because it’s so easy to put up up, you know, a slide deck together and then kind of do a nice hookey stick of saying this is our business model. But, you know, the reality is much harder. So, um, so that’s what we’re saying. Fail fast is like validate that you have buyers as soon as you can, and so long as they have not put some money and then they’re not supporting you and they don’t need to be 1000 people, right? You know, you can find 10 people who give you who write a small, you know, check for buying the product. You know, that’s pretty much. And if you don’t fail, if you don’t find this, you know, if you don’t find this small group of lovers really early adopters than what it is that you should do in order to, you know, in order to do that and if you are in the right there in the wrong direction, just just, you know, fail, give your money back to your investors. There is no arm of being wrong, because they are aware they’re aware that this is risky. They are aware that this is that you know, you don’t know what you’re doing. You think you do, and you have to be a bit you need. You need to be bit convinced about what you what you are after. But in the end, if you really don’t see the early signs of success just give your money to your investors, you know? And don’t be …

Jeffery:
(Inaudible) Money back, but in in, uh, I think overall, it does sound good. But you’re right. It’s a shift. And it’s a movement that as you’re building your company, you’re pivoting, you’re testing. There’s a position where you have to make a decision. Can you double this business? Can you four times business? If you can’t, then how do you move into a direction where you can?

Kevin:
Exactly. That’s exactly there’s so much value in humility here. If you go back to your investors and say, Look, I you know, I’ve taken your 10K check. I’m only able to give you the five k check because I spent of spends half of it to prove well, disprove that what I was doing was right or wrong. I’m now. I now know what I’ve learned. I know my lessons. I’m going to give you my I’m gonna liquidate the company. I’m going to give you what’s left. You take it. Next time I come back, I’ll tell you a bit more. I’ll have I’ll have learned and I have much more chance to succeed next time. So I’ll be more inclined to raise money again because I know that I will have created trust with somebody you know.

Jeffery:
I like that. No, that is that is very valuable. If you could get entrepreneurs to think that way and go to that direction. Hey, you know what? You’ve got the money there. If you’re gonna be able to make the right hypothesis and build it out into a business. And if you don’t figure out where you could make that change and if you can’t and failed and start something new But bring something back to the investors that show have made your time to do this. Now move on to something else that may be more constructive, and you’ll probably find that that investor that came in the first time will come in the second time because they’re going to see that you were true to your end goal behind what you’re doing. So I love that. That’s Ah, uh I guess we can preach it and hopefully maybe some startups we’ll see. That is away to test. They’re getting paid to test a theory. And if that theory works, then they’re gonna be able to be successful, and they have a great team of investors and other people supporting them. So that’s great. So on this journey, and I’ve read a bunch of different things that you’ve written and you composed around this, so maybe you can share a little bit more about how you envision and see a startup going through this process. Because you’re kind of in a way, you’re trying to change the way VCs work and the way that they fund early stage companies. So how does that look to you if I start a new company and I come to you? Kevin, I got this great idea. This is what it is. How do you see the journey for me from raising funds?

Kevin:
Yeah. So, um, from from your point of view and I’d like to go back to ah, your points till about, um you know, the way we see VCs moving forward is that, um you know, VCs, um, great on their own, right? They do what they can with the model that is suited for purpose, right? So, essentially, just to do a quick politics on this is that they investigate of their money, they prove they can find good companies and show some some some track record. They set up a fund. They raised the fund. They deployed the fund. They liquidated fund. That’s pretty much 99.9% of the VCs on Earth, right? But they are super small teams. And, um, we know that some of those once they see so much d flow that they are struggling to see that the flow and curate that the flow properly and make sure they obviously do proper due diligence. Because what’s on the website and on the pitch deck is very often different from what’s, you know, on the cut base or what’s on the bank account or what’s on the customer pipeline. Yeah, so there is a lot of due diligence, and due diligence is super key here. To be a good investor at seed, you need to put your emotions away. You need to tell I don’t like this entrepreneur. Even if you do, you need to You need to be so controversial. You need to be like, you know, almost like people, or I like it. I don’t like it and always find reasons not to like a deal. And ah, and then that is that is going to be a gift to you because you’re gonna be spending so much time into the details that will make this business, kind of work or not. Yeah. So having said that, we think that all VCs are going to be forced to effectively spend more time with the companies that they enable they back. Right. If you look at the best VCs on the planet, you know, A16Z and the sequoias and the benchmark they all have teams working with their portfolio companies, they do not. They try to reduce the uncertainty by being super hands on. They are large funds. They manage billions, you know, But they, um, super hands on. They still have lots of people on the payroll, and those are some of the best, and they work with the portfolio companies. They just don’t deploy cash and come to the next board meeting asking you how how fast you are growing, right. That’s very much. Well, what obviously should do. But the reality is that the model is saw so limited. So you as an entrepreneur trying to rise money today. What super important is that you define precisely what you’re trying to achieve yourself, what you’re trying to prove as a company, right? What it is. Is it your first revenue? Is it that you’re trying to get to a certain level of product maturity? Is it because you’re trying to find on some market research and some product developments to prove your business model? What it is? What is it that you are financing? Yeah. Is it your product market fit is it? Are you financing your minimum valuable value? You know, how was the value that you’re creating toe a customer, which you can quantify and say? Now I know my pricing. You know what it is that you’re financing, And truth is, that money is not going to give you that. You know, money is just going to give you the fuel, but you still need to find the right the right direction and obviously the vehicle to get there. The vehicle being the team, being you operation, you know, being all of that. So yeah, I think you as an entrepreneur. The way we see this evolving is that we are a co investment platform. We are We are working alongside other and your networks and VCs. Ah, and then we offering this platform for them to review deals more effective, more effective, if it efficiently for them to leverage their network and the next tunnel network better when it comes to doing startup due diligence, typically, can you tell me what you think about this? Can you look at the cyber security side of this business? Can you tell me if this is going to scale? You know, can you tell me about the science? Is this GDPR compliant? You know, all of those things that are super important when you’re making a deal? Then you really want to make sure that you’ve got a good a good network around your dealings when you’re before investing in because they can’t see, you can’t know everything yourself. You just cannot. You can be. You can have great good feeling, and you can write a check and be super lucky. But those are exceptions, not the rule. Yeah. So you know, back to the story as an entrepreneur, when you’re rising money, you’re going to be working with one of our V C or Angel Network partner. They’re going to be, um, basically backing you. They’re gonna say, OK, well, you need for you need 500 k. We write a check off 300k, but we’ll go invest with concealers Ventures. They are bringing the network of expertise to get you to your next to your objectives, right to you, to get you achieve your goals. You know, we think that you are an amazing team, but you need a great CFO doing, you know, half a day a week. You need the right. Um, COO, you need a regulatory, uh, director, You need, you know, one of the best lawyer. That’s what you need to start. You can’t afford just to work with kids outside of, you know, coming out of universities because they don’t want to work for big Corporates. That’s not the right That’s not the right channel to higher customers. And it’s great to have young kids, you know, cool kids. You know, 20,30 years old. Um, and because they’ve got plenty off energy and stuff. But at the at the end of the day, what you want is you wanna have people that can be accountable, responsible and make proper decision. Right? So that’s why, as a startup, the average the average age to succeed is 42 years old, is there’s a reason for that. It’s not. It’s because, you know, you’ve got the Zuckerberg and you’ve got some others that are super lucky, you know, get into things. And of course, they got quite backing. So they get, you know, the market was with them. So you know, all the stars were aligned. But the rule is that you need to have lots off industry experience if you wanna win, and you need to be surrounded by the right people. So you know, to get the long story short, we co invest alongside Andrew Investors. NBCs. They bring the cash because that’s what they do. We bring the expertise, and when I say we it, sometimes them as well. The only thing they do is they using our platform and our technology to invest to invest their time into a digital assets because we have created this currency for entrepreneurs by converting the shares of the companies into a tradable assets. So that’s very much the scenario here. Now we offer speed at the back of this because not only you work with the right expert at the beginning, you know, we’ve got the former CEO of Firefox. We’re talking to the former CEO of HP, looking to one off our investors, the former CEO of Santander Bank. Those guys, they have 20, 30 years experience. They don’t bother much working for £1000, £2000 pounds a day. That’s not what gets them out of bed. You know what excites them is that they are building something super big that is going to turn lots off money in 5, 10 years. That’s what excited, that’s what motivates them and also because they enjoy being, you know, involved in complex challenges as well. So all of this is nothing about money, as you can tell, which is where we come from.

Jeffery:
No, I like that. So in there is there a different journey than you’re taking from a pre seed to a seed to Series A. If we start with yourself, what do you change? The dynamics of this now because it’s live Invest?

Kevin:
It’s a very good point, actually. You can, you know, since we enable startups toe convert their shares into a currency to have access to a curated network off experts Effectively, what you can do as a result is that you can break down the fundraising cycles into small chunks instead of going after big, big rounds. So as an example, instead of starting, you know, seed round two or three million, you know, European, you know, average. Um, you know, seed round size. You would, um you would basically get going with 250 k. You convert your shares, you can you convert 250 K work off yourselves into this currency. You you pay some experts and some of your employees some of your teammate whoever to get to the next sprint. What do you try to prove in the next six months? Raise that in six months, you have proven X Y z. Your valuation is higher. Your risk is lower. You rise again. 250 k. Much interesting. Very much, much more interesting evaluation because you have there is the business. So all of the sudden as an entrepreneur, I earn on the evaluation because I don’t get to spend my equities at the wrong valuation. Something that young entrepreneurs don’t understand is how equity works. Mostly most, most most entrepreneurs we talked to they don’t have a clue about the importance of good equity management. No clue. Even some of the more mature entrepreneurs, because this is this is an art on its own is just understanding. Equity management is king for an entrepreneur. In the end, entrepreneurs working with Consilience Ventures they get they get a better deal than if they’re rising the next 18 months of cash flow. Because when they, you know, when they rise 18 month of cash flow, you know, 10 or 12 months later this round, they’re still spending their equities that they, you know at the price at which they rise, You know, 12 months ago. Although the business is completely different because young startups are changing. You know, high growth companies are are different every six months. You know, every six months you are different company. So why do you need to rise 18 or 24 months of cash flow. If you know that. Six. You know, six months, six from six months from now, you’re going to be a very different company, right? Why would you not be smart about this and just rise your next six months and the reason why today it’s not done. It’s because it’s bloody hard to raise money takes 6, 9 months already. So when you do this for 6,9 months, you want to do it only for 24 months, 18 or 24 months. Because that’s only what makes sense. Because you don’t want to keep, you know, spend your time doing this. But if you really focus on building your business and you really get your product right and you really get your team right and you exact tEAM right, and then you go after a big market, then you should be raising as little as possible and then do it again very quickly, you know, and and and and that’s how we breaking. We’re breaking this cycle down. You know there’s something emerging here. I mean, it’s it’s been around for a few years now, but there was no seed, you know, at the time of the Amazons or the you know, there was no seeds, it was series A right away. And then you had seed. And then now everybody’s talking about pre-see! And now and now everybody’s talking about pre-seed, seed, pre-series A. So, as you can tell, the fundraising cycle is shortening. No, it’s shortening. And of course, then you you know, you raise a series B and series C and then you take your 25 million in the bank and then you expand so growth money. It’s still roughly the same, you know is unchanged, but the whole launching and growth phase you know, the early days of the growth, the company’s is completely, you know, it’s changing, and we want to do micro financing for companies not pre-seed or seed, but just your project. Get it, prove it, show us what you’ve done. And we do this alongside other VCs who are themselves, writing money and, of course, writing checks and of course, benefiting from the process of their risking those businesses and investing at the right valuation for the right risk instead of just benchmarking

Jeffery:
No, I love it. And I wholeheartedly agree with you that, you know companies will come to me and say they’re raising a million and a half dollars on pre money valuation and pre revenue. And I’m like, well, why wouldn’t you raise 500,000 and show what you could do and then come in and do another raise and another raise and just keep doing micro raises because you’re pivoting and changing. You don’t you’re not — I guess the best example is that you’re going to climb a mountain. You don’t start at the bottom of the mountain, you start way further back. There’s 15 trails that will get you to the base of the mountain. We’re gonna pick the right trail that gets you there, so keep doing the things you need to get there, and then when you get to the base of the mountain, there’s maybe two trails that will get you to the top, and you’ve got to really at that time, you gotta focus, hire them, make sure you got the right teams, the right money, the right everything to pick the right trail because the temperature changes, the weather’s air different, and you’re going to go through that growth and you get to their first.

Kevin:
There are some benefits. You know, there are some nuances that what I’m saying is that there are some benefits of raising big chunks, you know, of money because it helps you to attract some talents that would not consider you otherwise. Well, I think this is very much where finance is changing is that the best people are not looking for money anyway. They’re looking for real skin in the game, correct? They want That’s what you know, that’s not what they’re looking for. So, of course, if you can say, look, you know, I’ve raised, you know, 1.2 million. You know, I’m now ready to pay you 100k salary. Well, you know, you may be doing a mistake here, because instead, that person, if that person is the best person, that person may take half in equity and half in cash because you are much more, you know, resilient, cash flow wise. That’s what really matters. So at the end of the day, if we — but at the end of the day, you don’t wanna have 20 employees on your cap table because it’s a mess, right? You don’t want to do this. So that’s where you create an ESOP and stuff. But, well, if you really to organize the shares of the vehicle and you use this as a currency without having them on your cap table bang, you know, problem solved. So all of a sudden you work with the and you don’t. Sometimes those people are too good that they don’t need to be full time. Our CFO, for example, our CFO formerly CFO of Fizzy Jet. When when I started the company, there’s no, there was no way I was going to take, you know, FizzyJet CFO full time, you know, But the guy was so brilliant that he needed to do half a day a week or something. That’s how we started. And we did this for a year and then, you know, and, uh, a real you know, he became I was totally dependent on him because he is just a, you know, an amazing CFO and thanks to him, we managed on securing amazing tax claim and an amazing R&D credit. And, you know, and we were very wise in terms of money management, very wise. And it was only possible because the guys have done that, you know, for multibillion dollar companies. And he was also financing some spin out, you know, backed by EasyJet and an Easy Group. So that’s what I’m talking about here is that you don’t need to pay a full time salary if that person is the right person at the beginning. There is a point where you need to onboard those, but it’s gradual, so that’s what you do. And incense hiring. It’s gradual. Why do you not raise money gradually? Yeah, so that’s very much the bottom of it. You have to rise money gradually as you onboard more resources.

Jeffery:
I love it,

Kevin:
…and it has to be synchronized.

Jeffery:
Now it’s I love the way you way. You shared that. It totally makes sense. There’s, uh, there’s a totally a different way to manage financing and the way you raise funds. And I think a lot of startups will get a lot of a lot out of this conversation. On learning how those different vehicles can work for them and how they can grow their team and part time CFOs and part time people can actually help them move, give them some shares, prove the business, and then slowly start to grow and build in those key areas of people that are going to really make other angels and other VCs want to invest more.

Kevin:
Much more interested because you’re safe business. And, you know, you’re saying you’re much safer business because you’ve got those people taken care off what really matters at this point, and no matter how many co founders you have to start with, there are always lacks, you know, you know, shortcomings in the team and and then gaps, right? Always. You know, I’m not going to mention any names, but when I was at Microsoft with my team, when we were doing the tag due diligence before boarding companies, we were working with companies that were very well funded by VCs. They had no tech, absolutely no tech, and they were rising at tech, you know, evaluation of tech businesses with, you know, a revenue multiple. You know, that would make no sense right, and there was no tech. So how do those people with no technology, you know, get to raise that those crazy evaluations? Money from people who are professional? Because we’re not talking about more raising money from the four manuals, which are largely and professional. There are some professional and angel investors. Now there are some sort of capitalist, but they are more people that just do this as a side gig because it’s fun because it gives me, you know, it excites me. And then it’s also a good placement, because if I look at a bit of my money, there are much more likely to get you know, some money back. If I if I diversify well enough and diversifying means at least having 50 companies in your portfolio, the problem with 50 companies in your portfolio is that you’re going to be taking is going to take you decade to get to 50 companies because you need to review at least 5000 deals. And I’m not talking about investing in all of the companies that rise money for Crowdfunding because we know the average returns of Crowdfunding platform is very. It’s you know, it’s close to nothing. So and that’s why you know most crowdfunding platforms are not sustaining in the end is because the companies that are raising you know, Vikan crowdfunding or you know, are not that great. Some are, but it’s just very. It’s a lot more difficult because there’s a lot more noise. So, yeah, at the end of the day, how do you build a nice diversified portfolio? Were alongside top players who know how to select companies? And I know how to take care of businesses and business growth without spending your whole life on it? Just leveraging a nice network of people who know exactly what they’re doing. And, ah, and by leveraging this network, uh, it’s called wisdom of the crowd. Then you obviously invest in something that is, you know, by default, lot less risky, and therefore your oven in multiple may not be 30 50 times as if you found the only unicorn because you only have point 3% or points or 2% to find a unicorn. You know, if you don’t find a unicorn, then if you find companies that exit at 100 million then it’s fine. It’s fine.

Jeffery:
Yeah, it’s still a good win. No, I love it. That’s great. All right, so now we’re gonna shift quickly into our rapid fire questions. I think you and I could talk about this for a very long time because it’s both dear to our business models and how we work and how we invest. So I love it, but we got to jump into these questions, and then we got a couple of questions to end it all off with, but s so far amazing. Okay, what’s your favorite part of investing?

Kevin:
That’s a tough one. Um, it’s my favorite part of investing is understanding how entrepreneurs think about the business they are after. That’s really what excites me is that I’m learning so much the way. Yeah, that’s what that’s what it is. So think about the way investors — entrepreneurs are thinking. That’s why I enjoy the most.

Jeffery:
I like it. How many companies do invest in per year?

Kevin:
We’ve Ah, We’ve made five investment this year. We’re going to be doing about 20 next year. We’re building our capacity to make 100 investment a year.

Jeffery:
Awesome. Uh, any verticals that you like to focus on?

Kevin:
We, for now, focus on on fintech MedTech. And also, we also have strong capabilities in IOT industrial or cybersecurity.

Jeffery:
Okay, we have a couple of companies you can check out. All right, Any requirements that you look for before you make a commitment. So anything that’s really stands out that you got to make sure you mentioned team before. But is there anything else on the paperwork side that you really want to be?

Kevin:
yeah. We have very, uh, discipline due diligence framework, where we have about 30 data points per startup. But we also have broken that down into three different, uh, company maturity. So we have 30 questions broken down into six different categories that will go for put for prototype companies. And you have the same for product market fit companies, or at least companies that pretend or believe they have rich product market fit and part of the assessment. It’s also validate whether they have rich product market fit or whether they have, or whether they believe they’ve reached product market fit. And then there is another threat. There’s another set forward for scale up some Indian. All of this is standardized. Ah, and it’s basically based on the company majority. Um, yeah, with some waiting and stuff, So yeah —

Jeffery:
makes sense. Do you lead rounds?

Kevin:
We do both.

Jeffery:
Okay. Any preferred terms? Do you care if its pref shares, common shares?

Kevin:
We are flexible Investor. We, um we Sometimes we were, You know, we’ll take a board Sometimes we want we very much flexible it. At the end of the day, not every dealing — You know, all deals are different. So we just agile here, we do what makes sense.

Jeffery:
Okay. And do you have a follow up investment on the company’s as well at a percentage of that investment?

Kevin:
So at this point, we’re looking at continuing investing in to allow our companies up to series B and certainly beyond depending on the appetite of our network, given that we reinvest on a performance basis. So if they’re reaching certain criteria, we are investing.

Jeffery:
Okay. Any companies that stand out that you want to share? You don’t have to share the names, but you’re more than welcome. Any companies that you think the rock stars you really want to talk about?

Kevin:
I think one rock star in our portfolio emerging rock star. Now portfolio is a company called Check Step, which is doing amazing work in tackling, uh, um, issues around quality content, organic user generated content online. So the, you know, one simple but still bad way sometimes, you know, simplistic, you know, as negative. So this is going to sound negative, but enabling platforms to generate fact news. And fact, content check step is doing an amazing work there. But, I mean, all of our companies are super exciting. We’ve got company tackling private debt issues, working with debt on insolvency practitioners. So they are basically doing amazing deep learning to enable the relegation of data and the structuring of data a lot more faster than anyone else in the market. Got amazing AI for premature baby. And we’ve got some cool tech that are just very good UX UI for wealth managers. And yes so that’s the — we’ve got a pretty exciting portfolio.

Jeffery:
Awesome. Okay, so now we’re gonna jump into two more questions, and then we’re gonna have a couple of personal questions to end it all off. So, uh —

Kevin:
I may have an Internet issue at the personal question. You never know.

Jeffery:
Alright, actually, one more question. So, based on all the things that you’ve done, everything you’ve gone through throughout your career to get yourselves to the platform you guys have built on the way you’re investing in the way of helping startups. Is there any heartfelt story that you want to share? That really defines what an entrepreneur is like? Someone that maybe went through a tough go and it succeeded, or they went through a tough go, and they decided that it wasn’t working and they failed fast. Any great a story that the community can relate to?

Kevin:
Yeah, that’s a tough one. I think there is the common pattern is that if you, um if you if you seeing that you’re pushing too hard and you don’t get any results in a see this as a party and across, you know, some of the entrepreneurs I admire, But there are a few ones that, um I prefer not to mention they’ve gone through tough times very, very difficult times and they and they exited in the range of $50 million. And they consider this as being a failure because they were building something very, very big. So we have so obscene entrepreneur suffering a lot. And umm that kind of I was yeah, I was, um, no, emotionally, um, affected. But it was very hard to see how painful. Uh, this process of rising money was given the size off the opportunity they were going after and given the size of the problem that they were serving. And that’s one of the challenge, which is some sometimes something that, um, makes me really think hard about how we can change the way companies get funded. It’s because real innovation, at least in Europe, rarely get funded. Very rarely. Yeah, you don’t have lots of risk decors. And you hope you have lots of LPs, mostly governments. So you have lots, lots off very conservative LPs and as a result, really innovative companies no, don’t rise money from European investors. Which is why now, with these US VCs are doing their shopping here because there is a land off opportunities. Forest acres, because Europe is conservative in comparison to the U. S. But the technology and the talents that is, you know, growing up here is just amazing. And it’s just so frustrating not to see so much more money coming into this market. Because if you bring that capital and expertise to this this market, you’ve got something amazing. This is the best market in the world. Her capital, right? Europe is the best by far, you know. You know, before the U S. So um, of course, there is less venture capital money flowing. Um, but they stand out, um, off living here, it’s very high, so people can buy.

Jeffery:
That’s interesting, because I would say that based on that theory and in the information shared, Canada is very similar. Yeah, you know, they’re very risk adverse. Americans attend to have a see it, go after it and take it down and move to the next thing quickly. Everybody carries their own value, but there’s not very many countries that have the same mindset financially. The American the U. S. is very much driven around finance. The whole country is

Kevin:
the whole country.

Jeffery:
Yeah, and That’s what makes the US the global power that they are exactly the rest of the countries. They’re a lot more reserved and even cove. It is really pulled. A lot of countries back even further because, uh, even though they know 95% of the country’s made up a small business, the risk factor is very reduced because that’s what they teach you to save for rainy days and not to invest in things that seem crazy. But the ones that have been the most successful happen to be the ones that are a lot more innovative and more crazy. And, uh, yeah, and they’ll usually find that Americans don’t have a problem jumping on that because the risk factors there because they have been brought up on paying for themselves, taking care of themselves. That money is only as far as you can find it and build it and grow and make it happen, whereas the rest of world is go get a job, work for this company and get your money and put it in a bank account and see. So it’s a tough space to be maneuverings in, but I think you’re right. That There’s a lot of opportunity to pick up some great and great companies to invest in if you’re open to it and you can handle the risk.

Kevin:
Exactly. Exactly.

Jeffery:
So the personal side questions, which is always my favorite. Only it’s only something I recently started doing a maybe a month ago. So the best way the first question is, what is your first favorite sports team?

Kevin:
Uh, supports team? It would be, um, you know, it would be right now. Right now, it’s Mercedes, you know, McLaren. Hamilton, without any doubt,

Jeffery:
Which team was that?

Kevin:
Mercedes McClaren. So, Formula One. Grand Prix Hamilton is by far.

Jeffery:
Yeah, I was just, like, really? All right. I like that. Yeah that’s good.

Kevin:
My my favorite sports team right now, they’ve managed to crack everything.

Jeffery:
Yep, I like it. That’s brilliant. Okay, what is your favorite movie and which character would you play in the movie?

Kevin:
That’s a funny one. What’s my favorite movie? I don’t know what’s my favorite movie. Ah. Ah. I think, um um yeah, I know, I know. Um, I don’t know the name in English. Let me just look it up for you. I just want to make sure I can share with the audience into table. Oh, it’s actually it’s actually so the Intouchables. Intouchables. So and I would play the main character, which is the funny guy along, you know, working for the disabled, man, you know, doing some crazy stuff, making people laugh and go outside of their comfort zone to the point that it actually is enjoyable.

Jeffery:
So untouchable is the is the I wanna make sure I got the right movie here.

Kevin:
Yeah, the The Intouchables. Yeah.

Jeffery:
The Untouchables, which is from 1987 ?

Kevin:
September 2020, 2012

Jeffery:
0h, 2012. So I got the wrong one here. Okay, So I’m not finding the right movie here. What’s —

Kevin:
Yeah, There you go. Drop it here. The Intouchables. And I even show you with the trailer because if you didn’t see it, then it’s a must watch.

Jeffery:
All right. And you’re gonna play the — oh The Intouchables. Oh, I remember this movie. I saw this.

Kevin:
Yeah,

Jeffery:
Yeah, this movie was fantastic!

Kevin:
It’s amazing movie. It’s It’s everything In one movie you’ve got nice cars, you’ve got good laughter’s You’ve got somebody who’s was super wealthy and and and fortunately very, very bored because of his, uh, because his, um um you know, his health and in the end he had so much fun without even thinking of the money, because just somebody’s super poor is giving that person so much good time.

Jeffery:
Yeah. No, I thought it was a brilliant movie. Yeah, came out amazing. So amazing.

Kevin:
Amazing

Jeffery:
So you would play. You play Driss?

Kevin:
Omar Sy. Yeah. Exactly.

Jeffery:
Yeah. Omar Sy, right? A fantastic actor, too. I really like that.

Kevin:
Yeah, he’s a very good guy.

Jeffery:
Well, that’s brilliant. Alright, Well, so, Kevin, I want to thank you very much for your time today. As I always do. I took lots of notes, big fan. So thank you very much for that. We’re going to see you at Skip the line on December 1st at two PM Eastern. Right now. Have you join us there.

Kevin:
Yeah. Book me up.

Jeffery:
And what? What? I like to leave the end of the show with. Is it like to leave you the last word? So anything you want to share to entrepreneurs or to investors, the floor is yours. Feel free to (inaudible)

Kevin:
Yeah, thanks. Yeah, I guess the last ah, last words. Ah, two words is, uh, have fun. Just have fun. This is so hard to make it more complex than what it is you’re dealing with human. It’s completely irrational. So make sure that you have fun all the time

Jeffery:
Find somewhere to have fun in this process right?

Kevin:
This is what matters in the end. And do work only with people that you have fun with. If you don’t feel comfortable with the people in the room, you should not take their money on. Uh, yeah, that’s what That’s the most important bit here.

Jeffery:
I love it. Well, great last words, Kevin. Thank you very much again. Fantastic lots there to learn lots of gorgeous state and take in. But I love the idea about micro financing, man. It’s a different way of looking at things and it can allow companies to move in pivot quicker and get in the right space. So I appreciate your time again. Thank you.

Kevin:
Thanks, Jeff. It’s been fun.

Jeffery:
Well, that was awesome. A big fan of Kevin and what those guys were doing. I love their platform. I love the idea of restructuring the finance doing it in micros. I talked about the onion peeling back the layers. There’s lots of different layers where people are going to get involved, fail fast and win. I think that’s a great way of looking at things.

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