Vosik Shamsiev

"Try to out innovate everybody else that's the only thing you can do to stay on top of the market"

- Vosik Shamsiev

Vosik outlines what he looks for in a start-up

Talk Takeaways

Listen to Vosik Shamsiev as he shares great insights on his experience that will resonate to many startups. He discussed the challenges of both external and internal competition, the perspective a consultant can provide, on finding that right spot to position your business, and how acquisition should always be on the table.

Vosik’s piece of advice to startups is to not be rigid and possess the ability to adapt and pivot where the opportunity lies. He also shared his interesting foresights on the investing landscape in the next 36 months.

About

Vosik Shamsiev was born in Uzbekistan. He moved to Japan to study in 2000 and ended up working there and meeting the love of his life. He has worked for solar companies and semiconductor companies which led him in the venture division. After moving to Canada, he started a private practice in Asset Management.

He speaks 4 languages English, Japanese, Russian and Uzbek.

Core competencies include International sales, venture capital, and business development.

Experience:
Asset Management
2016 to present
Self Employed

Consultant
TEL Venture Capital

Venture Partner
TEL Venture Capital, Inc.
2014 – 2016

Photovaltaic Equipment Sales Division
Tokyo Electron
2010 – 2014

Project Manager
Space Energy Corporation
2006 – 2010

Group Leader
Planex Communication
2003 – 2005

Media Manager
1997 – 2000

The full #OPNAskAnAngel talk

Jeffery:
Vosik, welcome! Thank you very much for joining us today we’re always excited that we get to talk with another angel investor but i’ve got to work with Vosik over the last couple of months in one of other investments. so I got to learn a bit about yourself and got excited at the opportunity to want to spend a few minutes or we’ll say another hour with you to learn a bit more about yourself and what you’ve been up to in the whole angel investment community. so maybe to start off you can give us an Idea of a little bit of your background, where you came from what you’ve been doing, and then how you got to where you are today and then one other caveat if you can share one thing about you that nobody would know that would be brilliant

Vosik:
Okay, thanks for having me. I’m not sure if I’m excited yet hearing it will take one hour or more. Briefly about myself, 40 something years old, was born in, then soviet union, currently Uzbekistan. In 2000, moved to Japan to study, ended up working there as well after graduation. I was planning to go back, happened to meet my wife there so they decided to stay in Japan for a while. Worked in solar companies and worked for the big corporate company in the semiconductors which led me to the venture division within the same company, and after moving to Canada four years ago, I’m doing good solo. Basically, that’s probably a very short version of what I’ve been doing so far. Some fact which nobody knows about me…that’s a tough one, I’m very public person, everybody knows me. No, I guess, I speak four languages decently well. That would be my native Uzbek, Russian, Japanese, and English.

Jeffery:
Perfect! Well that’s some information that people would know and what I find is it’s a good little unique identifier. So, when people come up to you they’ll say, “Hey! I speak languages, three languages too.” So, it’s a good way for people to connect with somebody that they may not have a lot of things in common with, but there is one common ground that helps start a conversation. So, I’m a big fan of finding that one unique thing that everybody can relate to so- or just something to remember who you are which is great. So, in our discussions you chatted about a few things that you kind of done over time and one of them was on raising funds. So, I’d be interested to learn a little bit more about in your past roles and in the businesses that you were part of, what was- is there a structure behind it? Or how did you go about raising dollars inside of a business?

Vosik:
Well, I was part of the relatively established startup. I joined it later on, not as a founder, just a normal employee in the financial department that was a solar business. 2005, 2006 that was very hot topic and we were expanding really fast, so we were trying to — I was in charge let’s say of purchasing which raw material was coming very short and well, considering that from 2004 the price for silicon spiked from 40 dollars to 400 in 2006.

Jeffery:
Wow!

Vosik:
Yeah, 2007 it was around 400. So, we were trying to source the material and one of the things was just to buy out the old factory which is not working and bring it up to the speed, improve, put the new equipment, put the personnel in charge to make it, to make sure it’s sufficient enough for the solar, and well other than just developing the project, the financing obviously should have been secured. So, we were looking at local venture funds, we were looking at big trading companies who might have been interested. It all came crashing down after the solar market basically, collapsed in 2008 like everybody else in 2008. So, we raised some funds, we just discharged it back to the investors, and didn’t go ahead with the plans because it was not much need fight. At that time the company actually folded like two years later because the competition from China was much more than we expected at that time. I was working in Japan, it was leading, one of the leading companies in the [ inaudible 4:55 ] industry for five, six years.

Jeffery:
Okay

Vosik:
By the time Chinese newcomers came to the market, we were very much outpaced by the volumes stay pushed by the lead times, by the costs. So, it lasted first well, not long enough but it’s an experience.

Jeffery:
No, for sure. So, when you guys are raising these funds, did you have a specific target? Did you go after institutional money? You were a startup so, there’s a position where you’d fit in that would be best, what was the position that you guys took? And obviously you raised funds so, it worked. It’s very rare that you give money back but understand the circumstance, so how did how did you guys go about that? Was there planning, anything strategic about it, or it was kind of a buckshot spray you just one at everybody?

Vosik:
It was, well, first of all, obviously trying to round up the people who much closer to the industry itself, who know what they’re talking about, and who might actually use some of the material. So, we started with the close trading companies. Japanese trading companies are famous for trading all kinds of materials, so that was one of the big sources of funds. The other idea was to get someone from the venture capital which we did, but that was the part which we basically gave it all back because it was raised for the project rather than for the company expansion. So, that’s the reason why it sounds strange but we did not consider it as a loan, we weren’t considering as a part of the new venture set up for the specific purpose, but well, since it didn’t, there was no need for it anymore. We just decided to dissolve the company and get the funds back. But well, there were other financing schemes available, so at the moment, let’s say we did buy lots of new equipment and we paid out right cash in it. The company was quite profitable at that time when the need for the financing came, we just leased all the equipment to the leasing company and use the proceeds as well.

Jeffery:
So, there was that. There was a bit of a strategy, you were going after like-minded people in the space. Obviously, you got hit with the 2008 financial crisis that kind of caused all of these other problems and kind of trickled down everywhere else. I’m kind of assuming, plus you have also the Chinese companies coming in, and kind of dominating the market on price, and resourcing, and whatnot. So, now obviously there’s a lot of big players in the solar space. It’s taken off in the last, I would say the last five to six years it’s really kind of shifted and grown, is there anything that you learned from that process to kind of where the markets have shifted ? Is it really about duration? Is it about really buckling down and raising as much money as you can to weather the storm? Is there any advice you can kind of give? Because a lot of startups are going to go through this they’re going to go into a market, they’re going to raise some dollars, and they’re going to get high competition. They may have not built a strong moat around their business, but at the end you guys had to make a strategic decision on either to fold in and move on to other projects or continuing the fight. Obviously, you chose the latter, but is there any advice that you would see now based on your experience that you might have taken a different approach in?

Vosik:
Well, it’s easy to say after the things happen, but what we didn’t do is, well what we did do is underestimate the competition. At that time the semiconductor silicon was really allied kind of manufacturing business. There were probably five, six companies globally who were able to do the quality which is required. And most of our engineers and myself included them, although I’m not engineer, we’re really dismissive about the investments by the Chinese company into the fields they will not be able to bring the quality required within that short period of time. They will not be able to perform with the amounts, the volumes they’re planning, et cetera. So, one thing was yeah, underestimating the competition, that’s probably the biggest one which was the reason why we gave it up. Yeah, the reason is probably juggling too many balls at once, so trying to secure the contracts from supplier, paying tons of money for them for the prepayment, and then trying to establish our own manufacturing facility at the same time. We should have really focused on what we want to do. I mean it’s easier to get out of one of the things but not on both of them at that time things. So-

Jeffery:
There are two interesting things that you really touch on and I like that one on the competition side that you had. Basically, if you cover it to two faults that you could have corrected and it’s interesting because a lot of investors when they’re talking with startups, they’re always asking them what their mode is and I think a lot of times, the startup will think in their mind, “Ah, I’m good. We’ve got the product no one cares. We’re in our own little world, we’re doing our own thing, no one’s ever gonna compete against us,” and you really hit home that aspect that you guys who are raising money, driving a business, you’ve been in the space were leaders in the space and you still had a competitor come in or competitors come in, and really dominate and take over the market causing you guys to walk out and and lose big time because you obviously followed the company. So, it’s scary like you don’t realize the impact that sounds pretty, I’m making it sound big because I think it really is big, so, I like- what would be the emphasis that you would put on the competition? Like if you guys missed this and you guys were a big business, what would you recommend a startup does in order to not miss this – the competitors and not underestimate what they’re going to be able to do and come after you? Is there a way that you can gauge this better? Is there a way to manage competition? I’m really curious as to how you feel that could work out better.

Vosik:
Frankly, at that time, amounts and volumes coming out of China, probably the whatever our efforts would be, would have been doomed. So, the price of the costs we were having was no way comparable to what the Chinese competition had, so it was a matter of time for us, frankly speaking. It was a not very let’s say highly value added product, it was very technical product, very good quality, what required lots of know-how and efforts, and good personnel, but that didn’t stop chinese to replicating whatever we were doing. So, yeah well for the startups, if they are in the similar position, try to out innovate everybody else that that’s the only thing you can do. That’s the thing to stay on top of the Market. Innovate, think not just improving your product, innovating in let’s say business model, improving your cost structure, improving your manufacturing capacities, streamlining your outputs, streamlining your inputs and outputs for the materials. So, those things also part of innovation and well, consider what Toyota was doing as a lead. I mean timely deliveries and timely out, so that thinks innovation, not in the just- in the technology but innovation in a way of how to manage the business, how to reduce the cost, how to make it at least comparable to what China can do. I mean obviously the salary is one major thing for the most of the industries automation is probably would have been very helpful in our case but there was no technology at that moment.

Jeffery:
You really have to be forward thinking when you’re in this type of business or in any business. You really have to be thinking not just now, but in the next six months, eight months, or two years from now. What is the competition going to do, are there other established companies that see that you’re getting a- you’re doing a land grab and they decide to ramp up and resource up and China is a competitor, but there’s many competitors around the world that can obviously do the same thing that China did to you guys? So, you mentioned that resources are a big one, that’s always the biggest cost to any company, would have there been opportunities for you guys to open up an office in China so you could compete better? Not the Japan- in Japan, it’s very expensive. I’ve been there a few times and I do know that overall, it’s an expensive structure but it also has a very hard working community, so a lot of brain power that’s going on in Japan. So, you’re competing against many versus a few but at the same time I’m sure you can balance out somewhere in order to maintain competitiveness. If not we’d all be folding our cards because China is going to come after us every single moment we turn. So, what allows you to be better tactful at that? So, that you can be a startup that survives especially, if you find yourself into a very good vertical like Solar, like the weed side of things right now, semiconductor, there’s a lot of players that are slowly starting to build up. Zoom as another one you know, they’ve taken off in the last little while because of the platform and how they appealed to everybody. So, is there any advice that you would say you know you really gotta build IP, better IP, or stronger IP? Or what is it that’s going to really help protect you a little bit better so that you can run faster?

Vosik:
Well, if you see that the collapse is imminent, you probably the best way to plan it is to be sold out to some of those Chinese competitors. That’s one of the way to exit that we actually kept up for a couple of years after the market collapsed. Well, assuming that in 2007, one watt for the solar panels was around seven, eight dollars and by 2010 that was around one dollar. So, what- that you there are limits on what kind of cost cuttings you can make. So, we had a let’s say, fully automated warehouse with no people present to manage all the inventory. So, that was kepler’s upload for one year maybe more, but again the market collapsed that much so there was no really potential for the company like let’s say not big volumes to survive. Not big volumes but at the same time 2008 I think ourselves were close to 200 m. yes, so it grew to quite decent size but we all know what happened.

Jeffery:
So, is there also something to focus on? Was there a lack of growth in your sales side to be able to offset your expenses and your costs? Like was there a way to maybe shift into a different vertical? reevaluate where you’re positioned to see if you were solving a different problem instead of staying course? Like did you have to pivot at all to be competitive and is that-

Vosik:
At that time the solar market was very much dependent on the government policies. So, it was artificially demand, artificial demand in 2007-8 because Spanish government was paying quite decent money for the electricity production from solar. By 2009, when they stopped saying that basically the whole market which was focusing on that 40 percent of the global market in Spain had nowhere else to go. It came up, the other markets came up, the markets kept growing, but it was very difficult to offset the very high growing Spanish market at that time and but looking back so today, at that time, what a new setup and your volume of manufacturing was around five gigawatt hours, today it’s probably 150. So, it all works better for the let’s say, for the industry for the environment especially. So, I’m not complaining about the experience we had but like I said, it might be not the right place to have that kind of business. We didn’t have much of the high level value added.

Jeffery:
For sure and you mentioned and I also feel that this is pretty crucial in any business especially, in a startup world is that when you start a business, your excitement is that you’ve got money, and you want to hire a lot of people, and you just want to tackle this problem like crazy, and start managing a lot of internal resources to move forward. And you mentioned that as you guys were growing, you were trying to cut costs and find ways to eliminate barriers that would allow you to grow in the market and be competitive. I think that there is a maybe a misunderstanding of what and how you can be competitive internally and you know, you can generate sales, and you can optimize and innovate. As you mentioned, which is huge in your business but from a competitive standpoint, there’s also internal competitiveness which is how do I reduce my overall cost structure to allow myself to have more dollars to spend in marketing and sales, to generate more value so that I can stay in the market longer, did you guys find that you became at one point just very resource heavy and you were burning a lot of cash flow each month and that was affecting your long-term strategy and then that’s where you decided to pull back? And what kind of advice would you give to paying attention to these things? Because I’m sure you faced this with startups now on the investment side, where they’re growing really quickly but their costs are tripling and their bottom line isn’t so, is there some advice that you learned from that instance that might say, “You know what, hey man. Go a little bit slower,” or is there something that you would recommend to help?

Vosik:
I would say that the company, well, they were trying to cut the cost but the real moment of truth came after the company was acquired. I mean there was a tax to acquire the company by the big Japanese oil producer which they did and only after they taking it over the company there were some reduction in the personnel cutting the fat. So, in a way that required the third party view what’s happening within the company and what’s happening in the Industry to adjust to current realities to the situation. So, in a way it doesn’t have to be acquisition by the third party to be able to see it from outside, but you can all the startups can also benefit by hiring consultants or by taking a look at as a third party. Well, it’s difficult if you’re insider in the company but probably one of the ways to deal with hiring consultant even if you are startup, you will probably have some fat which is- which you will be able to make it leaner. Let’s, but again, the purpose of the small companies are most probably are looking the way forward that they will grow. They will need that personnel at some point and given that there is no like, major obstacle like the whole industry had in 2008, 2009 and the company is kept growing, the consultant, the restructuring, the cutting costs, probably not the highest priority for majority of the startups I would say. And it will come at some point, but the sooner you start trying to let’s say improve your operational efficiencies by reducing the extra fat, is the better your company will turn out in long term. So, for the startups, I would recommend to well, it’s very, I would say common thing to the startup.

Jeffery:
Well, the lean startup is certainly what they talk about but when you raise a lot of funds, everybody tends to want to hire and move quick. So and they feel the more resources you have, the faster you can move, and I think you kind of just talked to it that it’s not always the case.

Vosik:
It’s not always the case, unfortunately.

Jeffery:
Yeah and you need to you need to evaluate yourself on every step as you go. And you mentioned that bringing a consultant in can be something of assistance and I think there’s a point in time, where you grow to a certain stage and maybe that’s 20, 30 people and then maybe at that point based on your burn and maybe that’s the point where you bring somebody in or it’s on the finance side, you see a CFO and they’re doing some sort of evaluation on the company to say, “Hey are we in the right position? Are we burning the right cash and are we matching that up to how we’re growing the sales?” On the business side that allows you to stay more competitive is fingering out not just on resources, but there’s other things that you end up spending on. As you mentioned, there was a big shift in product costs that have they changed well, maybe we should look at inventing a new product or working with a different type of product. So, there’s always and that goes into the bucket of being innovative and I think that in the lean startup phase, or in any business, you always have to be looking at those three pieces. I guess to be allowing yourself to be more competitive and competitive doesn’t just start with somebody on the other side of the sea, it starts internally figuring out how can I be innovative, how can I reduce my overall cost and burn, and then how do I grow the business to ensure that I can offset some of these to allow myself to have some free cash flow.

Vosik:
Another let’s say, trigger for the reevaluation of your operational expenses of your burn rates is well, it could be next financing. Round the new investors will be looking at your company with the magnifying glass, so there might be some suggestions on what to cut and where to cut and that could be one of the ways to again look at it as a third party. You don’t always have to rely on the consultants or the acquisitions.

Jeffery:
That’s a good point. So because you’re kind of steering in this consultant slash investor side that they can give you help, does this allow you to kind of stand behind the advisors, investors, mentors that these are good for business and they’re good to help companies move forward especially in an early stage?

Vosik:
I would like to consider myself let’s say, semi-smart investor. I don’t like the dumb money, just dumping even waiting what happened. So, if there is a way I can help the company to be better, to grow faster, to have higher sales, to improve, to innovate, that’s probably I will try to add the value by I don’t know advisory or the consultant or the board observer at some point. Yeah, but any company requires help. I mean whichever the stage is and third party view on the company is always important I would say. You know what you don’t know.

Jeffery:
Well, 100 percent and the only way to learn is to pay some money and find it out as you go, right? So-

Vosik:
Doesn’t have to be paid. I mean for the startups, I think it’s very good opportunity to get some advisors from within investors and try to use that potential knowledge towards the future growth.

Jeffery:
For sure. So there’s one thing you touched on before which was you could have sold yourself to a competitor and things like that. So, there is a structure around there is that something that and startups don’t tend to look at this because it’s probably out of their realm, but is there an opportunity for a startup to evaluate a market and decide, “You know what, maybe if we can raise x amount of money, we could go in and buy this other startup, and this would give us traction to this side of the product or to this extra cash or resources whatnot.” Is that something that you’ve ever ever worked with on your startups and consider or is it something that’s more later stage series, a b c where you start to look at acquisition to grow quicker?

Vosik:
Well, I did have personal experience with that but I think that acquisition question will come up at any stage. I mean depending on the needs of the founders and the ambitions but the exit I mean, acquisition as an exit is always one of the ways to go ahead with the conflict with the natural progression of the company. So, why not starting planning for it from the beginning if you realize that some third party can do it better, faster, cheaper than you can do if you feel that you can add from within the big company to grow your business even further, why not? So-

Jeffery:
Like it!

Vosik:
Should be always on the plate.

Jeffery:
Yep, I guess that’s where that consultant comes back in where they’re giving you some right feedback to help you move forward.

Vosik:
I hope they will listen to him at some point but yeah.

Jeffery:
No, I agree. So, it’s interesting again the experience you have. I think that carries well so well into what startups are looking for, what they’re trying to understand about their business, they’re usually new their first time, so there’s a lot of things that they’re not going to understand and they got to learn as they go. So, I think that, that is some great feedback around those areas that we were just chatting to. Maybe we changed a little bit and give us a little bit of information on or insight on what got you wanting to invest. Where did that come from? Is it just, “I think I’m going to go invest in some startups”? What kind of moved you into the space? What got you excited and interested in early stage companies?

Vosik:
I’m- I have been always nerd. I like new things. I like new gadgets, technology. So I have been keeping pulse on most of the developments, well not most of them, but at least probably b2c ones globally. So, the real trigger for me was still in Japan, joins the big corporation and the venture division of it and look for- looked through the number of quite a number of startups which we would be able to invest, and at some point presented to the investment committee within the company. Some of them were shut down, some of them didn’t even reach the investment committee, some of them were not the synergy thing. So and looking back, I realized that there were so many missed opportunities. I should have put my money personally because you never know, I mean it was interesting idea. At some point I was thinking, “Okay, I should put my money if the company is not doing it, I’ll put it myself,” and didn’t end up going because I assumed there was some conflict of interest doing my personal things on the company expense. So, decided to go solo and do it myself instead of relying on the company to keep my let’s say, keep my [ inaudible 29:29 ] coming.

Jeffery:
So, you so in the process of investigating startups, you actually started to find yourself more interested in working with them and investing in them personally than you did in what your core at the time, your core role was. So that kind of moved you over the line and when the opportunity came you decided, “You know what, I’m gonna go in this direction and I find that this is a much better opportunity for me,” and I like the idea of being able to get in with an early stage company.

Vosik:
Exactly. I think it’s some frustration might have been involved that seeing that great startups are not being- not getting interest they deserve from the big companies and that’s probably one of the main triggers.

Jeffery:
I like that because when I worked for big corporation and I did my own thing way back, I remember I would bring startups into Loblaws at the time, and I would bring them in and I would think they were the perfect fit for the businesses I was running and I remember one day, I had this a real network that was built out. It was quite large and it was around the soccer mom, if you will, and the business was doing really well and I was pitching it in to be a brand that would be associated with all of our ecommerce platforms that it was approved by moms. And at the time, my boss said to me, “We’re not here to build a startup’s company,” and I was like, “Really? But this is doing very well like they have millions of people that are part of their network, they would actually be very supportive in what we’re doing.” And they felt that because they were a large corporation that they would be helping this startup, not realizing that this startup would actually be helping them build a community around what they were doing. So, I totally agree with you that sometimes the mentality isn’t there on supporting and helping a smaller business. And ultimately that moved me into working for a startup and investing in startups and then building out everything that we do with startups. Because of a very similar occurrence where I didn’t understand what the premise was that, if someone was building something that was strong that they wouldn’t be a great fit to build something bigger and better together. So, I totally support that.

Vosik:
Welcome to my world.

Jeffery:
Well, they say the reason teachers become teachers is because they didn’t get the educational system that they like and they feel they can go in and correct it. So, it’s been proven that that’s why you become a teacher. So, I guess we’re following the same line of information is that, we’re feeling we were short shifted and we’re going to go for the little guy and make sure they win.

Vosik:
Exactly.

Jeffery:
Well, that’s fantastic. That’s not a bad problem at all, so it’s good that there’s more and more people like yourself that are finding their way into the startup community. But finding ways to support them and not just through financial means but as you mentioned, through mentoring and other pieces that are going to help these companies move forward. So, in that you did mention the mentoring and advisor standpoint and I’m a big fan of this, is that something that you provide to the companies you invest in? Do you choose to want to be part of them at some capacity if it’s thought through investment early on it’s just through helping? You really dive into that with the startup and spend a lot of time helping them explore the business or is it something you only do once you’ve made an investment?

Vosik:
I- well if there is need this startup is really needs the support from, I’ll do it even before the investment and there is always fun to watching company grow. And if there is something which I can help with that, why not? I might not be personally interested at that moment but later stage, yeah.

Jeffery:
Nothing wrong with that.

Vosik:
Yeah. feel myself important, feel myself wanted.

Jeffery:
No, that’s good and do you have a favorite part of investing?

Vosik:
Exit?

Jeffery:
Yes, exits do work pretty well I guess in the short or long term of early stage Investment . But I guess that could be your favorite part, I haven’t heard that one yet as being the favorite part but it’s still valid.

Vosik:
It’s important part, yeah. Well, exit is one that’s probably not always guaranteed but that’s the beauty of it. You have one, “Okay, that’s I did something right,” another thing is seeing the company grow. I mean it’s fun to watch little to three people company maturing and becoming something formula force in the industry at some point of time and it’s well- it’s partially your contribution as well. I bet, I guess so it’s not really my child, it’s really like looking at your nephew’s growth but still fun.

Jeffery:
No, I like that. Well, I think that we’ve learned a little bit about raising some funds, learning different ways to operationally structure your business, things you need to look for, reducing burn, your overall sales, there’s a lot of things that can help balance your business out and things that can protect you from as we said the big beast in the room, is always the competition and people forget about that. And I think the way you got into the market and the way you’re trying to help, I think is huge and it’s super valuable. And I think a lot of founders or business people should look at startup world just for all the reasons that you share because I think it brings a lot of value back into the ecosystem and it also is a way of giving back and supporting. And you’ve got the wins at the end which are the exit or watching a company grow and you don’t get to see that very often. You know every time we throw money into something we expect and hope that it’s gonna grow and it doesn’t happen every day, so when you do see, it feels good that you made like you said the right choice. So kudos and I’m obviously super appreciative of the fact that there’s lots of good people coming into the market in this space like yourself. So, I think now what we’re going to do is we have a few questions left that I want to ask but I’m going to dive into our rapid fire questions.

Vosik:
Okay.

Jeffery:
Perfect, all right! So, we’ll get started. How many companies or dollars do you invest in per year?

Vosik:
Three to four.

Jeffery:
Okay-

Vosik:
In the beginning was one or two, but yeah.

Jeffery:
Normally you’re progressing and you’re getting better at it. So, that’s brilliant!

Vosik:
I hope I am and I think that my match was six companies last year.

Jeffery:
Okay, well that’s awesome! That’s obviously, it’s a good thing. Do you do follow-up investments or is it a percentage of your investment portfolio that you’ll make reinvestments in?

Vosik:
There were among the investments I’ve made, there were two companies which were asking for the follow-ups. I didn’t go ahead with just one of them.

Jeffery:
Okay so, you’re 50 50. So, you’re going to evaluate and decide.

Vosik:
Exactly. Sometimes the amount I can contribute doesn’t really make sense for the next round. So, I just said that.

Jeffery:
I completely agree with that and if you can make that statement, I think that, that helps start up so that they can prove that from where they are and where they’ve gone to that they don’t need the angel money to keep going. That it’s time for a higher growth institutional money that’s going to benefit them.

Vosik:
Yep.

Jeffery:
Any notable portfolio companies that you would like to share?

Vosik:
Notable.. The one of the recent companies I did let’s say partial exit, is the aspect Fire Out of Vancouver. So to make it simple, it’s a- they have a 3D printer for human tissue. So at the moment they can print human organs using the 3D printer, at the moment they are selling it for testing the drugs, selling it to the pharma companies. Hope in future they will be able to grow on what they have and growth actually physical organs which instead of waiting for the transplant list you just print it out and put it in.

Jeffery:
Brilliant!

Vosik:
Hopefully, yeah they’re working together with few Japanese, big Japanese chemical companies and I think the announcement was that working on the liver, that’s bloody difficult organ, to make they have liver has 50 more than 50 different functions and they’re going in with the liver first is really.. if I’m outside I would say ridiculous but well let’s see how it works out.

Jeffery:
Well, it sounds pretty impressive. So that’s a great one to share, thank you! What verticals do you focus on?

Vosik:
I do not have preferred verticals. I think I’m agnostic but I try- I prefer to invest into b2b companies. I have not enough confidence to go ahead with b2c ones.

Jeffery:
Okay, do you have any preferred terms that you’d like to invest on if it’s prep, shares, common?

Vosik:
Not really, I try to let’s say, value the company like the conditions the company set themselves first and go ahead with that but yeah. If I might negotiate on the valuations but they’ll refer you to commons that is not no different for me.

Jeffery:
Is there a timeline for your investments like you like to do things quickly? One to three months six months a year or anything like that?

Vosik:
I would say normally takes two three months to from the first initial speech or handshake to actually writing a check or wearing the money.

Jeffery:
Okay.

Vosik:
Sometimes it’s faster. I think the fastest was probably two months.

Jeffery:
Okay.

Vosik:
The longest was probably half a year so..

Jeffery:
All right, do you look to lead rounds?

Vosik:
If I have to, if there is no person better than I- than me who can do that, yeah. I did lead to the investments.

Jeffery:
Okay, do you take board seats?

Vosik:
I prefer not to. I still believe the company has to prove themselves and I prefer the observer one to be able to see what’s happening but not to influence the company on what on the daily strategic decisions.

Jeffery:
Is there any other due diligent work that you prefer to have in order to make your decision? Is there anything that stands out in all your investments that you need to know that the business has this like co-founders or AP&L or revenues like is there anything that just helps you make a decision if you’re going to invest?

Vosik:
I want to see how flexible the companies are. The ability to adapt to things and well, probably that very much depends on the CEO and the team. I want to see what their core product is, is it technology? The business model and maybe combination of both and see if the company is able to operate beyond the comfort zone. I mean I like challenging them on why don’t you do that before, why don’t you go ahead, and after this client instead of this or after this industry, instead of the one you’re planning originally. So, sometimes work, sometimes not but..

Jeffery:
Okay, is there anything from your previous investments including the one that’s the exit, is there any underlying piece that you see makes a startup successful? Any information that you want to share like one or two points and say you know do these three things damn it and that’s what’s going to make you successful or at least on your way to it?

Vosik:
At the moment I have what 15 or so investments and none of them bankrupt so, probably getting investment from me is one of the keys. (Laughs) Just kidding, not really the I think the pandemic, I think they equal to everybody and whatever you do hard work, all the connections, it might be a new some companies prosper in this environment, some companies do not so probably like I said, ability to change, ability to adapt.

Jeffery:
Okay, nope. That’s a good point. Can you share one story of something more heartfelt that you were working with a startup, you didn’t think that they really were gonna make it or they had a problem or something wasn’t right or they got hit with a problem, you were excited about them then you weren’t sure, and then they overcame adversities and became a successful company and you were super proud of them. Is there something there that you can share or even just some sort of crazy story that you can’t believe happened and you netted out in the wind and it’s everybody’s happy?

Vosik:
There was a still within while working with the big corporate I was looking at one company out of Germany. What where they were trying to do is to slice silicon for the semiconductor manufacturing. When people talking about semiconductor silicon, it’s basically a huge chunk very long ingot of silicon which needs to be sliced, polished, and diced. What they were trying to do is to they put some fatty on top of it, super freeze it, do the laser damage points, and then just pop it off cleaving the wafer off cleanly with very loss low curve, loss that was the initial idea. I like the idea, I thought it’s a cool way to approach the slicing business. What I didn’t like is that they’re trying to use it for the silicon which is like I said earlier in this interview, bloody cheap disease. So, I referred to the company I mean, to the division within my company. I said, “Okay I know you’re working on the power Semiconductor and you need silicone carbide. Similar thing also ingots, also sliced, but instead of 40 dollars per kilogram you think, 1500 for that.” “So can you give me a couple of ingots, so I can send them to them and they will test it to see if it works.” Well, it turned out, it worked and I started talking to the company, they were trying to raise a one million on five frame validation as soon as they did the silicon carbide they tested successfully. One year later they were sold out at 150 am.

Jeffery:
Wow!

Vosik:
Missed opportunity for me but yeah I’m glad I participated and steered them the right direction.

Jeffery:
And that comes from the startup, just working with lots of different people and selling through and hopefully, the people they’re working with are giving them ideas and new ways of looking at a problem and they follow through with it. And it can pull in some big success.

Vosik:
Exactly, so yeah. I’m really proud of that was my first solution, I mean, you don’t need to follow 40 dollar. I mean the curve loss there is negligible. Yeah, if you can save on one and a half thousand dollars in good that will be probably significant and yeah, that was a fun project.

Jeffery:
Nope, that sounds pretty awesome and kudos for the nice save! So last question, crystal ball: the world’s changed a lot in the last six months, eight months, what is the- in your crystal ball, where do you see the world in the next three months and maybe, the next three years? Like where do you see the shift occurring? Is there going to be a specific vertical that people are going to be focusing on or do you think things are going to go back to normal and investments are going to pick back up again where are you kind of seeing the world change in the next I’d say, 12 to 12 months to 36 months?

Vosik:
I wish I had crystal ball but at the same time, I think the world has changed the last half a year people were saying that the remote work is not feasible. Look at what we’ve got now, people sitting back at home, and working, doing same things they were doing in the offices. So there will be major changes in regard that less dependence on the commercial real estate less dependency on corporate real estate. People will spend more time at home, so that’s one positive thing, see more small family. Business-wise, three months, I don’t think it will change from what it is. Now people are still being very cautious, optimistic but cautious, I would say and there is election coming up so, two months is probably better timeline. Three years from now, I think we’ll be back to normal with less reliance on office work, wrestling reliance on the offline sales will probably that change which the world is experiencing now. Shifting for the work from home shifting for the grocery delivery rather than going and buying them groceries, clothes, whatever. That will be going back a bit but the balance will be not as it is last year. So and the verticals yeah, whatever you can help to kind of last my delivery drone, delivery those things might be Interesting but might be a bit out a bit too far. I’m still looking very optimistic about autonomous driving that will be the probably last coffin into the work from office. I mean actually and things like real estate in downtowns because instead of living and paying three thousand dollars, you can pay same three thousand dollars in huge place with this pool and taking care of kids. But instead of driving and traffic, you’ll be shuttled by your autonomous but that’s probably not in another five, ten years. So, verticals to invest within next-

Jeffery:
Let’s just progress it out a bit more for another three years.

Vosik:
That you will have to start doing investment into that now to actually reap the fruits in five to ten years. So, you have to well again, if it’s within your scope and even investment, probably should be looking a bit closer.

Jeffery:
All right, I like it. Well Vosik, I want to thank you very much for your time today. I take as I do, I take lots of notes. I’m a big fan actually, I was so caught up in the conversation at the beginning I was like, “Oh my god, I’m not even taking notes!” So, I’m starting to write not-

Vosik:
But you’re recording that so (Laughs).

Jeffery:
I know, but I’m always writing down, I want to make sure I get the meat potatoes in my notes but I appreciate your time. I think it was brilliant, there was a lot of learning. Just in that earlier part of what you went through with your original business and I think a lot of startups are going to learn a lot from that. So, I appreciate your time, appreciate everything you said, and one thing that I’ll leave it with is, what we like to do is I like to leave it with you, with the last word. So anything you want to share to the startup audience on something they can look forward to or something they should do or anything that you want to give feedback on. I leave you with the last word to share to the audience.

Vosik:
Cool, it’s like that token for the startups. I think I said it several times already, try not to be rigid, pivot, adapt, change your business model, change your technology, change whatever things you do, the world is not stagnant, world is changing every day, and your ability to adapt, your ability to change with the world or change the world, it will be probably decisions this decisive in how successful your startup is and do not just focus on the growth. If you see the good product, if you see there is a market even if it’s niche, go ahead and do it. Doesn’t have to be the whole world using it as long there is a market for the product that you made, that you have developed, and companies or people are paying for it even if it’s a small one, go ahead and do that. So it doesn’t have to be three billion dollar company, you can- it could be your next company for the dealing one. The first one could be also small start niche target which makes you money, which makes money for your investors, and makes you happy.

Jeffery:
I like it, “makes you happy.” and that’s big. Well, thank you again Vosik for all your insights, for sharing, and for giving us the last word. So thank you very much! We’ll leave it at that.

Vosik:
Thank you!

Jeffery:
And yeah, we’ll be attached again but thank you very much again for all your insights.

Vosik:
Have a good one!

Jeffery:
Alright, you too! Thanks Vosik!

Vosik:
Bye.

Jeffery:
Well, there you have it! That was fantastic! Like I said I got all caught up in the conversation that I wasn’t taking my usual notes but I will say that there was a lot of great insights into his experience but how that pushed and resonated with the other startups that he works with and the key one for what he talked about was obviously, when there’s a point in time, where you need to figure out if you’re in the right spot and reducing cost burn rate, bringing a consultant talk to advisors, talk to your investors, learn, and figure out what’s the best positioning for your business. Create options, any insights are going to help you be more stabilized, and if you can reduce that cost then that allows you to be more competitive and I think the big subject of the today’s conversation was really around competition outside, and internal competition. I think we forget that internally there’s a lot of things that you’ve got to be lean around to compete against the outside environment. And on the outside, it’s also learning what things you can shift and change because they’re coming at you. Everybody sees an opportunity, they see you’ve got growth, they see you’ve got potential, they’re going to come at you, right? Airbnb, Lyft, Uber, all of these different platforms all had competition and if they weren’t there at the beginning, they came after. So, I always take a look at that, lots of great insights on how he invests and what he looks for but like you said pivot, adapt, change, always think about those things when you’re in business. You have to know be psychotic about your business, know the ins and outs, be ready to change and just keep changing because you gotta. It’s not fall with the money, it’s following the way the customer works and adapts with you, and you adapt with them, learn, pivot, change, grow. I love it. It was great conversation with Vosik, he created some great insights in what the next 36 months is going to look like. Check out the video, like it, and we’ll see you guys all very soon.

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