WEBVTT 00:00:00.000 --> 00:00:02.859 Welcome to the Innovation Conversation, a podcast 00:00:02.859 --> 00:00:05.419 about innovators, both in business and real life. 00:00:05.879 --> 00:00:08.380 Hosted by myself, Ricardo Rescual and Harry McCona. 00:00:08.480 --> 00:00:11.699 This podcast is also sponsored by ODEV Tech. 00:00:12.439 --> 00:00:14.640 ODEV Tech is your premier software development 00:00:14.640 --> 00:00:18.019 partner. Make sure you check them out at odev 00:00:18.019 --> 00:00:22.399 .tech. The podcast is also sponsored by Notion 00:00:22.399 --> 00:00:25.359 .so. Notion is offering six months for free for 00:00:25.359 --> 00:00:27.839 new users. Make sure you check out our website, 00:00:28.039 --> 00:00:30.579 thestoreofevents .co .uk to read in the software. 00:00:31.559 --> 00:00:33.880 Hi, and welcome to another episode of the Innovation 00:00:33.880 --> 00:00:36.840 Conversation. Today we are joined by Azzy Veracobos. 00:00:37.039 --> 00:00:39.320 Azzy, welcome to the podcast. Thank you. Thank 00:00:39.320 --> 00:00:41.500 you very much for having me. Azzy, would you 00:00:41.500 --> 00:00:45.200 like to introduce yourself to the audience, please? 00:00:45.619 --> 00:00:48.600 Yes, of course. So my actual name is Azza Ara, 00:00:48.659 --> 00:00:51.280 but everyone calls me Azzy. I am the head of 00:00:51.280 --> 00:00:54.179 scouting and programs at Startupwise, guys. Startup 00:00:54.179 --> 00:00:57.299 with Guys is a global funds accelerator that 00:00:57.299 --> 00:01:00.280 invests in B2B startups all over the world. We 00:01:00.280 --> 00:01:04.140 have more than 440 startups invested in our portfolio. 00:01:04.840 --> 00:01:07.620 And we have very recently closed our exit number 00:01:07.620 --> 00:01:11.700 20. And we work with startups all around the 00:01:11.700 --> 00:01:15.939 world. We specifically have people living, mostly 00:01:15.939 --> 00:01:18.900 living in Europe. So we are basically around 00:01:18.900 --> 00:01:22.980 the world working mostly remotely. We have our 00:01:22.980 --> 00:01:27.680 hometown home in Dali and then other places where 00:01:27.680 --> 00:01:29.780 we feel like it's home as well, like here in 00:01:29.780 --> 00:01:34.019 Malaga where I am. So there is no connection 00:01:34.019 --> 00:01:38.620 with the Mafia whatsoever? No, not indeed. It's 00:01:38.620 --> 00:01:41.319 like Ricardo, don't make that joke. No, but I 00:01:41.319 --> 00:01:43.700 absolutely love the name. You mentioned something 00:01:43.700 --> 00:01:45.540 quite fascinating, which is you've had a lot 00:01:45.540 --> 00:01:48.280 of successful exits, which is not I think it's 00:01:48.280 --> 00:01:53.079 always a really good way of evaluating things 00:01:53.079 --> 00:01:55.280 because 20 is a really high number, so it's an 00:01:55.280 --> 00:01:59.019 excellent number to have. Why do you think that 00:01:59.019 --> 00:02:02.140 is? What makes it so successful? Is there any 00:02:02.140 --> 00:02:03.920 type of philosophy your company follows to make 00:02:03.920 --> 00:02:06.200 that happen? Yeah, that's a great question. I 00:02:06.200 --> 00:02:10.060 think it comes to a combination of several things. 00:02:10.120 --> 00:02:12.900 We've been in the market for 12 years now and 00:02:12.900 --> 00:02:17.590 we started in Estonia. We obviously have a very, 00:02:18.830 --> 00:02:20.949 we know that country is a small country, but 00:02:20.949 --> 00:02:23.129 with lots of very promising, amazing founders. 00:02:23.870 --> 00:02:27.069 So I think we started by connecting with really 00:02:27.069 --> 00:02:30.770 great founders in that country. And I strongly 00:02:30.770 --> 00:02:34.349 believe in great founders actually connecting 00:02:34.349 --> 00:02:38.110 to other great founders. So I think that we, 00:02:38.349 --> 00:02:41.969 we started building that network very well 12 00:02:41.969 --> 00:02:45.990 years ago. And from there, we of course expanding 00:02:45.990 --> 00:02:49.750 to other countries. And I think we managed to 00:02:49.750 --> 00:02:52.810 keep doing that work that we started in Estonia 00:02:52.810 --> 00:02:57.490 with kind of an overlooked markets. And then 00:02:57.490 --> 00:03:00.289 we kept doing that in other markets as well. 00:03:00.969 --> 00:03:04.990 And I also think that not only we are good at 00:03:04.990 --> 00:03:07.069 making those connections and networks, we're 00:03:07.069 --> 00:03:10.990 also good at nurturing those startups. So we 00:03:10.990 --> 00:03:14.419 select. great founders, but then we also like 00:03:14.419 --> 00:03:16.979 to work very closely with them so that we can 00:03:16.979 --> 00:03:21.240 help them grow and succeed in whatever they're 00:03:21.240 --> 00:03:24.060 doing. We work with them in the accelerator programs, 00:03:24.060 --> 00:03:28.539 but then we also keep very close to them after 00:03:28.539 --> 00:03:31.979 the program ends. So I think that's mainly part 00:03:31.979 --> 00:03:34.939 of the success. Is there any vertical you focus 00:03:34.939 --> 00:03:38.840 on or is it agnostic? We have multiple verticals 00:03:38.840 --> 00:03:41.699 that we focus on. We have accelerator programs 00:03:41.699 --> 00:03:45.240 that are focused on SaaS, which is the most generic 00:03:45.240 --> 00:03:49.400 one. We also have PropTech, Web3, cybersecurity, 00:03:50.000 --> 00:03:55.180 defense, sustainability. So we do have lots of 00:03:55.180 --> 00:03:59.360 verticals. But I would also say that we are mainly 00:03:59.360 --> 00:04:04.379 open to any really great B2B early stage startup. 00:04:06.870 --> 00:04:09.009 When you're looking at all these founders, all 00:04:09.009 --> 00:04:11.310 these ideas for startups, I'm sure you've managed 00:04:11.310 --> 00:04:13.590 to identify trends in the sense that you kind 00:04:13.590 --> 00:04:17.689 of know who's going to make it or not. Yes, I 00:04:17.689 --> 00:04:20.649 wish I could say we have the secret sauce, but 00:04:20.649 --> 00:04:23.629 no, I think I would lie if I say that we know 00:04:23.629 --> 00:04:27.529 what makes a startup great. I don't think anyone 00:04:27.529 --> 00:04:34.540 has that really secret sauce. I think that basically 00:04:34.540 --> 00:04:37.819 if you ask my personal point of view, I like 00:04:37.819 --> 00:04:42.579 very much founders that obsess over solving problems 00:04:42.579 --> 00:04:45.699 rather than obsessed with the products that they 00:04:45.699 --> 00:04:49.819 are building. And I think that's a, I basically 00:04:49.819 --> 00:04:53.420 see that very easily when we start talking to 00:04:53.420 --> 00:04:55.860 founders and you see that very quickly when they 00:04:55.860 --> 00:04:58.720 are really good at explaining why they want to 00:04:58.720 --> 00:05:01.019 solve the problem that they want to solve and 00:05:01.019 --> 00:05:04.670 how big that market is. and how ambitious they 00:05:04.670 --> 00:05:08.509 are to make that a reality and to fix that challenge 00:05:08.509 --> 00:05:12.850 or problem they have identified. Usually, I don't 00:05:12.850 --> 00:05:14.689 think that's a secret sauce, but that is one 00:05:14.689 --> 00:05:18.670 thing that we look at a lot when we select startups. 00:05:19.730 --> 00:05:22.410 How does the process look like for a startup 00:05:22.410 --> 00:05:27.250 that wants to join? The easiest way is to apply 00:05:27.250 --> 00:05:29.649 to one of the programs that we are running across 00:05:29.649 --> 00:05:32.290 the year. We have multiple programs running all 00:05:32.290 --> 00:05:35.240 year long. And that will be the easiest one. 00:05:35.259 --> 00:05:37.079 And then once they apply through the program, 00:05:37.279 --> 00:05:40.399 we basically screen them and we invite them into 00:05:40.399 --> 00:05:42.959 our scouting process. Another way, of course, 00:05:42.959 --> 00:05:45.319 is to connect directly with someone from Startupwise 00:05:45.319 --> 00:05:48.079 Guys. Of course, because of that, we have that 00:05:48.079 --> 00:05:50.720 network of founders, but also mentors in our 00:05:50.720 --> 00:05:52.839 network, of course, the investors from our funds 00:05:52.839 --> 00:05:56.639 as well. Basically, almost anyone from the Startupwise 00:05:56.639 --> 00:06:00.360 Guys team, we are always open to meet great founders. 00:06:01.370 --> 00:06:04.850 I would say, yeah, any way, anywhere to connect 00:06:04.850 --> 00:06:07.589 with us directly. And that can be through LinkedIn. 00:06:07.790 --> 00:06:11.550 It can be if you see us in an event or of course, 00:06:11.550 --> 00:06:13.569 if you apply directly through a program, which 00:06:13.569 --> 00:06:16.550 is obviously also an easy way. Interesting. You 00:06:16.550 --> 00:06:19.430 know, as a lot of these startups exit and 20 00:06:19.430 --> 00:06:21.370 is a really good number to have, you know, as 00:06:21.370 --> 00:06:24.449 a successful exit. Have you managed to identify 00:06:24.449 --> 00:06:27.449 whether that, how should I put this? Have you 00:06:27.449 --> 00:06:29.250 managed to identify what actually makes or break 00:06:29.250 --> 00:06:31.370 a startup? and it's always the same thing or 00:06:31.370 --> 00:06:33.589 actually does it vary dramatically depending 00:06:33.589 --> 00:06:35.930 on the startup? Yeah, that's a great question. 00:06:36.529 --> 00:06:39.509 It's funny because it's kind of linked to the 00:06:39.509 --> 00:06:42.709 first answer that I gave you. So I think most 00:06:42.709 --> 00:06:45.209 of the times what breaks a startup is the team. 00:06:46.430 --> 00:06:49.790 And then it's also very hard for some startups 00:06:49.790 --> 00:06:52.870 to raise funds. So they managed to raise the 00:06:52.870 --> 00:06:55.389 first, sometimes they managed to raise that first 00:06:55.389 --> 00:06:57.930 round of investment, but then they struggle for 00:06:57.930 --> 00:07:00.269 the second round because they don't They don't 00:07:00.269 --> 00:07:02.470 manage to get to that point where they can raise 00:07:02.470 --> 00:07:06.709 money again. So I'd say first is the team to 00:07:06.709 --> 00:07:11.670 actually break through and resist through the 00:07:11.670 --> 00:07:14.810 highs and lows, especially the lows. The market 00:07:14.810 --> 00:07:18.610 constraints and actually making the first sales 00:07:18.610 --> 00:07:22.930 and not only those first sales, but being consistent 00:07:22.930 --> 00:07:27.149 in growing those sales. Usually that's also a 00:07:27.149 --> 00:07:28.670 thing that breaks startups is where they don't 00:07:28.670 --> 00:07:31.839 manage to get that done well, which is also something 00:07:31.839 --> 00:07:34.399 that we help in our programs. We help them with 00:07:34.399 --> 00:07:37.660 their sales development and their sales marketing 00:07:37.660 --> 00:07:41.779 approach. So I think I would say basically those 00:07:41.779 --> 00:07:46.480 are the two key points. Three, so team, sales 00:07:46.480 --> 00:07:50.420 and investment. So let's focus on the investment 00:07:50.420 --> 00:07:52.620 for now because I'm always curious. I'm sure 00:07:52.620 --> 00:07:54.660 you get a lot of very cold emails asking for 00:07:54.660 --> 00:07:56.730 money straight away, right? So what do you think 00:07:56.730 --> 00:07:59.009 it's the best way for a startup, and I know I 00:07:59.009 --> 00:08:00.709 have a lot of startups listening to this, to 00:08:00.709 --> 00:08:03.649 actually go out and raise capital? You mean when 00:08:03.649 --> 00:08:06.069 it's a cold outreach? When it's a cold outreach, 00:08:06.629 --> 00:08:09.370 because what I find is it's easy for you to raise 00:08:09.370 --> 00:08:11.850 capital if you have already a gigantic network 00:08:11.850 --> 00:08:13.910 of people that have the availability to lend 00:08:13.910 --> 00:08:16.189 you the money or invest in your company. However, 00:08:16.790 --> 00:08:18.910 it doesn't always happen that way. And especially 00:08:18.910 --> 00:08:20.709 when you're creating a new product that might 00:08:20.709 --> 00:08:22.990 not be the right product for your specific market, 00:08:23.029 --> 00:08:24.720 that might be the right product. Let's say in 00:08:24.720 --> 00:08:26.139 Spain, you might be building something that works 00:08:26.139 --> 00:08:28.800 really well in the UK, but you won't find investors 00:08:28.800 --> 00:08:31.500 in Spain willing to stake that leap. So how do 00:08:31.500 --> 00:08:35.440 you manage that? That's a great question. I agree 00:08:35.440 --> 00:08:37.879 that, of course, it's easier to raise funds when 00:08:37.879 --> 00:08:40.559 you have that network or when you have someone 00:08:40.559 --> 00:08:43.120 connected to the person that you need to talk 00:08:43.120 --> 00:08:48.059 to. But when it's a cold outreach, for me, usually 00:08:48.830 --> 00:08:52.070 What helps is when that email that you send out 00:08:52.070 --> 00:08:54.169 or that message that you send out through LinkedIn 00:08:54.169 --> 00:08:58.990 actually has something that really makes me want 00:08:58.990 --> 00:09:02.549 to know more. So you can usually, sometimes startups, 00:09:02.730 --> 00:09:05.309 what happened with them is they tend to send 00:09:05.309 --> 00:09:07.309 really long emails with everything they want 00:09:07.309 --> 00:09:10.570 to achieve and their dreams and everything. Most 00:09:10.570 --> 00:09:12.649 of the times we don't have time to read really 00:09:12.649 --> 00:09:16.049 long emails with all the startups that approach 00:09:16.049 --> 00:09:20.129 to us. So I would say usually what helps me is 00:09:20.129 --> 00:09:23.389 when you are very straight, you reached out to 00:09:23.389 --> 00:09:25.450 me very straightforward with what you offer. 00:09:25.990 --> 00:09:29.049 So usually you should know who you are talking 00:09:29.049 --> 00:09:32.029 to. So if you know that we are looking for B2B 00:09:32.029 --> 00:09:35.990 early stage startups that invest in these specific 00:09:35.990 --> 00:09:39.250 verticals and you know, if you know what we do, 00:09:39.750 --> 00:09:41.889 you should be able to tailor that message accordingly 00:09:41.889 --> 00:09:45.250 as well. So, Hey, we are a B2B SaaS startups. 00:09:45.570 --> 00:09:48.480 We've started. doing this, these are the kind 00:09:48.480 --> 00:09:50.480 of, this is the kind of traction that we've achieved 00:09:50.480 --> 00:09:53.559 so far, which means you can either have, you 00:09:53.559 --> 00:09:55.220 know, revenues or if you don't have revenues, 00:09:55.440 --> 00:09:58.080 what kind of metrics you have to demonstrate 00:09:58.080 --> 00:10:00.220 that you have something that is already kind 00:10:00.220 --> 00:10:04.600 of validating in the market. And then just leave 00:10:04.600 --> 00:10:06.779 me hanging there, leave me wanting to really 00:10:06.779 --> 00:10:09.320 know more about you. So if you've managed to, 00:10:09.340 --> 00:10:11.840 you know, if you are raising funds, but you've 00:10:11.840 --> 00:10:14.159 already started raising part of those funds and 00:10:14.159 --> 00:10:19.340 you have maybe 20 % of the total investment closed 00:10:19.340 --> 00:10:22.500 or something that says to me that, you know, 00:10:22.799 --> 00:10:24.700 that there might be something appealing there. 00:10:25.559 --> 00:10:28.039 Sometimes some people also attach like a short 00:10:28.039 --> 00:10:30.580 video with their product demo. That's fine. But 00:10:30.580 --> 00:10:34.080 what I would say is just make sure that in a 00:10:34.080 --> 00:10:36.820 few bullet points, you tell the key things that 00:10:36.820 --> 00:10:40.519 are going to leave me wanting to meet you and 00:10:40.519 --> 00:10:43.460 wanting to know. Interesting. So it's all about 00:10:43.460 --> 00:10:47.070 delivering. A message that, you know, it's captivating, 00:10:47.190 --> 00:10:51.429 isn't it? Yeah. Yeah. And yeah, and making sure 00:10:51.429 --> 00:10:53.330 that if you, if you have, this is funny because 00:10:53.330 --> 00:10:56.610 sometimes startups have metrics that they've 00:10:56.610 --> 00:10:59.009 started collecting, but sometimes they don't 00:10:59.009 --> 00:11:02.490 share them straight away. And for me, sometimes 00:11:02.490 --> 00:11:06.070 it's funny because I, I always tell them, just 00:11:06.070 --> 00:11:08.610 tell me, tell me, you know, everything that you've 00:11:08.610 --> 00:11:11.250 achieved so far, because that's how I know if 00:11:11.250 --> 00:11:13.149 you have something that is appealing in the market, 00:11:13.190 --> 00:11:17.740 because We don't invest in the idea stage. We 00:11:17.740 --> 00:11:21.220 invest when they already have an MVP or an idea 00:11:21.220 --> 00:11:23.759 that it's already started to be validated in 00:11:23.759 --> 00:11:26.600 the market. So if you are the point, you should 00:11:26.600 --> 00:11:29.440 have something to show me. Yeah, exactly. Yeah. 00:11:29.519 --> 00:11:31.879 And I think it's really hard to invest in just 00:11:31.879 --> 00:11:34.600 an idea, isn't it? I mean, you must really believe 00:11:34.600 --> 00:11:36.759 strongly in that founder or that team to just 00:11:36.759 --> 00:11:39.539 say, hey, here's my money. Go and create something, 00:11:39.700 --> 00:11:41.500 build an MVP with just an idea. Like, well, hold 00:11:41.500 --> 00:11:46.700 on. I've seen it. Most of, I mean, sometimes 00:11:46.700 --> 00:11:49.379 it's because that founder is a second time founder. 00:11:49.500 --> 00:11:53.320 Okay. And then you already know that he's already 00:11:53.320 --> 00:11:56.360 done it one time and either he did, you know, 00:11:56.519 --> 00:11:58.779 for successful exit or he just was very good 00:11:58.779 --> 00:12:00.899 building product. But that first trial didn't, 00:12:00.899 --> 00:12:02.659 you know, make through because it wasn't the 00:12:02.659 --> 00:12:04.360 right time. It wasn't the right market, whatever 00:12:04.360 --> 00:12:08.600 that is. So I've seen it. I think right now it's 00:12:08.600 --> 00:12:12.149 way more rare than a few years ago. when it was 00:12:12.149 --> 00:12:14.389 much easier to raise money that way. Right now, 00:12:14.529 --> 00:12:17.710 I think you need to be, yeah, you need to show 00:12:17.710 --> 00:12:21.169 that you have really an amazing idea or you're 00:12:21.169 --> 00:12:24.529 really great building products and you have that 00:12:24.529 --> 00:12:28.490 track record and you can tell others, hey, I'm 00:12:28.490 --> 00:12:31.590 building this. I'm about to build this. If you're 00:12:31.590 --> 00:12:33.389 jumping now, it's, you know, perfect timing. 00:12:34.029 --> 00:12:37.090 But it's, I would say that that is a very rare. 00:12:37.350 --> 00:12:39.169 Very rare. At least in our case, it's definitely 00:12:39.169 --> 00:12:43.500 very rare. But in general, in the industry, I've 00:12:43.500 --> 00:12:46.019 seen that that is less and less common than it 00:12:46.019 --> 00:12:49.519 used to be five or years ago. Interesting. What 00:12:49.519 --> 00:12:51.399 do you think, you know, we mentioned team and 00:12:51.399 --> 00:12:54.019 sales, two things that I'm quite passionate about. 00:12:55.139 --> 00:12:57.100 You know, when it comes to team, is there any 00:12:57.100 --> 00:12:59.659 tips or tricks you have that, you know, make 00:12:59.659 --> 00:13:01.879 it work better? Because ultimately, at least 00:13:01.879 --> 00:13:03.980 when you have two founding members, it comes 00:13:03.980 --> 00:13:06.360 down to it actually being a relationship. and 00:13:06.360 --> 00:13:07.799 you end up spending more time with that person 00:13:07.799 --> 00:13:09.399 than you spend with your loved ones, especially 00:13:09.399 --> 00:13:11.159 when you're building stuff. So how do you manage 00:13:11.159 --> 00:13:13.539 that? Have you found the magical formula that 00:13:13.539 --> 00:13:17.580 kind of works or it's like any relationship? 00:13:18.740 --> 00:13:21.919 Yeah, I don't think there's a magic formula. 00:13:23.759 --> 00:13:26.179 What I usually see working very well is when 00:13:26.179 --> 00:13:29.879 those two people, assuming there are two, they 00:13:29.879 --> 00:13:32.220 know each other for a very long time either from, 00:13:32.220 --> 00:13:34.000 you know, they've studied together, they've worked 00:13:34.000 --> 00:13:37.870 together. They've done other projects, not even 00:13:37.870 --> 00:13:41.250 related to startup. Well, together they've gone 00:13:41.250 --> 00:13:44.769 through, the important thing is that they have 00:13:44.769 --> 00:13:47.610 had arguments before, so they know how to get 00:13:47.610 --> 00:13:50.389 through that. And also they've gone through tough 00:13:50.389 --> 00:13:53.870 times together. Ideally, that's usually something 00:13:53.870 --> 00:13:56.190 that helps because it's going to happen eventually 00:13:56.190 --> 00:14:00.190 in a startup as well. And also having complementary 00:14:00.190 --> 00:14:04.559 skills really helps. I've seen many times. And 00:14:04.559 --> 00:14:07.720 it doesn't mean that it can't work because of 00:14:07.720 --> 00:14:10.940 course you can have a team of two engineers that 00:14:10.940 --> 00:14:16.259 make it through amazingly. But usually the great 00:14:16.259 --> 00:14:18.860 combination is when you have one very good tech 00:14:18.860 --> 00:14:21.259 one, and then when you have someone really good 00:14:21.259 --> 00:14:24.220 in sales and business. Usually that combination 00:14:24.220 --> 00:14:27.480 is the best. Of course, it's a very difficult 00:14:27.480 --> 00:14:29.440 combination. Sometimes it doesn't happen both 00:14:29.440 --> 00:14:31.840 at the same time, but ideally you should have 00:14:31.840 --> 00:14:34.230 someone very good building the product. and someone 00:14:34.230 --> 00:14:37.169 very good at selling the product. Which brings 00:14:37.169 --> 00:14:39.470 me to my next topic, which is actually sales. 00:14:40.029 --> 00:14:42.870 I actually have a sales background and I think 00:14:42.870 --> 00:14:46.509 what always impresses me is how some founders 00:14:46.509 --> 00:14:49.669 are unable to sell their idea themselves and 00:14:49.669 --> 00:14:51.649 they go on to hire other people to sell their 00:14:51.649 --> 00:14:53.889 idea. And for me, it's always been a pet peeve 00:14:53.889 --> 00:14:56.830 and I always know if there's a sales position 00:14:56.830 --> 00:14:58.909 open and the founder is asking, can you come 00:14:58.909 --> 00:15:03.309 and sell my idea? It's not going to work. What's 00:15:03.309 --> 00:15:07.110 your take on this? What do you think? Yeah, it's 00:15:07.110 --> 00:15:08.809 interesting because that's also something that 00:15:08.809 --> 00:15:11.629 I've seen happening a lot. Startups struggling 00:15:11.629 --> 00:15:16.029 to explain what they do. It doesn't mean that 00:15:16.029 --> 00:15:18.470 they're not a good startup, but it's usually 00:15:18.470 --> 00:15:21.409 not a good sign because if they are unable to 00:15:21.409 --> 00:15:24.370 explain to an investor what they are doing, I 00:15:24.370 --> 00:15:26.960 think... Sorry. That's completely fine. It's 00:15:26.960 --> 00:15:29.419 actually, I think it adds a very nice element 00:15:29.419 --> 00:15:32.220 to the podcast. So for our listeners, Ezzy Sun 00:15:32.220 --> 00:15:33.840 is actually on the back on singing, which is 00:15:33.840 --> 00:15:37.460 great. I think he's calling me, but if we can 00:15:37.460 --> 00:15:39.580 hold. Okay. So for our listeners, we just had 00:15:39.580 --> 00:15:41.679 a little break. So as you can check on our son, 00:15:41.740 --> 00:15:44.039 we're back on. So we're talking about sales team 00:15:44.039 --> 00:15:46.639 and also actually reaching out to investors. 00:15:47.440 --> 00:15:49.200 I'm curious about what you think about what's 00:15:49.200 --> 00:15:51.159 actually happening right now. No interest rates 00:15:51.159 --> 00:15:53.750 are going down as we speak. there's always a 00:15:53.750 --> 00:15:56.029 lot of conversations about how hard it's actually 00:15:56.029 --> 00:15:59.470 to raise funds. From your side, from your perspective, 00:15:59.710 --> 00:16:00.950 what do you think? Is this a good moment or a 00:16:00.950 --> 00:16:04.169 bad moment? It's a difficult moment. I wouldn't 00:16:04.169 --> 00:16:08.789 say it's bad because I think it was worse before. 00:16:09.309 --> 00:16:11.690 I think it's getting better but it's still very 00:16:11.690 --> 00:16:17.190 hard. We see in the market overall that a lot 00:16:17.190 --> 00:16:20.629 of people are really struggling to raise these 00:16:20.629 --> 00:16:23.620 funds. But I think it's going to eventually get 00:16:23.620 --> 00:16:28.519 better. It was way worse one year. So I think 00:16:28.519 --> 00:16:32.779 it's going to get better eventually. I'm curious 00:16:32.779 --> 00:16:34.980 on something else, which is, you mentioned that 00:16:34.980 --> 00:16:37.299 you were founded in Estonia. Now you also have 00:16:37.299 --> 00:16:39.879 offices in Spain. I mean, you have a pretty big 00:16:39.879 --> 00:16:42.340 European network of startups coming your way. 00:16:43.360 --> 00:16:45.820 How relevant is it for a startup to actually 00:16:45.820 --> 00:16:48.120 think outside of the box or outside of their 00:16:48.120 --> 00:16:50.570 specific country? and go elsewhere. Also, do 00:16:50.570 --> 00:16:54.029 you think that's easy to do or not so much? Yeah, 00:16:54.169 --> 00:16:57.850 that's a good question. It's fine. I've seen 00:16:57.850 --> 00:17:03.509 trends. So for some countries, they always start 00:17:03.509 --> 00:17:06.730 with their own country. And then eventually when 00:17:06.730 --> 00:17:08.589 they've managed to break through in their country, 00:17:08.730 --> 00:17:11.369 then they think, you know, to go outside of their 00:17:11.369 --> 00:17:13.609 country. For other countries, it's the opposite. 00:17:13.809 --> 00:17:16.029 They always think outside of their country first. 00:17:16.269 --> 00:17:19.269 So for example, for really small countries like 00:17:19.269 --> 00:17:23.690 say, Lithuania, Estonia, they usually think outside 00:17:23.690 --> 00:17:26.809 of their country first. And they're kind of more, 00:17:27.049 --> 00:17:31.029 they usually have a more global mindset first. 00:17:31.170 --> 00:17:33.569 And I think it's because of the size of the country. 00:17:34.670 --> 00:17:38.109 Whereas for example, countries like Spain or 00:17:38.109 --> 00:17:42.750 France or Turkey, they usually always think of 00:17:42.750 --> 00:17:45.859 local first. And then, you know, if they break 00:17:45.859 --> 00:17:49.000 through, then they think about going outside 00:17:49.000 --> 00:17:53.920 other countries. As an investor, when you look 00:17:53.920 --> 00:17:55.819 at Spanish startups, would that be a criteria, 00:17:55.859 --> 00:17:57.779 for example? Because I ended up talking with 00:17:57.779 --> 00:17:59.299 a lot of startups because obviously we run a 00:17:59.299 --> 00:18:02.619 lot of events in Spain. And they always, I think 00:18:02.619 --> 00:18:04.559 they're kind of struggling to break away from 00:18:04.559 --> 00:18:07.680 the Spanish market. What do you think? Well, 00:18:07.680 --> 00:18:11.160 for us, we are global. We look for scalability. 00:18:11.299 --> 00:18:14.410 So if you start, if you... don't have a global 00:18:14.410 --> 00:18:17.890 mindset to, you know, to go outside of your country, 00:18:18.450 --> 00:18:21.089 then we are not going to invest essentially. 00:18:22.490 --> 00:18:26.589 But I would say it's not just us. Overall, I 00:18:26.589 --> 00:18:30.509 see that they usually struggle to find investment 00:18:30.509 --> 00:18:34.509 if they don't have a global mindset. Interesting. 00:18:34.549 --> 00:18:36.630 Interesting. So it's all about thinking globally 00:18:36.630 --> 00:18:38.670 yet locally type of thing, right? Yeah. I mean, 00:18:38.670 --> 00:18:40.630 it's fine to start in your own country. I think 00:18:40.630 --> 00:18:44.769 it makes sense. But you should have, if you are 00:18:44.769 --> 00:18:46.990 a startup with ambition to grow, you should have 00:18:46.990 --> 00:18:50.470 a plan to go beyond your country. You know, when 00:18:50.470 --> 00:18:52.230 you see all these founders and they're kind of 00:18:52.230 --> 00:18:54.789 struggling, what do you tell them? Cause I'm 00:18:54.789 --> 00:18:56.769 most curious, cause you know, startup life is 00:18:56.769 --> 00:18:58.690 crazy. You have really good moments and everything 00:18:58.690 --> 00:19:00.809 is amazing. And then you have a horrible week. 00:19:01.210 --> 00:19:02.930 The world's going to fall apart. Oh my God. I 00:19:02.930 --> 00:19:05.130 don't know if I can live another day. So how 00:19:05.130 --> 00:19:06.849 do you, how do you, what do you tell people when 00:19:06.849 --> 00:19:12.359 that happens? I feel their pain because I understand 00:19:12.359 --> 00:19:14.859 how hard it must be, you know, to go through 00:19:14.859 --> 00:19:21.480 those highs and lows. We, I feel proud of our 00:19:21.480 --> 00:19:25.180 team because we are very much very well connected 00:19:25.180 --> 00:19:29.759 to our startups. I would say our CEO, Cristóbal, 00:19:30.700 --> 00:19:35.039 like talks on WhatsApp with so many of them, 00:19:35.039 --> 00:19:37.700 startups from our portfolio that have been invested. 00:19:38.140 --> 00:19:41.460 for with us since the first year. So, and they 00:19:41.460 --> 00:19:43.380 feel, you know, if they are feeling like they 00:19:43.380 --> 00:19:46.420 need help or they need someone to help them with 00:19:46.420 --> 00:19:49.740 a specific challenge with whatever that may be, 00:19:49.740 --> 00:19:52.660 it might be for an investment round, but it can 00:19:52.660 --> 00:19:56.779 also be for, you know, I need an intro with a 00:19:56.779 --> 00:20:02.480 client or, and I feel specifically proud that 00:20:02.480 --> 00:20:04.980 our founders feel that we are very close to them. 00:20:05.279 --> 00:20:08.119 So if they need our help. we are there to help 00:20:08.119 --> 00:20:10.880 them basically. Interesting, which brings me 00:20:10.880 --> 00:20:14.039 to my next question. As a founder, and this is 00:20:14.039 --> 00:20:16.000 a bit of a tricky question for you to answer, 00:20:16.420 --> 00:20:19.319 but as a founder, let's say you have a lot of 00:20:19.319 --> 00:20:21.400 opportunities on the table in terms of VCs would 00:20:21.400 --> 00:20:23.440 pick. So what do you think should be the criteria 00:20:23.440 --> 00:20:25.900 for a founder and the questions they should ask 00:20:25.900 --> 00:20:27.680 from a VC fund to understand actually, is this 00:20:27.680 --> 00:20:30.720 a good partner to work with or not? Yeah, yes. 00:20:31.299 --> 00:20:35.259 I personally think that a relationship with an 00:20:35.259 --> 00:20:40.420 investor is It's going to be potentially longer 00:20:40.420 --> 00:20:43.579 than any other personal relationship. Longer 00:20:43.579 --> 00:20:47.460 or stronger, should I say. So you probably are 00:20:47.460 --> 00:20:49.799 going to have to have really tough conversations 00:20:49.799 --> 00:20:52.980 with that person. You're going to have to report 00:20:52.980 --> 00:20:56.940 to that person on a monthly basis. So I think 00:20:56.940 --> 00:21:00.559 in some occasions it can be tougher than your 00:21:00.559 --> 00:21:03.079 own personal relationship with your partner. 00:21:03.400 --> 00:21:05.400 So I think it's important that you choose if 00:21:05.400 --> 00:21:07.619 it's important for your personal life to, you 00:21:07.619 --> 00:21:10.240 know, who you want to partner with in your personal 00:21:10.240 --> 00:21:14.559 life. In this case, I think it's the same. It's 00:21:14.559 --> 00:21:17.980 as important as that because for most founders, 00:21:18.480 --> 00:21:21.019 their startups is their own dream. So I think 00:21:21.019 --> 00:21:25.119 for me and everyone talks about this, but I think 00:21:25.119 --> 00:21:28.059 it's the way it should be is you look out there 00:21:28.059 --> 00:21:31.160 for smart money and smart money is not just money. 00:21:31.920 --> 00:21:36.259 How can these people help me? In which way? And 00:21:36.259 --> 00:21:38.259 it can be in many ways. It can be because they 00:21:38.259 --> 00:21:42.559 have a strong network in a specific industry 00:21:42.559 --> 00:21:45.700 that I need, or it can be because they're going 00:21:45.700 --> 00:21:47.740 to help me with the next round of investment 00:21:47.740 --> 00:21:52.920 as well, or they're going to be available for 00:21:52.920 --> 00:21:56.900 me when I need help and I need support. It needs 00:21:56.900 --> 00:22:00.460 to be something beyond the money itself, because 00:22:00.460 --> 00:22:04.109 the money phase. Once you've already requested 00:22:04.109 --> 00:22:07.910 it, then that's it. That's all you get. I think 00:22:07.910 --> 00:22:10.450 founders should basically think a lot about who 00:22:10.450 --> 00:22:13.230 they put in their cap table, and they should 00:22:13.230 --> 00:22:16.089 ask many questions before accepting who they 00:22:16.089 --> 00:22:18.349 add in their cap table. They should also ask 00:22:18.349 --> 00:22:20.769 around, ask other founders from that network, 00:22:21.650 --> 00:22:25.569 how is your relationship with these people? How 00:22:25.569 --> 00:22:28.069 was the whole investment deal? How did they treat 00:22:28.069 --> 00:22:30.410 you in the process? How are they treating you 00:22:30.410 --> 00:22:34.660 now? We, for example, when we get startups to 00:22:34.660 --> 00:22:38.740 join us in our programs, we always ask them to 00:22:38.740 --> 00:22:41.000 talk to other founders that are in our portfolio 00:22:41.000 --> 00:22:44.940 network so they can firsthand hear from those 00:22:44.940 --> 00:22:48.200 people how they went through the program, but 00:22:48.200 --> 00:22:50.259 also how they are right now after this program. 00:22:50.839 --> 00:22:52.539 And I think that's important. I would do it as 00:22:52.539 --> 00:22:56.259 a founder and talk to people around the investors. 00:22:57.359 --> 00:22:59.259 Because it's always matchmaking, isn't it? It 00:22:59.259 --> 00:23:04.500 goes both ways. Yes. Because a character cannot 00:23:04.500 --> 00:23:07.380 be just give me money and then magic happens. 00:23:07.500 --> 00:23:09.119 It needs to be the way like are you the right 00:23:09.119 --> 00:23:11.339 type of money for my company? Yeah, exactly. 00:23:12.099 --> 00:23:14.480 Because I know a couple of people, what they 00:23:14.480 --> 00:23:17.140 do is they actually they take 50 % of the company 00:23:17.140 --> 00:23:19.039 and then say here you go, here's the money. And 00:23:19.039 --> 00:23:20.960 I'm just thinking that's crazy. They don't want 00:23:20.960 --> 00:23:23.500 to have to do that. Especially at seed stage 00:23:23.500 --> 00:23:26.599 because... No, it's terrible. Yeah. Yeah, there's 00:23:26.599 --> 00:23:28.799 nothing you can do afterwards. Something that 00:23:28.799 --> 00:23:33.420 I... I have seen a couple of times already is 00:23:33.420 --> 00:23:36.119 in our, in Startup Wise Guides, is startups that 00:23:36.119 --> 00:23:39.700 come to us and their cap table is absolutely 00:23:39.700 --> 00:23:44.079 broken, hard at a very early stage. And we know 00:23:44.079 --> 00:23:46.740 we can't invest with that kind of cap table, 00:23:46.740 --> 00:23:49.539 but because the cap table was so broken, we felt 00:23:49.539 --> 00:23:54.079 so bad for those founders. We actually had a 00:23:54.079 --> 00:23:56.599 few conversations with them to show them and 00:23:56.599 --> 00:23:59.259 to explain why their cap table was broken. We 00:23:59.259 --> 00:24:01.799 were not going to invest, but at least we felt 00:24:01.799 --> 00:24:04.619 like these guys deserve to know what's happening 00:24:04.619 --> 00:24:06.960 with their cap table. And even if we are not 00:24:06.960 --> 00:24:09.839 going to invest, so they know in which state 00:24:09.839 --> 00:24:11.819 they are, because they obviously haven't been 00:24:11.819 --> 00:24:17.119 very well, you know, advised. So I think we, 00:24:17.119 --> 00:24:20.180 we placed, I placed pride in that, that we always 00:24:20.180 --> 00:24:22.980 think founder first. And even if we are not going 00:24:22.980 --> 00:24:26.230 to invest, if we can help. you know, and you 00:24:26.230 --> 00:24:28.809 are in the process with us, we are going to fail. 00:24:29.230 --> 00:24:31.630 And what does a healthy cap table looks like? 00:24:31.950 --> 00:24:33.869 It definitely doesn't look like 50 % of the... 00:24:33.869 --> 00:24:38.869 I imagine so. ...of our control. I mean, obviously 00:24:38.869 --> 00:24:42.170 the healthiest cap tables is when the founders 00:24:42.170 --> 00:24:48.230 have the equity shared proportionally, when if 00:24:48.230 --> 00:24:50.430 they have investors already in the cap table. 00:24:50.700 --> 00:24:54.579 that they haven't lost, of course, control of 00:24:54.579 --> 00:24:58.200 their own company. So obviously, definitely owning 00:24:58.200 --> 00:25:01.480 way more than 50 % of your company when you are 00:25:01.480 --> 00:25:06.099 at an early stage. And not having a ridiculous 00:25:06.099 --> 00:25:08.880 amount of investors in that cap table from the 00:25:08.880 --> 00:25:12.160 very beginning. I've seen cap tables with a very, 00:25:12.160 --> 00:25:15.619 very long list of investors, which basically 00:25:15.619 --> 00:25:18.470 means When it comes to a point where you have 00:25:18.470 --> 00:25:20.829 to have board meetings or when you have to make 00:25:20.829 --> 00:25:23.049 decisions, I mean, those things obviously can 00:25:23.049 --> 00:25:26.170 be legally bound in contracts, in the agreements 00:25:26.170 --> 00:25:29.190 that you sign, but it usually makes it messy. 00:25:29.690 --> 00:25:32.450 In terms of the legal standings, do you think 00:25:32.450 --> 00:25:34.829 there's a, I know you have multiple operations 00:25:34.829 --> 00:25:37.569 in Europe, but is there a better geography to 00:25:37.569 --> 00:25:39.710 run the start than the other one or it's all 00:25:39.710 --> 00:25:43.430 pretty much the same? I mean, there are countries 00:25:43.430 --> 00:25:47.539 where they have more help. you know, from government 00:25:47.539 --> 00:25:51.819 side to build and to create startups. So I know 00:25:51.819 --> 00:25:54.400 Estonia is a great example of a country where 00:25:54.400 --> 00:25:59.059 you can very easily set up a startup and set 00:25:59.059 --> 00:26:01.700 up a business. Other countries are more difficult. 00:26:01.799 --> 00:26:03.859 I'm aware there. I don't want to get in trouble, 00:26:03.859 --> 00:26:05.920 but I know that other countries are not as easy. 00:26:06.220 --> 00:26:10.519 What I always say to startup is once you know 00:26:10.519 --> 00:26:12.740 you are building a startup and once you have 00:26:12.740 --> 00:26:15.660 your team that you want to do it with, Just get 00:26:15.660 --> 00:26:18.279 a lawyer first. Go to a lawyer and make sure 00:26:18.279 --> 00:26:22.220 that you sign that agreement with your co -founders 00:26:22.220 --> 00:26:26.079 and that you have a lawyer who is an expert who 00:26:26.079 --> 00:26:28.940 can help you assess once you have your first 00:26:28.940 --> 00:26:32.140 investors on board as well. I think a lot of 00:26:32.140 --> 00:26:34.440 founders underestimate the importance of having 00:26:34.440 --> 00:26:36.720 legal help from the very beginning because I 00:26:36.720 --> 00:26:39.539 think it can save you from a lot of issues in 00:26:39.539 --> 00:26:42.160 the future. Yeah, I agree 100 % because that 00:26:42.160 --> 00:26:43.779 makes a huge difference, doesn't it? Because 00:26:43.779 --> 00:26:45.900 at the end of the day, You're building your dream, 00:26:45.940 --> 00:26:48.059 but your dream needs to be legally protected. 00:26:48.480 --> 00:26:51.740 Especially when different money comes in. It's 00:26:51.740 --> 00:26:54.339 a big thing. As we're reaching the end of the 00:26:54.339 --> 00:26:56.359 podcast, if people want to reach out to you, 00:26:56.380 --> 00:26:59.519 how can they do so? Please, you can find me on 00:26:59.519 --> 00:27:02.759 LinkedIn and also you can find me on Twitter. 00:27:02.799 --> 00:27:04.900 I can send you the handle if you wish, Ricardo. 00:27:05.640 --> 00:27:08.000 I can put it on the description of the podcast. 00:27:08.599 --> 00:27:11.039 So yeah, I think LinkedIn and Twitter will probably 00:27:11.039 --> 00:27:25.180 be the easiest way. The podcast is also sponsored 00:27:25.180 --> 00:27:27.900 by Notion .so. Notion is offering six months 00:27:27.900 --> 00:27:30.460 for free for new users. Make sure you check out 00:27:30.460 --> 00:27:33.259 our website thestartupevents .co .uk to read 00:27:33.259 --> 00:27:35.799 them this offer. This podcast is also sponsored 00:27:35.799 --> 00:27:39.480 by startupnetworks .co .uk. Startup Networks, 00:27:39.559 --> 00:27:41.859 it's an online forum where you can find all the 00:27:41.859 --> 00:27:44.160 resources you need to run your startup, from 00:27:44.160 --> 00:27:46.480 grants to investors to tips and tricks on how 00:27:46.480 --> 00:27:48.779 to be successful in your startup. This podcast 00:27:48.779 --> 00:27:52.680 is also sponsored by Odev Tech. Odev Tech is 00:27:52.680 --> 00:27:54.940 your premier software development partner. Make 00:27:54.940 --> 00:27:58.319 sure you check them out at odev .tech.