I'm Josh and welcome to Two Commas, the podcast where we talk about exits, particularly with
founders who have taken a business from often inception all the way through to a seven-figure
plus exit.
Today, I'm really excited to have joined me on the show Hugh Calveley.
Hugh is the co-founder and CEO of Moxion, deep in the entertainment space and had a
real impact taking New Zealand technology in the entertainment movie business to Hollywood
and then onto a successful exit.
Hugh, thanks very much for joining me on the show today.
I'm really grateful to have you here.
And perhaps as always, we can start the show with a bit of a backstory and a bit of a high.
Yeah, yeah, of course.
And pleasure, pleasure to be here.
And I've, I've known you for a while now.
And actually, I just completely forgot.
I like the look of trepidation you have, but I have something for you.
There we go.
A pair of Moxion socks.
Yes.
To put some context around these beautiful stripey numbers, Hugh and I caught up just
recently about a month ago.
And we're talking about what might exist still of Moxion.
And you said the socks are still around.
And I said, I love stripey socks.
And so now I've got my own pair.
You have.
Thank you, brother.
I think that might be the last pair in existence.
So treasure them.
Yeah, you never see them on TradeMe.
They're called the mock socks.
So that was part of a marketing exercise we did before we were acquired.
Yeah, so I come, I come from like, fairly humble beginnings.
I think I didn't grow up in an entrepreneurial space.
My parents were fairly, fairly hardworking and bless them, but they didn't have an entrepreneurial
bone in their body.
And this was out in Cue Mu in the late 70s and the early 80s.
And it was a great time to grow up because change was afoot.
And computers were first starting to come in.
And movies were just starting to reap the benefits of computers in terms of visual effects.
So back then, I think the two things that I remember are seeing my first computer, which
was an Apple IIe, and seeing Star Wars.
And you always remember the first time you see Star Wars, right, if you're of my generation.
And those are two fairly iconic bits of the entirety of certainly my living history, you
know, Star Wars release and then the Apple IIe computer as well, you know, phenomenal,
both of them.
Yeah, yeah, yeah.
So they, I think, just wedged their way into my subconscious.
And here I am, you know, many years later, in the movie industry with a startup that
was primarily around SaaS and computers.
And that wasn't your first startup, Moxion?
You had something earlier on than that?
Could you give us a bit of insight into what your first venture was?
Yeah, so it was called RoboForge.
And it was in the early 2000s.
And we came up with an idea, there were three of us, and then later five of us, to build
a robot fighting game.
Darren Green, the guy who was, I think, yeah, he had the main idea.
He had seen this Japanese robot fighting game.
And then also, I think, there was BattleBots.
And we thought we're going to try and do a computer graphic version of that.
So it was pretty successful in terms of the product.
You could build these robots and we had our own physics engine.
But unfortunately, we had just got to the US.
We got a great review at a PC gamer.
And we were going around trying to sell it.
And the first company we demoed to was Sony.
They were interested.
They made us a deal.
We had another, I think, eight companies to go see.
And we thought, wow, we got a deal from the first people that we saw.
Let's keep going.
But unfortunately, the dot com crash happened whilst we were still traveling around the
US.
So all the funding was pulled out.
And we went our merry way elsewhere.
With some experiences.
What do they say?
You either win or you learn.
And yeah, from there, I ended up working as a computing programming contractor for hire
in the UK.
Then I ended up in Brunei and Singapore.
And I was working in Singapore.
I had a good friend who was a trade commissioner up there.
And I was meeting a lot of these New Zealand companies wanting to come up to Singapore
and expand.
And one of them was trying to set up a film school in Singapore.
And I got talking to them and was very interested in what they were teaching.
And couldn't wait for them to set up in Singapore.
So I ended up coming back to New Zealand.
And I did my film school here.
I met my wife.
And then I always say I ran away and joined the circus, which is the film industry.
And I was lucky enough to be on the film set as the wave of digitization swept over on
set.
So that wave had already happened with post-production around visual effects.
But it had been delayed because they were still shooting on film.
And it wasn't until a digital camera, which was the Arri Alexa, came about, where it had
the quality, it was good enough to actually start replacing film.
And I think if you want to see how you can create a successful startup, you should always
look at where there is rapid change for opportunities.
And what we were seeing is that people were building these data silos to try and handle
this new digital content that was coming from set.
And they weren't talking to anyone else.
They certainly weren't talking to the cloud.
And I just saw an opportunity of getting the data and the metadata that was now being generated
in a digital format on set that previously had been analog and into the cloud as fast
as we possibly could and make it available for the whole post-production workflow.
Now, there's a bit of a story that I think you might be missing out here, which is one
that is a particular favorite of mine, where you were on your way delivering some film,
I understand, to somewhere and you were covered in fake blood because that was a part of the
set that had been going on.
And you had a fake cadaver in the car.
Can you elaborate and confirm whether or not that story is true?
Yeah, so there's a movie called 30 Days of Night, which was a well-known comic strip.
And they were shooting in New Zealand.
And it was meant to be set in Alaska, where you truly do get 30 days of night, which is,
if you're a vampire, hopefully no spoilers here, is happy times.
Right?
You don't basically you party for 30 days.
You don't have to sleep at all.
So we were shooting in New Zealand.
It was midwinter and we had to shoot from, I think, six o'clock at night to probably
five or six in the morning.
It was grueling.
It was it was rain.
There was mud, fake snow.
I think we called it 30 Days of Blight.
And this was one of the first sort of big movies I'd been on.
So very nervous, wanting to do right.
And one of my jobs was making sure that the camera sheets were delivered and that the
right metadata was on them.
And that's very, very critical, because when you're shooting on film, if you decide to
push a film, so if you push underexposed or overexposed, that information needs to travel
with the film, because unless you develop it correctly, you're going to lose information.
So I'd already been sort of threatened with dismemberment if I didn't deliver these camera
sheets to the right people.
And you can probably imagine my horror when at five in the morning, someone rocked up
to me and said, you know, hey, bro, I've got to give you this.
And the film would already left.
So here I am freaking out, driving down the motorway, North Western motorway, trying to
catch the runner with the film very, very early in the morning.
And my cell phone goes off.
So I thought, oh, must be the runner.
Right.
So I swerved to answer my cell phone, the car corrected it back, and I caught the attention
of the cop who was behind me who had his lights and pulled me over.
And what had also happened was I had some blood on my face because we were like, we're
actually probably on my entire upper torso because we were mucking around with some blood
squirts and one had gone off too close to me.
So I'd worn it and I hadn't bothered, but I thought, you know, I'm going to go home
and have a shower.
It's all good.
Also in the back of the car was a decapitated dummy, which I'd covered in a sheet because
we were shooting a student horror movie.
Right.
You know, just those kind of movies that you shoot when you come out of film school, where
you know just enough to make it truly awful.
You know, I mean, I like to say that the only victim is the audience in those ones.
Right.
The classic B.
Yeah.
And we couldn't get a female dummy.
It was meant to be female.
So we had a dummy.
We called it Steve and slapped a nightie on him and hoped for the best.
So Steve was covered in the back of the car.
When I swerved, he had spun out and was lying there splendid in the back seat.
And I just remember the cop coming over to me and he walked up.
He had light shone on my face and said, what's that on your face?
And I was just so tired.
You know, when you're really tired, you're just very, very honest.
Yes.
And very literal.
You know, and I should have said, you know, don't don't shave in a hurry or something.
I don't know anything.
But I just looked him in the eyes when he asked me what's on my face and I said, it's
vampire blood.
And then I remember him looking over in the back seat and then he just freaked out.
And he just dialed in everybody.
So I was sitting there in the car watching my career disappear down the down the highway
in front of me going, you know what, all this information that's actually on these camera
sheets should be available digitally and it should be able to be captured at the point
of record and we can just put it somewhere up in the up in the cloud and people can help
themselves to it.
So I think that probably was the genesis of what later became Moxion and became this product
which rapidly got the information from set and connected it to the remainder of post
production.
I love an origin story and that's one of my favorite in terms of spotting the opportunity
for something.
So you started to talk about Moxion a little bit there.
Could you elaborate a little more in terms of what the start was and then what the ultimate
shape and form of the company was when you sold it?
Yeah, of course.
So from there I had to wait a few years because the mechanism wasn't available on the cameras
even when they came out digitally to deliver the footage because what's really important
is that you don't get a live stream of the cameras from set.
So people would starting to do that already but it doesn't really work because unless
you know what's been recorded on the cameras then it's kind of useless.
If you see a camera is pointing at someone's foot, well is that because it's in the shot
or is it because they're not actually filming and the camera person's got a tight shoulder
and it can be dangerous too.
So I know one director where they refused to come on set if it was being live streamed
because what he did is he had these very good actors but they were just not jowling together.
So he asked them to shoot a scene or rehearse a scene like they were three-year-old children
having a party and just to get them to relax.
Unfortunately that was a live stream that the studio exec saw and went, what's he doing
with the actors?
He's ruining the actors, right?
And so without the context the stuff is not just useless but it can be dangerous.
So what I was waiting for was the ability to know what the camera was recording so
then what we could do is get a proxy of that and send that up into the cloud along with
all the accompanying metadata because that metadata can be incredibly useful.
So for example if you're doing a visual effect on that shot then you need to know the depth
of field, right?
What's in focus?
What's out of focus?
And the easiest way to do that as a visual effects artist is to match the lens and things
like the ISO.
So you can just pop that lens on and any visual effect you do will match the reality.
And if you don't do that you have to guess and guessing is expensive because these guys
don't come cheap.
Yes, right.
So we did that, we created the cloud environment but what we also needed was we didn't have
the funding to do it ourselves was the ability to save that footage and get it up to the
cloud.
The part that we really needed was a bit of hardware which was on almost every single
movie set and it was called Qtake and that married with the cloud, the cloud platform
we were building was going to give us this kind of holy grail.
And I just needed to sweet talk this guy called Vlado who was from Slovakia and in order to
do that I went to Vegas for the first time of my life and met him there and he was a
real character.
And I just remember that we spent the entire week figuring out a heads of agreement and
then at the end of that he said okay, now we drink.
This is the Tiki Bar vodka shot story, yes okay got it.
We ended up at a place called Frankie's Tiki Bar if anyone has been to Vegas.
You should go.
Doing shots with Vlado and I think I put every second shot in the pot plant behind me so
I survived.
I probably didn't.
I just remember that afterwards he said we should go and have a spa.
And so we went to this hotel that was nearby and assumed it was his hotel and we jumped
the fence and had a spa and then this very large security guard turned up and he had
a taser on his belt and said you boys better get out of my pool.
We got out and I said to Vlado can I borrow a towel and he said I don't know it's not
my hotel.
So yeah and then after that there was this photo of us in the pool and I had Michael
my co-founder doctor a tramp stamp of the Q-take logo onto us and we sent that to him
and said this is a sign of our commitment.
I love it we've gone and got tattoos after the Tiki Bar and then the random hotel spa
pool.
So that was a really a great relationship to have and it's held firm to this day.
So we met under the guise of Moxion doing a fundraise and so as an investor of 50 companies
now I've seen literally hundreds of pictures.
It's possibly approaching the four figures rather than three and so over that time I've
had a lot of people postulate what may happen with their company and where they're going
to go with it.
Only one experience of all of those is someone had a vision for what may happen a time frame
and a multiple and that thing has actually like almost to the letter come true.
So I've got a two part question for you I didn't want to steal your thunder.
I'm curious if you could share with us what that pitch was to the best of your recollection
and then the second bit is how you then went about navigating the journey to make sure
that you kind of stayed true to what that original intention was.
Yeah yeah so the pitch and I can't take too much credit.
I was lucky enough to be in the industry that I was developing the startup.
Right and so I understood the space so so the company that ultimately acquired us was
Autodesk and early on they were a very interesting player in the space and I'd always admired
what they'd done and what they were doing and I just saw them as a natural partner.
Of course it was very aspirational.
We hadn't actually done anything with them at that point but it worked out that when
we eventually start to integrate some of their products the potential was even greater than
what I originally envisaged.
So yeah there was Autodesk and I can't remember the other two companies you might do.
I don't know the space intimately but I just remember that Autodesk was one of them as
I believe from memory they are the company that has the highest revenue per employee
and it's in the region of Osiragraph recently about 650,000 US dollars they generate per
employee.
It's remarkable it's a phenomenally profitable successful company.
Yeah and incredibly smart people there as well and what's interesting is that they're
very diverse across not just the M&A but of course the construction and design space as
well and I think you know watch the space but there could be some really interesting
cross pollinations that occur between that as well.
So the pitch was invest your money with us with Moxion this is the vision.
We intend to 10x the investment that you make sell within I think it was six years or eight
years something in that sort of region and it'll be one of these three companies that
buy us.
So and what I'm hearing you say is that it was your knowledge of the space and your awareness
of the problem that you were solving for that meant that you could have the certainty or
at least the confidence to be able to turn up and a lot of it is about confidence in
business and especially in the fundraising space as well.
So there's another story that I came across my researchers came across before this conversation
and it was you doing the the hard yards in LA as most startup founders have to do somewhere
sometime whether it's LA or whether it's Auckland or whether it's Moscow but you were really
doing the hard yards there and you were struggling to get a break and I understand that there
was a particular producer that you wanted to be able to get exposure to and get some
endorsement from can you tell us about that kind of conversation.
This is you know before the exit we'll come back to the exit in a second but I'm just
curious about one of those it sounded like it was one of those pivotal moments in the
growth of the company so bring that to life for us if you could.
So we started to do fairly well in Australasia and part of it was and just you know I think
a huge thanks to the New Zealand film community and also the New Zealand investors so the
great thing about New Zealand is that they kind of the film industry and the investors
here are very much like the parents you want to have they're hard on you but incredibly
honest and incredibly nurturing right and so we would get feedback from the film industry
and what we were building very quickly and you know if you weren't doing great they'd
tell you and we could get access to these people that you wouldn't normally be able
to get access to in the US especially as we were you know relatively unknown and so on
the back of that we raised money and we went up to the US going well it's working in Australasia
it's just going to be a slam dunk here right and yeah there was a bit of a it didn't yeah
it didn't work out like that.
Reality hit you in the face.
Reality certainly certainly came calling and I think the reason for that was that we didn't
have the contacts there that we had in New Zealand we kind of had contacts of contacts
but also you know here's this crazy wide-eyed Kiwi that's turned up on your door you're
a big US studio and I'm telling you how to make movies it's like whoa really you know
the interesting thing about LA is that no one ever says no right they just stop calling
you or they block your calls right so you come out of every meeting going hey I think
that we've really onto something here and then you never hear from them again so it
was it was a very tough time it was very disheartening and you know I don't like I'm very stubborn
I don't like giving up but I was probably as close to giving up as I've ever been in
my life and then we got a little bit of a break I there was someone working there was
a producer and they said you got to meet this person he's really kind of dialed into your
space he will get it right and that was kind of the other problem too is that a lot of
people I was meeting although they could I think see the efficiencies of what we could
do in terms of film production it wasn't really going to affect them they were kind of in
the middle management area and worst case it was success it was a success and but they
wouldn't reap any benefits from it but the downside was massive if we you know delayed
their movie or broke their movie they wouldn't work again so it was very hard to meet someone
at the right level that could I understand it and be have the I guess the it was very
it was very hard to meet someone who was at the right level and also had the autonomy
to take the risk you know had they were the senior enough to do that and so I heard of
a producer and they said I'll tell you where they are they were working on the Harvey Weinstein
movie and they said but you've got to get on and meet them yourself so luckily I had
some contacts with the security guards on the lot they let me on pointed me to where
the trailer was and I think I actually had a clipboard was you know the old so important
yeah white coat and a clipboard yeah get it anywhere and I remember going knocking on
the trailer door and he answered the door and said and you are and I went hey I'm here
and I'm hustling and bless him he said okay come on and sat me down and I think he said
look you got two months and I looked over and I saw on the inside of the door which
had closed that he had like this this number written I think it was six on on US letter
and I said what's that and he said oh that's number of days I've got left on the shoot
and I said it's not going well he's going let me tell you it's going so bad I'm thinking
who's I got a screw to get off this shoot right and so I had a whole setup of this
product that we had and I basically dialed them in and gave him the ability to see what
we're shooting on a set in New Zealand within about 90 seconds of the camera turning off
so sitting in his trailer we could see what had been shot on a another set on the other
side of the world and he went well this is this is going to change things and he said
I'm probably going to end the therapy after this so I'm on the right space but you should
meet Barry Osborne yes and so through that Barry was actually back in New Zealand shooting
a movie and I went and met him and I think probably there are a few few people that absolutely
changed the trajectory of where we're going one of them would have been Rudy Rudy Berblitz
from flying Kiwis just for the record who was just one of the greatest mentors and supporters
that I've had another one would have been Barry Osborne and he had more fortitude and
foresight than probably I'd have off the product there were times where I think I turned up
at a studio one time with a bottle of wine and saying and said look thanks so much for
trying to get me on this this gig you know appreciate everything you've done and he
would go no no no no don't give up now we're just getting warmed up yeah and he was absolutely
right he's going well have you thought about this have you thought about that and just
someone with that level of I think character and experience is such an asset for a for
a fleeting startup yeah yeah I doubt because you know also you're growing so quickly you
know over a few years you've done the equivalent of going from crawling to walking you're like
a baby then you're an adult and there aren't many people that can go through that very
fast transition with you and he was one of them and Rudy was another and I think that's
something too that I've learned I'm going I'm being very tangential here but you know
as if I went back and sort of gave myself some advice is it's okay to let people go
through that process because they have done what was right for that stage and they might
not be right for earlier and they wouldn't have been right for earlier but I've you know
I've thought I've let let people go who and it's okay to do that because they weren't
right for where you are now but they were just perfect for that moment you needed them
yeah it's been said that people come into your life for a reason a season or a lifetime
and the trick is to figure out which of those that person that relationship is you've also
talked quite deeply there about mentorship and getting advice and guidance from the folk
that have been there they may not have been there but they may have a different perspective
to you and they understand where you're at but people that can support encourage cajole
kick you in the butt occasionally you know all those sorts of things are invaluable I'd
like to jump on to the the exit with Autodesk if I can yes of course so talk me through
kind of the the key timelines so that the company was officially sold in 2022 it was
kind of mid to late 2022 recollection and so let's go back to when the prospect of the
deal rose its head and then what was some key milestones from there and then we'll kind
of unpack each of those threads as we go yeah of course so it was a really interesting time
for us because we had got onto a series called rings of power the Lord of the Rings series
that yeah yes yeah which was I think it might still be the biggest TV series ever made okay
and then covert hurt right and we saw probably 80% of our productions just disappear and
that was another of we think this might be over moments and then what happened is that
a lot of the people who we had spoken to previously and they knew about our product but they hadn't
engaged with us started calling and they said figured out our product was really the only
way for them to keep shooting and maintain these little bubbles that was bringing up
because of the immediacy of what we could do and so we went from you know thinking to
we're going to shut shut up shop to doubling tripling revenue and employees over like six
to eight months and suddenly we were on all these you know huge movies like you know Jurassic
World and the the matrix reboot and the Batman and rings of rings of power the TV series
and two very very progressive people that were on their own names really understood
again you know this happens to me people who seem to understand what I'm doing even better
than I do and take it into new areas so that happens got run with it you know and another
person called Jesse and they really championed us with Autodesk because we had integrated
with one of their products called shocker and I think there was just this synergy there
that really really helped progress this incredibly ambitious TV series that they were trying
to do an absolutely outrageous number of visual effects shots and there's no way they could
do it by brute force they just had to be clever and so they were building all these systems
and out of necessity they really helped us advance our integration with the audience
or a desk shocker and that way we got to know the audience team very well and it just kind
of made sense and that was an interesting time in us too because we're 2021 kind of
phase yeah yeah and we were growing we really needed decided to decide do we do a series
a our competitors in the US had done a series a and unfortunately or fortunately actually
and I think this is one of the things about the the New Zealand startup scene is that
we've been quite heavily diluted so if we were going to do a series a we were probably
going to find it hard to get a venture capital or private equity involved because when you
get founders down to that low level they you know quite rightly I think see that they're
going to lose a lot of their enthusiasm yeah influence I think is the key thing because
yeah the risk and the return is not as great did you mind me asking yeah at that stage
because there was you and a co-founder yes yes what we what kind of percentage points
of equity we sitting on at that stage I think we're a sub 10 sub 10 yeah yeah yeah and
they really wanted us around 60 60 65 and you know the New Zealand ecosystem has changed
massively since then because what happens is if you get down to that level then it's
hard to progress and you probably have to have like a you know how are we going to do
this discussion with with the shareholders who you don't want to do that right and and
also like our shareholders are just great you know our investors were amazing you know
it wasn't that far it was not their fault that we were naive enough to let that happen
right yeah you know I just I can't I can't thank them enough because I wouldn't be sitting
here having this fun conversation with you right without them and she'll go a little
story about some some of these amazing shareholders I'll tell it later but yeah so we're trying
to figure out what to do and there were a few options open to us but doing a series
a was probably not the way we're going to go forward and there were other companies
who just wanted to buy us outright and we just it just made sense with Autodesk they
they had a vision which none of the other people who were interested in us had and they
kind of they kind of got us as well and and we got them I feel like I'm going to say they
completed us I think it's appropriate given the business that you're in yeah yeah let
me just recap a couple of things and just pick up on a couple of additional questions
so you had already done some work and working alongside Autodesk that the software that
they had and the adjacent space you then had some introductions from some kind of formative
key people to senior folk folk and Autodesk so you got elevated inside the organization
so in other words they started to if you like I can say this again more concise way no no
it's okay no we're good and then they as a consequence became more interested in you
as a business and as a proposition and so then how did you flip from being a we're a
prospect of real partner and oh by the way in the background we need money you're thinking
about that how did you flip that conversation into being a potential acquisition conversation
did you have a third party investment banker involved some advisors or something that were
there working on your behalf or or was it just a natural segue or did they ask you
what I'm curious about that piece yeah so we were thinking about doing a series a and
we I think we looked at them first as a possible lead investor yeah in the series and then
so we engaged with them around that they've got a ventures division right they do yes
yeah exactly and we we just started talking from from from that angle then I think at
some point we kind of heard that they weren't interested in investing and we went oh well
it's a shame but very quickly it was followed by however however yeah we would like to acquire
you right you know and you know let's look at what that would take and at that point
you were thinking about raising money not about selling the business so yeah so what
did that do to your mentality your psyche were you like blown away and this is incredible
or were you more like oh it's too soon or where did you go I think I'm just trying to
remember back in that space because we're incredibly busy as well right yeah and so
I think part of me went this makes a lot of sense are we but are we at the right stage
you know for this and the more we learned about them the more we engage with them it
really seemed that this this was a great next step because the rapid growth that we wanted
to do we were probably going to have to align with them anyway right because they were such
major players in the industry so I think just having you know being part of their company
just just made a lot of sense yeah and also I think raising money doing these rounds it's
really distracting it's so distracting and you know we didn't want to slow the growth
so yeah and to your question we yeah I remember opening up so we created the DD room and I
think there were probably four or five of us in there and then we invited them and suddenly
there were like 120 wow or something like that wow it was pretty high numbers and I
remember going this is a scale way beyond what we do more than the staff that you had
in total oh yeah when we I think we had sort of I don't know 15 staff you picked at 15
15 20 20 maybe 20 yeah we had we had a whole lot of contractors actually yes because we
go when you grow quickly it's easier to bring the contractors on board and yeah I mean but
you know they do they do this often we were in very good hands yeah a pretty slick M&A
process yes and team yes both of which they can they can help because they navigate the
conversation in a way that like is logical and it makes sense yeah but also it can be
quite intimidating right because it was the first time you've been through that process
before yes and did you who was on your side you know lawyers advisors accountants whoever
was yeah so we had we had lawyers accountants on our side and we had a person from the SAS
space who had experienced in Silicon Valley a guy called Pooj who was amazing at just
making sure that we had our act together right because they move at such speed and there
are so many of them that you really don't want for them to be waiting on you if anything
you want to be the other way around yes so yeah kills deals and so you might want to
make sure that you get through this stuff swiftly and appear to be the organized company
you hope to appear to be exactly yeah and you know and we were lucky because when we
were pre pre meeting Rudy we we didn't have any proper structures any documents any proper
ministered board meetings or any kind of anything like that but once Rudy came on the board
all that changed so you know I mean that something is if I if I have to give advice to a startup
is prepare yourself for exit from the very very beginning because that's going to ensure
you have the right systems in place the right processes the right board members all the
information that you do not want to be scrambling around to try and create when you are at the
point of success yeah you know I've seen I call it the hygiene factors yeah which oversimplifies
and dumbs it down a lot of it is actually around the just the organization rather than
necessarily the deep thought or the intelligence so it's more just about having the discipline
and the follow through for that stuff some of it is definitely around thinking and having
having the right systems and the right advisors in place especially the board's related activity
but you know making sure you've got effective reporting and thorough reporting it's all
in the same place and it's consistent it's just good discipline right yeah so they jumped
into due diligence and they were pouring through there was a hundred odd people from their
side that were going through everything that was sitting inside the data room and you mentioned
that there had been others that were potentially interested as well so you were able to develop
a little bit of deal tension leading up to that stage yeah yeah because I mean what you
do is you you sign an agreement that you are exclusive up to a point in time and then you
need to keep them informed about any other interests that is coming through so you can
you can use that to apply some tension you can say well you know someone just reached
out to see if we were available but obviously you can't you can't say who that person was
or anything like that it's kind of like dating right yeah so you're I'm out in the dating
pool I'm still on tinder you know still available because nobody's locked this down yet but
I'm really interested in you so we're kind of exclusive but not really kind of things
so it's yeah yeah yeah you just you just can't swipe yes it's why you get a lot of trouble
right you just talk about how you could potentially swipe right yeah yes got it so at what stage
did you move from exclusive conversation to letter of intent presuming that was the the
process that you went through which is quite a North American approach yeah that was it
was fairly rapid I think I remember it was in the weeks not months wow okay and then
you get the letter of intent and then you're locked in yes and you go away and you really
do the work yes you know you have you know interviews and questions and yeah there are
there's a huge amount of coverage of every facet of your business yes and again that's
where Pooj really helped yeah you know he was a he was a buffer he was like foreshadowing
what was going to come up making sure we had that giving us coaching on you know how to
how to present how to how do I guess answer these questions that you've never been asked
before yeah it's invaluable so you know it's it's somewhat easy once you know but not knowing
it's just so hard yeah yeah I get that so the driven tent turned up you go into deep
D approximately what was the duration between the LOI and the DD process and then the deal
being done that's the first half of the question yeah the second half is was there any market
changes from what was encapsulated on the better of intent and the ultimate deal that
got done no not not I think it got extended a couple of times so I think that was meant
to be wrapped up before Christmas and it's been about four or five months yeah maybe
three months I have my head and then we got extended out a couple of times just you know
a mutual agreement we needed to dig deeper into some areas and you know I think also
because we were a New Zealand company there were quite a few differences in terms of just
some legalese structure that kind of stuff which we had to get a head round you know
I think American companies are really interested in just buying the IP whereas we really wanted
the whole company to be sold so just sort of figuring out the different approaches that
could be taken in the lining on that and then yeah then it was done and I remember I was
actually I think three in the morning and I was in Nelson I was exhausted and there was
the I can't remember the name but it's called the the deal closure call or whatever it is
right yeah where they're about to transfer you know tens of millions of dollars to a
bank account yes and you get to say yes I remember like waking up it was it was sort
of cold in the morning and jumping on this call and it was just surreal there was you
know our lawyer their lawyer and then at one point they said you know have been any material
changes in the last 24 hours and we said no and then they said are you okay to release
the funds and my lawyer turned to me and said are we okay to release these funds and I think
I quit you know release the hounds how at funny that had been filmed that would have been
great for posterity yeah and then it was done and I remember going back to Ben and you know
crawling him beside my wife and starting to cry because my whole life had changed in that moment
and it had been such a ride that I hadn't really processed it until that you know 2 30 in the
morning and Nelson yes just sitting there going wow wow if you don't mind me asking I'm guessing
that the the overwhelming of emotions was a lot of a lot of tension had been built up over that
time and you end up with a lot of uncertainty as you're going through that process and so
you get to the stage of it all being kind of you know realized and it's actually going to happen
and we're going to do this deal I'm really curious as to whether at that stage or subsequent to that
you had any any turmoil or any upset because this was your baby you know you'd Moxion had
a huge stamp all over it you'd made a lot of sacrifices to to grow that company you'd moved
moved countries with the family you'd dealt with the hardship of growing a business you had a year
of really really difficult times in LA so you know they say that one of the hardest parts of
selling a business and I've had this experience with my first company is the essentially the
essentially the separation anxiety and they call it founders remorse do you think any of that
that overwhelming nature at that time could have been for that or was it was it just all things
that we've spoken about oh it really was just I think the weight of responsibility of having
all these amazing investors who best as who had trusted me so I'd gone on stood before them and
sold what I thought I could do to them and they'd given me money and just that sense of responsibility
I also had family money in there as well but my uncle David was a very instrumental part of the
process as well he came in and pretty much saved our company early on with an investment before we
we had any uh you know a real angel investment and got us to being able to have that angel
investment um yeah I mean I think it was you know I think a little bit of you know your child's
leaving home yes uh for the first time will it will it will it come back and will it ever be the
same uh but I think just really
doing right by our investors was kind of the emotion um and also by the family as well because
I'd put them through a whole lot um you know my she's now 11 but um I hadn't seen her
you know a lot of the times and you know it should and the whole sale process had really
exacerbated that too because you have to keep selling right so you know I was in charge of sales
as well as everything else as a ceo you have to make those numbers right because the deal pivots
around you making the numbers that you said you would right so you still got to keep closing them
plus you have all the pressures of the deal as well and I remember her coming into me uh and I
was in the room and I was on a zoom call and I was on a phone call and I was on a phone call
on a zoom call and I was pushed her away and she came in later and said daddy do you still love me
and I just went look sweetheart I love you this is just a really really important part of my life
I need to get it right I will so make it up to you and then she said what will you do daddy I said
I'm going to take you to Hogwarts to Hogwarts Hogwarts yeah that's a restaurant a cafe
or no it's odd the place Harry Potter yes okay okay cool yeah I'm going to take you to Hogwarts
and and she was just getting into Harry Potter then and her eyes widened and she went okay
have you taken her yes I took it I took it to um Universal Studios in Orlando amazing and um
we spent a week there yeah so uh yeah that was one of the first trips I booked after we closed
yes uh so tell me through talk me through a couple of things um so I'm guessing that the
reason that you're required ultimately was because you slotted into a great part of the
portfolio of products that you want to discard but if you could just clarify that um a little
more and then I'm also curious as to what the um uh the mechanism for valuing the company was
so why do they buy you and how do they value yeah yeah sure um so uh yeah so we slotted quite well
into Autodesk's existing tool set because they were primarily in post-production and we were on
set production and so a lot of the footage and the metadata that we were acquiring they needed
further down the chain and so I guess our acquisition got them closer to the to the
source to the I guess the wellspring of this uh both metadata and and data in terms of um the
the visuals and that kind of stuff uh and you know one of the one of the things that they were doing
and are doing now there's they're creating this this uh platform uh for production which is called
Flow and I could really see how we could we could help that as well um and a lot of this is about
interoperability um which is kind of the bane of a lot of film productions is that you process
something somewhere and then you have to move the data and the metadata to something else and then
to something else something else and the vision of Flow really is about bringing bringing the
tools to the data rather than the other way around uh and that's that's valuable for so many reasons
you know security um just the ability to have consistency of product and interface and then
all this kind of stuff in an industry where it's so so fast turnaround um it's a bit like a startup
every production I think every movie production is a bit like a startup you know you just start to
figure out how to make things work and then it's all over right um yeah and um makes sense in terms
of why that would be what I would consider to be like a strategic acquisition because it makes sense
across the portfolio of things that they have it also increases their presence and position
in the clients that they work with and they could no doubt kind of cross sell upsell and then kind
of you know work alongside the other things that they were doing so um how did they how did they
value the business and what was the what was the mechanism that was used to um to get to that number
yeah so it was it was um I think a combination of of revenue and um strategic uh alignment or value
um so uh also this was this was around covid so valuations were fairly high then yeah um and
yeah so I mean we got we got over a 20 times revenue valuation from them um uh but but you
know that that's what companies were going for around that time yes um and yeah uh I think also
um there was a appreciation of keeping the the team here as well which was another
you know if you flip it around that was what we saw with the value that they brought
above just the money was they really seemed to understand our team and wanted to nurture them
so that that was a another a big tick in the box for why we went with it yeah great and you've
stayed on since then it's been a couple of years now hasn't it coming up three years almost yeah
so um it's um in november I think yeah was the deal was structured there was cash up front I
believe there wasn't a long earn out for you and your co-founder yeah yeah I mean there was some
retention uh just just for myself and and Michael my co-founder yes but I think all the what was
important to us as all the shareholders were pretty much after a year it was it was all um
distributed yeah and my recollection being an investor just for the sly mistakes is that it
was 80% I think or 90% upfront yeah um cash uh this is for the investors and a chunk of
yours and that as well and then it was about a year long of retention and it was a relatively
small proportion um so it was it was it was a generous deal as a good deal yeah yeah um and
you know like we mentioned earlier they've done this before they're you know they're a firm hand
on the investment teller yes yeah so I think we've talked about the um how they valued the
company I'm curious now about the journey of the exit specifically so that kind of 12 18 month
period or so uh and and maybe post um handing over the keys as well if you look back upon that if
there was anything that you would do differently knowing now um sorry knowing now then what you
know now in terms of the whole whole moxium process or just the deal process yeah
um I think just a lot more prep right uh I mean the questions that they asked were very very
very fair and relevant questions I think if we had just done even more prep uh for that then um
it would have it would have been smoother I wouldn't have been kicking my daughter out of the
room uh uh but I mean you know you don't you don't know until you've done it that's right uh it was
just this you know huge amounts of learning um and just being in those conversations with
you know these top American law firms who who's bread and butter is uh is doing these acquisitions
all these terms and little things um
yeah what I've done differently you know what probably not um because I wouldn't have gone away
and learned all this stuff because yeah you're so busy anyway I wouldn't have had capacity to do it
I think it probably happened at the right time yeah um maybe maybe a little bit more rigor uh
around um our our board notes and stuff like that from the early days but that certainly
started to come uh with Rudy and also Garth who came on as well yes that's right um so yeah I
think maybe sort of the early stuff we could have cleaned up a little yeah okay because we had to do
it we had to do it fast um yes and you know it was a lot of it was all there but we just had to go
through emails and reconstruct it um yes uh as as part of that and that takes time yeah which has
some potential threats and risk around the the deal itself and so we had to do that and
around the the deal itself yeah so what I've heard you say is that um preparedness is super important
even if you don't know when necessarily it's going to happen uh and then having folk that are around
you that have walked that path historically and kind of know the things to look out for and can
give you some coaching around some of those crucial conversations that happen that's in terms of the
deal process of course along the way what we haven't talked about is building a wonderful product
that met a real need and solved a critical problem and you mentioned at the very start of this
conversation the timing of bringing that to market was just bang on because you know cloud
computing was becoming ubiquitous and people were probably quite frustrated with the journey and then
of course there was all of the production houses that started to pour you know billions of dollars
into into new productions which had a quite a um uh quite a tectonic shift I understand on the whole
industry as well so a number of factors that led to that being successful so I've got um one last
question for you Hugh uh and it's the um alternative universe question and so in this universe you
didn't head down the path of becoming a software engineer and then moving into um space before the
movies then moving into the movie business and uh you know transporting cadavers covered in vampire
blood around the place and then of course starting a software company but in the world where you
would have done a different career one that you have perhaps looked upon from time to time and
thought it looks like a really satisfying and rewarding career what what could that have been
I think I think I would have liked to have been a script writer or a writer yeah well I love
stories I love their power the power they have to connect uh and change people yes uh and I think
you know what what we've really talked about here is a bit of a story too um uh and yeah I think it's
an area that's always fascinated me it's just just how words on a piece of paper can transport you
yes so you know maybe it's not too uh well they'd say old dog new tricks um I'm a big fan of
Andrew Huberman I'm not sure if you come across his work um Huberman Labs and so he makes science
accessible for everybody um and so he talks about um connecting up neural pathways in your brain
and um you're actually never too old to do it and so you can do it into your literally into your
80s takes a little bit more effort and there's a bit more process and repetition of things to
make sure those things stick uh but um I know you've got some writing skills anyway and so
you know um perhaps uh it may never be too late to have another alternate second career who knows
yeah who knows exactly I might be sitting here again that's right but another example is Sellega
you mentioned that a movie is like a startup anyway um so there you go Hugh it's been a really
insightful conversation um I've learned a lot today um not the least of which is how to pronounce
your surname um Hugh Calvley Calvley I've got it right the same time um so there's been some
gold in there about raising money about building a startup about tenacity about how to navigate
your way through a deal process so I'm really grateful for you turning up and joining us on
the show and I'm really grateful for my fancy new stripy socks so that they'll see you I can
tell already already I've got a pair on here some stripes yeah yeah yes yes so thank you sir
thanks for coming on oh my absolutely you