“Why are you going into Venture Capital? Why not go build another Huddle?” That’s what I’ve been asked time and time again in the last few months. Well, the fundamental reason lies probably in the early days of Huddle, when Andy (Mcloughlin, my co-founder and now partner at SoftechVC – one of the best seed investors in SF) and I were stumbling round the coffee houses and mayfair offices of London, meeting investors for our early A & B rounds.
We were, time and again, disappointed by what we saw on the other side of the table; a lack of bravery/risk appetite, the terrible associates we were put in front of because the partners couldn’t be bothered to meet, how little detailed thought or intellectual rigor was applied to really understanding our business (the good bits and the bad bits), how easily sold/led they were and above all the general arrogance and laissez faire attitude (not to mention the extraordinary amount of time off – right when we were trying to close our deal and running out of money!). And then subsequently, having worked with lots of different investors on both sides of the table, we are still so saddened by the low levels of operational understanding (particularly at early-stage) that we see, the crazy suggestions we hear that only make sense if you’ve lived your whole life in a spreadsheet, and the lack of genuine support to dig in, fix issues, raise money, hire talent, figure out how to enter new markets – really work for the companies they’ve invested in.
Let me illustrate what I mean with a great little story about the difference we saw between European and US Venture Capital when we were scaling Huddle. I spent 3 months meeting every VC in London for our B-round, with very little interest. But simultaneously, we had tens of inbound requests from VC’s in Boston (in particular) to meet, the best of the very best, Matrix, General Catalyst, Bessemer and more. And they didn’t just want to talk, they wanted to meet – getting on a plane to come see us. And it wasn’t the associates, it was the partners, And then, having got all 3 lined up for partner meetings on a Monday, I got on a plane to Boston. When I landed, on Sunday night, I was taken out for dinner by Larry Bohn from General Catalyst, who brought along the founders of Hubspot to sell me on how good the firm was. Star-struck? Just a bit! Then the next morning I presented to the 3 firms. At Matrix I spent time with David Skok before the meeting, THE SAAS guru and one of the nicest guys I’ve ever met. And in the afternoon I was back with GC, who not only put me in front of one of the founders of Lotus Notes (!) but then, at the end of a long day for everyone, when I finished my pitch – all the partners stood up and applauded. Seriously. And it wasn’t me – it was what they do to everyone who’s made it that far. Absolutely incredible. Now THAT’s how you sell to a founder. A finally, exhausted, late that night I flew to SF for yet more meetings. Whilst I was in the air, I got an invite from Matrix to meet Josh Hannah for breakfast at the (infamous) Rosewood Hotel. There, over breakfast, he handed me a termsheet for a $10m investment in Huddle. It was signed that week, and not one term changed between signature and funding…..And the rest is history.
Amazing, isn’t it. But if you’re a European founder, compare and contrast that with your experiences…
Now, a huge amount has changed in the last 8 years. I passionately believe both that Europe’s time is here and that we’re on the cusp of a second Industrial Revolution, potentially even more exciting than the birth of the Internet 20+ years ago. Amazing new VC firms have been founded led by operators/founders on both sides of the Atlantic, the amount of Venture Capital available in Europe has grown 5x, Europe has accelerated rapidly with a growing list of Unicorns and genuine world leadership in market sectors such as Deep Tech/AI, FinTech, HealthTech & E-commerce, and the market has become much more competitive for everyone, raising the bar on how hard everyone has to work.
But still, time and again, I see some of those old traits rearing their ugly head. And, just as importantly, I see amazing European founders building incredible companies but stumbling in the transition from local to global (particularly entering the US).
So, I decided to try to do something about it….
Lets see how we get on shall we?!