Music:
Speaker0: Hello and welcome, everybody. This is Joe from StartupBrate.io,
Speaker0: your trusted source on the German, Swiss and Austrian startup scene,
Speaker0: now reaching a global tech audience.
Speaker0: Today, we're speaking to Andy Goldstein, admittedly a former colleague of mine
Speaker0: at Deloitte, even though we never worked directly together.
Speaker0: He's a serial entrepreneur, co-founder of the German Axel Reinter,
Speaker0: former colleague of mine at Deloitte, and manager director at VU Venture Partners Europe.
Speaker0: We'll dive into how he's reshaping investor education, why Europe needs to think
Speaker0: bigger, and what it takes to bridge the Atlantic in startup investing. Andy, welcome.
Speaker1: Great to be here, Jorn. Thanks for your time.
Speaker0: Totally my pleasure. How would you summarize your,
Speaker0: admittedly, a little bit unconventional journey from launching companies to
Speaker0: building platforms like the German Accelerator and now VU with a, I would say,
Speaker0: extensive stint at Deloitte in between?
Speaker1: Yeah, absolutely. So I think I would describe it as in two big buckets,
Speaker1: one which is reinvention and the other is fascination with what's missing.
Speaker1: So reinvention in the sense of, you know, I moved over to Germany when I was
Speaker1: just beginning in my 20s as the IBM PC was launching.
Speaker1: I spent 20 years building a business and exiting, really learning it the hard way in the market,
Speaker1: and then started into building the Entrepreneurship Center at the LMU,
Speaker1: which gave me access to great technology and lots and lots of founders with a big brand behind it.
Speaker1: We saw then that there was not enough and we had to reinvent that.
Speaker1: And that's where the German accelerator came in and really finding category
Speaker1: leaders and taking them out.
Speaker1: And also starting my own angel funds was a reinvention where I started to say,
Speaker1: you know, I need to also get involved in helping startups to start to get the money.
Speaker1: And now actually becoming a VC and and really trying to change the way investors think in Europe.
Speaker1: And all of those things, when I say fascination with what's missing,
Speaker1: At the time when I began them, it wasn't clear that somebody needed to step up and do it.
Speaker1: And now it is, of course, clear that there should be accelerators.
Speaker1: But back when the LMU accelerator started, it wasn't necessarily.
Speaker1: And I think probably in five years from now, it'll be clear that we need to
Speaker1: train our investor community much more as well.
Speaker0: We may add for our audience most people
Speaker0: are from the dach area but lmu means ludwig
Speaker0: maximilian university yes it's one of the premier um universities in bavaria
Speaker0: and i would say also very good one in germany yes of course um they also work
Speaker0: together with a technical university tum in unternehmertum right yes.
Speaker1: When i that was also one of the things when i first came on it was It's not
Speaker1: so common that the universities work together, and I pulled together the LMU,
Speaker1: the TU, the Hochschule Munich,
Speaker1: so the University of Applied Sciences, and the Bundeswehr, which is the Army
Speaker1: University, and pulled everyone together and started a global summer school, which is still running.
Speaker1: So kind of thinking out of the box and getting people inside the country to work closer together.
Speaker0: For everybody who's interested down here in the show notes, we will,
Speaker0: of course, link our interview with Unternehmertum.
Speaker0: I was wondering what personal experience made you realize Europe had a gap in investor education?
Speaker1: I think the real experience of that is when I started my two angel funds and
Speaker1: realized that every time we wanted to have a major expansion,
Speaker1: we ended up looking for U.S.
Speaker1: Investors. So simply, it's not to say that there aren't European investors,
Speaker1: and it's definitely growing.
Speaker1: It just seemed that there's a real gap in it. There's a lot of startup capital.
Speaker1: There's a lot of government support, which you don't have sometimes even in
Speaker1: the United States here, which is definitely impressive.
Speaker1: But then once you get much past your A round, you're pretty much looking outside
Speaker1: of Germany and hoping that you can find a growth capital partner as well that's
Speaker1: from Europe or from Germany.
Speaker1: But clearly, they're in the U.S.
Speaker1: And clearly, they're in Asia.
Speaker1: So that was what really – it was the reality that made me realize it.
Speaker0: What I had in mind when you've been talking about that, like the bigger rounds, I've always heard it.
Speaker0: Usually, rule of thumb, Series A is $1 million annual recurring revenue.
Speaker0: And if you want to go bigger, like $10 million, so you're talking about Series
Speaker0: B. What comes into mind is like Tiger Global, Insight Partners,
Speaker0: Sequoia, but also from China.
Speaker0: We had, for example, Tencent as a big investor here or SoftBank,
Speaker0: also pretty big investors, but all from abroad.
Speaker0: I was wondering from our audience, what do you think Europe needs more?
Speaker0: Better startups or better investors? Drop us an answer in the comment or tag
Speaker0: us on LinkedIn or post with hashtag StartupRadioDebate.
Speaker0: So let's get a little bit into VU Venture Partners, a fund that actually trains VCs.
Speaker0: Can you tell us a little bit about what this exactly is and how is it disrupting
Speaker0: the traditional VC model?
Speaker1: Yeah, absolutely. So when I was on to my next step recently,
Speaker1: I started really looking deeply into why VC doesn't perform that well.
Speaker1: And what I mean by that is around 75% of venture capital funds,
Speaker1: as a total number of funds, don't ever produce a carry, don't pay profit, and therefore
Speaker1: you know, don't pay their LPs back more than the money that they invested.
Speaker1: That's just a huge number. And one of the main reasons, if you talk to VCs,
Speaker1: a lot of them will say the same thing, which is that it's the most expensive
Speaker1: training program of all.
Speaker1: And that's the reason that people are, the reason for that is that people are
Speaker1: learning by doing with the money of their LPs.
Speaker1: And what really is different about VU is that VU is a fund that allows you to
Speaker1: do real investing by actually doing it.
Speaker1: So every quarter, the name of the fund, VU Venture Partners, we accept.
Speaker1: It's a real program. We call it an investor accelerator.
Speaker1: We accept between 40 and 60 investors globally into the program.
Speaker1: And those people attend, they're treated as partners.
Speaker1: They attend every partner meeting. They come to every deal flow meeting.
Speaker1: They're in every investment committee meeting. They are driving deals.
Speaker1: They are each looking at around 100 deals each during, let's say, a three-month period.
Speaker1: So what you have is you have a situation where if you have 50 people in the
Speaker1: cohort, then each looking at 100 deals, we're looking at 5,000 deals a quarter.
Speaker1: So 20,000 a year, that's about 10 times the amount that most VCs are able to look at.
Speaker1: And the, you know, what's also very disruptive about it is that the people who
Speaker1: are signing up are really on an extremely high level.
Speaker1: So whereas most VCs, when they go into a specialist area, they need to go hire
Speaker1: expert witnesses and things like that.
Speaker1: And people who are specialized in a specific area with VU, we now have VU stands
Speaker1: for venture university.
Speaker1: And we have now over 800 graduates, 800 venture fellows, which means that we
Speaker1: have a huge network of people and we always have an expert that we can call on.
Speaker1: And the people who are in the cohort itself are also tremendously talented.
Speaker1: So when you're talking about our health tech investments, we have three medical
Speaker1: doctors that are in the cohort this time.
Speaker1: We have professors when you're talking about deep tech. So it really is a group
Speaker1: of people that are able to analyze deals at a level that is quite uncommon in BC.
Speaker0: You've already hinted at it. You let the participants of Venture University
Speaker0: who gets trained there, who get trained there, ask real investors to join the
Speaker0: real investment committees.
Speaker0: What kind of impact does this have?
Speaker1: So it has massive impact because the venture partners are actually driving the process.
Speaker1: So everything is remarkably well templated out.
Speaker1: You get help on all of your due diligence. You get coaching from the general
Speaker1: partners and weekly meetings, two of them where they go through and make sure
Speaker1: you understand what topics might be missing in order to get through the investment committee.
Speaker1: But in the end, you learn how to build conviction for a deal that you're absolutely behind it.
Speaker1: And unless there's a couple of venture partners that are absolutely committed
Speaker1: to getting a deal done, it probably is not going to come to the investment committee
Speaker1: because the venture partners are the ones that are saying we're ready to come to the IC.
Speaker1: And because everybody is invited to every IC, so the program runs global online, California time.
Speaker1: So the key meetings are like, you know, 6 p.m. to 8 p.m. European time.
Speaker1: When there's an investment committee, even if it's a deal that you're not leading,
Speaker1: you're on the investment committee and you start to see how you're in the meeting.
Speaker1: You still have to pass through the two general partners, but actually that's
Speaker1: the way every single venture capital fund works, right?
Speaker1: You always have to get the general partners to approve the deal.
Speaker1: And last quarter, as an example, we did six investments and had eight investment committee meetings.
Speaker1: So there's a very large percentage of the deals that are actually getting done.
Speaker1: And that's one of the big learnings is you come out of the program being an investor.
Speaker1: You've done four to six deals in a quarter. If you stay for a full year and
Speaker1: you do all four quarters, you've done
Speaker1: 16 to 25 investments, right? And you become much more proficient as you go along.
Speaker1: And you're also in the cohort with people who have been in already.
Speaker1: So you're learning from each other, and you're getting strong coaching from
Speaker1: two general partners that together have over 50 years of VC experience and remarkable
Speaker1: track records of actual paid back investment.
Speaker0: You already hinted that you came over to Germany in your early 20s.
Speaker0: For everybody who's watching this, they can tell that you're not in your early 20s anymore.
Speaker0: Actually, we had a conversation at the Business Angel Day and I know very well
Speaker0: how mature you are, how senior you are.
Speaker0: But you've seen over this time quite a lot in the U.S.
Speaker0: And in Europe, and VU is, as you said, also based in California.
Speaker0: So what do you see as the main difference in mindset between the European and
Speaker0: the American investors, and how does VU address them?
Speaker1: Yeah. Just for clarity, by the way, we are – the main office is in San Francisco,
Speaker1: but we have offices here in Munich and Europe.
Speaker1: We're in Hong Kong and we opened Brazil recently. So about 65% of the deals
Speaker1: come out of the US in 35, which is also not a bad representation of the number
Speaker1: of startups that are really hitting the market.
Speaker1: So, you know, the main difference that I see between the American and the European
Speaker1: investors, and anytime you generalize, it's already wrong.
Speaker1: But let me say that the Americans tend to be much, much more stage agnostic and
Speaker1: It's here in Europe, you get a lot of no's because you hear it's too early for
Speaker1: us or it's too late for us.
Speaker1: And you don't hear that so much in the States.
Speaker1: You see that even the big VCs are coming in very early and they're staying very late.
Speaker1: Here it's much more what stage are
Speaker1: we doing and you're kind of i don't want to say stuck but
Speaker1: you're more limited uh in the
Speaker1: stage that you're investing and i think that and the americans are definitely
Speaker1: more agnostic because they're return focused the key focus is not you know what
Speaker1: stage it is it's do i believe that there's going to be a return on this we for example at
Speaker1: we invested about six months ago in open AI, which you say, well,
Speaker1: you know, what is that about?
Speaker1: But it's doubled since then, right?
Speaker1: And so, you know, we get into those kinds of deals because we have access to
Speaker1: them via our alumni, but we really are focused on what's the return gonna be.
Speaker1: The other thing we focus on is how transformative is it?
Speaker1: Like, do we genuinely believe that it is transformative? And I think that there's a certain
Speaker1: Belief and experience in the U.S.
Speaker1: That shows that actually, yes, startups can completely transform industries.
Speaker1: And we see that again and again, you know, whether it's from Google to you name it, Venmo and on and on.
Speaker1: It's always been startups that have been cutting edge over the last 50 years.
Speaker1: And so we're looking for those truly transformative companies.
Speaker1: And the other thing I think is that we're still a bit more, the American funds
Speaker1: are a little more marketing focused.
Speaker1: So trying to really understand what is it that's going to allow a startup to
Speaker1: break into a massive market? What's the hack that they have?
Speaker1: So it's great to have a big market, but how are you going to get it?
Speaker0: When I look into some of the investments there, WeGrow, HealX,
Speaker0: Cellbricks, Arquid Robotics, Isaac Health, AOA, Insight, and so on and so forth.
Speaker0: Pretty interesting.
Speaker0: And as you already mentioned, also stage agnostic more or less, right?
Speaker1: Yes.
Speaker0: Yes, yes. Especially given the valuation of OpenAI, I would say it was a big later stage deal.
Speaker1: Later stage deal, absolutely. And it was opportunistic as well,
Speaker1: because we had a chance to come in.
Speaker0: We've been talking a little bit about the mindset already.
Speaker0: I would even go as far as fixing Europe's investment mindset a little bit.
Speaker0: And I've seen a lot of material about you where you also mentioned,
Speaker0: for example, what I found pretty interesting, born global advantage of Israeli startups.
Speaker0: Where does Germany hesitate to internationalize?
Speaker1: I think, I mean, Israel has the, there's nothing like necessity, right?
Speaker1: You know, the old saying, necessity is the mother of invention.
Speaker1: When your company is born in a market of six or seven million people,
Speaker1: there's no question for you that you have to be international.
Speaker1: Germany does have the, somewhat the disadvantage that the market is massive in Germany, right?
Speaker1: So you don't have to go outside Germany because you could build a successful
Speaker1: business, a very successful business first in Germany and then internationalize elsewhere.
Speaker1: You have the challenge in Germany as well that you don't have the advantage
Speaker1: of, let's say, the UK or of France, where as long as you're in Paris,
Speaker1: you've covered the whole country. As long as you're in London,
Speaker1: you've covered the whole country.
Speaker1: It's not enough to be in Munich. You have to be in Munich. You have to do business
Speaker1: in Berlin. You have to do business in Dusseldorf. There's eight different places.
Speaker1: So I think that the complexity of the German market combined with the size and
Speaker1: the potential of it very often stops startups from internationalizing soon enough.
Speaker0: So you would say they should think a little bit early about it?
Speaker0: I have to admit most startups that are pitching startup radio,
Speaker0: they already think internationally because they want to be in an English speaking podcast here.
Speaker0: How can they think more globally from day one?
Speaker1: I think that it has to do with a combination of thinking and doing.
Speaker1: And that was also very much the impetus when we started the German accelerator
Speaker1: program was, you know, let's not just think about being global.
Speaker1: Let's let's go global. Let's get people over into other countries and do that.
Speaker1: So I think it's I think it one of the big things is to have partners on the
Speaker1: ground, you know, from inside your business as soon as possible.
Speaker1: Who are building the market just like you're building the market in the local country
Speaker1: that you're from you know just like you have a team in germany you
Speaker1: want to really try and find people in
Speaker1: the other markets as quickly as possible and not and not wait you know because
Speaker1: the longer you wait the more entrenched you become and the more the problems
Speaker1: in your local market become aware you become aware of them whereas when you're
Speaker1: dealing with them in multiple countries at the same time you just deal with them
Speaker0: For our audience i was wondering if you would join a fund,
Speaker0: if it trained you and lady cole invest in real deals why or why not um as always
Speaker0: leave uh the leave comment here down in the show notes andy we will be back
Speaker0: after a short ad break then we will be talking about scaling startups and sales in europe,
Speaker0: Andy, welcome back to Scaling Startups and Sales in Europe.
Speaker0: You said Europe has a sales problem in one of the interviews,
Speaker0: one of the publications found.
Speaker0: What's behind that and how can founders overcome it?
Speaker1: So I'm going to be very direct and say that at least in Germany,
Speaker1: many people don't like sales.
Speaker1: They literally don't. They really don't like it. And so.
Speaker0: I actually have to admit, when I was starting out by myself,
Speaker0: January 1st, 2021, one of the hardest things that I had to learn over time is
Speaker0: doing sales, getting out there, getting active.
Speaker0: And I kind of know what you mean here.
Speaker1: Yes. I mean, there's a YouTube video of mine, which has been out for well over
Speaker1: 10 years. It's called Entrepreneurial Thinking.
Speaker1: And in that lecture, which I've done for hundreds and hundreds of people,
Speaker1: I always ask the question, you know, who wants to be a salesperson?
Speaker1: And almost nobody raises their hand.
Speaker1: And it's because, and this is, I think, the way to fix it, is people have the
Speaker1: wrong conversation going on in their head about sales. The conversation is salespeople
Speaker1: are annoying people who sell you crap that you don't need. That's not true.
Speaker1: That's a thought. That's not true. And I think that as soon as people are able
Speaker1: to understand that the conversation, if you don't like to call it sales,
Speaker1: then go right ahead and call it business development, whatever the word is that makes you feel better.
Speaker1: But sales is nothing more than speaking your commitment.
Speaker1: That's what it is. What are you committed to? What really, what are you? And that's the thing.
Speaker1: Startups, you know, the thing most impressive about startups,
Speaker1: they commit their life to something that is really hard to do.
Speaker1: And it's impressive for other people to see startups and people see people just giving it all. Right.
Speaker1: But they need to talk about that. You just talk about what you're why are you
Speaker1: giving your life for this?
Speaker1: Why are you so behind this? And not to get concerned about what's my picture
Speaker1: of what a salesperson is, but really to think of yourself as committed.
Speaker1: I often relate sales to marriage.
Speaker1: Yeah. And I say to people, you know, it's like you don't want to walk in and
Speaker1: say, hey, listen, you've you know, you're not so terrific, but I'm pretty good.
Speaker1: You want to get married and see how it goes? No, that's not a good sales pitch.
Speaker1: You know, a good sales pitch is I love you madly and I don't want to spend another day without you.
Speaker1: I want you in my life. Absolutely. And I'm going to be true to you.
Speaker1: Well, it's the same thing with sales for anyone.
Speaker1: This is why I want you to be my client. This is what you're going to get.
Speaker1: And you can count on me. And I think that conversation we need to push out into the market.
Speaker0: And actually, I also learned that marriage and raising children is always done
Speaker0: better if you do have a certain marketing mindset there.
Speaker1: There you go. There you go.
Speaker0: Yeah, we've been talking about sales here and more and more popping up in my
Speaker0: mailbox first were offer for AI sales tools.
Speaker0: And now I do have a few suspects who really bombard my inbox with pitches for podcast guests.
Speaker0: Do you think those AI sales tools are a game changer for founders with limited sales experience?
Speaker1: I think they can be.
Speaker1: And the way in which they can be is when they're used for focusing on product market fit.
Speaker1: So what I mean is helping you to find the right buyers.
Speaker1: I think that the reality of sales is you spend 80% of your time talking to people
Speaker1: that probably will not do 20% of your sales.
Speaker1: And if you could change that, if you could flip that model and spend 80% of
Speaker1: your time talking to the people who are going to really make the sales,
Speaker1: that can be a real game changer.
Speaker1: And I do think that AI tools hold out that possibility.
Speaker1: And I also think that they hold out the possibility of dramatic increase in
Speaker1: productivity, meaning that you don't necessarily need to hire the same number of salespeople.
Speaker1: And so I think those two things put together, if you're able to achieve that,
Speaker1: then yes, they can really be a game changer.
Speaker0: I actually even had or have still an AI tool that is replying to my landline
Speaker0: phone, to my office phone.
Speaker0: And actually, it turns out this is also a pretty great thing because every time
Speaker0: somebody wants to buy something, I
Speaker0: get a message instantly to my phone and everything else is put in a queue.
Speaker0: So that's working out pretty well for me.
Speaker0: What do you think is the single biggest mistake when a startup,
Speaker0: for example, from Germany is scaling to and in the US?
Speaker0: And maybe you'll mention the German accelerator because that's the next topic
Speaker0: we're talking about here.
Speaker1: I think it really is the mistake of not being local fast enough and long enough.
Speaker1: So I think that people wait too long to get into the other markets and markets are always developing.
Speaker1: So this idea that I'm going to conquer one market and then I'm going to go to
Speaker1: another doesn't really work very well.
Speaker1: And so I think that it's, you know, it's that idea of getting in.
Speaker1: And I think that probably they underestimate the power of partners that are in the market.
Speaker1: So you don't necessarily need to conquer the whole market
Speaker1: you just need to look and see who's already asking you
Speaker1: and wants to be you know is a client already and
Speaker1: you all most of them have clients very very early on you
Speaker1: know really leveraging people in the local countries from a client perspective
Speaker1: as well that are already using the product and building that out so building
Speaker1: from a uh from a base of strength rather than trying to go out and and you know
Speaker1: do everything all at once i
Speaker0: See and personally i've
Speaker0: had the experience um it's a lot
Speaker0: of people are doing very very early on those first like uh testing the waters
Speaker0: in different markets with um with co-working spaces and just go from frankfurt
Speaker0: to new york and go there stay there for some time work,
Speaker0: beat people, get to know the park and so on and so forth very, very early on.
Speaker0: And that's something I see here.
Speaker0: We already hinted about the German accelerator.
Speaker0: I actually did a few interviews when I was in New York, but it's now seven years ago.
Speaker0: There is a very nice co-working location where the German accelerator is located.
Speaker0: And they do have an awesome rooftop from which you can see in the background
Speaker0: the New York skyline, as well as the One World Trade Center.
Speaker0: Having this picture in mind, can you go a little bit back how this all built
Speaker0: up at the origins of the German accelerator and what sparked all of that?
Speaker1: Yeah, absolutely. So it's great that you're talking about the New York location
Speaker1: because that was actually the second location.
Speaker1: And the first location was Silicon Valley. So originally it was called the German
Speaker1: Silicon Valley accelerator. Right.
Speaker1: And the real spark was Professor Dietmar Harhoff,
Speaker1: who went over on one of his trips and walked into plug and play and saw that
Speaker1: there were countries that were sending startups over and said, this is absolutely,
Speaker1: you know, something that Germany has to be doing.
Speaker1: So and the other thing I think that sparked it was that when the German government
Speaker1: was convinced that they needed to be in the other country, we needed to have a German presence.
Speaker1: And that was supplied by German entrepreneurship, which was a company I co-founded in Germany.
Speaker1: And so we really had people on the ground who were able to convince the German
Speaker1: startups, explain to them what they were doing, and could send them over there
Speaker1: as well and then really train them.
Speaker1: So that was really the initial spark for the whole program.
Speaker0: We may also add that you have now way more locations.
Speaker0: For example, Boston comes to mind. But also in Asia, you do have offices in
Speaker0: Singapore, Tokyo, Shanghai, in Latin America, in Buenos Aires and Sao Paulo.
Speaker0: So basically, you can get out into the whole world with this program.
Speaker0: We've been already talking about that you now support expansion into nine plus global markets.
Speaker0: How did the program evolve from being first in a plug of play in Silicon Valley
Speaker0: and then adding locations? Was it like a need-based request from the entrepreneurs?
Speaker1: It was a combination. Yes, there was definitely a request from the market side.
Speaker1: And there was also, I have to give a lot of credit to the German government,
Speaker1: regardless of the administration.
Speaker1: There's various people. Johannes Felling is a name that I think you can't think
Speaker1: about the German accelerator without him.
Speaker1: He was really the person who brought it through in the very beginning.
Speaker1: Stefan Dreves from the ministry has been and still is one of the driving forces
Speaker1: behind the German Accelerator.
Speaker1: And it really has a lot to do with the ambition of the government to be in and
Speaker1: support market leaders from Germany to become global.
Speaker1: And so it was very much done hand in hand with where entrepreneurs were asking,
Speaker1: but also where the government itself said, this is a priority for us.
Speaker1: And that also, I think, shows the power of, you know, that's what I meant before.
Speaker1: Sometimes when you have one really great client can actually take you very, very far.
Speaker1: And I think that's something we also try and teach people in the U.S.
Speaker1: And when they go to different, whether it's Singapore, wherever they go,
Speaker1: get a great client and expand along with them.
Speaker0: That usually makes a lot of sense.
Speaker0: It's also a recommendation I've heard pretty early on, and it's kind of stuck with me over time.
Speaker0: To wrap this a little bit up, because I know you're not currently actively involved
Speaker0: with the German accelerator anymore,
Speaker0: I would still be interested to pick a little bit your head about your framework
Speaker0: for deciding when a startup should expand beyond Europe.
Speaker1: Yeah, so I think that the important thing is that it's not about our frameworks.
Speaker1: Yeah, it's really one of the things I like to say is passion not included.
Speaker1: Yeah, it's not about the it's not about a framework that says you're ready to do this.
Speaker1: It's are you passionate about being in the country?
Speaker1: Are you committed to doing that? Is it something that's absolutely on your roadmap?
Speaker1: And it's not. And when we see that kind of passion.
Speaker1: Yeah. And it's this another saying I like to use is mission possible.
Speaker1: Like, I believe I can do it. And when we see the passion for doing it and we
Speaker1: see that the startup really believes that they're able to do it,
Speaker1: those are the kinds of companies that we really want to support.
Speaker1: And I think that that's worked quite well when you actually look at the results
Speaker1: of the German Accelerator program.
Speaker0: Yeah, I have to totally agree. I think I'll dig deep in YouTube and maybe link
Speaker0: the interviews that I did in almost almost seven years ago in May 2018 in New York.
Speaker0: OK, for the last piece, let's talk a little about the view venture partners,
Speaker0: the portfolio and investment strategy.
Speaker0: Are there any sectors and technologies you are particularly excited about right now?
Speaker1: So we are a generalist fund. We invest out of six different verticals,
Speaker1: fintech, prop tech, health tech, consumer enterprise, and what we call pioneer,
Speaker1: which would be deep tech and space.
Speaker1: I would say we're probably like anyone today, not even just funds.
Speaker1: Very excited about AI, you know, but AI goes across everything.
Speaker1: AI is really not in any way a vertical in our opinion.
Speaker1: And I would have to say that the two sectors that we're probably most active
Speaker1: in right now and most excited about are health and space.
Speaker1: So I think that the breakthroughs, especially in health, which are coming specifically
Speaker1: through AI are just remarkable.
Speaker1: And if we could get regulation to keep up with the breakthroughs of technology,
Speaker1: I think we would be saving a lot more lives today.
Speaker1: And then I think that what's happening in space is just, yeah,
Speaker1: it goes without saying the cost of putting something up into space is just coming down dramatically.
Speaker1: And as that happens, the possibilities increase dramatically as well.
Speaker1: You know, we're looking into everything from, you know, setting up more real
Speaker1: estate in space to how you do charging in space.
Speaker1: And so those are two areas that we're definitely excited about.
Speaker0: I vividly remember even a few years back, you already had companies that were
Speaker0: doing a lot of interesting analytic stuff with data they gotten from pictures of the Earth's surface.
Speaker0: Was it building radar that did like tracking of large building projects to, I remember,
Speaker0: a company that was tracking that were forecasting a Black Friday sales based
Speaker0: on the occupation of the parking lots and stuff like that.
Speaker0: So that is already pretty interesting. Yeah.
Speaker0: Getting a little bit back to VU, how does your program's deal flow differ from a traditional VC?
Speaker1: Yeah, I think that is really a very big differentiating factor.
Speaker1: And it continues to grow, right? Every quarter, we're graduating 40 to 60 additional investors.
Speaker1: All of those people are incentivized for their entire career to bring deals in.
Speaker1: We share any deal that you bring in as a venture fellow alumni,
Speaker1: you're going to get a very significant profit sharing on that deal.
Speaker1: So we have remarkable access to deals that other people are already doing,
Speaker1: where we get allocations in deals where you would wonder, you know,
Speaker1: how would a fund that's, you know,
Speaker1: making ticket sizes between 200K to 1 million and can go up to maybe three or
Speaker1: four and follow on getting into deals which have, you know, are raising 400
Speaker1: million, right? And it's coming in from our alumni.
Speaker1: So I think that that's one of the very key factors that I just don't see any other fund having.
Speaker0: I think that's maybe a little bit understatement that you've worked with dozens
Speaker0: of founders, maybe hundreds.
Speaker0: What do you think are the three traits that separate the top 1%?
Speaker0: You talked about passion already. You talked about sales already.
Speaker0: Would you include them?
Speaker1: No doubt I would include them, for sure. I wouldn't have said it before.
Speaker1: I didn't think that was important.
Speaker1: But I do think that if I had to really say what are the three key traits,
Speaker1: one is that the startup has a massive impact.
Speaker1: Differently better solution for handling the problem than the status quo does.
Speaker1: Massively better. So it's a magnitude of improvement that is just completely
Speaker1: has the potential for transformation.
Speaker1: So that massiveness of the difference to the status quo is one very big thing.
Speaker1: The second very thing is clearly the market size.
Speaker1: You know, are they targeting something that if it were to actually,
Speaker1: if they were to be successful, would it be transformative, right?
Speaker1: So I think that's a very, very important thing.
Speaker1: And the other thing is something that people often miss, which is that there's
Speaker1: a certain genius in simplicity of the way they market, right?
Speaker1: And so let me give you a real-life example.
Speaker1: One of our general partners, Andrew Salison and Sky Fernandez,
Speaker1: are the two general partners inside of BU. Definitely look them up.
Speaker1: Andrew wrote the first check to Venmo, the payment company, which everybody
Speaker1: – in America, people don't say transfer me the money. They say Venmo me, right? It's a verb.
Speaker1: When that investment was made, I'm going to guess there were probably 100 companies
Speaker1: out there doing payment transfers.
Speaker1: So the size of the market was obvious, right?
Speaker1: So what was the marketing hack? And the thing that the marketing hack was that
Speaker1: Venmo was really the first company that said, all you need to transfer money
Speaker1: is a mobile phone number.
Speaker1: That blew the market open with an incredibly interesting and simple interface.
Speaker1: So I think those sort of three things together are really what separate the 1%.
Speaker0: Andy, we are now recording, I do believe, for almost,
Speaker0: yeah, for quite a bit. And I do believe it was very interesting and insightful for our audience.
Speaker0: Thank you for sharing these insights and for giving us a window into how you're
Speaker0: transforming both startups and the people who invest in them to our listeners.
Speaker0: If you enjoyed today's episode, of course, give us a five-star review and follow
Speaker0: us wherever you're listening and check out our exclusive subscriber segment for more.
Speaker0: And remember, this isn't just a podcast. It's a global startup intelligence network.
Speaker0: Andy, thank you very much. It was a pleasure having you as a guest.
Speaker1: Jordan, thank you so much.
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