Podcast Primer with Aarish Shah of Nothing Ventured

Very happy to have been invited to talk with the wonderful Aarish Shah on his Nothing Ventured podcast.

We spoke about:

👼🏾 Investing as an angel versus out of a fund structure.
🏗️ The importance of portfolio construction and pacing how you deploy
📽️ My vetting process for investments I'm considering
🤖 My opinion of where we're going with AI having built in the space before

You can check out the Primer now on Apple, Spotify, YouTube or wherever you listen 🎧

YouTube below, other links in the comments 🔗

#founders #startups #venturecapital #buildinginpublic #investinginpublic

Cap table red flags

Q. What are red flags on a cap table?

A. The negatives are a long tail of small investors and ex-founders who own a large share of the business.

The former is bad because sometimes you need to ask all shareholders for approval. The latter is bad because you may need approval and you don't know how good the relationship is with the remaining founders. Also, the remaining founders may not own enough of the business.

Q. How can you prevent these?

A. Bring smaller angel tickets in via SPV using Vauban from Carta or Odin and make sure you have reverse vesting if you have co-founders. Then you are protected if one of you leaves. If you raise a round with a VC lead they will generally insist on reverse vesting anyway.

Q. What is reverse vesting?

A. Typically you will accrue the rights to your shares over four years. This protects investors against founders raising a round and then leaving the business and protects founders against co-founders leaving.

#founders #startups #venturecapital #buildinginpublic #investinginpublic

Evening update - 19 June 23

#TodayI

Ran to Pilates (thank you Runna) with Maria Jose Freeman (Fernandez) of Pilates Core Club.
Had a call with Kiran Mehta of Mercia Asset Management PLC.
Shared what I need to see if you are in a competitive market.
Was pitched by Edward Page and Seb Cohen of Paace.
Was pitched by Daniel Marrable of Forumm.
Attended lunch break meditation at Guille-Allès Library.
Belatedly called my father to wish him happy fathers day.
Chatted with Alice Garnier of Capsule Insurance.
Was pitched by ⚡️Dora Palfi of imagi.

#founders #startups #venturecapital #buildinginpublic #investinginpublic

Competitive spaces

Q. What am I looking for in a competitive space?

A. Differentiation that matters and how good are you at executing vs your competitors.

Q. What is differentiation that matters?

A. If it could make all the difference - a must have and not a nice to have. The differentiation is the product rather than a feature.

Q. And execution?

A. Execution matters in all startups. In a competitive space what matters is how well you execute compared to your competitors. If your competitors are great at execution it will be hard to win, no matter how good you are.

This is often why people prefer to compete with incumbents rather than other startups but there are counterexamples. Microsoft is executing really hard right now on adding AI to all their products, for example.

#founders #startups #venturecapital #buildinginpublic #investinginpublic

Help me solve a problem

Current struggle - help required:

I'm starting a monthly newsletter for people who don't want to read every post.
I want an additional newsletter for angels who want to know when one of my businesses is raising.
I want to charge $1 a month for the latter to filter out timewasters.
Both Substack and beehiiv use Stripe which isn't available in Guernsey.
Substack has a minimum $5 monthly subscription.

Help me, please! I'm open to other ways to solve the timewaster problem.

#founders #startups #venturecapital #buildinginpublic #investinginpublic

Evening update - 16 June 23

#TodayI

Shared my red flags when receiving a pitch deck or video pitch.
Had a call with Sarah Wernér of Husmus to discuss how we might collaborate to support black female founders.
Had a meeting at our house build site.
Had lunch with my wife.
Met Matthias Plunser of Channel Islands Workation for coffee.
Was pitched by Adam Engberg and Rik Yapp of Kirmada.

#ThisEveningI

Am on taxi duty for my wife.

#founders #startups #venturecapital #buildinginpublic #investinginpublic

Early red flags

Q. What are early red flags when you receive a pitch deck or video pitch?

A. In a video pitch, an inability to sell. You can tell this really easily in a video, you can't in a pitch deck.

The other is a tarpit idea.

Q. What is a tarpit idea?

A. A tarpit idea is one everyone thinks is a great idea. If everyone thinks it's a great idea that means either there are twenty other people already doing the same thing or that many people have tried and failed for reasons you don't know. Avoid these like the plague.

They are called tarpits because it is so easy to get stuck in them because by definition you get a lot of positive reinforcement on your idea.

#founders #startups #venturecapital #buildinginpublic #investinginpublic

Evening update - 15 June 23

#TodayI

Shared how you make a good impression with investors.
Finally set up my unbundled vc founder WhatsApp group.
Shared Richard Lee of Venyu's video pitch.
Chatted with Greg Mccallum of Think Work about a project he is working on.
Had my Important not Urgent day.

#NowI

Am heading to an improv drop-in and the first part of a standup comedy course with Sarah Hansmann Rouxel. The former I've done before. The latter is terrifying.

#founders #startups #venturecapital #buildinginpublic #investinginpublic

Public pitch - Richard Lee of Venyu

Delighted to share, with permission, Richard Lee of Venyu's video pitch.

Venyu is your copilot for organising corporate events.

Please let me know if you would like an intro or feel free to reach out directly.

#founders #startups #venturecapital #buildinginpublic #investinginpublic

How do you make a good first impression with investors

Q. How do you make a good first impression with investors?

A. Tell your story compellingly and concisely.

Q. Why does that matter?

A. A compelling storytelling skill correlates strongly with sales skills and sales is one of the most important founder skills because you have to be able to sell your product, to raise from investors and to persuade people to work for you who have many choices.

The ability to tell your story concisely means you understand your business well. It's often said that if you can't say it briefly you don't understand it.

#founders #startups #venturecapital #buildinginpublic #investinginpublic

Evening update - 14 June 23

#TodayI

Shared my most triggering statement.
Was pitched by Leon Wilson and Ashley Crane of PollenPay.
Took some docs to the bank.
Was pitched by Chris Moore and Philip Godden of Kikapay.
Prepped for a Hotbed SaaS investor tips session
Answered lots of questions at the Hotbed SaaS investor tips session. Thank you Perdie Alder and Margaret Anne Coyle for including me. Video below.
Met with Jo Stoddart and Emma Shell of Locate Guernsey to prepare for a Fireside Chat.
Collected the kids from school and took them for ice cream.

#founders #startups #venturecapital #buildinginpublic #investinginpublic

At my old place we did this

What statements do you find triggering?

One of mine is, "At my old place we did this and it was great."

Really? Do you know why it worked at your old place? Given where we are now you think that means it will work here and why?

It's not just about experience. It's about understanding why things work and why they don't. Then you have a chance of translating that experience into something helpful.

What statements do you find triggering?

#founders #startups #venturecapital #buildinginpublic #investinginpublic

Evening update - 13 June 23

#TodayI

Shared my new frictionless pitch for VC-led rounds.
Had my first sign-up via this.
Received and gave feedback on investment docs for an imminent investment.
Helped a founder with intros and remits on other VCs.
Organised tutoring for one of my sons.
Chatted with a founder.
Caught up with Euan Cameron of Willo®.
Had a postponement.
Was pitched by Samuel Adesanya of Devo.

#NowI

Have to leave early for a parents' evening.
Have at least ten other things on my must do today list (apologies if you're not on it).
Need to take the bins out.

#founders #startups #venturecapital #buildinginpublic #investinginpublic

Pitch with a lead

Founders, if you have a lead VC you can now book straight into my diary with no filter.

I typically use a video pitch as my first filter rather than a pitch deck. I need that filter because of the volume of applications.

Now, if you are a pre Series A digital tech startup with a credible lead investor you can book straight into my diary. No filter. I don't need a filter because your lead has done that for me.

I've included extended hours to make sure we can meet quickly because I like to move fast and not waste anyone's time.

Why?

This was inspired by my receiving three introductions in 24 hours by VCs to founders whose rounds they were leading. I rate the VCs. I asked myself why I was asking for a video pitch when I knew they would meet my minimum quality requirements.

I didn't ask for the videos, I went straight to meetings and my investment in one of them is closing soon.

I could have missed the deal if I'd insisted on a video pitch and added friction to the process.

Any chance you have to remove friction where it's not necessary, take it.

#founders #startups #venturecapital #buildinginpublic #investinginpublic

Evening update - 12 June 23

#SaturdayI

Woke up at 3am and walked 39 miles round Guernsey (half way round pic with my boys below).
Passed out.

#SundayI

Wrote a magazine article.
Sent emails to angels about a portfolio company that has a small additional raise.
Recovered.

#TodayI

Cycled to pilates.
Had a recovery pilates session with Maria Jose Freeman (Fernandez) of pilates core club.
Asked what you are running from.
Tried and failed to pay a bill.
Had a few postponements.
Prepped for my founder WhatsApp group and my monthly newsletter.
Added an unusual disclaimer to my email signature.
Soft launched my pitch with a lead process.
Was generally unproductive and not at my best.

How was your day?

#founders #startups #venturecapital #buildinginpublic #investinginpublic

What are you running from

What are you running from?

This is Harry Stebbings of 20VC's favourite question to successful founders and investors. He believes they are all running from something and that is what drives them.

A recent FT article suggests the same thing:

Hayes Barnard was sitting at a football match with a fellow chief executive when he decided to test a theory about what might account for his neighbour’s success.

“I gotta know,” ventured the founder of US fintech GoodLeap “Is it daddy issues, near-death experience or learning difficulties?”

What are you running from?

Do you need to be running from something to be successful?

#founders #startups #venturecapital #buildinginpublic #investinginpublic

Evening update - 9 June 23

#TodayI

Asked if you'd be interested in a quarterly unbundled vc newsletter and what you would like to see in it.
Took the kids to school.
Had coffee with MATHEW GULLY and collected my son's football trophy (below, proud Dad moment).
Spoke with Kornel Grunwald about his quantum computing startup.
Asked what platform I should use for a newsletter.
Was pitched by a founder who wishes to remain anonymous.
Chatted with Lottie Unwin (she/her) of Copy Club.
Was asked to write a magazine column.
Was pitched by Richard Lee of Venyu.
Finished early to collect the kids from school.

#TomorrowI

Walk 39 miles round Guernsey.

#founders #startups #venturecapital #buildinginpublic #investinginpublic

Bonus newsletter advice post

Bonus newsletter post.

What platform should I use and why?

I send portfolio founder updates using Gmail multi-send.
Many people use Mailchimp.
Substack seems interesting because I can also use Notes and get network effects.

Thoughts?

#founders #startups #venturecapital #buildinginpublic #investinginpublic

Newsletter advice please

I'm considering starting a monthly or quarterly newsletter you can sign up for on my website.

My instinct is to keep it simple - who I've invested in, updates to what I am doing, most popular posts, portfolio company information and a request for great deal flow.

Would you be interested? If not why not? (Please be honest, I'm here to learn.)
What would you like to see in it?

Help me please!

#founders #startups #venturecapital #buildinginpublic #investinginpublic

Evening update - 8 June 23

#TodayI

Shared that you shouldn't take my advice.
Had coffee with Barrie Baxter of Brixx Software.
Had my Important not Urgent day.

#NowI

Am collecting the kids from school and taking them to the beach to collect pebbles for a school project.

#SaturdayI

Am walking 39 miles round Guernsey. I am not collecting sponsorship but if you'd like to make a donation to XLH UK, using this link, I'd be very grateful. They support people with the condition my youngest two boys have. I wrote about that here.

#founders #startups #venturecapital #buildinginpublic #investinginpublic