July 15, 2025 • 57 mins
In this episode, Alex Dam from Hillfarance VC shares his journey from New Zealand into fintech and venture capital. He discusses startup involvement, entrepreneurial competitions, and challenges in VC internships. The conversation covers the future of work, brand building, and Hillfairance's unique models. Alex offers strategies for networking and fundraising on Twitter and emphasizes storytelling in sales. He also explores communication with LPs and the importance of personal connections. Insights into New Zealand's tech ecosystem and traits for successful VC and founder dynamics are provided, along with advice on avoiding investment pitfalls.
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(00:00):
I totally agree.
(00:01):
Totally agree.
He's the guy that gave me inspiration to hop onTwitter and start reaching out to potential LPs
on Twitter.
And one of them, actually, one of them isactually from The first one that I got was from
New York.
And so he yeah.
He was my first LP, and I got him from Twitter.
How you know, so what advice would you give?
(00:23):
So how did you obviously, you don't have towouldn't have to put this person on blast, but,
how did you do it?
Did you just DM somebody?
Like, how did you know that person was an LP?
Welcome to The Investor, a podcast where I,Joel Palafinkel, your host, dives deep into the
minds of the world's most influentialinstitutional investors.
(00:45):
In each episode, we sit down with an investorto hear about their journeys and how global
markets are driving capital allocation.
So join us on this journey as we explore theseinsights.
Everyone's story of how they got into VC isdifferent.
So yeah, happy to have you to talk about thatif you want.
(01:05):
Yeah, you teed it up for me to usually havepeople just talk about where they grew up, what
they studied.
Some people are aware of private equity andventure capital, based on their upbringing and
their family background, where a lot of peopleknew nothing about it like me, right?
I was really in the tech space, you know, lotof my family was in medicine and, and tech, and
(01:28):
then I kind of learned about venture as I grewin my career.
So in contrast to that, I'd love to hear yourjourney, how you broke into venture, where did
you start?
What did you study?
And then we'll just kind of, you know, take itfrom there.
Sure, more than happy to.
So my kind of story is I was born in NewZealand, born and raised in New Zealand.
(01:50):
My mom was actually born here as well.
She's New Zealand born Chinese.
But my dad came over here from Vietnam as arefugee.
He came, I think he arrived in New Zealand agesago when he was 15, so he came here by himself,
kind of escaped communist Vietnam at the time.
(02:11):
Yeah.
So he he raised me, met my mom, and he's he'san entrepreneur himself, actually.
He runs his own kind of inbound tourismbusiness.
Tourism is a big a huge thing here in NewZealand.
Sure.
And yeah.
So I kind of grew up the normal way.
Went through high school, had no idea what Iwanted to do outside of high school.
(02:33):
Ended up ended up choosing computer science andlaw, so a conjoint degree at at the local
university here.
Had no idea, still had no idea what I wanted todo.
So I ended up failing every single one of mypapers because I was playing too many games
(02:54):
during the time.
I was playing a game called Survival Evolved,and I ended up just funking.
And so I dropped out, worked at thisengineering consultancy for a year, and during
that time really built up some people skillsbecause it was quite a people orientated job,
just engaging with people.
(03:14):
Somehow found out that I liked.
I spent most of my salary, just saved it, andinvested it in index fund and whatnot, and
that's kind of when I started gettinginterested in finance and personal finance.
So I thought, you know what, screw it, I'mgoing go back to uni, study finance.
And so I went back to another universitybecause the first one wouldn't let me back in
(03:36):
because of my shit grades, And studied financethere for two and a half years.
And throughout that period, got exposed toentrepreneurship and startups through a minor
that I was doing.
And that's kinda when I started catching theplug, I guess, so to speak.
I did heaps of entrepreneurial pitchcompetitions during my time at uni and thought,
(04:01):
man, this is awesome.
And so then I just started reaching out topeople all throughout Auckland, New Zealand,
founders all throughout the country, basicallyjust asking for a coffee and a chat and doing
my research on them, asking them, you know,what problem are you solving?
Are you guys hiring?
(04:22):
And then I somehow ended up working for twostartups.
Yeah.
So I worked
for So you took coffee chats with VCs trying toget a VC job or trying to get
a No, startup with startup founders.
Okay.
Got it.
Yeah.
I I had coffees with founders specifically.
Mhmm.
At that point in time, I had no idea what VCwas.
I just knew that people were doing like,working on and building some really cool shit,
(04:45):
and I wanted to be a part of it.
And so I ended up working for two startups.
One was a student discount app, which allowedany tertiary student to get discounts on
clothes and food around the campus.
And then I joined later in that startup andthey were trying to pivot to a learning
(05:08):
management system, but that ended up goingunder, so that failed.
And then I moved into another startup rolewhere I was doing a lot of business development
for a fintech startup here.
So over here, we have a kind of like asuperannuation four zero one k that you guys
have over there, but it's called KiwiSaverhere.
(05:28):
KiwiSaver, you know, you contribute apercentage of monthly or form release salary to
this superannuation fund.
And so, this startup worked on advising youinto the right fund.
So, if you're older, have a higher income,maybe you should be in a more balanced or
conservative fund.
(05:49):
So they did Kiwi.
So it's kind of like an index fund?
Yeah, it was more advising, like providingrobot advice for investors into what fund they
should be in, whether that is an index fund ora more actively managed fund.
So it's kind of like wealth planning, I guess,but it's a little more Is it automated, so it's
(06:11):
not humans in there?
It is automated, but there always needs to be ahuman element to financial advice.
And so they would give you the advice and thena financial advisor, pair you with a financial
advisor to then revisit it if you need changein the future.
And so they were called National Capital, andthey actually ended up getting acquired quite
(06:34):
early in their life cycle.
So they just got acquired by a local wealthmanagement firm here, and I left and didn't
really didn't really know what I wanted to doafterwards.
I had a job lined up at a big bank.
I interned there, and I just thought, man, Ireally don't want to go back to that place.
(06:55):
It was boring.
Felt like you were getting a bit siloed andit's just a small cog in a really big machine.
That's what I felt.
And then one of the founders that I connectedwith ages ago, he was like, Hey, there's this
internship at this VC here.
(07:18):
A very new VC started in 2020, and it's calledHillfairance.
And I think you should apply.
And so I thought, Yeah, I don't even know whata Hillfairance is, let alone VC.
I knew that there were some VCs here, someinvestors that invested in stocks, but I didn't
really know what that entailed.
(07:41):
And so I applied like everyone else.
It was kind of a stock standard applicationprocess.
You apply, you do one of those recorded videointerviews, and then you have a one on one chat
with the managing partner.
So at that time, so that was, I think it wasApril of last year, April 2021 is when I did my
(08:06):
one on one with Rob Vickery, who's the managingpartner and founder of Hillcrest.
What do you think of that?
What do you think of those automatedinterviews?
I think it's a good way as an employer to get alot of candidates at scale, because I can
imagine it's just a huge pain to scheduleinterviews.
Know, you as an interviewer have to really justblock off your whole day and just meet a lot of
(08:28):
people.
And it's not only you a lot of times if youwork in an organization like the interviewer
has to meet multiple people.
So I feel like it's, it's a scalable way to geta lot of volume of candidates.
And then it'd be cool if there's like some AIthat grades the candidates, I don't know if the
tech is like that advanced.
But you know, I'd love your thoughts on thehiring manager side and then just the person
(08:56):
that's trying to get a job if that's a goodmethod for them.
On definitely the hiring side, hiring managerside, it's definitely a scalable way for you to
do it and get in bulk the amount of applicantsand review them really quickly.
My experience with those video interviews as Ihad to do them was the big four accounting
(09:19):
firms and all the other ones is it's great.
And they ask you some really good behavioralquestions, but I guess it's not suited for
everyone.
So you could be an awesome candidate, but maybeyou can't think immediately on the fly and
given the time limit, you only get a minute orthree minutes to answer the question.
(09:41):
So you could be an awesome candidate, but nothave I guess, quick word to communicate.
Yeah, I think also sometimes like when you'resystematically getting questions, it's not a
natural experience and a lot of times you mightmess up or maybe the question goes by too fast
or something.
Yeah, and you gotta redo it.
(10:02):
Can't redo it.
Mean, but you know, you can't redo it.
I guess you can retract what you say, right?
So like, you were interviewing me now, and Imisspoke, I can be like, Oh, so not sorry,
never mind.
But I guess without one, it's, you know,there's no way to redact anything because it's
already been submitted.
I guess there's also the pressure of you haveto get it right the first time.
You have to get it right the first time,otherwise you're screwed.
(10:24):
And that mindset screws you up when you'retrying to answer the question.
And I had that happen to me multiple timeswhere I just froze during one of those video
interviews and I'm like, oh, I'm trying to getback to what it was.
I mean, I think is cool Oh, go ahead.
Sorry.
I'll say my point whenever you're done.
Okay.
(10:45):
On the actual applicant side, yeah, I felt itwas good, but I'd rather speak to people in
person.
Of course, that's not scalable and meaningfulin person.
Mixed feelings about those vinegar interviews.
(11:05):
I mean, I was just gonna say, I think it'sinteresting to see us getting towards a skill
based economy.
So there's a friend of mine that built thistrading app, and you can trade, it's not real
money.
I think sometimes they award you some virtualmoney.
So it's real money they award you into theplatform.
(11:26):
If you perform well.
And what you do is you kind of like papertrade, but you trade and they teach you how to
invest like an institutional investor.
So you're kind of managing an investmentportfolio.
But I think what's really cool is submittingthat data to a hiring manager, because that's
essentially at the end of
the day, right?
In the investment space, you want to look atalpha, especially not so much in venture,
(11:50):
because it's illiquid.
But when you get into like a liquid assetspace, you you know by the end of the day if
you're up or down.
And you can just tell immediately by the valueof your holdings, you know, if your performance
is good or bad.
And I think that's super valuable to seeversus, you know, just a bunch of psychology
(12:10):
tests and personality tests and obviously somefinancial modeling exams.
I think at the end of the day, are you a goodtrader?
Can you invest and manage a portfolio andprovide alpha?
So I think I'm really excited about just kindof hopefully technology that can just show your
performance already, like instead of just a lotof, you know, yeah, showcase it.
(12:34):
And I think that I think there's someinteresting use cases for venture to, like, you
showcase a deal and you kind of talk about whythat deal is a good deal, and then maybe the
best ones kind of get ranked.
And then you submit that to VC because at theend of the day, when you interview for venture,
what do you do?
Talk about a deal or you send over a memo,right?
And I think if you could do that and everybodydoes that and kind of the best ones already
(12:59):
bubbled, those people should be going, I feelto the tier one VCs because I feel like, I
mean, it's super valuable to go to a topschool, but there's also really smart people
that have gotten into great funds from being ata at a startup or, you know, just kinda
networking as well.
So I just think, you know, not to not to derailthis discussion, but I just think it's really
(13:22):
cool.
I mean, Google is kinda doing that now withdevelopers.
Right?
So like, if you write well, from what I'veheard, I heard that if you're searching some
unique keyword when it comes to data science,and you start coding or doing some algorithms,
like Google will know, and then they actuallywill send you an application or send you an
invite to to to apply.
(13:45):
So they, know, so I think that's kind ofinteresting.
Yeah.
Just kind of like the future of work and yeah.
Future of work and Yeah.
Future of employment.
So Yeah.
That that's funny that you mentioned the whole,you know, using having something to show on
your CV that you've actually done something.
Like I used to run the investment club at ouruniversity and we used to put on those training
(14:09):
comps.
And then so a lot of those people that won it,like first, second, third, usually are the ones
that got into those top tier funds, thosetradings.
And yeah, it's good to have some of that, allthe extracurricular stuff that the students
have done and just people do in general arewhat set themselves apart, I think.
(14:33):
Yeah, the deal side as well with VC.
I always tell people to bring an LPs and theJVs to see, to add value, not just a deal,
bring it up as well if you can.
I'd say that's more valuable than bringing indeals because I mean, there's always deals, but
you can't fund the deals if you don't have anycapital.
(14:55):
So I mean, I think I always believe, you know,and the ability to do investor relations, you
can raise money, you can you'll always beemployed.
And same thing if you can sell, which isinvestor relations, You'll always, you'll
always make money, right?
Somehow.
So definitely it's a
That's something I'm learning right now as wellbecause I'm a senior associate at the firm and
(15:19):
there's three of us.
There's two partners and then myself.
I joined last year and I take part in prettymuch everything.
So I do the deals, portfolio management, andthen my managing partner gets me on some of the
LP side, we're still raising our funds.
We're closing our fund at the end of the year.
(15:39):
And so that has been a really eye openingexperience because you're basically pitching
like a startup.
You're pitching your firm, you're pitching whatsets you apart from everyone else, why founders
want your capital.
And yeah, just learning that it's all sales aspart of the LP process.
(16:00):
I managed to get a couple under my belt, whichis really- Oh, wow.
Pretty proud of.
That's great.
But it's still an ongoing learning process forme in terms of how to pitch and how to find
them as well.
Let's check that out.
Yeah.
Yeah, they don't want to be found.
No, they don't.
So that's
the tricky part.
(16:21):
So a lot of times it's, you know, it's I trulybelieve in the law of attraction.
So, you know, you attract, don't chase, right?
So if you can build something amazing, and youknow, especially if you're somebody that's
super talented, people will be attracted toyou.
And, you know, look, I mean, the best deals,best funds are usually oversubscribed, even in
(16:45):
bad markets, because they attract.
And, you know, it's the product, I would say isnot really, there's only so much you can do
with a product.
Like if you think about, you know, Bridgewateror any of these big funds, you know, there's
no, there's no magical, mystical thing thatthey're doing.
(17:05):
They're just great at building content andcommunity and really attracting the right
investors, you know, and if you think aboutlike, historically, right, a lot of these,
these hedge funds, you know, there's always,you know, the benchmark usually in terms of
returns, and I mean, IRR for VCs, on average,like 22%, 23%.
(17:25):
And even hedge funds, right?
Hedge funds, their return on average is, youknow, probably in the late 20s, early 30s.
So again, you know, what you have is reallySequoia, which is essentially a media company.
When you think about Bridgewater, they've gotthe principles and they've got all those media
properties as well.
(17:46):
So I think it's at the end of the day, it'slike the brand and the marketing.
I mean, if you look at Nike, like Nike is ashoe, right?
But what really makes it expensive is just theswoosh sign.
It's just the the brand, right?
So I think that brand recognition is reallywhat kind of makes it premium, but it's nothing
really physical or, or anything tangible,right?
(18:11):
It's just kind of perceived, perceived value.
So if you are perceived as like a premier fund,then you can charge, probably a little bit
higher on the management fee and you're justoffering something that's hard to access.
And then the thing is like communicating andhelping people understand that it is valuable.
(18:33):
That's another thing too.
I agree.
And something I'm learning throughout this pastyear is how do we build our brand as a firm?
This illustration in the background is actuallythe Hill Farrance village.
So Hill Farrance is actually named after ourmanaging partner's ancestral village back in UK
Somerset.
So we have this village philosophy, thisvillage concept, where all of our startups are
(18:59):
like, Right there, they all live around here.
And then we have Well, I'm probably over herebecause I'm separated from one.
But yeah, the whole village concept is reallystrong for us, so much so that we give a
portion of our carried interest to ourfounders.
So it's interesting.
(19:21):
I've never heard that before.
Yeah, it's all about the village.
Call it collaborative carry.
So everyone is basically invested in each otherwhen they come into the fund or when we invest
in them.
And so they're all invested in each other'ssuccess.
We've seen that flow through into the Slackchannel, everyone's chatting to each other,
(19:46):
sharing sales leads, hiring leads.
If one hiring person or talent didn't work outfor one company, they'll share it with a whole
lot.
And also sharing connections as well.
So we've seen it, although it's still earlydays, we've seen it, it's been quite awesome to
(20:06):
see everyone just so involved in each other'sbusinesses.
Yeah.
Yeah.
So that's so that's
no, that's, that's pretty interesting.
I mean, I, I'd be curious to know how youfigure out the economics.
Is it just a portion of the 20% that just getsdistributed to all the portfolio companies by
(20:27):
the end of the fund?
Yep, so we have a target set amount ofportfolio companies.
We reserve 20% of our carried interest for ourportfolio founders, and that gets evenly
distributed across all of the founders,
regardless That's of check interesting.
So there's other things that I've seen too.
(20:48):
I mean, there's a fund that I met recently thattakes some of their carry their profits, and
they donate it to charity.
And that actually fits with the mandate of somespecific institutions who are, you know, really
aligned with a charitable cause.
And that's how you can get over the fence.
Because most VCs, if you think about it, right,they're not, they don't, they're not known to
(21:10):
be a charitable cause, right?
There's a capitalist clause, but not as muchcharitable vehicles available.
So I think if you can offer kind of outsizedreturns, and the LP doesn't get impacted
because it's none of the LPs returns, it's onlythe carry.
It's kind of a win win.
It's a slam dunk, Because you're giving, you'reproviding social good.
(21:33):
Mean, the GP, I mean, I think this GP didreally well in their career.
So I guess they don't really need the carry,but I think there's probably just great
opportunities to give back and get involved incharity work.
That's really awesome to see that.
They did theirs, and I think I saw recently oneof I don't know if it's a fund over in The US
(21:55):
or one of them is re recycling the carriedinterest into building up their platform.
Oh, interesting.
Like their plant like their online platform?
Yeah, the online platform or the platform thatthey use to service their founders.
I forgot what fund it is, but I saw it onTwitter.
Twitter's an awesome place, by the way.
Love it.
(22:16):
I just got into it now.
I know.
It's an important platform for VC.
I mean, I'm still building my community there.
But, yeah, I mean, it's definitely important.
All the VCs and LPs are there.
You know, what I
would my first LP.
Yeah.
So what I would say is all the LPs arewatching.
They're all on Twitter.
They're just don't want you to know.
(22:36):
But you know, they're watching, they'refollowing like, you know, OpenLP, VC Twitter.
So they're definitely following all thosehashtags.
And when you post stuff, and especially if youpost it frequently, I feel like you're always
going to be in their newsfeed, right?
So that was kind of a of advice that I got fromsomebody else, know, always be in the newsfeed.
That way you're kind of, you know, people justkind of following you from afar and then
(23:00):
finally they connect with you, you know?
So,
yeah, on that, I want to give a quick shout toone of your alumni, Mac the VC.
Yeah, he me a lot of inspiration in terms ofactually going on to Twitter and find He raises
his first fund on Twitter.
And yeah, so Mac was, know, I'll give him ashout out when I post this episode.
(23:24):
But yeah, Mac was, he was in my, you know, wehave this thing, I have a new program called
the fund accelerator that's been around forabout And a we take in about 40 to 50 funds at
a time.
And Mac was when it one of our cohorts, butyeah, mean, he, what he did with his platform
was just quite amazing.
(23:45):
I mean, and he wrote about it to to raise his,his fund, he took about 1,100 meetings.
And there's actually two or three other VCsthat wrote about their journey as well.
So Elizabeth Yin is another one, I think sheraised 11,000,000.
And she actually showed a Google Doc, whichlike mapped out every single meeting she took,
(24:06):
I think she obviously took the names out.
But you can just see the volume of meetingsthat it takes.
And, and, you know, that just tells you thatsales, right?
Sales, you're really building.
I feel like, you know, I know I've hammeredthis to, like, Alice on the line here a 100
times.
So, like, you've got volume, and then you'vegot, you know, you gotta kinda filter a lot of
the people that are not qualified.
And then, hopefully, those 10 meetings a daythat you have, they're like really high
(24:29):
quality, know, people that are interested ininvesting in your fund.
And then I think a lot of it is curation,right?
So like, if this LP is only interested, I mean,it's crazy.
So there could be an LP that's only interestedin healthcare, and they see you, you already
know it's not a good fit, but then they endedup just liking you, right?
And they're like, wow, cool, like you'reactually doing climate change.
(24:52):
I'm a healthcare person, but you know what, Ithink climate change is really cool.
And this is an opportunity for me to get intoclimate change, right?
So I think at the end of the day, you know,half of sales is storytelling.
So helping people understand, what your journeyis and what problem you're trying to solve, I
would say.
(25:12):
I totally agree.
He's the guy that gave me inspiration to hop onTwitter and start reaching out to potential LPs
on Twitter.
And one of them actually, one of them isactually the first one that I got was from New
York.
And so he was my first LP and I got on Twitter.
(25:33):
So what advice would you give?
Obviously, don't have to put this person onblast, how did you do it?
Did you just DM somebody?
How did you know that person was an LP?
I started going through all the hashtags, justgoing crazy throughout the hashtags and going
(25:56):
through threads, I noticed a lot of LPs, someare more vocal than others, but some just want
to be low key.
And so went through the threads, decided tocomment on some of them, and he actually put
his email in one of the threads.
Oh, interesting.
(26:17):
Oh, wow.
And I was like, gotcha.
And then I basically got a ton of my Yeah.
To into email him, based on Twitter, andemailed him.
But some of the other ones I use them forHunter to find their emails, and just so I
found the emails because they're on LinkedInand Twitter.
(26:39):
Cold emailed them.
Most of them were cold, actually.
Yeah.
Because they're all offshore.
And
so So how did you get their emails?
Do use, like, one of those databases?
Or you just kinda yeah.
Yep.
Yep.
Those those ones, they can just find youremail.
So Apollo is the one that I used.
Yeah.
So So does Apollo filter on like, can you docan you use it?
(27:02):
Because I know Apollo.
I think you can scrape emails or you candownload, like, data.
Can you do a filter on, like, single familyoffices in Apollo?
I don't know if you can do single familyoffices.
I know you can do it to search VCs.
I don't know if you can do it to curate like asingle family office database.
They probably have They didn't have it.
(27:25):
I just
Yeah, they have these companies too.
I mean, they look, just look up, just I betanybody here, if you just Google single family
office email list, you could probably downloadlike a list of like 10,000 single family
offices.
But the problem is like everyone else isemailing the same list.
(27:45):
Yeah.
So they're all just kind of hitting the spamfilter.
I think the challenge is too sometimes thosepeople they leave those firms and their emails
have changed.
It's not even the same organization thatthey're with.
So it's also like, if you're doing the samething that everyone else is doing, you're just
getting stuck in the same funnel and you'regoing to that spam.
(28:06):
I wanted to do something different, although Idid cold email, most of them.
I kind of made myself known before or just havemy name there or connect with them on LinkedIn
before I send them an email just to be a littlebit more memorable in their minds.
(28:27):
And then, oh, it was a long process, Joel.
It took like three minutes
you to email this person gold, and then, youknow, what do you recommend?
Do you recommend just sending the deck?
I mean, do you recommend doing a blurb?
Because this is the thing, there's, there's afine art to this, right?
So when you when you interact with people, youdon't want to, it's just like dating, right?
(28:51):
You don't want to tell, like your first datethat you have like, you know, you've had this
is your third marriage and, you know, you haveall this, you know, baggage.
You know, maybe you can bring that up in layerslike later on, but you don't wanna drop that
bomb like the first time and same thing, youdon't wanna give somebody like your data room,
(29:11):
like the first meeting, you wanna kind of teasethem and attract them with kind of something
exciting, right?
I think you want people to come on thatexciting journey with you.
Yeah.
I treat it like how a founder would how I wouldwant a founder to pitch up.
Us, like, give a tease, like, give, like, givesomething that would make our eyes light up.
(29:34):
Be like, oh, shit.
Okay.
This is This is interesting.
I need to dive in more.
And I have a really compelling subject line,number one.
I followed some of those Twitter threads thathad cold email templates initially, and those
were built for founders, but it works just aswell for VCs.
(29:57):
Do you know Sam Parr?
No.
So if you look him up, there's a podcast calledMy First Million.
So Sam Sam Parr owned the newsletter, TheHustle.
And he sold The Hustle for like 25,000,000 toto HubSpot.
(30:19):
He is like an expert at copywriting.
So obviously the hustle is like a newsletter,right?
So like just having that catchy subject line,that's super important to get people to open
up, right?
And it's kind of like your one liner, right?
Same thing when you go to a bar and you wannatalk to somebody or spark up a conversation,
(30:39):
you got that one liner, right?
So that subject line is essentially that.
He has a course actually as well on copywritingand even like high converting emails.
So I feel like that's definitely somethingthat's worth investing in at some point, know,
if you're thinking about sales or emailmarketing, just making sure that line is catchy
or at least just hiring somebody that's likesuper talented at, you know, email, email copy.
(31:05):
So it's super important.
Yeah.
Yeah.
Yeah.
Just the the way there's a craft to doing this.
You make them as warm as possible.
It's not really a cold email.
It's just like a a warmed up, well, lesswarmed.
Yeah, so-
But it still took a couple months though toclose.
It was a small check, but it was my first oneand I'm really proud of it.
(31:30):
It took three months to close, so they emailedback, set up a meeting, did the initial chat
with them, and then brought in my managingpartner afterwards to talk about our portfolio.
Luckily, I guess I have to preface this withcold emails are even more effective when you
(31:53):
have something in a show, like when you'vealready done something, when you've already
executed.
Luckily for us, we're a 2020 vintage, but we'vehad some decent performance so far with our 15
portfolio companies, and so we actually hadsomething to show.
We've already invested in 15 companies and soonto be 16, and so we had some stuff to talk
(32:17):
about in that email to give it more context andto actually entice people to want to set up a
meeting with you.
And then the the actual meeting over Zoom wasmore just talking about it and talking about,
you know, us as a firm and why we're differentand, you know, all that stuff.
Like and then it's when all the data andinformation comes in.
(32:41):
And, yeah, no, it was a good experience,though.
Very long quote, but it was
And, you know, different LPs are gonna havedifferent questions.
Right?
So there's gonna be a lot of different types ofquestions depending on the persona.
So if you're a small check, if you're a small,you know, high net worth individual, you know,
(33:02):
you're probably going to ask the same kind oftypical questions you might be asking if you're
in an angel investment, Just kind of kind ofgetting to know the person.
And then obviously, you go institutional, youwant to learn a lot more of the quantitative
track record numbers and know a little moreabout, you know, your portfolio strategy.
I think what's also important when you goinstitutional is thinking about what your
(33:22):
larger institutional vision is, what's yourplan for staffing?
What's your plan for infrastructure?
Because a lot of these bigger institutionalallocators, they're trying to re up, they're
trying to invest and then reinvest and recycletheir proceeds.
So it is kind of a long term game.
(33:43):
But that was really good.
What else have you learned in the LPfundraising process?
Luckily for us, so we have like our LP base ispretty diverse, it's high net with family
offices, either offshore or in New Zealand, butwe also have institutional capital for our fund
(34:03):
one, and so the sovereign fund here actuallyhas a fund of funds arm to it that invests in
VC funds here.
They're called NZGCP Elevate New Zealand, soit's a fund of fund, and so we went through the
institutional DD process and came up the otherside, and so they put in 15,000,000 New Zealand
(34:27):
into a fund, so that was a great experience forlearning about institutional capital, as you
say, just learning all the other stuff that'sinvolved and how different it is to pitching
maybe a single family officer or a high networth individual.
(34:48):
For me, I'm still learning a lot on the LPside.
The art of selling but not selling is reallyimportant.
Oh, yeah.
With them, it's about who you know.
It's so much better to have someone vouch foryou that knows you and your fund, and they can
(35:10):
vouch for a family office that is looking atdiversifying into a venture fund.
It's just so much better to have someone thatcan vouch for you.
Yeah, what were some things that you learnedgoing through the institutional due diligence
process?
Definitely having a because I wasn't too a partof it because I'm but one of the things is
(35:38):
tightening investment thesis.
Yeah.
And so prior to that, we were more of ageneralist sector agnostic fund.
We still play in pre seed and seed.
One of the things is having more of a focus.
Mhmm.
So, you know, going out of that process, we'vewe've really thesis into four main areas now.
(36:06):
So vertical AI machine learning, the future ofmedia content and games.
So I failed games in uni, but now I'm investingin games, which is funny.
And climate tech is the main three buckets thatwe invest in.
Majority of our portfolio right now is verticalAI machine learning.
Sure.
That's probably the one thing is just having tofocus in also.
(36:29):
Yeah, do they want you to, and I think animportant thing too is seeing how that evolves,
right?
Because you have those two to three differentsectors you're focusing on now, you know, does
it make sense to evolve that?
And if so, why?
Like, I think that's definitely something thatI've heard too, like, people are going to ask
like, Oh, what, what triggered the change?
(36:51):
You know, is there something that you believeor something in your strategy or your thesis
that really drove changing that strategy?
Yep.
And then I think they also probably wanna knowwhy you even have that strategy.
Right?
So probably I'm thinking some having some dataaround that to really back why you think that's
a good decision to go about that, right?
(37:12):
Yeah, and that's what they asked us is like,why are you guys now focusing on this?
So for the AI machine learning side, ourmanaging partner ran a seed fund and raised
three funds in California, so that's where hekind of learned his trade, then he's moved over
here and launched Hill France.
But before that, he was investing in verticalAI machine learning robotics, and so that's a
(37:38):
sweet spot.
And on the gaming side, the gaming side isactually pretty awesome because in New Zealand,
we have a growing video game market.
Mhmm.
And, I mean, we've generated more than 200 milin in export revenue from just our games alone.
Oh, wow.
So it's a it's a growing market here.
(37:58):
I don't know if you guys if any of you guys onthe call have have played Path of Exile or
Balloons Tower Defense, the one where you're,you know, throwing darts at a balloon.
Oh, we made that in New Zealand.
Oh, wow.
I love Balloons Tower Defense.
What would have probably been my favoritestrategy game growing up in the on the
computer.
Yeah.
So I'd
The studio is called Ninja Kiwi, and they exitup for 200 mil to NTG Group in Europe, and most
(38:28):
of the other large ones have investment fromTencent or have been acquired by Tencent.
There's a huge gaming market here, and sothat's where we see, I guess, an alpha here is
that it's growing.
We really want to incubate some of the moreindie studios here so that they can get to that
stage.
(38:48):
And also, have some of the most talentedanimation VFX people in the world at Weda
Digital, who now have just exited to Unity forabout a billion bucks, and now are looking to
do some other stuff.
And so we have a pretty awesome talent poolhere in New Zealand to go off.
(39:09):
And that's kind of our thesis around futuremedia content and games.
But also I just love playing games, so I justwant to invest in stuff that I want to play.
Yeah, I mean, be excited about what you'reworking on.
Tell us a little more about New Zealand.
Just tell us about the ecosystem.
How has it evolved?
You know, so you tell me about video gaming.
(39:30):
It's cool.
But what are the other hot industries andwhat's picking up there?
Definitely deep tech is a focus here.
Mhmm.
Deep tech, agri tech has always been I mean,we've always been an exporter of milk and
dairy, but now people are heavily going intothe deep tech side of things here in New
Zealand.
(39:54):
More than 50% of the investments done last yearwere in deep tech companies of varying degrees
of stages, but that's where the trend lies inNew Zealand right now, although we don't really
play in that space unless it's it's climatetech.
What I would say is, from my observationsanyway, is the New Zealand startup ecosystem
(40:18):
and even funding it here is still at itsadolescent stages.
It's not nearly as mature as California, evenAustralia.
Australia is more of a mature market than overhere, so it's growing.
I think it's mainly because we haven't had toomany wins on the board yet in terms of startups
(40:42):
that we can take inspiration from.
We've had Rocket Lab, Vend exit for about 500mil sequin for about $1.01 bill.
Mhmm.
But not too many, but I think now we're gettingthere now with I mean, like, few years back,
you know, there were you could count the amountof VCs here on one hand.
(41:09):
Mean, when we were chatting on the phone, wetalked, like, I know, like five or six VCs, you
knew all of them, right?
So it's kind of, I mean, it's, I would say it'sthe same thing in New York.
So I was joking, like, few hours ago, I went toa happy hour, like this Tuesday in New York,
and like, it was the exact same people at ahappy hour from like a week ago.
(41:31):
Yeah.
So it's even though you think like, thesecities are big, like those communities are
still small.
And it's like the same people, right?
They go to these events.
So, So I totally get it.
There's more Are there more venture funds now?
A lot
more venture funds now.
And a lot like we started in the height ofCOVID.
We launched a fund, some of the other fundsalso launched during this time.
(41:55):
And so we have more VC funds here.
A good thing about what happened in COVID ispeople started coming back to New Zealand and
they started starting companies.
And so we've funded two companies that havestarted out of COVID from founders just wanting
(42:15):
to actually solve a problem and make a change,and COVID was just the right time to do it.
And so we've also seen an explosion of startupshere post COVID, so post So 20 most of them are
operating in the pre seed stages right now.
There's not too many later stage companieshere.
(42:37):
Although, yeah, there's not too many laterstage companies here.
Yeah.
It's mainly like the ones that we see anyway,our our seed pre seed.
Yeah, sure.
And how you know, so I'm just curious, so whatare the biggest industries in New Zealand?
So like, what do people do for a living outsideof college, right?
(42:59):
So for example, like in New York, it's financein surprisingly, in Utah, I was curious why
there were so many fund admins in Utah, youknow, and Neil, you might be laughing about
this, right?
But I actually asked the fund admins in Utah,like, what is it?
Why are there so many in it?
And I guess they just have a really goodaccounting program.
So like Utah's accounting, New York is finance,Silicon Valley is, you know, obviously,
(43:24):
software and tech.
So what's kind of like the main industry thatpeople go into, like after they graduate?
Like, where are the most of the jobs in NewZealand?
I'm not too sure, Joel.
I just know that previously it was agriculture.
It was dairy.
Oh, agriculture. It was
(43:44):
It was our Got largest export.
We have really great land and great dairy farmshere, and so we export all over the world for
dairy, and one of our largest companies here isFonterra, which is a publicly listed dairy
company.
Yeah, I'm not too sure.
(44:05):
People 90 something percent of our GDP is madeup of SMEs, small, medium, and large
enterprises businesses, Sure.
Mainly small business owners here, but I can'tsay, I'm not informed enough to say where
(44:25):
people actually go.
Yeah.
Yeah.
What I what I do want is for the techecosystem.
And actually, would be before it wasn't, youknow, it wasn't viable to work at a start up,
and now it is.
Mhmm.
Yeah.
We just got Yeah.
We had a, you know, I had a food tech panelearlier today.
So is that a hot industry right now, of likethe lab grown plant based food industry?
(44:52):
You think that's evolving, especially since youguys have a deep tech ecosystem now?
Yeah.
There are there are some that just got fundedMhmm.
That are in that food tech and or also meatalternative or Yeah.
Space.
There's even a there's even a, a meatalternative VC here called Better Bite.
(45:15):
So they just invest in vegan or meatalternatives.
Some other people, other companies are I knowone that is doing some stuff on whole proteins
as well, but all the other deep tech stuff isrenewable energy, waste reduction, energy
(45:36):
efficiency, or ways to fix that.
What else is there?
Yeah, those are the main ones.
Those are the main ones.
Yeah.
Cool.
So, you know, we got around eight, eightminutes here.
So anyone in the audience, feel free to chime,chime in if you have any questions, a couple
(45:58):
things I can do to tee up some questions forthe audience is, you know, number one, what do
you look for in founders, right?
So the founders that you have a lot ofconviction in that you're taking to the
investment committee, what are some of thepatterns you're seeing?
And then after that, maybe you can just give usone or two tips on how people can, you know,
break into VC.
(46:19):
Gotcha.
So because we invest in pre seed seedcompanies, I guess everyone says this, but it's
all about the people.
That's investing in someone that I would loveto work for is number one, investing in people
that have an audacious vision and can actuallyback that up with either their previous
experience, but we're we're also open to peoplethat don't have that previous experience, but
(46:44):
they're just hungry.
Yeah.
Because sometimes that's what happens.
And so, yeah, investing in the people is thefirst part.
And pretty much the only part, to be honestwith you, in VC.
For the second question, tips for people to getinto VC.
But real quick.
(47:04):
So, you know, real quick before we jump, Iwanna double click on that a little more, like,
because pre seed is really difficult becauseyou're backing those people that have industry
experience.
Are you looking for people that have started acompany in the past?
Or is it okay, they don't have any trackrecord?
Could they be a first time founder and you'restill okay, so what, what, like the what is it
(47:30):
to do over the fence?
I guess, know, because they've got they've gotsome work experience, they might have been in
cloud computing for a long time, and they'relaunching a cloud computing company.
What's kind of that x factor that gets you overthe the investment decision?
How obsessed are they over the problem thatthey're solving?
Yeah.
Is that one?
(47:51):
Sure.
Probably the answer to that question is thatall of our founders are just obsessed with
solving a particular problem in their field ofchoice.
I'd like to say that they're giving you aglimpse.
These founders that we've invested in aregiving you a glimpse of what their future looks
like, and that passion is what tests me overthe edge to invest.
(48:20):
Yeah.
Yeah, that's good advice.
And then, you know, you're kind of like me, youhad a non traditional path, you know, of the
tech and startup ecosystem.
So that was somewhat similar path to me, know,it kind of was a I mean, look, you had a big
role at a massive bank, had an institutionalfinance role.
And same thing, I was like, wow, this is areally big company.
(48:43):
So, know, what, what are some tips that youwould give to some people, maybe some options,
if people wanna pivot into VC?
Talk with founders.
Talk with get in touch with founders.
Funny enough, they're actually easier to getcontact with in VCs over here.
(49:07):
Get in
touch with them.
They're always open to chat and talk to youabout their startup, about what they're doing,
what they're building.
Get in touch with them, have a coffee, justunderstand a little bit more about their
problem.
If you want to get into VC, you just got beendlessly curious about all these startups that
you're talking to.
Otherwise, what are you doing before?
(49:29):
You got to want that that drive to learn moreabout different companies and different
technologies.
Otherwise, it's gonna get a bit a bit dull.
So that's number one.
To get into VC, it's mainly, yeah, like threethings, deals, portfolio management, and LPs.
(49:49):
You can provide value in any of those threebefore you even, you know, apply or approach a
VC.
You're more likely to get that role.
If you say to a VC, I have an LP that would beinterested in your fund, that'd be awesome.
(50:11):
Or here's a deal that you haven't thought ofthat I think would be really good for your
investment thesis, and I think you should doit.
Do I get?
So funny story, I guess, to end off with.
When I was doing the final interview with Rob,our managing partner, I knew he was into games,
(50:35):
video games.
He talked about it.
He wrote blogs about it.
And so I spent half an hour of a one hourinterview interviewing him and asking him about
games.
And I think doing your research on theindividual partners within the firm is so
important because you also have the brand nameof the firm, but you also have the personal
brands and reputations of each partner in thatfirm.
(50:58):
And so leveraging that is really important aswell.
Yeah, it's good advice.
Anybody in the audience have any questions?
Yeah, I have a quick question.
As we're talking about founders and VCs, likehow people get into VC, what do we look for in
(51:20):
a founder?
I'm kind of curious what the overlap between aVC is and a founder.
Because I almost feel like there is probably abig overlap.
But I want to know the distinctive qualitiesbetween a VC and what a founder is from your
guys' perspective.
(51:42):
The parallels would be different in the abilityto sell and storytell.
Are you asking also the the differences aswell, Joseph?
Yeah.
So you mean as a VC raising money versus afounder raising money?
Like what the like the different paths are?
(52:03):
Yeah, exactly.
Because
Got it.
Look, I mean, I would say it just, you know, ifyou're a small fund, I mean, and Alex, you can
confirm this, but I feel like if you're a smallfund, you're, you know, your approach is very
similar to, to being a founder, right?
You're building a website, and it's probablylike a website on WordPress or something,
(52:25):
right?
And you're built a lot of the content andcommunity you're building on your own, and
you're kind of bootstrapping in the beginning,you know, I mean, so I would say a lot of it is
similar.
It's just your clientele, you can probably goon, you know, and you can use like NFX and
there's like hundreds of 1000s of, like VCs,right, you can kind of look up who the VCs are.
(52:48):
I mean, there's a lot more information on whothe VCs are.
I'll show you guys real quick.
So if you go to, I think NFX is like a techenabled VC fund.
But like they hold on, let me just pull thisup.
So if you go to NFX signal, I'll just do thisand I know we're out of time.
(53:09):
But it's pretty cool.
So you can go into NFX signal, and just likelook up any VC, right?
So if you go in here and you do like climatetech, you know, it's in here, like they like
they'll break out like so many different subindustries and you can see who these VCs are
and could probably figure out a way to getahold of them, you can connect with them on
LinkedIn.
You know, a lot of LPs, I think it's just muchmore difficult.
(53:31):
And there's just a lot more friction.
Mean, it's tough to also engage with a lot ofthese VCs, at least the information, you know,
it's easier to know who they are versus, youknow, most family offices don't want to be
found.
So that's what I would say.
But, you know, you're still building apipeline, using a business development strategy
(53:53):
to close capital.
Yeah, the difference part is, yeah, I agreewith Joe where we're fund one, we're a small
tiny fund and we've done stuff that, we'redoing stuff that's not scaling, just to get
across the door, close our fund and do deals.
(54:18):
The difference one is hard.
Yeah, It's something that I need to marinate onin terms of what the differences are.
I guess, for us, we're not really particularlysolving a problem.
We're investing in problem solvers.
That's one thing.
And contrary to popular belief, we're not astech enabled, like VCs aren't as tech enabled
(54:42):
as startups are.
We don't leverage tech as much, which I reallywant to.
I want to build our own tech stack.
That'd be awesome.
Yeah.
Yeah.
Alicia sorry.
Ellis, you had a question?
You're on mute.
Sorry.
No.
Yes.
It's it takes a little while sometimes.
(55:03):
Thank you.
I wanted to ask what don't you look for what iswe ask you for the yes right what do you look
now what don't you look what are those thingsthat are like what we never talk about?
(55:23):
In terms of, like, investment or sector ortechnology, us, we don't invest in crypto
blockchain companies.
Mhmm.
Like, if if we invest in games, it'straditional game studios.
It's not blockchain games because in mypersonal opinion, it's not the games aren't
there yet.
They're not fun enough for the user adoptionfor people to actually play it for the
(55:48):
enjoyment of the of the game and not play it sothat you can trade NFTs.
So that's one.
What I don't look for is what I see a lot ofthe time here, that's big problem here is
pretty bad cap tables.
A lot of the founders have have given away toomuch equity in the pre seed stage and makes
(56:11):
them unfundable for future rounds, especiallybecause we want most of our portfolio all all
of our portfolio companies to eventually raisecapital offshore.
Their cap table has to be pristine at thestart.
So we can't invest in companies that have givenaway too much equity at this Yeah.
(56:33):
And there's misaligned values there as wellwith the companies.
The more funding rounds they go through,they're going get more and more diluted.
And if shit hits the fan one day and they ownlike 2% of their own companies, they're just
gonna say, screw it.
I want out.
Yeah.
So those those are the main things, Alice.
(56:55):
Mhmm.
Thank you.
Cool.
Well, hey, I know we're out of time.
Really appreciate it, Alex.
This is a lot of fun.
And everybody else, hope you guys have a goodrest of the day or evening.
No, this is awesome, guys.
Thanks for having me
is great, man.
Really awesome.
Really fun learning about the ecosystem and thethe villas that you guys have built.
(57:18):
Yeah.
Feel free to connect with me on LinkedIn orwhatever or ask me questions about New Zealand.
Happy.
If you guys are coming in New Zealand, let meknow.
It's a small it's a small village in itself.
So Yeah.
We all know each other.
Yeah.
I totally agree.
(00:01):
Totally agree.
He's the guy that gave me inspiration to hop onTwitter and start reaching out to potential LPs
on Twitter.
And one of them, actually, one of them isactually from The first one that I got was from
New York.
And so he yeah.
He was my first LP, and I got him from Twitter.
How you know, so what advice would you give?
(00:23):
So how did you obviously, you don't have towouldn't have to put this person on blast, but,
how did you do it?
Did you just DM somebody?
Like, how did you know that person was an LP?
Welcome to The Investor, a podcast where I,Joel Palafinkel, your host, dives deep into the
minds of the world's most influentialinstitutional investors.
(00:45):
In each episode, we sit down with an investorto hear about their journeys and how global
markets are driving capital allocation.
So join us on this journey as we explore theseinsights.
Everyone's story of how they got into VC isdifferent.
So yeah, happy to have you to talk about thatif you want.
(01:05):
Yeah, you teed it up for me to usually havepeople just talk about where they grew up, what
they studied.
Some people are aware of private equity andventure capital, based on their upbringing and
their family background, where a lot of peopleknew nothing about it like me, right?
I was really in the tech space, you know, lotof my family was in medicine and, and tech, and
(01:28):
then I kind of learned about venture as I grewin my career.
So in contrast to that, I'd love to hear yourjourney, how you broke into venture, where did
you start?
What did you study?
And then we'll just kind of, you know, take itfrom there.
Sure, more than happy to.
So my kind of story is I was born in NewZealand, born and raised in New Zealand.
(01:50):
My mom was actually born here as well.
She's New Zealand born Chinese.
But my dad came over here from Vietnam as arefugee.
He came, I think he arrived in New Zealand agesago when he was 15, so he came here by himself,
kind of escaped communist Vietnam at the time.
(02:11):
Yeah.
So he he raised me, met my mom, and he's he'san entrepreneur himself, actually.
He runs his own kind of inbound tourismbusiness.
Tourism is a big a huge thing here in NewZealand.
Sure.
And yeah.
So I kind of grew up the normal way.
Went through high school, had no idea what Iwanted to do outside of high school.
(02:33):
Ended up ended up choosing computer science andlaw, so a conjoint degree at at the local
university here.
Had no idea, still had no idea what I wanted todo.
So I ended up failing every single one of mypapers because I was playing too many games
(02:54):
during the time.
I was playing a game called Survival Evolved,and I ended up just funking.
And so I dropped out, worked at thisengineering consultancy for a year, and during
that time really built up some people skillsbecause it was quite a people orientated job,
just engaging with people.
(03:14):
Somehow found out that I liked.
I spent most of my salary, just saved it, andinvested it in index fund and whatnot, and
that's kind of when I started gettinginterested in finance and personal finance.
So I thought, you know what, screw it, I'mgoing go back to uni, study finance.
And so I went back to another universitybecause the first one wouldn't let me back in
(03:36):
because of my shit grades, And studied financethere for two and a half years.
And throughout that period, got exposed toentrepreneurship and startups through a minor
that I was doing.
And that's kinda when I started catching theplug, I guess, so to speak.
I did heaps of entrepreneurial pitchcompetitions during my time at uni and thought,
(04:01):
man, this is awesome.
And so then I just started reaching out topeople all throughout Auckland, New Zealand,
founders all throughout the country, basicallyjust asking for a coffee and a chat and doing
my research on them, asking them, you know,what problem are you solving?
Are you guys hiring?
(04:22):
And then I somehow ended up working for twostartups.
Yeah.
So I worked
for So you took coffee chats with VCs trying toget a VC job or trying to get
a No, startup with startup founders.
Okay.
Got it.
Yeah.
I I had coffees with founders specifically.
Mhmm.
At that point in time, I had no idea what VCwas.
I just knew that people were doing like,working on and building some really cool shit,
(04:45):
and I wanted to be a part of it.
And so I ended up working for two startups.
One was a student discount app, which allowedany tertiary student to get discounts on
clothes and food around the campus.
And then I joined later in that startup andthey were trying to pivot to a learning
(05:08):
management system, but that ended up goingunder, so that failed.
And then I moved into another startup rolewhere I was doing a lot of business development
for a fintech startup here.
So over here, we have a kind of like asuperannuation four zero one k that you guys
have over there, but it's called KiwiSaverhere.
(05:28):
KiwiSaver, you know, you contribute apercentage of monthly or form release salary to
this superannuation fund.
And so, this startup worked on advising youinto the right fund.
So, if you're older, have a higher income,maybe you should be in a more balanced or
conservative fund.
(05:49):
So they did Kiwi.
So it's kind of like an index fund?
Yeah, it was more advising, like providingrobot advice for investors into what fund they
should be in, whether that is an index fund ora more actively managed fund.
So it's kind of like wealth planning, I guess,but it's a little more Is it automated, so it's
(06:11):
not humans in there?
It is automated, but there always needs to be ahuman element to financial advice.
And so they would give you the advice and thena financial advisor, pair you with a financial
advisor to then revisit it if you need changein the future.
And so they were called National Capital, andthey actually ended up getting acquired quite
(06:34):
early in their life cycle.
So they just got acquired by a local wealthmanagement firm here, and I left and didn't
really didn't really know what I wanted to doafterwards.
I had a job lined up at a big bank.
I interned there, and I just thought, man, Ireally don't want to go back to that place.
(06:55):
It was boring.
Felt like you were getting a bit siloed andit's just a small cog in a really big machine.
That's what I felt.
And then one of the founders that I connectedwith ages ago, he was like, Hey, there's this
internship at this VC here.
(07:18):
A very new VC started in 2020, and it's calledHillfairance.
And I think you should apply.
And so I thought, Yeah, I don't even know whata Hillfairance is, let alone VC.
I knew that there were some VCs here, someinvestors that invested in stocks, but I didn't
really know what that entailed.
(07:41):
And so I applied like everyone else.
It was kind of a stock standard applicationprocess.
You apply, you do one of those recorded videointerviews, and then you have a one on one chat
with the managing partner.
So at that time, so that was, I think it wasApril of last year, April 2021 is when I did my
(08:06):
one on one with Rob Vickery, who's the managingpartner and founder of Hillcrest.
What do you think of that?
What do you think of those automatedinterviews?
I think it's a good way as an employer to get alot of candidates at scale, because I can
imagine it's just a huge pain to scheduleinterviews.
Know, you as an interviewer have to really justblock off your whole day and just meet a lot of
(08:28):
people.
And it's not only you a lot of times if youwork in an organization like the interviewer
has to meet multiple people.
So I feel like it's, it's a scalable way to geta lot of volume of candidates.
And then it'd be cool if there's like some AIthat grades the candidates, I don't know if the
tech is like that advanced.
But you know, I'd love your thoughts on thehiring manager side and then just the person
(08:56):
that's trying to get a job if that's a goodmethod for them.
On definitely the hiring side, hiring managerside, it's definitely a scalable way for you to
do it and get in bulk the amount of applicantsand review them really quickly.
My experience with those video interviews as Ihad to do them was the big four accounting
(09:19):
firms and all the other ones is it's great.
And they ask you some really good behavioralquestions, but I guess it's not suited for
everyone.
So you could be an awesome candidate, but maybeyou can't think immediately on the fly and
given the time limit, you only get a minute orthree minutes to answer the question.
(09:41):
So you could be an awesome candidate, but nothave I guess, quick word to communicate.
Yeah, I think also sometimes like when you'resystematically getting questions, it's not a
natural experience and a lot of times you mightmess up or maybe the question goes by too fast
or something.
Yeah, and you gotta redo it.
(10:02):
Can't redo it.
Mean, but you know, you can't redo it.
I guess you can retract what you say, right?
So like, you were interviewing me now, and Imisspoke, I can be like, Oh, so not sorry,
never mind.
But I guess without one, it's, you know,there's no way to redact anything because it's
already been submitted.
I guess there's also the pressure of you haveto get it right the first time.
You have to get it right the first time,otherwise you're screwed.
(10:24):
And that mindset screws you up when you'retrying to answer the question.
And I had that happen to me multiple timeswhere I just froze during one of those video
interviews and I'm like, oh, I'm trying to getback to what it was.
I mean, I think is cool Oh, go ahead.
Sorry.
I'll say my point whenever you're done.
Okay.
(10:45):
On the actual applicant side, yeah, I felt itwas good, but I'd rather speak to people in
person.
Of course, that's not scalable and meaningfulin person.
Mixed feelings about those vinegar interviews.
(11:05):
I mean, I was just gonna say, I think it'sinteresting to see us getting towards a skill
based economy.
So there's a friend of mine that built thistrading app, and you can trade, it's not real
money.
I think sometimes they award you some virtualmoney.
So it's real money they award you into theplatform.
(11:26):
If you perform well.
And what you do is you kind of like papertrade, but you trade and they teach you how to
invest like an institutional investor.
So you're kind of managing an investmentportfolio.
But I think what's really cool is submittingthat data to a hiring manager, because that's
essentially at the end of
the day, right?
In the investment space, you want to look atalpha, especially not so much in venture,
(11:50):
because it's illiquid.
But when you get into like a liquid assetspace, you you know by the end of the day if
you're up or down.
And you can just tell immediately by the valueof your holdings, you know, if your performance
is good or bad.
And I think that's super valuable to seeversus, you know, just a bunch of psychology
(12:10):
tests and personality tests and obviously somefinancial modeling exams.
I think at the end of the day, are you a goodtrader?
Can you invest and manage a portfolio andprovide alpha?
So I think I'm really excited about just kindof hopefully technology that can just show your
performance already, like instead of just a lotof, you know, yeah, showcase it.
(12:34):
And I think that I think there's someinteresting use cases for venture to, like, you
showcase a deal and you kind of talk about whythat deal is a good deal, and then maybe the
best ones kind of get ranked.
And then you submit that to VC because at theend of the day, when you interview for venture,
what do you do?
Talk about a deal or you send over a memo,right?
And I think if you could do that and everybodydoes that and kind of the best ones already
(12:59):
bubbled, those people should be going, I feelto the tier one VCs because I feel like, I
mean, it's super valuable to go to a topschool, but there's also really smart people
that have gotten into great funds from being ata at a startup or, you know, just kinda
networking as well.
So I just think, you know, not to not to derailthis discussion, but I just think it's really
(13:22):
cool.
I mean, Google is kinda doing that now withdevelopers.
Right?
So like, if you write well, from what I'veheard, I heard that if you're searching some
unique keyword when it comes to data science,and you start coding or doing some algorithms,
like Google will know, and then they actuallywill send you an application or send you an
invite to to to apply.
(13:45):
So they, know, so I think that's kind ofinteresting.
Yeah.
Just kind of like the future of work and yeah.
Future of work and Yeah.
Future of employment.
So Yeah.
That that's funny that you mentioned the whole,you know, using having something to show on
your CV that you've actually done something.
Like I used to run the investment club at ouruniversity and we used to put on those training
(14:09):
comps.
And then so a lot of those people that won it,like first, second, third, usually are the ones
that got into those top tier funds, thosetradings.
And yeah, it's good to have some of that, allthe extracurricular stuff that the students
have done and just people do in general arewhat set themselves apart, I think.
(14:33):
Yeah, the deal side as well with VC.
I always tell people to bring an LPs and theJVs to see, to add value, not just a deal,
bring it up as well if you can.
I'd say that's more valuable than bringing indeals because I mean, there's always deals, but
you can't fund the deals if you don't have anycapital.
(14:55):
So I mean, I think I always believe, you know,and the ability to do investor relations, you
can raise money, you can you'll always beemployed.
And same thing if you can sell, which isinvestor relations, You'll always, you'll
always make money, right?
Somehow.
So definitely it's a
That's something I'm learning right now as wellbecause I'm a senior associate at the firm and
(15:19):
there's three of us.
There's two partners and then myself.
I joined last year and I take part in prettymuch everything.
So I do the deals, portfolio management, andthen my managing partner gets me on some of the
LP side, we're still raising our funds.
We're closing our fund at the end of the year.
(15:39):
And so that has been a really eye openingexperience because you're basically pitching
like a startup.
You're pitching your firm, you're pitching whatsets you apart from everyone else, why founders
want your capital.
And yeah, just learning that it's all sales aspart of the LP process.
(16:00):
I managed to get a couple under my belt, whichis really- Oh, wow.
Pretty proud of.
That's great.
But it's still an ongoing learning process forme in terms of how to pitch and how to find
them as well.
Let's check that out.
Yeah.
Yeah, they don't want to be found.
No, they don't.
So that's
the tricky part.
(16:21):
So a lot of times it's, you know, it's I trulybelieve in the law of attraction.
So, you know, you attract, don't chase, right?
So if you can build something amazing, and youknow, especially if you're somebody that's
super talented, people will be attracted toyou.
And, you know, look, I mean, the best deals,best funds are usually oversubscribed, even in
(16:45):
bad markets, because they attract.
And, you know, it's the product, I would say isnot really, there's only so much you can do
with a product.
Like if you think about, you know, Bridgewateror any of these big funds, you know, there's
no, there's no magical, mystical thing thatthey're doing.
(17:05):
They're just great at building content andcommunity and really attracting the right
investors, you know, and if you think aboutlike, historically, right, a lot of these,
these hedge funds, you know, there's always,you know, the benchmark usually in terms of
returns, and I mean, IRR for VCs, on average,like 22%, 23%.
(17:25):
And even hedge funds, right?
Hedge funds, their return on average is, youknow, probably in the late 20s, early 30s.
So again, you know, what you have is reallySequoia, which is essentially a media company.
When you think about Bridgewater, they've gotthe principles and they've got all those media
properties as well.
(17:46):
So I think it's at the end of the day, it'slike the brand and the marketing.
I mean, if you look at Nike, like Nike is ashoe, right?
But what really makes it expensive is just theswoosh sign.
It's just the the brand, right?
So I think that brand recognition is reallywhat kind of makes it premium, but it's nothing
really physical or, or anything tangible,right?
(18:11):
It's just kind of perceived, perceived value.
So if you are perceived as like a premier fund,then you can charge, probably a little bit
higher on the management fee and you're justoffering something that's hard to access.
And then the thing is like communicating andhelping people understand that it is valuable.
(18:33):
That's another thing too.
I agree.
And something I'm learning throughout this pastyear is how do we build our brand as a firm?
This illustration in the background is actuallythe Hill Farrance village.
So Hill Farrance is actually named after ourmanaging partner's ancestral village back in UK
Somerset.
So we have this village philosophy, thisvillage concept, where all of our startups are
(18:59):
like, Right there, they all live around here.
And then we have Well, I'm probably over herebecause I'm separated from one.
But yeah, the whole village concept is reallystrong for us, so much so that we give a
portion of our carried interest to ourfounders.
So it's interesting.
(19:21):
I've never heard that before.
Yeah, it's all about the village.
Call it collaborative carry.
So everyone is basically invested in each otherwhen they come into the fund or when we invest
in them.
And so they're all invested in each other'ssuccess.
We've seen that flow through into the Slackchannel, everyone's chatting to each other,
(19:46):
sharing sales leads, hiring leads.
If one hiring person or talent didn't work outfor one company, they'll share it with a whole
lot.
And also sharing connections as well.
So we've seen it, although it's still earlydays, we've seen it, it's been quite awesome to
(20:06):
see everyone just so involved in each other'sbusinesses.
Yeah.
Yeah.
So that's so that's
no, that's, that's pretty interesting.
I mean, I, I'd be curious to know how youfigure out the economics.
Is it just a portion of the 20% that just getsdistributed to all the portfolio companies by
(20:27):
the end of the fund?
Yep, so we have a target set amount ofportfolio companies.
We reserve 20% of our carried interest for ourportfolio founders, and that gets evenly
distributed across all of the founders,
regardless That's of check interesting.
So there's other things that I've seen too.
(20:48):
I mean, there's a fund that I met recently thattakes some of their carry their profits, and
they donate it to charity.
And that actually fits with the mandate of somespecific institutions who are, you know, really
aligned with a charitable cause.
And that's how you can get over the fence.
Because most VCs, if you think about it, right,they're not, they don't, they're not known to
(21:10):
be a charitable cause, right?
There's a capitalist clause, but not as muchcharitable vehicles available.
So I think if you can offer kind of outsizedreturns, and the LP doesn't get impacted
because it's none of the LPs returns, it's onlythe carry.
It's kind of a win win.
It's a slam dunk, Because you're giving, you'reproviding social good.
(21:33):
Mean, the GP, I mean, I think this GP didreally well in their career.
So I guess they don't really need the carry,but I think there's probably just great
opportunities to give back and get involved incharity work.
That's really awesome to see that.
They did theirs, and I think I saw recently oneof I don't know if it's a fund over in The US
(21:55):
or one of them is re recycling the carriedinterest into building up their platform.
Oh, interesting.
Like their plant like their online platform?
Yeah, the online platform or the platform thatthey use to service their founders.
I forgot what fund it is, but I saw it onTwitter.
Twitter's an awesome place, by the way.
Love it.
(22:16):
I just got into it now.
I know.
It's an important platform for VC.
I mean, I'm still building my community there.
But, yeah, I mean, it's definitely important.
All the VCs and LPs are there.
You know, what I
would my first LP.
Yeah.
So what I would say is all the LPs arewatching.
They're all on Twitter.
They're just don't want you to know.
(22:36):
But you know, they're watching, they'refollowing like, you know, OpenLP, VC Twitter.
So they're definitely following all thosehashtags.
And when you post stuff, and especially if youpost it frequently, I feel like you're always
going to be in their newsfeed, right?
So that was kind of a of advice that I got fromsomebody else, know, always be in the newsfeed.
That way you're kind of, you know, people justkind of following you from afar and then
(23:00):
finally they connect with you, you know?
So,
yeah, on that, I want to give a quick shout toone of your alumni, Mac the VC.
Yeah, he me a lot of inspiration in terms ofactually going on to Twitter and find He raises
his first fund on Twitter.
And yeah, so Mac was, know, I'll give him ashout out when I post this episode.
(23:24):
But yeah, Mac was, he was in my, you know, wehave this thing, I have a new program called
the fund accelerator that's been around forabout And a we take in about 40 to 50 funds at
a time.
And Mac was when it one of our cohorts, butyeah, mean, he, what he did with his platform
was just quite amazing.
(23:45):
I mean, and he wrote about it to to raise his,his fund, he took about 1,100 meetings.
And there's actually two or three other VCsthat wrote about their journey as well.
So Elizabeth Yin is another one, I think sheraised 11,000,000.
And she actually showed a Google Doc, whichlike mapped out every single meeting she took,
(24:06):
I think she obviously took the names out.
But you can just see the volume of meetingsthat it takes.
And, and, you know, that just tells you thatsales, right?
Sales, you're really building.
I feel like, you know, I know I've hammeredthis to, like, Alice on the line here a 100
times.
So, like, you've got volume, and then you'vegot, you know, you gotta kinda filter a lot of
the people that are not qualified.
And then, hopefully, those 10 meetings a daythat you have, they're like really high
(24:29):
quality, know, people that are interested ininvesting in your fund.
And then I think a lot of it is curation,right?
So like, if this LP is only interested, I mean,it's crazy.
So there could be an LP that's only interestedin healthcare, and they see you, you already
know it's not a good fit, but then they endedup just liking you, right?
And they're like, wow, cool, like you'reactually doing climate change.
(24:52):
I'm a healthcare person, but you know what, Ithink climate change is really cool.
And this is an opportunity for me to get intoclimate change, right?
So I think at the end of the day, you know,half of sales is storytelling.
So helping people understand, what your journeyis and what problem you're trying to solve, I
would say.
(25:12):
I totally agree.
He's the guy that gave me inspiration to hop onTwitter and start reaching out to potential LPs
on Twitter.
And one of them actually, one of them isactually the first one that I got was from New
York.
And so he was my first LP and I got on Twitter.
(25:33):
So what advice would you give?
Obviously, don't have to put this person onblast, how did you do it?
Did you just DM somebody?
How did you know that person was an LP?
I started going through all the hashtags, justgoing crazy throughout the hashtags and going
(25:56):
through threads, I noticed a lot of LPs, someare more vocal than others, but some just want
to be low key.
And so went through the threads, decided tocomment on some of them, and he actually put
his email in one of the threads.
Oh, interesting.
(26:17):
Oh, wow.
And I was like, gotcha.
And then I basically got a ton of my Yeah.
To into email him, based on Twitter, andemailed him.
But some of the other ones I use them forHunter to find their emails, and just so I
found the emails because they're on LinkedInand Twitter.
(26:39):
Cold emailed them.
Most of them were cold, actually.
Yeah.
Because they're all offshore.
And
so So how did you get their emails?
Do use, like, one of those databases?
Or you just kinda yeah.
Yep.
Yep.
Those those ones, they can just find youremail.
So Apollo is the one that I used.
Yeah.
So So does Apollo filter on like, can you docan you use it?
(27:02):
Because I know Apollo.
I think you can scrape emails or you candownload, like, data.
Can you do a filter on, like, single familyoffices in Apollo?
I don't know if you can do single familyoffices.
I know you can do it to search VCs.
I don't know if you can do it to curate like asingle family office database.
They probably have They didn't have it.
(27:25):
I just
Yeah, they have these companies too.
I mean, they look, just look up, just I betanybody here, if you just Google single family
office email list, you could probably downloadlike a list of like 10,000 single family
offices.
But the problem is like everyone else isemailing the same list.
(27:45):
Yeah.
So they're all just kind of hitting the spamfilter.
I think the challenge is too sometimes thosepeople they leave those firms and their emails
have changed.
It's not even the same organization thatthey're with.
So it's also like, if you're doing the samething that everyone else is doing, you're just
getting stuck in the same funnel and you'regoing to that spam.
(28:06):
I wanted to do something different, although Idid cold email, most of them.
I kind of made myself known before or just havemy name there or connect with them on LinkedIn
before I send them an email just to be a littlebit more memorable in their minds.
(28:27):
And then, oh, it was a long process, Joel.
It took like three minutes
you to email this person gold, and then, youknow, what do you recommend?
Do you recommend just sending the deck?
I mean, do you recommend doing a blurb?
Because this is the thing, there's, there's afine art to this, right?
So when you when you interact with people, youdon't want to, it's just like dating, right?
(28:51):
You don't want to tell, like your first datethat you have like, you know, you've had this
is your third marriage and, you know, you haveall this, you know, baggage.
You know, maybe you can bring that up in layerslike later on, but you don't wanna drop that
bomb like the first time and same thing, youdon't wanna give somebody like your data room,
(29:11):
like the first meeting, you wanna kind of teasethem and attract them with kind of something
exciting, right?
I think you want people to come on thatexciting journey with you.
Yeah.
I treat it like how a founder would how I wouldwant a founder to pitch up.
Us, like, give a tease, like, give, like, givesomething that would make our eyes light up.
(29:34):
Be like, oh, shit.
Okay.
This is This is interesting.
I need to dive in more.
And I have a really compelling subject line,number one.
I followed some of those Twitter threads thathad cold email templates initially, and those
were built for founders, but it works just aswell for VCs.
(29:57):
Do you know Sam Parr?
No.
So if you look him up, there's a podcast calledMy First Million.
So Sam Sam Parr owned the newsletter, TheHustle.
And he sold The Hustle for like 25,000,000 toto HubSpot.
(30:19):
He is like an expert at copywriting.
So obviously the hustle is like a newsletter,right?
So like just having that catchy subject line,that's super important to get people to open
up, right?
And it's kind of like your one liner, right?
Same thing when you go to a bar and you wannatalk to somebody or spark up a conversation,
(30:39):
you got that one liner, right?
So that subject line is essentially that.
He has a course actually as well on copywritingand even like high converting emails.
So I feel like that's definitely somethingthat's worth investing in at some point, know,
if you're thinking about sales or emailmarketing, just making sure that line is catchy
or at least just hiring somebody that's likesuper talented at, you know, email, email copy.
(31:05):
So it's super important.
Yeah.
Yeah.
Yeah.
Just the the way there's a craft to doing this.
You make them as warm as possible.
It's not really a cold email.
It's just like a a warmed up, well, lesswarmed.
Yeah, so-
But it still took a couple months though toclose.
It was a small check, but it was my first oneand I'm really proud of it.
(31:30):
It took three months to close, so they emailedback, set up a meeting, did the initial chat
with them, and then brought in my managingpartner afterwards to talk about our portfolio.
Luckily, I guess I have to preface this withcold emails are even more effective when you
(31:53):
have something in a show, like when you'vealready done something, when you've already
executed.
Luckily for us, we're a 2020 vintage, but we'vehad some decent performance so far with our 15
portfolio companies, and so we actually hadsomething to show.
We've already invested in 15 companies and soonto be 16, and so we had some stuff to talk
(32:17):
about in that email to give it more context andto actually entice people to want to set up a
meeting with you.
And then the the actual meeting over Zoom wasmore just talking about it and talking about,
you know, us as a firm and why we're differentand, you know, all that stuff.
Like and then it's when all the data andinformation comes in.
(32:41):
And, yeah, no, it was a good experience,though.
Very long quote, but it was
And, you know, different LPs are gonna havedifferent questions.
Right?
So there's gonna be a lot of different types ofquestions depending on the persona.
So if you're a small check, if you're a small,you know, high net worth individual, you know,
(33:02):
you're probably going to ask the same kind oftypical questions you might be asking if you're
in an angel investment, Just kind of kind ofgetting to know the person.
And then obviously, you go institutional, youwant to learn a lot more of the quantitative
track record numbers and know a little moreabout, you know, your portfolio strategy.
I think what's also important when you goinstitutional is thinking about what your
(33:22):
larger institutional vision is, what's yourplan for staffing?
What's your plan for infrastructure?
Because a lot of these bigger institutionalallocators, they're trying to re up, they're
trying to invest and then reinvest and recycletheir proceeds.
So it is kind of a long term game.
(33:43):
But that was really good.
What else have you learned in the LPfundraising process?
Luckily for us, so we have like our LP base ispretty diverse, it's high net with family
offices, either offshore or in New Zealand, butwe also have institutional capital for our fund
(34:03):
one, and so the sovereign fund here actuallyhas a fund of funds arm to it that invests in
VC funds here.
They're called NZGCP Elevate New Zealand, soit's a fund of fund, and so we went through the
institutional DD process and came up the otherside, and so they put in 15,000,000 New Zealand
(34:27):
into a fund, so that was a great experience forlearning about institutional capital, as you
say, just learning all the other stuff that'sinvolved and how different it is to pitching
maybe a single family officer or a high networth individual.
(34:48):
For me, I'm still learning a lot on the LPside.
The art of selling but not selling is reallyimportant.
Oh, yeah.
With them, it's about who you know.
It's so much better to have someone vouch foryou that knows you and your fund, and they can
(35:10):
vouch for a family office that is looking atdiversifying into a venture fund.
It's just so much better to have someone thatcan vouch for you.
Yeah, what were some things that you learnedgoing through the institutional due diligence
process?
Definitely having a because I wasn't too a partof it because I'm but one of the things is
(35:38):
tightening investment thesis.
Yeah.
And so prior to that, we were more of ageneralist sector agnostic fund.
We still play in pre seed and seed.
One of the things is having more of a focus.
Mhmm.
So, you know, going out of that process, we'vewe've really thesis into four main areas now.
(36:06):
So vertical AI machine learning, the future ofmedia content and games.
So I failed games in uni, but now I'm investingin games, which is funny.
And climate tech is the main three buckets thatwe invest in.
Majority of our portfolio right now is verticalAI machine learning.
Sure.
That's probably the one thing is just having tofocus in also.
(36:29):
Yeah, do they want you to, and I think animportant thing too is seeing how that evolves,
right?
Because you have those two to three differentsectors you're focusing on now, you know, does
it make sense to evolve that?
And if so, why?
Like, I think that's definitely something thatI've heard too, like, people are going to ask
like, Oh, what, what triggered the change?
(36:51):
You know, is there something that you believeor something in your strategy or your thesis
that really drove changing that strategy?
Yep.
And then I think they also probably wanna knowwhy you even have that strategy.
Right?
So probably I'm thinking some having some dataaround that to really back why you think that's
a good decision to go about that, right?
(37:12):
Yeah, and that's what they asked us is like,why are you guys now focusing on this?
So for the AI machine learning side, ourmanaging partner ran a seed fund and raised
three funds in California, so that's where hekind of learned his trade, then he's moved over
here and launched Hill France.
But before that, he was investing in verticalAI machine learning robotics, and so that's a
(37:38):
sweet spot.
And on the gaming side, the gaming side isactually pretty awesome because in New Zealand,
we have a growing video game market.
Mhmm.
And, I mean, we've generated more than 200 milin in export revenue from just our games alone.
Oh, wow.
So it's a it's a growing market here.
(37:58):
I don't know if you guys if any of you guys onthe call have have played Path of Exile or
Balloons Tower Defense, the one where you're,you know, throwing darts at a balloon.
Oh, we made that in New Zealand.
Oh, wow.
I love Balloons Tower Defense.
What would have probably been my favoritestrategy game growing up in the on the
computer.
Yeah.
So I'd
The studio is called Ninja Kiwi, and they exitup for 200 mil to NTG Group in Europe, and most
(38:28):
of the other large ones have investment fromTencent or have been acquired by Tencent.
There's a huge gaming market here, and sothat's where we see, I guess, an alpha here is
that it's growing.
We really want to incubate some of the moreindie studios here so that they can get to that
stage.
(38:48):
And also, have some of the most talentedanimation VFX people in the world at Weda
Digital, who now have just exited to Unity forabout a billion bucks, and now are looking to
do some other stuff.
And so we have a pretty awesome talent poolhere in New Zealand to go off.
(39:09):
And that's kind of our thesis around futuremedia content and games.
But also I just love playing games, so I justwant to invest in stuff that I want to play.
Yeah, I mean, be excited about what you'reworking on.
Tell us a little more about New Zealand.
Just tell us about the ecosystem.
How has it evolved?
You know, so you tell me about video gaming.
(39:30):
It's cool.
But what are the other hot industries andwhat's picking up there?
Definitely deep tech is a focus here.
Mhmm.
Deep tech, agri tech has always been I mean,we've always been an exporter of milk and
dairy, but now people are heavily going intothe deep tech side of things here in New
Zealand.
(39:54):
More than 50% of the investments done last yearwere in deep tech companies of varying degrees
of stages, but that's where the trend lies inNew Zealand right now, although we don't really
play in that space unless it's it's climatetech.
What I would say is, from my observationsanyway, is the New Zealand startup ecosystem
(40:18):
and even funding it here is still at itsadolescent stages.
It's not nearly as mature as California, evenAustralia.
Australia is more of a mature market than overhere, so it's growing.
I think it's mainly because we haven't had toomany wins on the board yet in terms of startups
(40:42):
that we can take inspiration from.
We've had Rocket Lab, Vend exit for about 500mil sequin for about $1.01 bill.
Mhmm.
But not too many, but I think now we're gettingthere now with I mean, like, few years back,
you know, there were you could count the amountof VCs here on one hand.
(41:09):
Mean, when we were chatting on the phone, wetalked, like, I know, like five or six VCs, you
knew all of them, right?
So it's kind of, I mean, it's, I would say it'sthe same thing in New York.
So I was joking, like, few hours ago, I went toa happy hour, like this Tuesday in New York,
and like, it was the exact same people at ahappy hour from like a week ago.
(41:31):
Yeah.
So it's even though you think like, thesecities are big, like those communities are
still small.
And it's like the same people, right?
They go to these events.
So, So I totally get it.
There's more Are there more venture funds now?
A lot
more venture funds now.
And a lot like we started in the height ofCOVID.
We launched a fund, some of the other fundsalso launched during this time.
(41:55):
And so we have more VC funds here.
A good thing about what happened in COVID ispeople started coming back to New Zealand and
they started starting companies.
And so we've funded two companies that havestarted out of COVID from founders just wanting
(42:15):
to actually solve a problem and make a change,and COVID was just the right time to do it.
And so we've also seen an explosion of startupshere post COVID, so post So 20 most of them are
operating in the pre seed stages right now.
There's not too many later stage companieshere.
(42:37):
Although, yeah, there's not too many laterstage companies here.
Yeah.
It's mainly like the ones that we see anyway,our our seed pre seed.
Yeah, sure.
And how you know, so I'm just curious, so whatare the biggest industries in New Zealand?
So like, what do people do for a living outsideof college, right?
(42:59):
So for example, like in New York, it's financein surprisingly, in Utah, I was curious why
there were so many fund admins in Utah, youknow, and Neil, you might be laughing about
this, right?
But I actually asked the fund admins in Utah,like, what is it?
Why are there so many in it?
And I guess they just have a really goodaccounting program.
So like Utah's accounting, New York is finance,Silicon Valley is, you know, obviously,
(43:24):
software and tech.
So what's kind of like the main industry thatpeople go into, like after they graduate?
Like, where are the most of the jobs in NewZealand?
I'm not too sure, Joel.
I just know that previously it was agriculture.
It was dairy.
Oh, agriculture. It was
(43:44):
It was our Got largest export.
We have really great land and great dairy farmshere, and so we export all over the world for
dairy, and one of our largest companies here isFonterra, which is a publicly listed dairy
company.
Yeah, I'm not too sure.
(44:05):
People 90 something percent of our GDP is madeup of SMEs, small, medium, and large
enterprises businesses, Sure.
Mainly small business owners here, but I can'tsay, I'm not informed enough to say where
(44:25):
people actually go.
Yeah.
Yeah.
What I what I do want is for the techecosystem.
And actually, would be before it wasn't, youknow, it wasn't viable to work at a start up,
and now it is.
Mhmm.
Yeah.
We just got Yeah.
We had a, you know, I had a food tech panelearlier today.
So is that a hot industry right now, of likethe lab grown plant based food industry?
(44:52):
You think that's evolving, especially since youguys have a deep tech ecosystem now?
Yeah.
There are there are some that just got fundedMhmm.
That are in that food tech and or also meatalternative or Yeah.
Space.
There's even a there's even a, a meatalternative VC here called Better Bite.
(45:15):
So they just invest in vegan or meatalternatives.
Some other people, other companies are I knowone that is doing some stuff on whole proteins
as well, but all the other deep tech stuff isrenewable energy, waste reduction, energy
(45:36):
efficiency, or ways to fix that.
What else is there?
Yeah, those are the main ones.
Those are the main ones.
Yeah.
Cool.
So, you know, we got around eight, eightminutes here.
So anyone in the audience, feel free to chime,chime in if you have any questions, a couple
(45:58):
things I can do to tee up some questions forthe audience is, you know, number one, what do
you look for in founders, right?
So the founders that you have a lot ofconviction in that you're taking to the
investment committee, what are some of thepatterns you're seeing?
And then after that, maybe you can just give usone or two tips on how people can, you know,
break into VC.
(46:19):
Gotcha.
So because we invest in pre seed seedcompanies, I guess everyone says this, but it's
all about the people.
That's investing in someone that I would loveto work for is number one, investing in people
that have an audacious vision and can actuallyback that up with either their previous
experience, but we're we're also open to peoplethat don't have that previous experience, but
(46:44):
they're just hungry.
Yeah.
Because sometimes that's what happens.
And so, yeah, investing in the people is thefirst part.
And pretty much the only part, to be honestwith you, in VC.
For the second question, tips for people to getinto VC.
But real quick.
(47:04):
So, you know, real quick before we jump, Iwanna double click on that a little more, like,
because pre seed is really difficult becauseyou're backing those people that have industry
experience.
Are you looking for people that have started acompany in the past?
Or is it okay, they don't have any trackrecord?
Could they be a first time founder and you'restill okay, so what, what, like the what is it
(47:30):
to do over the fence?
I guess, know, because they've got they've gotsome work experience, they might have been in
cloud computing for a long time, and they'relaunching a cloud computing company.
What's kind of that x factor that gets you overthe the investment decision?
How obsessed are they over the problem thatthey're solving?
Yeah.
Is that one?
(47:51):
Sure.
Probably the answer to that question is thatall of our founders are just obsessed with
solving a particular problem in their field ofchoice.
I'd like to say that they're giving you aglimpse.
These founders that we've invested in aregiving you a glimpse of what their future looks
like, and that passion is what tests me overthe edge to invest.
(48:20):
Yeah.
Yeah, that's good advice.
And then, you know, you're kind of like me, youhad a non traditional path, you know, of the
tech and startup ecosystem.
So that was somewhat similar path to me, know,it kind of was a I mean, look, you had a big
role at a massive bank, had an institutionalfinance role.
And same thing, I was like, wow, this is areally big company.
(48:43):
So, know, what, what are some tips that youwould give to some people, maybe some options,
if people wanna pivot into VC?
Talk with founders.
Talk with get in touch with founders.
Funny enough, they're actually easier to getcontact with in VCs over here.
(49:07):
Get in
touch with them.
They're always open to chat and talk to youabout their startup, about what they're doing,
what they're building.
Get in touch with them, have a coffee, justunderstand a little bit more about their
problem.
If you want to get into VC, you just got beendlessly curious about all these startups that
you're talking to.
Otherwise, what are you doing before?
(49:29):
You got to want that that drive to learn moreabout different companies and different
technologies.
Otherwise, it's gonna get a bit a bit dull.
So that's number one.
To get into VC, it's mainly, yeah, like threethings, deals, portfolio management, and LPs.
(49:49):
You can provide value in any of those threebefore you even, you know, apply or approach a
VC.
You're more likely to get that role.
If you say to a VC, I have an LP that would beinterested in your fund, that'd be awesome.
(50:11):
Or here's a deal that you haven't thought ofthat I think would be really good for your
investment thesis, and I think you should doit.
Do I get?
So funny story, I guess, to end off with.
When I was doing the final interview with Rob,our managing partner, I knew he was into games,
(50:35):
video games.
He talked about it.
He wrote blogs about it.
And so I spent half an hour of a one hourinterview interviewing him and asking him about
games.
And I think doing your research on theindividual partners within the firm is so
important because you also have the brand nameof the firm, but you also have the personal
brands and reputations of each partner in thatfirm.
(50:58):
And so leveraging that is really important aswell.
Yeah, it's good advice.
Anybody in the audience have any questions?
Yeah, I have a quick question.
As we're talking about founders and VCs, likehow people get into VC, what do we look for in
(51:20):
a founder?
I'm kind of curious what the overlap between aVC is and a founder.
Because I almost feel like there is probably abig overlap.
But I want to know the distinctive qualitiesbetween a VC and what a founder is from your
guys' perspective.
(51:42):
The parallels would be different in the abilityto sell and storytell.
Are you asking also the the differences aswell, Joseph?
Yeah.
So you mean as a VC raising money versus afounder raising money?
Like what the like the different paths are?
(52:03):
Yeah, exactly.
Because
Got it.
Look, I mean, I would say it just, you know, ifyou're a small fund, I mean, and Alex, you can
confirm this, but I feel like if you're a smallfund, you're, you know, your approach is very
similar to, to being a founder, right?
You're building a website, and it's probablylike a website on WordPress or something,
(52:25):
right?
And you're built a lot of the content andcommunity you're building on your own, and
you're kind of bootstrapping in the beginning,you know, I mean, so I would say a lot of it is
similar.
It's just your clientele, you can probably goon, you know, and you can use like NFX and
there's like hundreds of 1000s of, like VCs,right, you can kind of look up who the VCs are.
(52:48):
I mean, there's a lot more information on whothe VCs are.
I'll show you guys real quick.
So if you go to, I think NFX is like a techenabled VC fund.
But like they hold on, let me just pull thisup.
So if you go to NFX signal, I'll just do thisand I know we're out of time.
(53:09):
But it's pretty cool.
So you can go into NFX signal, and just likelook up any VC, right?
So if you go in here and you do like climatetech, you know, it's in here, like they like
they'll break out like so many different subindustries and you can see who these VCs are
and could probably figure out a way to getahold of them, you can connect with them on
LinkedIn.
You know, a lot of LPs, I think it's just muchmore difficult.
(53:31):
And there's just a lot more friction.
Mean, it's tough to also engage with a lot ofthese VCs, at least the information, you know,
it's easier to know who they are versus, youknow, most family offices don't want to be
found.
So that's what I would say.
But, you know, you're still building apipeline, using a business development strategy
(53:53):
to close capital.
Yeah, the difference part is, yeah, I agreewith Joe where we're fund one, we're a small
tiny fund and we've done stuff that, we'redoing stuff that's not scaling, just to get
across the door, close our fund and do deals.
(54:18):
The difference one is hard.
Yeah, It's something that I need to marinate onin terms of what the differences are.
I guess, for us, we're not really particularlysolving a problem.
We're investing in problem solvers.
That's one thing.
And contrary to popular belief, we're not astech enabled, like VCs aren't as tech enabled
(54:42):
as startups are.
We don't leverage tech as much, which I reallywant to.
I want to build our own tech stack.
That'd be awesome.
Yeah.
Yeah.
Alicia sorry.
Ellis, you had a question?
You're on mute.
Sorry.
No.
Yes.
It's it takes a little while sometimes.
(55:03):
Thank you.
I wanted to ask what don't you look for what iswe ask you for the yes right what do you look
now what don't you look what are those thingsthat are like what we never talk about?
(55:23):
In terms of, like, investment or sector ortechnology, us, we don't invest in crypto
blockchain companies.
Mhmm.
Like, if if we invest in games, it'straditional game studios.
It's not blockchain games because in mypersonal opinion, it's not the games aren't
there yet.
They're not fun enough for the user adoptionfor people to actually play it for the
(55:48):
enjoyment of the of the game and not play it sothat you can trade NFTs.
So that's one.
What I don't look for is what I see a lot ofthe time here, that's big problem here is
pretty bad cap tables.
A lot of the founders have have given away toomuch equity in the pre seed stage and makes
(56:11):
them unfundable for future rounds, especiallybecause we want most of our portfolio all all
of our portfolio companies to eventually raisecapital offshore.
Their cap table has to be pristine at thestart.
So we can't invest in companies that have givenaway too much equity at this Yeah.
(56:33):
And there's misaligned values there as wellwith the companies.
The more funding rounds they go through,they're going get more and more diluted.
And if shit hits the fan one day and they ownlike 2% of their own companies, they're just
gonna say, screw it.
I want out.
Yeah.
So those those are the main things, Alice.
(56:55):
Mhmm.
Thank you.
Cool.
Well, hey, I know we're out of time.
Really appreciate it, Alex.
This is a lot of fun.
And everybody else, hope you guys have a goodrest of the day or evening.
No, this is awesome, guys.
Thanks for having me
is great, man.
Really awesome.
Really fun learning about the ecosystem and thethe villas that you guys have built.
(57:18):
Yeah.
Feel free to connect with me on LinkedIn orwhatever or ask me questions about New Zealand.
Happy.
If you guys are coming in New Zealand, let meknow.
It's a small it's a small village in itself.
So Yeah.
We all know each other.
Yeah.
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