Episode Transcript
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(00:00):
So my special guest today is Robin Egerow. Hopefully I'm pronouncing your surname
reasonably accurately.
Managing partner at the Nordic VC Goose Valley Ventures. Wonderful name,
Goose Valley, so we'll come on to that later.
Robin's invested in companies like Klarna, Lunar Bank and Receipt Hero.
(00:22):
So Robin, welcome to the Startup to Scale Up game plan.
Thank you very much. look forward to taking part
of this absolutely let's start
off with the name as i mentioned it's a it's an unusual name
for vc what's the what's the background to
the name boost value ventures came about
(00:42):
actually that we wanted to sort of
celebrate the nordics and the founders here
and everything that we we as investors and operators
love about this this place so the
name is actually the north salmi name of
a mountain formation that i have in my background and
(01:03):
it's actually the lago that's way up in the north
yeah so it's a
symbol for for the nordics for the founders and also keep keeping the the environment
and the sustainability and impact on top of our heads as well with everything
we do with the nature and you get to spend time in the real goose valley or
(01:24):
is it just something used for your background on Zoom?
Well, not particularly in Goose Valley, but up north I spend a lot of time.
We have the most amazing nature out there. So I would recommend anyone to go and visit.
It's it's amazing yeah but you
regularly get to see the northern lights there we've
(01:45):
all been going crazy in the uk over the
northern lights recently but i guess it's quite a regular occurrence
for you it is it is so just
being in those parts where you're close to nature
even if it's winter or summer or whatever it
is you feel feel part of something bigger
and i think that's that's an amazing feeling yeah indeed
(02:07):
um now recently you posted on linkedin
about the mensarius oaf and that
approach to ethical investing that that caught my
attention what exactly is the mensarius oaf
and why have you embraced this well it's we came across it because we're part
(02:28):
of this vc lab by founders institute and one of the first assignments was us
to you know have a thinking around this and if you can align with these principles and.
They were taken forward by if i remember
correctly the founder of vc labs and i
think they actually aligned quite well with our view
(02:48):
of your role as an investor and how
big a part you play in the ecosystem and how you should maintain your position
within the ecosystem i think it's super critical to take it with the highest
moral and ethics standards that you can so if you're.
(03:10):
Looking at startups in terms of their potential for creating positive change
as well as commercial success how exactly do you assess a startup on on both those criteria.
It's always harder to assess the company's own positive impact.
(03:33):
I think in the business right now, what everyone is agreeing around,
basically, is that let's start with making sure we don't have negative impact.
If you look at different goals with the sustainable business development goals
or just in general how the company is operating, you need to start with,
(03:54):
is this company making the world worse?
Hers basically and on the positive
side what what we discuss mostly is
that you need to have measurable and trackable kpis
for this i i always take
the example of receipt hero the finnish company that we have doing digital receipts
(04:14):
that is quite an easy measurable kpi to track how it's impacting because every
receipt sent digitally is a receipt that you don't have to print i think,
that's that's a key thing for us you need to be able to measure the results
of what they do and make sure that you don't have negative impact with with
(04:38):
what you're doing as well aren't there also.
Trade-offs and things that can be hard to to weigh out for example say you invested
in a company that was making major contributions using AI to healthcare, for example.
But if they're also using a lot of energy to power their AI technology,
(05:01):
aren't they, on the one hand, contributing to humanity and on the other hand,
having a negative impact?
I completely agree. I think this is something you need to weigh against each
other at every company you're in.
And I think this is the reason as well why we are not purely an impact investor,
(05:23):
because it's hard once you set those goals to say that everything is going to
be positive and it's going to be no weighing energy against input versus output.
You can end up in quite a hard position if you have a single downfall, so to say.
So I think it's really hard to do those measures.
(05:45):
All we can do is align with the standards that we have,
align with the LPs that we have and report as well as we can on the KPIs that
we have to reassure that we at least do best practice.
You can't be perfect, but you can do your best. And if everyone aligns with
(06:08):
what we have in place today.
It at least drives towards something better
than we used to have and understood so
broadly speaking what's your investment thesis so
we've already tackled the idea of of
ensuring there's no obvious negative impacts that
(06:28):
that makes sense beyond that when you're
looking at a company's commercial potential or
the leadership team and so on what are your key criteria what's your investment
thesis a little bit for background we're we're a fintech investor who's braving
with an impact angle as well and we do the early stages so primarily we do pre-seed
(06:52):
and this is where the company,
might have a mvp and they definitely
have a team in place and for us more
than 50 percent comes down to the team this is this is the people that you're
going to be with for so long and they I actually done the statistics and the
relationship between founder and VC lasts longer than the founder and their partner in marriage.
(07:18):
So it says something about the relationship you need to have.
And it's, you need to have a trust and loyalty between, between you.
That's really high. And there's an expression saying you can have a hundred
percent trust in your founder or you have zero percent. And I strongly believe
(07:38):
that, that either you trust them or you don't. There's no middle path here.
So when you do an investment in an early stage, it's going to come down to the team.
You need to feel that you can trust these people, not just with your money,
with your wife, your kids.
It's like, it should be that level of trust.
So that's the biggest, biggest thing for us.
(08:01):
And that you can break that down to experience and the path how they got to
be a founder and so on if the repeat
entrepreneurs are of course higher likelihood of success and so on but.
It comes down to the team and of course the market opportunity is also when you come,
(08:23):
in the early stages it doesn't have to be revenues and so on you need to see
that the market is going to be there and that it's gonna you're gonna be able
to grow your ham your total addressable market going further down the line,
and of course what kind of technology they are building product technology we're,
focusing quite highly on the technology so it weighs a lot in there in the process for us.
(08:51):
Yeah, I think those are the key three things that we look at when it comes to the cases.
Yeah, understood. When we last spoke, you mentioned that many VCs are ramping
up the pressure that they impose on founders and CEOs.
We need to be more cognizant of the mental health challenges that many founders face.
(09:15):
So how are you addressing
this at goose valley or how are you planning to
address this as your portfolio expands yeah this
is you know the founder is stuck in a really hard place it's like they're in
the middle of the time class having pressure from from their team of course
from the bottom but also from the board the investors putting pressure off and
(09:40):
we're coming Coming out of two time hits on the market first,
we had COVID and then we had the tech crisis now.
Which means that the pressure has been really high, of course,
on the investors as well, but especially of the founders.
And this is something you need to start to mitigate early on from the investment.
(10:03):
Because you should, as a professional investor, you should see this as a risk
factor within the case as well.
So any risk you have you should try to
mitigate as much as possible and this means
putting in place measures for when
the pressure is too high if they somehow crack
so to say and make sure that you're
(10:26):
from the start when everything is good it's easier to talk
and set these things in motion and make sure that
the founder have the support they need and also
from the investor commit to to this
in some it's always hard to say how you
commit but this could be having a mentor
from another portfolio company or within your
(10:48):
network that you can have that's more
neutral to talk to if that's what they need it could
be an external organization that we have discussed
having that's already operating where
they can meet other ceos just to be some sort of
a safe haven where you can speak and discuss your
problems and so on and as an investor it's
(11:09):
it's you need to address the
founders as humans as well of course they are rock stars founders but also a
person going home to their family or having a normal life outside and so you
also need to make sure that they understand we we know that you're you're not
just the founder that's Can I generate money for us?
(11:32):
You're also a person who can talk to me whenever you want.
I think some investors expect to be able to call the founder any time of day or night.
It should be the other way around. You're the one that should be able to pick
up whenever they need you.
And yeah. Yeah.
Do you think there might be a case bringing someone in to Goose Valley,
(11:57):
a bit like the lady they have in that TV show Billions,
who acts as a sort of psychotherapist and personal coach that everyone in the
hedge fund in Billions could bring someone in who could look after you,
your team, and all of your founders?
Well, something like that. when they is
(12:19):
working for the company it needs to be clear that this is
someone who's not operating on behalf of the
investors so to say a big as long
as it's someone that aligns with the founders and that have no incentive to
just please the investor i think i think it makes sense to have that and we're
seeing it more and more on like linkedin posts from founders who openly said I've run out of leeway.
(12:47):
I have to step down, and they're open with this. I've had people winning the
portfolio as well stepping down.
Luckily, before it was too late, so to say. So this is becoming more and more
something we talk about that we acknowledge,
and I think it benefits everyone to address this early on and make sure that
(13:10):
just because a founder or leaves or step down, you don't take the company down with it as well.
I've mentioned this on a few podcasts, so I'll quickly talk you through the idea of qigong,
which is something that during stressful times in the pandemic is something
(13:32):
that I got into as helping me cope with the crazy world we were living in.
And now I practice Qigong for one to two hours every single day.
I'm a big advocate of that approach to mindfulness and breath work and kind of moving meditations.
So, yeah, if you've got anyone in the portfolio starting to feel a bit stressed
(13:56):
or anxious about their world, feel free to send them my way. No charge.
I'll just give them a couple of virtual Qigong sessions, see if that calms them
down a bit. but I have found that to be incredibly helpful for me.
Yeah, for me to relax or get back energy for work,
(14:18):
I usually have either set up a call with a company pitching or having talking
to someone who I know sets my mind a bit free,
speaking of work and getting back to, you know, why you love doing the job that you have.
Because you need to get reminded sometimes, Sometimes, especially when you're
sitting in board meetings, handling crisis and running out of cash.
(14:42):
It's so many crisis and admin and operations that you need to manage all the time.
So you need to get reminded of why you love this job.
And for me, that's, you know, especially the founders. To talk to a founder
who's engaged, have a lot of ideas and want to push forward.
And especially new ventures is always exciting and thrilling.
(15:03):
So for me, that's a great way to, you know.
Get reminded and also relieve
some stress yeah and the
startup ecosystem is incredibly dynamic and
the pace of change just seems to be ramping up how
do you stay ahead of emerging
(15:23):
trends and identify promising opportunities
for us the key is
to stay focused in within our segment stay focused
on fintech where we've been operating for many many
years to avoid doing uninformed
investment so to say especially now
(15:44):
when we have so many megatrends impacting all markets but especially fintech
as a whole we see that ai is entering our space with full speed we see that
web3 with crypto blockchain and all of these things are becoming mass adopted
changing things we see embedded finance open
(16:05):
finance playing a huge part going forward so
to be able to keep up with all of this if you stay focused it really helps and
talking to professionals always just just yesterday spoke to two other investors
at an event around ai and and the potential for a bubble and so on,
(16:28):
and the different areas of AI where in the stack the companies are.
Makes a huge difference as well.
So for us, it's staying focused. That's the most important.
And don't make rash FOMO investment decision, to be honest.
What do you think of the argument that.
(16:50):
Open AI with their solution and probably some of their competitors as well from
the big, big AI players have got such power,
such a technological advantage that they can snuff out any startup type competition
(17:11):
almost instantly by just releasing an application build on their platform.
Form that replicates whatever any hard-working up-and-coming
startup could could try to create or what's what are your views on on that and
the potential dangers for the wider vc ecosystem i feel that this is not a new
(17:38):
threat this is i would say this is the reality i've been,
dealing with for since i started investing
working with investments nine years ago it's it's
always the threat of the big tech what if google
does this what if meta does this it's always you have that what if but you what
(17:59):
we've seen or what i've seen at least is that the ecosystem and the founders
and investors are very agile pragmatic changing so you sort of.
We have adjusted all the time and find ways to make sure that it's a great market
for the companies or there are companies that's not gonna be competing or be at risk for.
(18:22):
For the big tech companies and within fintech we have always had the discussions
yeah what if apple does this what when apple does this well they have tried
after many many years they failed we saw the
whole crash and burn with Goldman Sachs and so on.
So I think the threat is always there.
(18:47):
We've seen that it's not going to be a killer for us, so to say.
So I'm not that worried, to be honest.
Good. An optimistic VC, that's what we like to hear, rather than a pessimistic VC.
That's what one would hope to hear. Can you share a memorable success story
(19:09):
where a startup that you invested in truly exceeded your expectations,
where they really knocked it out of the park?
It's always easy to paint everything as a success story where you knock it out of the park.
But for me, it's the longer the journey, the sweeter the success.
(19:32):
And I think for me, in 2017, we were part of funding the company Open Payments,
which was based on PSD2, the payment directive within the EU.
That was going to become a law in place in 2019.
So we actually launched in the Nordic market the first pure PSD2 player.
(19:55):
And this was on the paper gonna be like a home run it was gonna be great but
that journey it took us one and a half years i think of fundraising to get that
company really up and running and.
Building something from scratch like that putting the
(20:15):
team in place we did everything
from the start and really like taking
something from zero to a company
that is today out racing an a-round
we landed some of the leading vcs in sweden we have been part of building the
(20:37):
up the ar taking it to new countries really created a real solid company
used by leading ERP systems in Sweden.
That's been an amazing journey. It's taken us then six, seven years to get to this point.
(21:00):
And with the twists and turns of COVID and the tech crisis and,
God knows how many crises we have sorted out and fixed and CEO changes.
But really, seeing the company what it is today, going out with confidence,
raising an A round, getting positive feedback, that's an amazing relief.
(21:22):
And just knowing that you were part of that journey, I focused on the fundraising there.
So I built the investor log from zero to 200 VCs and 300 angels.
I think that was you learn
so much on a journey like that as well and you
(21:43):
learn a lot from these the ceo louise
is number six employee at iceto so she
had done the journey as well and teaming up with these investors
we have in the company learning a lot from them on
taking the company forward has been has been great
so that's really for me the probably the most learning i've gotten and the best
(22:08):
journey i've done so far good and what's the most unusual pitch you've ever
received from a startup founder and did it end up being successful.
Successful this is it's tricky one on the
successful side that's always always harder
(22:28):
well just focus on an unusual
memorable pitch i think i think the last investment we did that that was quite
an unusual pitch that's the neo bank in iceland called indo i met them when
When they were just starting to build a company.
(22:50):
And I remember it so vividly. Because I remember when it came clear to me.
Within like 10 minutes. That this is a brilliant idea. And we have to be part of this.
Because it was a way. It's a beautiful combination of going into Iceland.
Where they hate the banks.
After the 08 crisis.
(23:12):
Building a solution for banking. ranking that I've never heard of before.
Where you connect straight into the central bank, you avoid building balance
sheet and so on to get the best interest rate, you do it straight into the central
bank, you do it tech savvy,
you build onto the central bank system, but you do it so tech savvy that you
(23:37):
just basically operate as a tech company.
And you had this amazing team that was just people you just want to have a dinner
with afterwards as well.
And it was just one of those moments where you see everything falling into place.
And we went live a little bit more than a year ago in Iceland with that,
(23:58):
and it took them one year to capture more than 10% of the market.
So it's just been an amazing journey as well to see here.
And now they closed their A round now at the end of last year.
And so that's also a little bit of a success story but that was one of those,
when you get a bit of a goosebumps when you realize can you actually do this,
(24:22):
which is quite unusual within fintech which
is highly regulated it's usually that you have to go through the same tracks
that all the big banks and so on you have to adjust to the big overlords of
the fsa's and everything but to be able to do a tech savvy smart solution that
benefits the end customers in that way.
(24:45):
And you can be completely transparent as well, which is something that people love.
So yeah, I would say that's something that stands out where I actually remember
the pitch, almost the whole pitch.
That's awesome. If you could go back in time and give one piece of advice to
(25:07):
your younger self when you were just starting out, in the venture capital industry, what would it be?
And relax it's just
after it takes a few years to
realize that a crisis is not
(25:27):
really a crisis it's just a problem you have
to solve having done this for so
many years now and so many bad situations
and crisis and problems that you have overcome i feel
like i don't really get stressed by any situation
coming up right now it's you can't
(25:47):
control everything you can just sort things out so i would
be like robin take that
jacket off put on a t-shirt and just relax you
don't have to like pretend like you're like
this super professional and not being
able to take a curveball just just take
(26:07):
it easy you take one problem at
a time and sort it out and just keep doing that
after a while you have built up experience
and knowledge and you've done this for a number of years and you look up and
you realize that yeah nine years have passed and you it feels like you're just
starting up robin agaro pool is a cucumber yeah i try to be I try to be,
(26:34):
and nothing helps by getting stressed or getting other people stressed.
Just take it easy.
Let's sort this out.
Well, I know who to call next time I'm feeling stressed.
I'll just get you on a phone call, and I think after five or ten minutes,
I'll be feeling nicely chilled.
(26:55):
So, Robin, been great getting to know you over the last few weeks.
Thank you so much for joining me on today's show.
Thank you very much, Gary. Really had a good time. Always fun to talk about
these things. Yeah, me too.