May 21, 2023 • 16 mins
Welcome to Crown Castê, your financial literacy podcast for small businesses. We publish inspiring, insightful conversations with investors and stewards of capital, about why they decided to make placements into a specific portfolio company of theirs. In today's episode, we are joined by John Butt.
John is the founder and General Partner of Conduit Ventures Ltd, a regulated UK-based investment firm managing capital contributed by blue-chip groups from around the world. John created Conduit in the early 2000s and was an early pioneer in the transition towards decentralised low carbon energy solutions with an emphasis on Hydrogen. He drives the strategic and operational direction of Conduit with a focus on disruptive solutions as catalysts of sustainable economic value creation. He has represented Conduit on the boards of several public and private companies in different geographical markets.
In this episode, we discuss:
1. Investing and Origination with Conduit Ventures:
How does John find the right companies to invest in?
What is Conduit Ventures' approach to fostering relationships with institutes, universities, corporations, and entrepreneurs?
What makes the team an integral part of Conduit Ventures' investment strategy?
2. Types of Companies and Investment Stages:
What types of companies does Conduit Ventures typically invest in and at what stages?
How does John define early stage and growth stage investments?
What are the crucial factors John considers when deciding whether to invest in a company?
3. Conduit Ventures' Investment Strategy and Process:
Why are references and past successful teams important in Conduit Ventures' investment process?
How does John evaluate the skill sets within early-stage teams?
What is Conduit Ventures' approach towards the IP-intensive sector, specifically with a focus on sustainability-driven innovation?
4. Post-Investment and Value Addition
What value does Conduit Ventures add post-deal closing?
How does the brand and network of Conduit Ventures benefit the companies in its portfolio?
What are the key learnings John shares with portfolio companies from previous successful and unsuccessful investments?
5. Exciting Technologies and the Future:
Why does John find the convergence of digital and material science exciting?
How does digitalization create new business models and optimize the route to market?
Why is the flexibility provided by IP important, but not the only factor for a company's success?
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Hi, I'm Lindsey beta for the Kate.
Welcome to another episode on this brand.
New podcast called Chromecast. Today we have a guest John, but
from conduit benches. Thank you for having me here in
juvie, a pleasure to be here. Thank you for coming back.
Wouldn't go into the issues. You had any of the recording but
we're going to dive right into. So obviously, you're the founder
(00:24):
principle of conduit benches andwithin your fund you've
allocated million As into companies in your portfolio.
That's correct. I'm Keen to just get a better
understanding of the process. So if you start with
origination, how do you find companies that you invest in
very good? Because the lots of ideas out
(00:47):
there. The question is picking the
right ones and or the right sweet of ideas which can result
in witness. Okay, so what we do The cost to
broaden it but it's very much relationship-driven.
We try to Foster relationships with research institutes
(01:10):
universities corporate and entrepreneurs so it isn't one
source. It's a variety of sources which
ultimately we find that people refer businesses to us and at
the same time, we have walk-ins,we evaluate all.
Yeah, but what we try to find our ideas concerns, comprising
(01:35):
of the right type of product, the scalability of that product.
And ultimately the entire ecosystem, particularly on the
team, the team is a major part of it.
If we take a step back, just understand a little bit more
about content Ventures, what type of companies do you tend to
invest in and what stage do you tend to go for?
(01:59):
It's typically Stage. We like that.
It's our comfort zone. We also get involved in the
growth stage, so we aspire to beinvolved throughout the
development lifecycle of each company.
We put money into. So we're active young.
We try to help the company. We do not seek to replace the
(02:23):
management. So, we Foster a relationship
with the management team and tryto To foster a basis for open
dialogue and suggest ideas, someof which we hope.
They are management, will find helpful and use useful.
And you mentioned early stage and growth stage.
Those two terms mean different things to different companies.
(02:45):
How do you define early and how to define growth stage, a
conduit Ventures early stage will look at the product which
is being developed. We look at the ideas, we look at
the team, we try to evaluate howfar from market adoption.
Product. The product is, and if the right
box boxes are ticked, the capitalist typically allocated
(03:10):
growth stage is typically when the company is actually out
there in the muck Market, the product has been ruggedized, it
has a significant level of marketing Market acceptance and
he needs additional Capital to shift from gear to.
Two together three and hopefullycruise control in terms of
(03:34):
revenue for the monthly. Recurring revenue for a growth
stage company. What range would you put that?
I think it's more the quality ofthe customer base, one of the
customers and the quality. All of the other quantity.
Yes, the quality of the Partnerships, the type of market
adoption Arrangements, which hasbeen put in place with the
(03:58):
partners. So Chilly.
It's like a house. You want a solid foundation.
Okay. And then to us, that is more
important because it means that you can probably scale better
and faster because at the end ofthe day, your objective is
market adoption at scale, that is what you want to achieve.
(04:21):
And so you have to have the right construct in place
beforehand. And when we're talking about the
roots, It to get 200 Ventures. You talked about Institute, you
talked about people, making introductions and relationships.
Yes. Is there any particular strand
that you find? Many more of your companies,
(04:43):
tend to come from those that youactually deploy?
Yes, I think it's when people make references to us the the
refer businesses to us. When the source is people, we
have groups, we have worked withteams who have worked with in
the past and have been successful.
We And we find those are very very helpful and of of a certain
(05:04):
quality and I realized that the academic institute's you work
with primarily because a lot of what you invest in is, IP
intensive, do you want to talk alittle bit more about the sector
that you focus on a conduit? Our investment theme is centered
on sustainability driven Innovation, so its energy.
(05:26):
It covers energy dick decarbonization so It brings
together the digital and it alsobrings together Material,
Sciences, and the research institutes are hotbed for a
both, okay? And so, it's it always pays.
It's always good to have an insight as to, what's coming
through the sustainability. Theme is very much in its
(05:50):
infancy and there's quite a waysto go.
So, we're excited to see a lot of these new ideas.
We've we've been, we've been in the space.
Quite some time. It has been an interesting
Journey. There have been some successes
and there have been others, which have not been successful
but a common theme throughout what we have witnessed is that
(06:14):
those companies which have been successful, you've had good
teams. You've had good people those for
a variety of reasons which have not been successful.
It's lodged been largely due to timing.
Route to Market. And in a lot of cases,
misalignment of interests, amongthe different steak steak, hold
(06:36):
hold this. John, you've mentioned team a
couple of times and I'm curious linking team to your process.
I realize you have an investmentcommittee and you go through a
degree of due diligence before you place any caps on it to
companies. But what does that process look
like? Because for many entrepreneurs,
it's a bit of a black box when it comes to speaking to
(06:57):
investors and the result, they guess at the end Yes.
Well you want people, first of all, who are ambitious and
open-minded because when you're starting a business, it's a
journey. Okay?
It's not an overnight. So along that Journey one has to
deal with different types of stakeholders.
(07:17):
Investools Channel, Partners Supply Chain Partners.
Your objective is to be relevant, have your product
relevant in the marketplace? We always say, Say a question
where was asked is whether is solution is a nice to have
solution or a must-have. We want teams who generate or
(07:41):
create the right businesses, which are going to make a big
impact in the market and in particular to the customer based
and beyond that. And so it's very important that
we have groups comprising of a blend of skill, skill sets and I
would say blend of ambition as well.
(08:03):
And at that stage, what sort of skill sets to look for deer and
how do you assess those skill sets, within those early teams?
It's a bit of an art. It's a judgment call.
Yeah, okay. Obviously, you look at the
backgrounds and their, their achievements and and so forth.
But often it comes down to whether there's the degree of
open-mindedness which results inconstructive engagement.
(08:29):
Aunt with Channel Partners Supply Chain Partners investors
board directors observers because it's a journey and it's
inevitable speed bumps will be encountered.
So we always try to evaluate whether how people are likely to
(08:51):
navigate speed bumps or better still anticipate potential,
speed bumps and And how to overcome these such speed bumps
when they do anticipate and navigate speed bumps yes in
faster because it's inevitable. Yeah, you will come across with
(09:12):
the I say the same thing. It's down to teams and it's down
to people. Yeah, it's a major proportion of
the criteria. Mmm.
So it's not just the technology.Technology is one component and
don't get me wrong. It is important, it is
important, but that may change business model.
Might Change. But the team, if they haven't
got the right commercialization of that technology requires a
(09:35):
sound blend of skill sets and people who in our opinion people
who are willing to listen and willing to engage.
So that's why I say open-mindedness is important and
post deal closing once this company is now within the
conduit. Yes.
(09:56):
Portfolio. What sort of value add would
you? They get from a country
Adventures. I think you better ask the
entrepreneurs. That's right.
They are best place. Yeah, well, I hope that you
listen to us. Yeah.
Okay. And we've got a network, we've
(10:16):
got experience out in out in thefield and we try to draw on
those experiences. Channel Partners.
Anticipating speed speed bumps. Yeah.
Okay. So we draw on the full range of
experiences, both the successes and those which have not been
(10:37):
successful and seek to discuss with the lead leadership team.
You know, ways to create successor short circuit such that you
achieve success, lighter and faster, by lighter, and faster
faster from a capital light situation because you simply do
(11:00):
not want to repeat the same errors as in the past, okay?
So again, it comes down to accelerating the pace of market,
adoption of solutions. And I also Imagine the brand of
the network that you come with that.
Trust is something but companiesin your portfolio can leverage.
(11:21):
Yes, it's there for the different companies to have
access to we're open-minded in terms of those successes and
those that have not been too successful if you can share,
just a little bit of some of those learnings that yes, you
then had to, you know, pass on to your portfolio, companies
that are that are still around. Yes.
(11:42):
Yes, I think at the don't want to repeat but we've just found
that those which have been successful.
I've always had constructive engagements with the different
stakeholders. You'll hear ye speak about
stakeholders of which shareholders one.
Yeah, okay. It's the they've been very open
(12:04):
in terms of information sharing very open in terms of engaging
with their stakeholders. How To bring products and
solutions to the market market engagement in informing them of
future challenges. So seeking advice and
(12:25):
solicitation, you know, a big portion besides the technology
IP driven. You see, we actually see IP as
it provides a company with the flexibility to practice and
engage and bring a product out to the market.
So yes, it's a defendable spot but we're very pragmatic, we
(12:48):
know that you create one IP, you've just created the basis
for someone else to learn from that, and there's probably
someone across the road, trying to make a better way or a better
product. You have to factor that in.
So, for us, a big part of the IPis, yes, it's solid.
It's new, it changes the situations in the company, but
(13:12):
we We don't see it as a BNN door, it just means you've got
the flexibility to actually get out there in the market.
A lot of their IP thereafter becomes the know-how.
And that's, and the know-how is embedded within the team's.
Okay, the customers the channel Partners, the basis for getting
(13:33):
products out there, which will make a difference and scale.
Fantastic said, that key advice if you're yeah, and obviously
just drift. If you just rely on that your IP
alone to sell itself, it wouldn't know.
It's not enough. It's important, but it's not
enough and decided. I wanted to segue back in.
Unless the question very valid points.
(13:54):
I agree into the question of what constitutes success is,
okay? And quite frankly those who have
not been successful, if I was tolook back, Back, I think I would
not be incorrect if I said that it's teams trying to be all
(14:14):
things to all people and also trying to do too much on their
own because you want to de-risk the process to the market.
You want to D risk, the product development.
You want to again, D risk from product from bench into the
customers hands indeed. So if I can Memorize that the
(14:38):
takeaway for Founder's Business Leaders is to focus on managing
those multiple stakeholders fromyour channel Partners or
investors and everyone else theyhave to interact with
identifying who the right ones are first time.
Yeah once you have make a strongcase, mmm seek to engage them
and manage them and just be open-minded and says again the
(15:02):
final question before I let you go, you work with lots of new
Technology. Is there any particular item in
particular technology? That's exciting you right now.
I don't think there's one you from my standpoint is the
convergence between the digital and the material science, okay?
(15:25):
The digital has created the basis for what we term.
Commercial Innovation, just meaning, new types of business
models. Yeah, so which means it
optimizes that route to Market. So it for instance in the
Decarbonization in the energy space, you can have your eyelet,
(15:48):
it just created. So that the impact of the
digitization has created the basis for of grade many grades,
just a variety of different business models.
Okay? Which also, you could argue that
brings in other sectors, as wellfintech.
(16:08):
And so, what we find with the impact of digitization is that
it just transforms, It has the potential to transform the roots
to mount Market, resulting in new business models all about.
So, just imagine not about just one material size.
So it goes back again, again, with the IEP question.
Yeah. You have your eye, you have your
(16:30):
IP, it's great. It provides you with the bases
to do something different, to achieve something different, but
then, the next challenge is getting it out into the market.
Indeed. Yes.
Thank you so much John. Thank you.
Thank you for having me and we look forward to inviting you to
season two, right? Thanks.
Thank you. Indeed.
Yes. Thank you so much John.
Thank you. Thank you for having me and we
look forward to inviting you to season two, right?
Thanks. Thank you.
Hi, I'm Lindsey beta for the Kate.
Welcome to another episode on this brand.
New podcast called Chromecast. Today we have a guest John, but
from conduit benches. Thank you for having me here in
juvie, a pleasure to be here. Thank you for coming back.
Wouldn't go into the issues. You had any of the recording but
we're going to dive right into. So obviously, you're the founder
(00:24):
principle of conduit benches andwithin your fund you've
allocated million As into companies in your portfolio.
That's correct. I'm Keen to just get a better
understanding of the process. So if you start with
origination, how do you find companies that you invest in
very good? Because the lots of ideas out
(00:47):
there. The question is picking the
right ones and or the right sweet of ideas which can result
in witness. Okay, so what we do The cost to
broaden it but it's very much relationship-driven.
We try to Foster relationships with research institutes
(01:10):
universities corporate and entrepreneurs so it isn't one
source. It's a variety of sources which
ultimately we find that people refer businesses to us and at
the same time, we have walk-ins,we evaluate all.
Yeah, but what we try to find our ideas concerns, comprising
(01:35):
of the right type of product, the scalability of that product.
And ultimately the entire ecosystem, particularly on the
team, the team is a major part of it.
If we take a step back, just understand a little bit more
about content Ventures, what type of companies do you tend to
invest in and what stage do you tend to go for?
(01:59):
It's typically Stage. We like that.
It's our comfort zone. We also get involved in the
growth stage, so we aspire to beinvolved throughout the
development lifecycle of each company.
We put money into. So we're active young.
We try to help the company. We do not seek to replace the
(02:23):
management. So, we Foster a relationship
with the management team and tryto To foster a basis for open
dialogue and suggest ideas, someof which we hope.
They are management, will find helpful and use useful.
And you mentioned early stage and growth stage.
Those two terms mean different things to different companies.
(02:45):
How do you define early and how to define growth stage, a
conduit Ventures early stage will look at the product which
is being developed. We look at the ideas, we look at
the team, we try to evaluate howfar from market adoption.
Product. The product is, and if the right
box boxes are ticked, the capitalist typically allocated
(03:10):
growth stage is typically when the company is actually out
there in the muck Market, the product has been ruggedized, it
has a significant level of marketing Market acceptance and
he needs additional Capital to shift from gear to.
Two together three and hopefullycruise control in terms of
(03:34):
revenue for the monthly. Recurring revenue for a growth
stage company. What range would you put that?
I think it's more the quality ofthe customer base, one of the
customers and the quality. All of the other quantity.
Yes, the quality of the Partnerships, the type of market
adoption Arrangements, which hasbeen put in place with the
(03:58):
partners. So Chilly.
It's like a house. You want a solid foundation.
Okay. And then to us, that is more
important because it means that you can probably scale better
and faster because at the end ofthe day, your objective is
market adoption at scale, that is what you want to achieve.
(04:21):
And so you have to have the right construct in place
beforehand. And when we're talking about the
roots, It to get 200 Ventures. You talked about Institute, you
talked about people, making introductions and relationships.
Yes. Is there any particular strand
that you find? Many more of your companies,
(04:43):
tend to come from those that youactually deploy?
Yes, I think it's when people make references to us the the
refer businesses to us. When the source is people, we
have groups, we have worked withteams who have worked with in
the past and have been successful.
We And we find those are very very helpful and of of a certain
(05:04):
quality and I realized that the academic institute's you work
with primarily because a lot of what you invest in is, IP
intensive, do you want to talk alittle bit more about the sector
that you focus on a conduit? Our investment theme is centered
on sustainability driven Innovation, so its energy.
(05:26):
It covers energy dick decarbonization so It brings
together the digital and it alsobrings together Material,
Sciences, and the research institutes are hotbed for a
both, okay? And so, it's it always pays.
It's always good to have an insight as to, what's coming
through the sustainability. Theme is very much in its
(05:50):
infancy and there's quite a waysto go.
So, we're excited to see a lot of these new ideas.
We've we've been, we've been in the space.
Quite some time. It has been an interesting
Journey. There have been some successes
and there have been others, which have not been successful
but a common theme throughout what we have witnessed is that
(06:14):
those companies which have been successful, you've had good
teams. You've had good people those for
a variety of reasons which have not been successful.
It's lodged been largely due to timing.
Route to Market. And in a lot of cases,
misalignment of interests, amongthe different steak steak, hold
(06:36):
hold this. John, you've mentioned team a
couple of times and I'm curious linking team to your process.
I realize you have an investmentcommittee and you go through a
degree of due diligence before you place any caps on it to
companies. But what does that process look
like? Because for many entrepreneurs,
it's a bit of a black box when it comes to speaking to
(06:57):
investors and the result, they guess at the end Yes.
Well you want people, first of all, who are ambitious and
open-minded because when you're starting a business, it's a
journey. Okay?
It's not an overnight. So along that Journey one has to
deal with different types of stakeholders.
(07:17):
Investools Channel, Partners Supply Chain Partners.
Your objective is to be relevant, have your product
relevant in the marketplace? We always say, Say a question
where was asked is whether is solution is a nice to have
solution or a must-have. We want teams who generate or
(07:41):
create the right businesses, which are going to make a big
impact in the market and in particular to the customer based
and beyond that. And so it's very important that
we have groups comprising of a blend of skill, skill sets and I
would say blend of ambition as well.
(08:03):
And at that stage, what sort of skill sets to look for deer and
how do you assess those skill sets, within those early teams?
It's a bit of an art. It's a judgment call.
Yeah, okay. Obviously, you look at the
backgrounds and their, their achievements and and so forth.
But often it comes down to whether there's the degree of
open-mindedness which results inconstructive engagement.
(08:29):
Aunt with Channel Partners Supply Chain Partners investors
board directors observers because it's a journey and it's
inevitable speed bumps will be encountered.
So we always try to evaluate whether how people are likely to
(08:51):
navigate speed bumps or better still anticipate potential,
speed bumps and And how to overcome these such speed bumps
when they do anticipate and navigate speed bumps yes in
faster because it's inevitable. Yeah, you will come across with
(09:12):
the I say the same thing. It's down to teams and it's down
to people. Yeah, it's a major proportion of
the criteria. Mmm.
So it's not just the technology.Technology is one component and
don't get me wrong. It is important, it is
important, but that may change business model.
Might Change. But the team, if they haven't
got the right commercialization of that technology requires a
(09:35):
sound blend of skill sets and people who in our opinion people
who are willing to listen and willing to engage.
So that's why I say open-mindedness is important and
post deal closing once this company is now within the
conduit. Yes.
(09:56):
Portfolio. What sort of value add would
you? They get from a country
Adventures. I think you better ask the
entrepreneurs. That's right.
They are best place. Yeah, well, I hope that you
listen to us. Yeah.
Okay. And we've got a network, we've
(10:16):
got experience out in out in thefield and we try to draw on
those experiences. Channel Partners.
Anticipating speed speed bumps. Yeah.
Okay. So we draw on the full range of
experiences, both the successes and those which have not been
(10:37):
successful and seek to discuss with the lead leadership team.
You know, ways to create successor short circuit such that you
achieve success, lighter and faster, by lighter, and faster
faster from a capital light situation because you simply do
(11:00):
not want to repeat the same errors as in the past, okay?
So again, it comes down to accelerating the pace of market,
adoption of solutions. And I also Imagine the brand of
the network that you come with that.
Trust is something but companiesin your portfolio can leverage.
(11:21):
Yes, it's there for the different companies to have
access to we're open-minded in terms of those successes and
those that have not been too successful if you can share,
just a little bit of some of those learnings that yes, you
then had to, you know, pass on to your portfolio, companies
that are that are still around. Yes.
(11:42):
Yes, I think at the don't want to repeat but we've just found
that those which have been successful.
I've always had constructive engagements with the different
stakeholders. You'll hear ye speak about
stakeholders of which shareholders one.
Yeah, okay. It's the they've been very open
(12:04):
in terms of information sharing very open in terms of engaging
with their stakeholders. How To bring products and
solutions to the market market engagement in informing them of
future challenges. So seeking advice and
(12:25):
solicitation, you know, a big portion besides the technology
IP driven. You see, we actually see IP as
it provides a company with the flexibility to practice and
engage and bring a product out to the market.
So yes, it's a defendable spot but we're very pragmatic, we
(12:48):
know that you create one IP, you've just created the basis
for someone else to learn from that, and there's probably
someone across the road, trying to make a better way or a better
product. You have to factor that in.
So, for us, a big part of the IPis, yes, it's solid.
It's new, it changes the situations in the company, but
(13:12):
we We don't see it as a BNN door, it just means you've got
the flexibility to actually get out there in the market.
A lot of their IP thereafter becomes the know-how.
And that's, and the know-how is embedded within the team's.
Okay, the customers the channel Partners, the basis for getting
(13:33):
products out there, which will make a difference and scale.
Fantastic said, that key advice if you're yeah, and obviously
just drift. If you just rely on that your IP
alone to sell itself, it wouldn't know.
It's not enough. It's important, but it's not
enough and decided. I wanted to segue back in.
Unless the question very valid points.
(13:54):
I agree into the question of what constitutes success is,
okay? And quite frankly those who have
not been successful, if I was tolook back, Back, I think I would
not be incorrect if I said that it's teams trying to be all
(14:14):
things to all people and also trying to do too much on their
own because you want to de-risk the process to the market.
You want to D risk, the product development.
You want to again, D risk from product from bench into the
customers hands indeed. So if I can Memorize that the
(14:38):
takeaway for Founder's Business Leaders is to focus on managing
those multiple stakeholders fromyour channel Partners or
investors and everyone else theyhave to interact with
identifying who the right ones are first time.
Yeah once you have make a strongcase, mmm seek to engage them
and manage them and just be open-minded and says again the
(15:02):
final question before I let you go, you work with lots of new
Technology. Is there any particular item in
particular technology? That's exciting you right now.
I don't think there's one you from my standpoint is the
convergence between the digital and the material science, okay?
(15:25):
The digital has created the basis for what we term.
Commercial Innovation, just meaning, new types of business
models. Yeah, so which means it
optimizes that route to Market. So it for instance in the
Decarbonization in the energy space, you can have your eyelet,
(15:48):
it just created. So that the impact of the
digitization has created the basis for of grade many grades,
just a variety of different business models.
Okay? Which also, you could argue that
brings in other sectors, as wellfintech.
(16:08):
And so, what we find with the impact of digitization is that
it just transforms, It has the potential to transform the roots
to mount Market, resulting in new business models all about.
So, just imagine not about just one material size.
So it goes back again, again, with the IEP question.
Yeah. You have your eye, you have your
(16:30):
IP, it's great. It provides you with the bases
to do something different, to achieve something different, but
then, the next challenge is getting it out into the market.
Indeed. Yes.
Thank you so much John. Thank you.
Thank you for having me and we look forward to inviting you to
season two, right? Thanks.
Thank you. Indeed.
Yes. Thank you so much John.
Thank you. Thank you for having me and we
look forward to inviting you to season two, right?
Thanks. Thank you.
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Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.