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#39 Pepe Agell: $0 to $100m sales in <3 years, getting Sequoia funding, being acquired by Zynga, working w/ Midas list VCs
Partner at Pear VC (ca. $700m AUM, >150 inv, 3 IPOs including >$38bn market cap Doordash), ex founding team and CEO at Chartboost (mobile ads, 700m users, backed by Sequoia, acquired by Zynga)
We are Pol Fañanás and Gerard García, two friends passionate about tech, startups, and VC, getting views from exceptional people doing interesting things and sharing it for free with those who lack access. Thanks for reading!
Pepe Agell is a founding team member and former CEO of Chartboost, one of the leading in-app monetization and programmatic advertising platforms. Chartboost reached >$100m sales in less than 3 years, received ca. $21m funding from tier 1 investors like the legendary Sequoia ($85bn AUM, early investments like Apple, Google and Nvidia), reached 700m unique users every months across 200k mobile apps, and got acquired by Zynga for $250m.
Pepe is also a Partner at Pear VC, American venture capital firm with 4 funds totalling ca. $700m AUM, >150 deals performed, 3 IPOs, and early investments like DoorDash (NSDQ:DASH; >$43bn market cap) and Guardant Health (NSDQ:GH; >$3.8bn market cap).
Before Pear VC and Chartboost, Pepe worked as Head of US Business Development in 3scale (API management, acquired by Red Hat) and as Product Manager at Hilti Group (construction industry, €6.7bn sales in 2023).
Pepe has a Master in Mgt, Tech and Econ from ETH Zürich, a Business Bachelor from Open University of Catalonia, and a Master + Degree in Industrial and Mechanical Engineering from Polytechnic University of Catalonia.
overView(s)
Curated highlight of the most important Views from Pepe in case you don’t have time to read everything (as it happens to the best of us):
Key success ingredients in Chartboost story. Founder awareness (being always conscious of what is happening in the company and in the market), culture (facta non verba), transparency (coherence in clarity both inside and outside the company), hiring timing (manage people with company timing in mind).
Product market fit toolkit. Total clarity of Ideal Customer Profile (ICP), continued fast iteration, founder-led sales, stop selling start helping.
Lessons from Sequoia. The power of reputation, ready-to-use playbook of real added value for all types of situations, constant inspiration to think bigger.
Secret sauce of a big exit. Perfect storm (COVID digital tailwinds, focus on bottom line net revenue providing profitability and new growth, personal circumstances, new leadership), owning the sale process of the company, cultivating strategic relationships with potential buyers for long, looking for alignment of values with acquisitor and not only money.
Working with Midas List VCs. Focus on hardcore networking using persistent help as main path, maximum respect to founders, tough love, portfolio problems awareness, efficient management of biases.
Pear VC framework. In Dealflow: Universities + Fellowships for students + Competitions + Pre-seed programs (PearX). In Analysis: Unique insight + coachable founders + ability to attract top talent + bottom up market clarity. Being a good board: Planning in advance + listen and ask + tough love + 1-to-1 support.
VC industry now. VC state: Lots of changes but will remain highly relevant, way more easier to play the game, more competition, funds pushed to more varied strategies, increasingly important to add value that moves the needle beyond just picking. Interesting verticals: GenAI applied to bundle fragmented sales tech stack, optimization of logistics processes and fintech infra.
Advice for youngsters. Plan frequently to get out of comfort with constructive challenges, have a traveler attitude always open to new insights, surround yourself with people that elevate you, give before even thinking about receiving.
Index
1️⃣ How did Chartboost come to be?
2️⃣ What was your aha moment that changed everything in Chartboost?
3️⃣ What are the most important ingredients for success you experienced in Chartboost?
4️⃣ Recommended toolkit to reach product market fit
5️⃣ Closing Sequoia funding and learnings from growing with a legendary investor
6️⃣ Can you walk us through how the $250m Chartboost exit ot Zynga happened?
7️⃣ High value lessons of working with Midas list investors Mar Hershenson and Pejman at Pear after going from operator to VC?
8️⃣ Could you share a deep dive on Pear VC’s framework for dealflow sourcing, investment analysis, and being a good board?
9️⃣ Reflecting on the current stage of VC investing, proper VC firm building and new exciting opportunities
🔟 Advice for young startup operators and VC investors?
1️⃣ How did Chartboost came to be?
In our twenties, my girlfriend now wife Maria and I used to follow open classes from Stanford via youtube/podcasts and we gradually became fascinated by the amazing stories of founders - enough to jump into the game. So after finishing our university degrees and in search of adventure, we went to Silicon Valley. No visa, no work. But fueled by the hope of learning from the best.
Consequently we started working in a few startups, some with more success other with less. For instance, companies like Tapulous (mobile gaming, acquired by Disney), Abiquo (cloud management, backed by Balderton), or 3scale (API management, acquired by Red Hat). There, we tried to optimize for learning by seeing how things worked from the inside - internal dynamics of interesting startups, fundraising processes, scaling up, getting to exit or failing, etc.
In the early 2011, when we already were living in the Bay Area for 3-4 years, Maria and his coworker and friend Sean (whom she met in Tapulous), started to think more about a new idea of product that could have great potential. While at Tapulous they experimented 2 key thinks first-hand. 1st, how fast was the Appstore evolving (number of users, engagement, monetization, etc). 2nd, how difficult it was to see products providing high quality elements like user acquisition analytics, advertising improvement, and monetization (e.g. in general, developers didn’t even know about the frequency of their company advertising when using the SDKs of the time).
So, as a result and since Sean was a good family friend, we ended up having lots of conversations about this. I still remember moments like going on a mountain hike with Sean, his girlfriend, Maria, and I, overthinking different angles for the idea. Talking about it over and over again. Finally, our conclusion was that a mobile-based programmatic advertising program could make sense, the market timing felt right, the user experience had to be like a 5 star hotel and it wasn’t like that with current solutions (e.g. no analytics, no transparency, etc), and it wouldn’t be difficult to build an SDK with better features than comparables that didn’t crash in the moment of integration like the others.
However when we started we didn’t really have a financial safety net. So we went through a moment of quite a bit of fear because being faced with the decision of stoping being and employee with the salary that it secured, and start not just a leap of faith but also paying employees we needed straight from a few savings that we had. I remember the vertigo of those early days. Maria and I even sold all our furniture and left our home, to rent a small room in a flat that we shared with a mom and his son - because we needed to allocate more resources for Chartboost.
Regardless, we pushed forward and leveraged our network to build our early teams. Also, some time ago we understood how these experienced became a very positive learning since it taught us the importance of culture and some key ingredients that helped Chartboost in the long term, like valuing being lean, capital efficient, working hard in struggling contexts, and taking true care of the team.
Anyway, there we were. Maria and I. 25-26 years old, no safety net, and knife between the teeth. Maria and Sean since the very beginning as co-founders launching the company and product. Me, sometime after that, more focused on sales. This is how the adventure started in February 2011.
2️⃣ What was your “aha moment” in Chartboost that changed everything?
Chartboost has an unconventional story because we grew very fast from the early days. In February 2011 Sean was building the 1st version of the product. Just after that moment, we were having conversations with developers to improve. And in May 2011 we were already selling.
One of these “aha moments” was gaining early traction with internal cross promotion. We went to video gaming studios with more than 1 app, and offered advertising among their gaming portfolio starting with a very easy free SDK which included a control panel to build campaigns and manage basic analytics. So for instance, you work with Candy Crush gaming studio and do promotion of new studio games, within the space of Candy Crush.
However when you start providing a solution for free, you are not taken that seriously. So after this lesson and once we were scaling up our number of integrations, we started exploiting external direct promotion campaigns. When? The same summer of 2011. And this was our 2nd “aha moment”. If with the 1st we blew in terms of user and customer growth, with this 2nd one was time for our revenue we got 10x constant monthly growth.
The mix of a solid product reputation among software developers, strong appetite for new advertising campaigns with superior analytics and great transparency, gave us what I’d say is a rare fast sales growth.
As a result, Chartboost went from $0m to $100m annual revenue in less than 3 years while still having a small team.
3️⃣ What are the most important ingredients for success you experienced in Chartboost?
Founder awareness. Being extremely conscious about what is happening in your market, even if everything is going great. Maybe specially, if everything is going great. As a good example, we understood that the market was very opaque and wild wild west, so a continued focus on new transparency opportunities could make you a big hit. We leveraged that and won big as a consequence. As a bad example, at times in Chartboost we ended up being so focused on our success that we ended up losing awareness of these new opportunities, as well as flexibility to pursue them. We had a competitor named AppLovin that was born at the same time that Chartboost and ended up being wildly more successful (NASDAQ IPO, >$26bn market cap) because this superior openness to catch new opportunities (on top of everything else they were doing good).
Culture. Culture is one of the most important elements for us and it really makes me happy feeling like we managed to get a very rare friendly team cohesion. And by culture I’m not referring to posting about company values in social media, but about actually living those values and doing constant push towards its blooming. Since the beginning we were obsessive towards building the best place where you could work, so we took a series of specific actions in that direction. From very simple ones like creating a slack channel named “Tell me something good” where everyone posted something positive about other colleagues,, to more demanding ones like having high transparency standards in all matters.
Transparency. This deserves a stand alone mention, since even though it is related with culture I think it’s one of the major success ingredients for Chartboost. As I said earlier, transparency was something underestimated by past/current competitors, however we saw that it was increasingly valued by the market (customers, users) - a very relevant agent causing frustration and bad user experiences because it was not being done right. We applied this vision early on in our product, and it worked. But we did some mistakes too. In 2019, after some success, we were burning way too much money in comparison with the results we were getting. This ended up in a forced cost reduction, that among other things implied layoffs. We spent months studying how could we reduce costs efficiently. And I remember at times having quite a bit of friction with some employees, because they were asking about more resources to pursue new ideas while I was super focused on survival and what were we going to do the next quarter. This resulted in multiples inefficiencies and tension. Fortunately though, eventually I understood that part of the team wasn’t aligned with the executive decisions because this transparency angle so used in our product roadmap was not being applied internally with the situation of the company. We ended up sharing the company Profit and Loss account with everyone and it helped Chartboost reinforce its culture and fight with recovered strenght through this tough period. After the fight (layoffs, having to kill exciting projects that were not contributing to net revenue, great monthly burn reduction, etc) it was a beautiful experience reaching a solid breakeven and sharing the happiness with the whole team because everyone understood how important was such a milestone in a critical moment.
Hiring timing. Finally, another important asset for me is understanding what talent requires every stage of the company. Yes, culture is important and we had an exceptional team union. However at the beginning we were too stuck into the idea of Chartboost team as a family, and I think this is wrong. Why? Because it can have some residual variables with negative impact in performance such as entitlement of early team members, lack of required changes in talent management or irrational sensibility to emotional damage. At times, when a company scales up big and fast, as a founder you need to bring more seasoned executives from external sources that are better fitted for new growth stages. At the same time, when a company scales up big and fast, as a founder you have to accept that there would be great early employees who are super smart and hungry that will leave to pursue other things (precisely because they are smart and hungry). Thus it is important to keep in mind how to manage talent properly and what role plays timing in this game.
4️⃣ Recommended toolkit to reach product market fit
Lots of things come to my mind, but a quick highlight could be the following:
Extreme Ideal Customer Profile (ICP) clarity. What is the ideal buyer profile for your company? What are all the qualities that would make a best fit for the solutions you provide? Who will generate the most value to your company? Age, gender, income level, location, budget, lifestyle, values, pain points, purchasing habits, product usage frequency, brand loyalty - among other variables.
Continued fast iteration. Be aware of relevant data for your company (any type, from product to business model, go to market, new market dynamics, etc), understand how to collect it efficiently, and execute fast responsive adaptation. What is your customer enjoying? What is your customer not enjoying so much? How can you improve? Can you generate more value? Can you capture more of the value you are generating? Some examples for Chartboost are constant improvement of ads analytics, simplification of SDK integration, the already mentioned fast change from free to paid version once we realized we were leaving money on the table, etc.
Founder-led sales. I’m aware this won’t sound like the typical comment of “build a great sales team and delegate”, but based on my experience there is nothing like a founder leading sales. Someone who knows all the in depth details of the product, own a super passionate story telling ability, and truly believes 100% in the company’s vision - it just moves the needle like anything else.
Stop selling, start helping. To conclude the PM fit toolkit, something that I’m still surprised it doesn’t not seem a widely shared mindset. If you want to grow revenue, stop selling and start focusing on how are you helping your client for real. Be more of an advisor willing to listen and solve problems rather than a guy trying to push a sale. For instance, at Chartboost our vision was providing a liquidity tool for an exciting new gaming industry that was struggling to monetize. We truly believed it and I have no doubt this mindset positively impacted the story telling of the company, helping it evolve beyond just another more advertising project.
5️⃣ Closing Sequoia funding and lessons from growing with a legendary investor
About closing Sequoia funding, everything started when in our 1st investment round an executive from AdMob (mobile ad company backed by Sequoia, acquired by Google for $750m) got in our cap table with a small ticket. Then some months went by and we ended up hiring this person from AdMob and eventually a few more.
The 1st fundraising happened in September 2011, it was around $2.15m. We continued growing and one of the executive hires from AdMob recommended us to talk with Sequoia because we were growing so fast that maybe we could be a fit for them.
To be honest, we weren’t sure about more funding and I don’t think we really were super attractive in terms of team (based on Sequoia standards). However our huge growth meant that we started to annoy the mobile ad divisions of Facebook and Google, and Chartboost lacked the budget to compete properly. So the company needed money.
And again, an unusual story. We didn’t do any term sheet fishing. Got connected to Sequoia, had 3 meetings with them, and clicked. Specially with Jim Goetz who became board member at Chartboost and our “go-to person” at Sequoia. It was curious that the investment process that we experienced was not really focused on our growth (which we thought could be considered the sexiest part) but more about our team and the story telling of the company. Also, the deal was very smooth and we felt super respected. At Sequoia you could feel that deep appreciation for the job of an entrepreneur.
Since then, this good beginning of the relationship did nothing but flourish. It has been a very good experience, a true honor and privilege to have them with us at Chartboost.
About lessons from working with Sequoia, there are a bunch.
First of all, the heavyweight impact of reputation can be wild. Just having them with us was an immediate positive reputational impact. It dramatically boosted our networks. We quickly and easily were starting to connect with CEOs of top companies, that happened to be Sequoia portfolio companies of course. Nice step up.
Second, they weren’t necessarily experts in our vertical, but they had such a state-of-the-art playbook for all type of situations, built after massive iterations of probably one of the best track records of successful VC investments and tech companies ever, that their pattern recognition added a lot of value. Specially in tough times when you need this strategic external perspective for key decisions. Jim played a key role in this.
Third, they simply elevate you. Maybe it sounds cliché but damn, do they help you think big. Constant inspiration. The people that had the more impact in my life have been those who helped me escape from mediocrity and win bigger. People that showed me that better options are real. And Sequoia has this exact same culture. For instance I remember feeling KO after having this bad period where for Chartboost to survive we needed to do cost reduction, important strategic changes, and layoffs. We were growing so much in the past, but suddenly we weren’t any more. The morale was greatly hurt and we presented to the board a new business plan that was quite conservative (and we knew it). At that precise moment, Jim Goetz got up in front of everyone and said “We know you are coming straight out of hell, we know you have been forced to do layoffs that broke something within you, it is normal that you feel pessimistic about the future. But I’m convinced Chartboost can do 30% more than what you have shared. Let’s fight together”. After that we made a new action plan and eventually it resulted in a surprising new era of growth. I’m aware this may sound too “movie-like” but when you feel like shit and you have an investor that cares, knows how to help, and actually does it … it’s extraordinary. Particularly in the worst moments.
6️⃣ Can you walk us through how the $250m Chartboost exit ot Zynga happened?
Firstly, I want to point out that to make an exit like this is kind of a perfect storm. A mix of elements, some in your control and others not in your control, which contribute to the sale happening. In our case:
Restructuring. Unconsciously well-timed, before COVID and thanks to our restructuring and increased focus on bottom line (net revenue), instead of top line (gross revenue), we became profitable and started growing again.
Pandemic. COVID period accelerated the growth of mobile gaming industry because there were more people with less things to do other than being at home. This was a tail wind for us.
Personal circumstances. Just after the restructuring (specially due to the lay offs) and the pandemic, I as on the verge of burnout. Breat experience but also very tough. It was exhausting for me. To be honest, I went through quite a dark period, I wasn’t OK. Plus I had wife and kids, and I wanted to be my best version for them and spend more life with them. So the sale made sense for me personally.
New leadership. We had a COO who worked in Chartboost for 4-5 years, was more experienced than us, knew the company well and wanted to be CEO.
Following up, and getting deeper into the story, as I mentioned earlier the year before the pandemic Chartboost started to be profitable and grow again after the restructuring.
Then COVID came and it acted as catalyst for the industry. It’s important to be aware of what is happening around and what opportunities may come your way, as we have commented.
Before long, in 2021, we were approached by a public gaming company who was a Chartboost customer, and made us the first offer in the pricing range we were looking for. Interesting gaming company (better than an advertising one like us because we could avoid overlapping teams thus we could ensure a sustainable future for Chartboost), good valuation, good cash option - good offer overall. There was only one problem, something about the CEO of the buyer felt off to us. The CEO was known in the ecosystem for having a too “domineering” style. These small signals were important to us because we wanted to give Chartboost a great home and we needed to trust in the new lead.
That being said, this was the only solid offer that we had. The potential buyer gave us the official offer on a Sunday and told us that the deadline to make a decision was next Wednesday, 3 days after. First thing Monday morning we talked to the board “We have this, there is no other thing, what should we do?”. We started to seriously consider the offer. However we also made a small list of other people that had shown strategic interest in Chartboost before. Important lesson learned here, always be aware of your leverage and never split the difference.
Following that, by pure providence, that same Monday, the CEO of Zynga wrote to us for a catch up call. Few months earlier, Zynga had made a press release talking about how they were open to inorganic growth in Adtech. We had tried to connect with them but they never replied. Then suddenly, this same day of April he contacted us to talk. Our reply was clear: OK but let’s talk today because on Wednesday we have the deadline of an offer to sale the company.
We talked that same Monday and shared with full transparency what was happening along with all the terms of the offer. They surprisingly moved very quickly and were able to send us a letter of intend and a consequential term sheet in a matter of hours.
We knew Zynga well since they had been partners for quite some time and we really loved the idea of being acquired by them. Thus, we moved forward. We told the CEO of the other company, and his first reply was “What would it take for you to come with me?”. We could have probably maximized the selling price but we decided to not play that game because we really believed Zynga was a better home. The following Monday, we signed. Tuesday we started the due diligence process. While we were starting the due diligence, Zynga told us they wanted to announce the acquisition in 1 month time. They had a special event and wanted to leverage the deal for the occasion. Therefore this happened very fast too. In a month we closed the deal and this is the story.
7️⃣ High value learnings of working with Midas list investors Mar Hershenson and Pejman at Pear after going from operator to VC?
Working with Pejman and Mar is incredible. People say VC is the dark side but there are great people and both of them are extraordinary for a number of reasons.
Pejman, simply put, is a person with a spectacular charisma and a fascinating story. True unsophisticated self-made. He was born in Iran, grew up during the Iranian Revolution and started working as radio host and professional football player. He then moved to Germany to play football there on a scholarship and get out of the challenging context of Iran. Eventually he immigrated to the US thanks to a cousin he had, and worked washing cars, then a yogurt shop and as rug salesman. In the last job is where he got introduced to venture capital because some of them were their customers, and the rest is history. He even convinced one of his bosses at the rug store to get into VC, and this boss ended up founding Plug and Play.
From Pejman I got high value lessons such as the importance of people skills and sharp instincts. He is able to hunt for talent like no one else, while also connect with everyone deeply. No preppy sophistication, no harvard type of guy, but great use of skills learnt in the real-world and just a natural born networker. For instance, elaborating more, Pejman is 24/7 in every interaction thinking how we can add value to the other person or to whom he can connect this other person in a way that this connection moves the needle. There are always precious insights floating around when you meet with Pej and he has been doing this for so long, that lots of founders, VCs, and LPs already know, which leads to a good reputational aura to anyone that is working with Pejman.
And then Mar is such a great balance as you already now since it was a Views guest some time ago. Also an incredible story. From Barcelona, then engineering in Madrid, then PhD in Standford and getting to the US with nothing. She built 3 companies, raised money from Pejman, and could sell the last one. Pejman was trying to convince Mar to launch a fund for a while and with the yes of Mar is how everything started.
From Mar, among lots of other things, I learned from her profound believe that entrepreneurs can learn and do pretty much anything, also the relevance of looking for founders that have something to prove and are motivated by a passion bigger than themselves, and how an ideal investor needs to adapt to make the entrepreneur better while doing decisions focused on the long term.
And as an extra, overall lessons from my time at Pear VC:
Tough love. Maximum respecto with process and people, but saying things as they are. High expectations but unwavering support. Challenge and guidance.
Problems awareness. In Pear VC, there is an interesting habit of paying attention to crisis signals of portfolio companies, to detect problems fast and even act faster to solve them by facing it straight up.
Biases management. After some years working in the ecosystem, you end up realizing that there are lots of biases everywhere. Specially with founders. In Pear VC I learned that, in contrast to the life as a founder, you need to be more careful with the entrepreneurs’ biases. They tend to have some very high degree of craziness, passion, opportunistic vision, curiosity and an almost pathological optimism. Which I personally share and I truly believe is necessary to build a company. But as a VC I realized that sometimes you more often than not, need to act as counterbalance to this.
8️⃣ Could you share a deep dive on Pear VC’s framework for dealflow sourcing, investment analysis, and being a good board?
To put into context, I’ll be talking about the US. Because in Europe I wouldn’t say we have product market fit yet.
Dealflow. Summing up, we do lots of different initiatives to build super early stage communities that eventually can generate dealflow. Some examples are the following:
Universities. We like to be close to universities. Subsequently, we have structured and unstructured ways of always looking for synergies with universities. Particularly, focused on reaching out to exceptional talent studying MBAs or degrees that we categorize as having a relevant entrepreneurial weight, that could be interested to launch something after graduation.
Fellows. Linked to the previous bullet, every now and then we get some Fellows (like internship opportunities for students) to dedicate a few variable hours every week to do market analysis, dealflow and investment analysis. It works really well, big win-win strategy.
Competitions. Again, we go to interesting universities for us and work with students to create projects for a competition. We could say the stage is pre pre-seed. Our main goal is to find powerful builders with a hustler attitude, who are super early in their careers. Then we make them checks that can easily get up to ca. $100k. Almost no strings attached.
Serious pre-seed programs. In addition to everything already said, we also do programs for “more serious teams” that are in pre-seed stage. The main spearhead here is Pear X, our pre-seed bootcamp. We do 2 badges per year and it includes education, mentoring, demo day, and investment. Usually we are talking about $500k - $1.5m tickets. After the selection process, we invite the best companies to work with us for 3 months in-person in Silicon Valley. The training tends to be a very intense period all Pear VC team actively supports the founders in terms of product, hiring, go to market, fundraising, etc. The main goal is to be super ready for demoday and ideally present something with traction and early product market fit signs. Over 90% of PearX companies end up raising a seed round, the average seed round size is $3m, and each badge has 15 companies.
Investment analysis. Pear VC is a generalist fund where every partner has a different style. But more than thesis driven we are people and market driven. We think it’s very difficult to have super clear investment thesis in such early stages. Too much radical pivots, from products changing completely to business models going from B2B to B2C overnight.
People. The main thing is that there needs to be a very genuine insight, experience, or research that shows how the founder understand the market opportunity with a really different approach. This is super necessary. Who wins in tech are the ones that have an unique insight, and ideally some former experience that is somehow linked to the market opportunity or the pain. From that pillar, I’d say it is important that the founder is able to attract high quality talent (better if this hires have different complementary skills as well as seniority), and that he/she is coachable - it is going to be a long tough road, so they need to know how to liste and show signals of adaptability.
Market. More empirical than the other element. It is very important to see a compelling bottom up approach to the market. Please, no this is my TAM and I’ll get a 10% of it. We need to see something more on the line of I’ve done a lot of market reserach and customer discovery, and based on that my ICP (Ideal Customer Profile) is X, I can charge Y as ACV (Average Contract Value), and realistically I can get Z number of customers. That is my market now. Maybe it sounds dummy or simplistic, but at the end of the day we all know that these are expectations of an uncertain future, the key is to have more meaningful information about how the founder thinks and how the company could work. Of course as investors we will do our homework afterwards, double check everything and make some risk discounts - but I need to see, understand, and believe the landing of the vision, the logic behind the big dreams.
Being a good board. As mentioned before, it is very important to master the dichotomy of unconditional support and fruitful challenge. From this fundamental, some key aspects in my humble opinion are:
Planning. Build operating plans from the very beginning. Even though we all know “Excel can take anything”, a plan forces everyone to formulate hypothesis and determine clear objectives. Numbers do not lie and with a detailed plan, you can have more objective and beneficial conversations.
Listen and ask. Extremely relevant to listen fully and properly, while proactively asking questions valuable questions that can help build the company. All of this without pushing the founder on the defensive.
Tough love. At Pear VC we are always trying to provide though love. It is our way of making comments and feedbacks - respectful and supportive but firm. We know founders in general tend to have exaggerated optimism. Our role as board member is to not only help dream bigger but also advise about risks, help them see the reality and be there for tough decisions. Tough love.
1:1. Beyond the board meeting and the roles that everyone has, there are people. For me, it’s very important to connect 1:1 separately. If possible, outside the office in a more personal setting, specially to bond in terms of emotions, concerns, and fears.
9️⃣ Reflecting on the current stage of VC investing, proper VC firm building and new exciting opportunities
First of all, as the pathological optimist that I am, I fervently believe the importance of VC industry is never going to disappear - regardless of changing times and challenges.
Now getting into the state of VC, the dynamics are changing. I’d say talent is smarter than years ago and the opportunities to access capital are bigger, more diverse and more accessible due to less barriers of entry. Funds are being push towards more flexibility in their way of investing. For example, I remember Sequoia firmly stating “If we can’t ride a bicycle to it, we won’t invest”. This is clearly not true anymore. Talent is more fluid and at the end of the day it is the true center of gravity. Companies go where talent goes. Investors adapt.
Also, investment opportunities are easier to find. The key in mi opinion is redefining value. This is what I’m thinking about all day. Money is a commodity. What I envision as a differential edge is communities that can add value to founders, and we are investing a lot into that idea. Insights are born with friction between talent, with access from one talent to another, and with meaningful connections within communities.
Additionally and on top of that, I think in the current state of VC it is very important the concretion about what that value is. Helping the founders with the go to market perspective, supporting in hiring the best firsts engineers, etc - actions that can really change the trajectory of a company. Founders are gradually becoming more selective, so way more effort in these strategies and tactics than in allocation, can end up becoming a virtuous circle with positive effects in company success, returns and reputation.
As an example, with Pear VC we have multiple communities (Female Circle, Persian Founder Circle, Universities), a 2k squared meters startup hub for founders open to company meetings and events, etc.
And If talking about interesting categories for me, well I must say I’m kind of boring.
I like B2B tools leveraging the new Generative AI boom to radically change how companies sell. In my life as entrepreneur I sold lots of B2B software and dev tools, and I believe there is room for huge innovation in salestech. The current tech stack can be and should be broken. Account executives are sick of having to choose/use from the current sales puzzle made by thousands of pieces. I think the market wants product bundling and with AI you can disrupt the sales process of SDRs and account executives.
I also like workflow automation tools too. From optimization of logistics processes to fintech infra providing liquidity to clients (e.g. empowering SMEs through payment products in order to help them own stronger POS management).
🔟 Advice for young startup operators and VC investors?
Comfort. Get out of it frequently. Not just accidentally but plan constantly escaping that zone and expose yourself to constructive challenges that fir your vision. It will help you understand your true potential and dream bigger.
Traveler attitude. When we travel, we are more perceptive and open to new experiences. The best new business ideas come from curiosity, new insights and opportunism.
Curated circle. Surround yourself with people you admire and who are better than you at something. Notably important for entrepreneurs.
Give before receiving. Even before thinking about receiving. Really important particularly for VCs/investors. There is a lot of ego out there, but the best investors I’ve seen are the one who live with great respect and service attitude towards founders.
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