YouSaid · the spoken record

Andy McLoughlin

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29
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2016-02-29
most recent
2016-02-29
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1
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  1. “So Josh Hanna, who led RB round at Huddle, Josh's GP at Matrix Partners, has always been for me kind of like the archetype, you know, great VC, former operator, Wicked Smart, got literally both physically and metaphorically a brain the size of a planet. And really nice guy, complete straight shooter, doesn't mess you around if he thinks something's kind of shitty and not going well, he'll tell you. But at the same time, immensely supportive and just always a great sounding board, Rally and I.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “So, I really like the medium newsletter just because it's such a wide range of topics that I get sent. So I really like Mark Suster's writing, but then in the same read, I'll be reading something about the US political system, then I'll be reading something about a new music act of London, all of which have been surfaced by a medium.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Obviously, pretty, and Sonos, which again is kind of in the same theme just because for me, like a happy home has music playing all around it. And this is by far the best way to do it.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Apart from Vinyl, which is kind of like a weird thing, I haven't bought physical media music in, I haven't watched a CD in forever, but I listen to hours of music every single day.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “Definitely the fact you have to become an insta expert on companies and spaces that you knew a thing about. I mean, we will see in an average year anywhere between two and a half and 3,000 companies, and we'll invest in 15. So you do the math to about 99.5% of the businesses that we see we won't invest in. You have to be able to make a very quick decision about whether something is interesting from a market standpoint and are the founders credible and does the product look like it has legs to compete because there will always be other people doing something similar. And then kind of having to say no after that is really tough.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “No, the book's wonderful. The book is great. And I think nonfiction I really enjoyed recently the hashing Twitter by Nick Bilton, a remarkable story about a company that managed to do well despite everything going wrong. There are just some absolute solid gold quotes in there. My favorite quote is actually from Mark Zuckerberg who had met with the Twitter team thinking that they were a group of Harvard or MIT or Stanford grads who knew exactly what they were doing and they were out to build this incredible mobile social platform. And of course what he met were in his description I think he said it's like three guys in a clown car drove into a gold mine.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Oh good question. So my favorite fiction book is a book called The New York Trilogy, which I read while I was on holiday in France. This is probably in 2005. It's the first vacation I've had in two years. And it was the first book I read on that vacation. It just reminds me of just feeling relaxed for the first time.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “You really see both, and there'll be companies which will probably try and sell to both business models. Grassroots is great because it can just spread like wildfire inside an organization. It can move from org to org very virally. But I think to make real revenue, you kind of need to be kind of selling top down. So GitHub is a great example of this. GitHub being adopted on community projects being adopted by small businesses all over the world, but it's that GitHub enterprise model where they're selling something that goes across the entire organization. It can be deployed on premise. It's highly secure. Talks to Active Directory and all of that good stuff. That's the real money maker for them.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Kind of doing construction, can it be better at their job given that everybody has a supercomputer in their pocket and more and more so on their wrist as well? Building tools and services for them is really exciting. Government tech is important and exciting as well. I think it's an area that's been kind of pretty overlooked in the past because selling to government is hard. It's expensive, but there are a bunch of initiatives in the US government and in the US and in the UK government that makes it increasingly easy to sell and are really kind of sneaky ways you can do that. We still do stuff in kind of horizontal web and mobile SaaS platforms so it could be next generation CRM or ERP or anything like messaging or anything in that space is interesting and then something that I particularly love is developer tools. So if you kind of prescribe to the notion that every business to a greater or lesser extent is becoming a software business, how can you help them either build or consume software better?”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Reason now, I think for legal reasons I probably can't speak too much about it, but as reported in the press, we are raising a new fund and an opportunity fund. And in terms of the kind of main topic areas of where we'll be investing, it's pretty similar to Fund4. About half of the fund will be deployed into B2B and SaaS, which is great for me because that's kind of my area of specialty. And that's really divvied up between vertical SaaS solutions. And so think about some deeply unsexy industry that's still running on spreadsheets and access databases and fax and email, anything that can revolutionize that where it's a really big untapped market is definitely really interesting. So think about SaaS for it could be for farmers or SaaS for construction or SaaS for the retail industry or so SaaS for anything which is just kind of pretty manual right now. And I think with a big focus on what we're calling blue-collar SaaS, so kind of software to help the non-knowledge worker do their job better. So how do you help somebody that's in a factory or in a mine or somebody?”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “It's going to be harder to raise funding right across the board. But the really good news is that great companies always do well in downturns. Great companies can always raise funding. Great companies prosper because they have access to the very best people, they have access to cheaper office space and cheaper services. The tourists who are just doing this because tech was sexy will go back and do whatever they were doing before, which leaves the really hardcore entrepreneurs to really kind of focus on what they're building and give them access to the very best people and talent available. There will be casualties and there will be good companies who for whatever reasons struggle to raise that next round. It could be because their last round was done at too high a price. It could be because they've never managed to get their sales and marketing costs under the control. And there will be some tears before bedtime before this is all done. But I think the for great companies, this will be a great time to build a business.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Salespeople in the organization. Large costs unless they are bringing revenue in, it's a cost center. Sales should be there to generate revenue, not to affect the bottom line. And so that's one place that we see. You see a lot of discretionary sales and marketing budget being cut. So all of a sudden they're not spending so much on tools and services and programs. I think that you'll see a lot of the fun stuff. So maybe mules get cut back to once or twice a week or completely cut and the company just has to double down and focus on the really important things, which is a Larry Ellesson quote that, you know,”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “I think you go out to raise a ground when you're ready to raise, because there's no point going out to raise a Series A if you're kind of well short of the kind of expected benchmarks unless you have some kind of unfair advantage. Perhaps you have a past relationship with a Series A firm and they would back you regardless. Or you've been building some kind of incredible technology that you haven't monetized yet. And it's going to be done on the strength of the IP. So assuming that that's not the case, then you could end up spinning your wheels and spending a lot of time trying to fundraise with no joy, in which case you then have to go to the second option, which is thinking about kind of reducing your burn. And I think what you have to do is look at your business and you say, you know, where is the fact that we can begin to cut into? And that will often start, and we saw today, you know, Xenophon's laid off 250 people, and those are generally probably the poorest performing.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “The second thing is that the good quality firms have generally been around the block and they have a great network so they can help you with not only introductions and warm introductions or even very warm introductions to great follow-on firms, the Series A will B or whatever around, but they also can help with hiring legal stuff and help with pricing and help with all the kind of strategic stuff that young companies tend to need. And then the third thing is exactly that, that if you find yourself running low on cash and the business is performing well but not well enough to do the Series A and we believe then firms like ours are able to kind of dip into the larger funds that we have and help extend the runway.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “Yeah, I mean, I think there are really a few things. I think the quality of the brand, I think this isn't just C all the way through, the quality of the VCs you bring on board is some kind of proxy for the quality of the company. You can infer something about the business based on the investors they have. You'd hope that good investors invest in good companies.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Yeah, I mean, if there was a startup going out from one of her, going out for their Series A and we didn't participate, that would look really bad. I think you can draw whatever conclusion from that you want. And what was the first question”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “For the company, but when you've got a bunch of either individuals or very small funds, all of whom are exposed to say $25,000 or $50,000 or $200,000 max, there's really no forcing function to make them put their hands in their pockets to kind of to help the company extend.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “It's kind of true. So, yeah, I mean, when you're fundraising, you want to go out with the most leveraged possible, which means having cash in the bank, having lots of runway, and then kind of using that to tell a great story about your revenue and growth and prospects and market size, et cetera. And I think one of the big issues that we're going to see in the market over the next few months is this, the downside of the party round. So companies that went out who they raised a big seed round, three or four, maybe even $5 million, but without a single lead. And what happens there is they go out to raise the Series A and for whatever reason they're not quite ready. And so then they have to think about how do they extend their runway. They can cut costs, or they can think about raising more capital. Now, the great thing about when you have a strong syndicate lead, so for example, if we were leading or a first round of leading, or if Cowboy or Homebrew leading, then you have somebody there with deep pockets who can actually provide more runway.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “Yeah, I mean, six months is the right time to do it. I think if you leave it much less than that, you begin to get into a situation where if it drags out, you could run out of money. Well, exactly because the thing that you have to remember is that VCs are, at the end of the day, in the business of trying to make money. And if they have leverage over a company, they will probably use it, which is kind of damning on people in my industry, but it's kind of ridiculous.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “When you're going out to raise, you just have to make sure that you look better than everybody else, and that will just mean in relative terms you're better in absolute numbers, the revenue is probably going to be higher.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “Yeah, that's a great question. And I think what we're counselling our CEO is on is to actually consider, and not just consider to actively try and raise more. There are companies in our portfolio who follow the seed round will have anywhere from 18 to 36 months of runway in potentially even more based on how they manage their burn. And whilst I think just saying, okay, 18 months of runway is the right number is probably a little bit simplistic. That's generally how it nets out. But what we send to the companies now is really plan on having 24 months worth because with Series A's getting harder to do, the revenue bar generally it's going to be higher even though it's very hard to put a magic number on what it is. It's going to be higher than it was and therefore given yourself more time to get there so that you look better than the other companies who are raising at the same time is key. Because what you have to remember is all of these Series A funds have cash they need to deploy. They can't sit on it indefinitely. They're just going to be more cautious about how they deploy it.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “Yeah, potentially, but we would look at every deal on its own merits. And whilst that would be one of a red flag that would be raised, it certainly wouldn't mean that we'd never do it. It just makes the bar so much higher.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “It's a great experience founder who's done this before, and she's on her second business, or it might be that it's a young inexperienced team, but they've had incredible revenue traction in the first kind of two years of their life. Is there a crunch though? You know, there will be a lot of companies who want to go out and raise funding to struggle. And that struggle manifests itself in rounds being done at lower prices, rounds being done smaller, so rather than that $7 or $8, $9, $10 million round, it might look more like four, five, six. And there'll be some companies that just fail to raise funding at all. Yeah, the C, and we have companies who we have bridged ahead of an A and more generally do that if we're great believers in what they're doing, think they just need a bit more time and money and momentum automatically.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “Yeah, I mean, that's probably the topic that I've been asked most about by our CEOs and people in the industry. It's a really hard one to answer because they ask what are the hurdles to doing a Series A now? And the honest answer is that every Series A will look different. And some Series A's will get done because purely based on the strength of the founding team and the product potential, some will get done based on the revenue traction. There will be companies that raise a Grey Series A that have never made a penny and there'll be some companies that do are doing like $4 million in revenue when they do their Series A and there's an entire continuum between them. And I think really though the thing that Series AVCs are looking for are companies that have the potential to be the winners in a, or one of the winners in a very large market. And they're looking for signals that can point towards that being there. And that signal may be because...”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “Yeah, so seed is definitely been a moving term. And back in the day, seed meant the first 250, maybe even $150,000 that went into a company. But seed rounds have really, really gotten a lot bigger in the last three or four years to the point now where you have a precede round. So you might have a friends and family round of $25 to $50,000 to get you off the ground. You then do a precede round of $250 to $450 or $500,000, and then you go out and raise a seed round. It could be anywhere from $1.5 to $3.5 million, which is kind of like a Series A was not that long ago. And of course, now Series A's are looking anywhere from $6 to $12 million. So it's kind of the same terminology just the rounds have got bigger and everything's kind of moved along one stage”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “Lots of different things. I find it very hard to focus on one thing for a long period of time. So being able to work with lots of companies on lots of different matters, helping them with everything from product to fundraising, hiring, strategy, pricing is really, it's a perfect fit for what I love to do.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  27. “Yeah, you know, with Huddle, Alistair, who's there. I felt by the time that I left that I was really just getting in the way, that when a company gets past 150 people and start getting up towards 200, they don't really need the kind of hustler founder there anymore. They need people who are going to adhere to processes and get stuff done and not traveling people's toes. And as much as I love the team and I love working there, I definitely felt like it was just a natural point to step back. And we tell our founders all the time that the initial team they hire isn't necessarily going to be the team that takes them all away. And I think as a founder, you can have to remember that that can be you as well, you know, just because you were there at the very beginning doesn't give you carte blanche to be there all the way through. And if at some point if you need to step back and hire people who are better suited, then you should absolutely feel that you are empowered to do that. And yeah, and given that I love the early stages, given that I love working on”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  28. “Is raised about $85 million of venture capital over the last few years. And yeah, it's a great business, but I'm a small business guy. I'd always loved working with startups. I'd been a very active engine investor from about 2011 onwards, invested in companies you might know like Postmates where I was the first investor, Buffer, Intercom, Secret Escapes, Pipe Drive, to name a few. I had about 36 angel investments in my stable by the time I stepped back from my exec role huddle and joined Softech. So I joined the team here in April 2015. So it's been about 10 months now. And it's been wonderful. I get to, as I say, I get to hang out every day with really smart people and hear their stories, hear about what these fantastic entrepreneurs are building. And I think the hardest part is just that we can't invest in all of them.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source

  29. “Sure, so I'm a massive nerd, I've always been a massive nerd, and I think it was probably inevitable I would end up working in tech. My first job after university was I worked for a telco where I ran all of their online systems. I was able to convince the MD there to give this kind of unseasoned 21-year-old amateur a chance at doing that rather than taking onto someone who was in their 30s who probably would have been far better equipped. But he did and it worked out really well. I then went to work for a consultancy putting in business process and document management systems and that's what really gave me the idea for a company called Huddle that I founded in 2006 at the very end of that year with my friend Alistair. Huddle's now a big company offices in San Francisco where we're sitting today in Washington, DC because we do a lot of business with the US government and then a big team in London.”

    2016-02-29 · The Twenty Minute VC · 20VC: SoftTech VC's Andy McLoughlin on The Series A Crunch, Maximising Runway and Minimising Burn and For Startups · IDENTIFIED FROM THE TRANSCRIPT · source