YouSaid · the spoken record

Sophie Kahn

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18
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2023-04-06
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2023-04-06
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  1. “I think we've seen significant progress in that it's top of mind for everyone when we invest in founders, the first things we talk about is how to build a diverse team, how to build your recruitment engine, your talent functions such that you can optimize for that. How do you think about the board of composition, et cetera? Questions and topics that weren't necessarily so prevalent 10 years ago or more. We can always be doing more. And at Blossom, we just say we lead by example, we lead by doing. And that's really, I think, how you make change.”

    2023-04-06 · Goldman Sachs Exchanges · How Europe’s tech startups are continuing to innovate in the current market · IDENTIFIED FROM THE TRANSCRIPT

  2. “I wonder whether VC funding and venture capitalists are the white ones Initiatives. And I think VT investors are brilliant technology investors. Certain industries call for experts. And so you do have a few venture funds who are experts in those markets and will build dedicated funds just to invest into those teams. But broadly VCs, I think should stick to software internet mobile, even crypto, and people who are experts in their field should be funding those types of projects. One question is whether VC funding is the right method of funding. You have government money, you have institutional grants, you have private equity for the much more capital intensive businesses. And so there is risk of these industries getting behind, but I'm not sure that it's necessarily the VC's job to fund those initiatives.”

    2023-04-06 · Goldman Sachs Exchanges · How Europe’s tech startups are continuing to innovate in the current market · IDENTIFIED FROM THE TRANSCRIPT

  3. “There's obviously a lot of excitement about the potential applications for generative AI. I think a lot of that is early. It's at the ideation stage. It's at the potential of what this technology can do. I think the more interesting as you just asked is how that can be embedded into existing products. And so I think that a lot of founders who have anticipated the rise of Gen AI and have thought about kind of product roadmaps in terms of what they can do. And so I think the first use cases are going to be in the existing software products you're going to see it in tools like Intercom or in Salesforce. You're going to see it in Zoom's, Microsoft Teams, Google, et cetera. And it will be another at least 12 months, I'd say, before you see the startups with brand new applications using this technology.”

    2023-04-06 · Goldman Sachs Exchanges · How Europe’s tech startups are continuing to innovate in the current market · IDENTIFIED FROM THE TRANSCRIPT

  4. “So, if we talk about Europe, I think we actually have to divide up UK and Europe. And I would say that the continent has greatly accelerated in terms of potential and actually outstripped the UK, especially hub-site Paris or Berlin, just in terms of the level of talent, in terms of regulation, in terms of, we just touched on some of the government measures. And if you just look at the dollar funding that goes into European startups, that's more going on the continent than in the UK. So I think overall we're very positive on Europe. We hope the UK does more to enable the ecosystem here because I think we might fall foul of losing our position. But in terms of what Europe has achieved at the last 10 years and the companies speak to themselves.”

    2023-04-06 · Goldman Sachs Exchanges · How Europe’s tech startups are continuing to innovate in the current market · IDENTIFIED FROM THE TRANSCRIPT

  5. “I think the European Investment Fund has been a big champion of venture capital and a big commitment to a lot of funds over Europe. And then if I look at particular countries, Macron has done a stellar job in France in terms of an enabling startup ecosystem being a champion of tech, better labor provisions, there's BPI that provide a lot of loans and equity funding to companies so that you can barely find a French startup that doesn't take that funding at the beginning. And so I think that governments just generally in Europe, they appreciate the value and the potential of SMEs and the growth of SMEs and what they can deliver in terms of jobs and what they can ultimately deliver in terms of contribution to GDP. And I think that has been a real change over the last 10 years in terms of supporting initiatives that will accelerate growth of SMEs.”

    2023-04-06 · Goldman Sachs Exchanges · How Europe’s tech startups are continuing to innovate in the current market · IDENTIFIED FROM THE TRANSCRIPT

  6. “One of the things I've observed is how much governments in Europe can be helpful and or hurtful to technology. How has recent government policy in various markets in Europe helped the European tech market and encouraged growth or where can it get better?”

    2023-04-06 · Goldman Sachs Exchanges · How Europe’s tech startups are continuing to innovate in the current market · IDENTIFIED FROM THE TRANSCRIPT

  7. “I think it goes too far to say that we're back in 09 or even kind of the early 2000s bubble. I think we saw this 15-16, we of course corrected before those years. Everyone had been told to go for growth and then told not to when we're having a repeat of that. There's still a lot of capital sitting on the sidelines, great businesses are being built. There's true adoption of technology and real need. I just think we got into some crazy heady heights in 2021 and we're correcting from that, rightly so.”

    2023-04-06 · Goldman Sachs Exchanges · How Europe’s tech startups are continuing to innovate in the current market · IDENTIFIED FROM THE TRANSCRIPT

  8. “Then those businesses don't need to look dramatically different in times of recession or economic slowdown. And our final point was they have to be recession proven that you shouldn't be playing into very sick industries like construction, for example. But what we see now, it's not a type of business that's doing well, but especially for our software businesses, is that you really have to prove your worth. And so ROI on your spend or value-based selling where you can say if you spend 100K or even 500K on our software, we're saving you X in headcount or we're driving more efficiency or we're driving more revenue as a result. And these can't be high level arguments anymore. They have to be very specific, very granular and detailed. So the champion internally in the org and the buyer can actually go to wherever they need to get budget from and finance and procurement, have a lot more power these days and they can really give the rationale why they need sign-off for this software.”

    2023-04-06 · Goldman Sachs Exchanges · How Europe’s tech startups are continuing to innovate in the current market · IDENTIFIED FROM THE TRANSCRIPT

  9. “For example, payments is a market size of that size. And you see when you have unlimited TAM how fast a business can grow. And then there are some specifics, especially investing in Europe, you have to see how these companies can scale cost effectively and fast. So you're looking at network effects or economies of scale. You're looking for distribution advantage, by which I mean you're not just reliant on paid spend as some kind of organic or viral adoption. And critically, that you can take this product and internationalize you can be global without almost restarting a business every time. I think that's been one of the challenges of European venture is that the company's got very stuck focused on their domestic market. But if you think about products like Airbnb or Uber, those apps or platforms look exactly the same no matter what country you're in. They're not having to rebuild a product for a different market. So we're very focused on that, which means actually if you follow all of those criteria,”

    2023-04-06 · Goldman Sachs Exchanges · How Europe’s tech startups are continuing to innovate in the current market · IDENTIFIED FROM THE TRANSCRIPT

  10. “Mentioned before that all of these companies should be playing into secular trends where if you're disrupting an existing industry or creating a new market, those tailwinds should surpass or outstrip any economic headwinds. From the outset, we had very clear investment criteria. When we started in 1819, we'd already had a decade of nominal growth at that point. It was evident to us that a recession was going to come at some point. And so we laid out these six investment criteria to be very specific on the types of companies, founders, and businesses that we would invest into where we could believe that these companies could be huge potential outliers and they would generate hundreds of millions. They had a path to profitability. It started, we talked about the founders and the types of founders. Obviously, you have to play into very big markets. You have to believe that these markets can hold businesses of that size. And we're not talking about market sizes of one, two, five billion. I mean, you're literally talking about market sizes of trillions and we look out.”

    2023-04-06 · Goldman Sachs Exchanges · How Europe’s tech startups are continuing to innovate in the current market · IDENTIFIED FROM THE TRANSCRIPT

  11. “Great company. So if the dollars that flow into venture funds are not disappearing overnight, institutional investors will continue to invest in the best venture funds. And those best venture funds will continue to gravitate towards the best companies. And so I think the founder needs to recognize, am I building a successful and viable business in which AC should continue to grow and continue investing? Or if a founder has concerns over the viability of their business, then they should be more focused on cash preservation.”

    2023-04-06 · Goldman Sachs Exchanges · How Europe’s tech startups are continuing to innovate in the current market · IDENTIFIED FROM THE TRANSCRIPT

  12. “We grew up in Europe where capital was never abandoned. There's always been the lamenting that European growth funds aren't really there, that capital comes from the US. It was never a given in those years that growth funds were going to come and invest in European startups. I think that changed in 2019 to 2022. We obviously saw an influx of capital from the US. But you don't know how long that capital is going to last. And so our advice to companies has always been grow efficiently, be in control of your own destiny. But I equally don't think the right advice is just preserve cash, be conservative because we're investing in industries where there should be great tailwinds of growth and you should be playing into that. And if you have a competitor that is cash strapped and can't afford to invest for growth or you have a new market ahead of you, you shouldn't just be slowing down because of concerns over the economy. I mean, early stage venture is not correlated necessarily to how the economy is performing. And I would argue that there will always be capital for”

    2023-04-06 · Goldman Sachs Exchanges · How Europe’s tech startups are continuing to innovate in the current market · IDENTIFIED FROM THE TRANSCRIPT

  13. “Fund, which is quite different from the average venture fund that normally 30 to 40 companies, and we're now investing out of our third fund, which is $475. We've raised about a billion dollars in total. There's some quite high-profile companies are now checkout in the payment space. MoonPay also in financial services, and a lot of software businesses as well, like Pigment, Tines, or Space Loft, and 24 companies. And the strategies remains the same. We've really found about constant in Series A, that's our core focus.”

    2023-04-06 · Goldman Sachs Exchanges · How Europe’s tech startups are continuing to innovate in the current market · IDENTIFIED FROM THE TRANSCRIPT

  14. “Collison story of going over and leaving Ireland, well, it was incredibly competitive for talent and for the capital out on the West Coast. And so that next genre was starting to stay in Europe. And I saw a significant funding gap for them. The most ambitious entrepreneurs wanted to raise capital from the West Coast funds. The West Coast funds didn't have the bandwidth or expertise to be doing early stage in Europe. And there just weren't enough venture funds in Europe supporting those founders at the series A stage. I guess like any founder spotting a problem that needed solving or a gap in the market, that's where I felt excited about building my own. And so LaunchBlossum in 2018 with another partner who joined me from Index. And we raised that first fund, closed it in 2019. It was an $85 million fund focusing on Series A. And our strategy has remained the same since. So each fund pretty concentrated. We make five investments a year. We target 15 to 20 companies.”

    2023-04-06 · Goldman Sachs Exchanges · How Europe’s tech startups are continuing to innovate in the current market · IDENTIFIED FROM THE TRANSCRIPT

  15. “So, I've been investing now over 10 years. I started my career at a fund called Index Ventures, and I started in 2012. And back then, there wasn't a lot going on in the European ecosystem. I joined Index because they were the only fund investing in Europe and the US. And so I took a view that I would join them in the London office but engineered to spend as much time as possible in the valley. So in my early venture career, I kind of split my time half between Europe and the US and I got to work with some phenomenal companies like Robin Hood, the mobile brokerage from really early days, so got to see the rise of how you build for hyper growth, how you build a world-class product and engineering team, but also grew up in the European ecosystem where it was very easily visible, the great talent and ambition wasn't confined to the West Coast, that there was a next generation of entrepreneurs in Europe that was just as ambitious, just as talented. And if you fast forward to 2016, 2017, they would no longer choosing to uproot and move to the valley.”

    2023-04-06 · Goldman Sachs Exchanges · How Europe’s tech startups are continuing to innovate in the current market · IDENTIFIED FROM THE TRANSCRIPT

  16. “Think the answer is quite different in Europe versus the US. I think in the USS Phoebe was integral to the tech ecosystem. It's a bank that grew up in the 80s providing not only banking services to technology companies, but also the funds. And so it really was the center of the ecosystem over there. And the UK, a number of accounts with SVV was small. The deposits relative, and also UK is only a fraction of the European startup ecosystem or technology ecosystem. With HSPC taking it over and backstopping the deposits, I don't think it's going to have any long stick impact. I think in the UK, what it highlights, there's nothing particular about the banking needs of a technology startup. It just highlights the lack of innovation in business banking to SMEs generally in the UK. And I very much hope that this kind of erases awareness. We might see more innovative products come to market in this space.”

    2023-04-06 · Goldman Sachs Exchanges · How Europe’s tech startups are continuing to innovate in the current market · IDENTIFIED FROM THE TRANSCRIPT

  17. “I think there was a Pacific 72 hours, maybe slightly longer that shocked founders. I think no one anticipated what happened that weekend. And I think there were some stark lessons learned by founders about cash management, diversification, cash. I mean, it's a story that ends well, which is good for all of them, but I think there will be some profound lessons taken away as to treasury management, liquidity management, diversification of their assets. We can talk specifically about credit suice and what has happened since. I think that's less concerning for technology startups. I think the question is the contagion after that and whether banks stopped lending so much, but there wasn't much of a lending product business to technology startups from investment banks. I think SPB was quite particular in its venture debt business. So I don't think that's going to have so much of an effect on technology startups.”

    2023-04-06 · Goldman Sachs Exchanges · How Europe’s tech startups are continuing to innovate in the current market · IDENTIFIED FROM THE TRANSCRIPT

  18. “There's still a lot of capital sitting on the sidelines, great businesses are being built, there's true adoption of technology and real need. I just think we got into some crazy heady heights in 2021 and we're correcting from that, rightly so.”

    2023-04-06 · Goldman Sachs Exchanges · How Europe’s tech startups are continuing to innovate in the current market · IDENTIFIED FROM THE TRANSCRIPT