YouSaid · the spoken record

Thomas Jones

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29
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2015-02-09
most recent
2015-02-09
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1
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  1. “Insurance, if you look into it at all, is interesting because insurers are quite poor at even knowing who you are. So they think in terms of policies, they know you've got a car insurance policy, they know you've got a home insurance policy, they're not very good at working out that you're the same person in both cases. They tend to rely on things like credit ratings in order to assess how likely you are to repay, to make a claim on your insurance. And they know that credit ratings are not a great predictor for that, but that's the easiest data they've got. So there's a whole bunch of areas where insurance is a big legacy industry. And we think it's right for disruption. We actually have a project we've started up called Tech Bridge London with an explicit aim to bring insurance companies together with exciting startups and kind of try and match them together where the insurance company”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Yeah, I think my answer there is probably insurance and the reason is, and it's a big area, it's boring, it has a lot of data. The kind of young startup kids don't tend to focus on it. They focus on retail things.”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Probably say start a business because I think starting a business is, I mean, being in the VC world is about new businesses. I think even if you viewed a purely as exercise in learning, you would learn an awful lot. I think it's the right way anyway, though. Starting a new business when you're young and you don't have a huge amount of cost of living, your lifestyle can be, you can throw yourself into it. I think you have the opportunity to bring the latest technology to whatever problems the world is currently facing, whatever business problems the world is currently facing. So that's an opportunity. I think there's other routes you can take to becoming a venture capitalist, but I think that's the one which I'd recommend.”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Investing in this asset class on the basis of having a broad portfolio because as with any investing, if you ever kind of look at that, if you try to pick a couple of winners, then the risk you are taking, especially early stage versus the potential reward, is crazy because most early stage companies won't even make it or will need further funding that kind of wipes you out as an investor. So if you're making a couple of early stage investments on CrowdCube, you're probably going to lose your money. Now people might say they understand that, but I'm not sure that they do. I mean, the FCA, which is the red goat against here in the UK, they commented on a survey recently which suggested that I think nearly two-thirds of crowdfunding investors admitted they had no previous investing experience.”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “That's a good thing. And I think it also creates a set of champions of your company, so people who own those shares. So that's a good thing. I think though as an investment vehicle, as if people are thinking about this as an investment, I think it's probably going to end in tears because early stage investing takes a long time and that doesn't mean of fears. It means sort of five years, six years, ten years. I mean, companies take a long time to actually an overnight success takes a long time. And also, it's very hard to pick winners. So even those of us who do it on a regular basis, I would only be comfortable with my”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “Yeah, I mean, it's a good question. Look, honestly, if I'm raising money, so if I'm the one selling the equity, especially if I have a retail product and I'm happy that that product is mature enough to be really pushed out into the market, if those things are all true, then I'm quite a fan of crowdfunding because I think the price that you will get for your equity will be high, as in you get a good valuation. I think the marketing that you'll get by using a platform, which I think in a number of cases has been very helpful to companies,”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “It does vary. I mean, we have a lower number enough to care means that it's some number of percent. It's not less than a percent. In some cases, though, we've taken a lot more than that. It just has to feel like it's meaningful if something good happens that we're going to care about it.”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “Yeah, this is not original to me, but when you're in the early stage worlds, which the really early stage world, valuation is a bit of a distraction and probably the right way to think about it, and this is what early stage investors should do, is to first of all say, well, how much money does this company need to move to the next measurable step? And secondly, how much of the company do I is the investor need to own in order to care? And those two numbers might tell you that the company needs £250,000 and I need to own 10%, in which case the valuation can work out is something like £2.5 million. So that sort of way of thinking, I think, works in early stage. Once you get a bit more mature than there are ways of valuing SaaS companies and so on that have cost of acquiring customers and market size and lifetime value of the customer, you can use these metrics.”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Exactly. But I was horrified when it achieved the value half that. So that would have been an investment to get in and get out and double your money. I mean, I think Uber is genuinely creating a new market. I mean, I've heard that it's tripled the size of the taxi market in San Francisco or something as it was before Uber existed. If there's some truth in that, then I've definitely seen the evidence in... With my own eyes, that the Uber is creating or taking business in London. I mean, I think... Other examples are Facebook has made some expensive acquisitions, but in proportion to the valuation that Facebook trades at, they're quite small. So I don't think the valuations themselves are symptomatic of a real bubble Even if I do think they are, they are pretty high.”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Yeah, I mean, it's a good question. I think We all know, at least in theory, about what happened in the dot-com boom. And I think if you look back at some of the stories around 1999 and 2000 and so on, some of the companies that were getting funded and the business plans or lack of business plans, there was a culture that said the whole world's going to change. We don't know what it's changing to, and it doesn't matter. So companies were valued on multiples of revenues. They were valued on very little real substance. And at the time, there was plenty of people saying, oh, this can't last, but nobody really quite knew what was going to cause that bubble to pop, if anything. And then eventually everyone said, hang on, you know, the emperor's got no clothes on. Now, this time around, I'm not sure that's what's happening. I think, let's say Uber, I'm kind of horrified at the valuations it achieved. And yet...”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “A massive global companies that have been built from the ground up in Zara's case since the 70s. I think there are some tech companies that are starting to To kind of get to a good size in Europe, there's Just Eat, which listed last year here. There's transfer-wise a good example. It's also an example of a company which might be playing to some of the strengths of London and Europe. In particular, it's dealing with a problem that doesn't exist in America because transfer-wise is a currency exchange. So if it's not a natural problem for Americans to even consider, you can also more generally talk about transfer-wise in what they call the fintech area. So companies which are specializing in financial technology. And because London is a genuine world-class city in finance and financial services, then it feels like it should be a place where innovation in fintech can”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “They actually acquired Booking dot com in the Netherlands, so it's a Dutch company for less than $100 million. And, I mean, priceline's now worth well over, I think, $10 billion. So a lot of that value comes from Booking.com, and yet the value has gone to, well, at least to a US company and its shareholders. And again, that willingness to pay good money for early stage or at least young companies as part of a growth strategy, again, is a positive thing about America. So I think these are reasons why America is a good place at least, if not to be, you know, to work with. But I think there are some good things you can say about Europe. I think it's very hard to generalize, and I think most attempts to do so end up being a little bit unconvincing, but at least if you're being anecdotal, then there's some real wins in Europe like Zara and IKEA, which are not tech companies, but”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Still captured by American companies even if they haven't founded them. And I'll give you one example of that which is probably quite well known, which is a price line. So Priceline who run sites like booking.com.”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “And that is partly, I mean, there's a bunch of cultural reasons, but one of them is simply the market size. And I think that together with the American kind of gung-ho culture, which is definitely different as well, especially traditionally, means that there have been willingness in America to take big bets, maybe because there's a greater chance of success. And the virtuous cycle there has meant that there really is a VC culture the whole way around. There's people who've built companies and sold them and are now investing in them, and that's almost incomparable how much bigger the scene is in the US, in the VC world. So that's the history. The other thing which I think is quite distinctive about the US versus Europe is that when companies are sold, they tend to be sold to American companies. And that, I think, is important as well, because I think a lot of the value that's created by startups”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “In the evidences there that the product culture is stronger in America and the services culture is stronger in Europe and in particular in London and the UK so if you're a graduate from a good university looking for a career the traditional route has been in the professional services so to be a banker or a lawyer or to work in the city to work in insurance to somehow work in an area where you're getting paid for your time”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Yeah, so what I'll give you now is a pretty uneducated opinion, but that's the easiest to get. I don't know a lot about the US in the sense that I've been to America, but I don't know anything about the US investing scene from first-hand experience. But what I can see and probably what is obvious is firstly that the US is a bigger market. So if you're building a product in the US, you've got a bigger market without having to think about it. It's not like you have to, if you've got sort of up to 300 million people who can buy your product or at least a good proportion of those people can buy your product, you don't have to think about the rest of the world at all. And traditionally that's been a strength of America. Whereas if you're in a smaller country, particularly the even smaller parts of Europe, but even in UK, if your market is sort of a fifth of that size, then your ambition will be can't be so great without having to consider a bunch of problems which are about going overseas. The implication there is that you are, I think,”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “In the same defeat, so we're always feeling we're in the same side. And what we really are asking of the companies we invest in is just that they give it their best shot and we help them where we can.”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “The later stage VCs will potentially have quite aggressive agreements with their companies with lots of first rights to any income or any proceeds in their disposal, conditions that the tying the company down, what they can do, rights to step in if the company is not delivering. It can get quite contractual and that's fine and appropriate later on. We invest earlier on than that. And so it would be totally inappropriate for us to ask the founders to commit to anything more than to give it their best shot. So we have the contracts we put in in our investments are very light and the relationships, we try to keep them quite social. Ultimately really, we want to be on the same side of the table as them. So we're fighting the same fights, you know, winning the same victories and experiencing.”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “I think you can, I mean, you know, in my old life when I was selling software to stock exchanges, you know, we had a very formal legal professional relationship and once or twice that relationship would get strained or that we never kind of got to an extremely bad situation. But it was always, it's a commercial relationship. There's two different sides, two different perspectives, often different interests. But at the same time, it's very important even in that situation to have a beer with the people you're working with because that's when you get a chance to kind of tear your grievances and also understand the other person's point of view sometimes better. I think in any situation a professional relationship can sit alongside a social one. But in our particular part of VC, where at the early stage?”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “Yeah, well, as you, I mean, it is the team, so it's the people for the area that they're in. Because if someone's passionate about an area, as in they've discovered something or they're working somewhere that they just want to stay in, then they will find the right opportunity eventually in that area. That's a bigger risk and probably not one that we'd want to take because the risk of them getting bored even is material.”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “Realize that your actual market is some subset of what you thought or it's a slight variation on what you thought. So if you have an early stage company, the one thing you can guarantee is that in 12 months time, the visions of the future will look quite different. And another 12 months later, it will probably look different again. And that's okay so long as you've got a team that you like working with and who's smart and hardworking enough to give it a go.”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “And so when you talk, look at that opportunity, you work out how quickly you can get into the company, change the management, do whatever's you're going to do and flip the thing. In early stage, that's not the case. And it would be the wrong thing to have any, I mean, we don't spend time looking at spreadsheets and projections. We don't spend time looking at potential acquirers or exit plans. What we like to look for is the opportunity. So the people whoever it is who's running the company, it's the key thing is that we like them, that we get on with them, and that we believe that they're the right people for this opportunity. I think the market they're operating in is important. The product that they've built is important. The fact that they've got traction by having sold that product on an arm's length as a product, those things are all important. But those things will all change because in an early stage company,”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “That's a good question, and the answer is, I'll give you a very clear answer, and I think it's probably the right answer for this stage in a company's life, and that is no, we don't. And I think it's quite different if you're investing later stage, if you're investing, say, in a private equity opportunity, then the amount of time it's going to take you to make that opportunity pay off is very important because every extra year eats into your annual return, your IRR. So if you take five years rather than three years, then you have a much, you know, your return to your investors is much lower.”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “Where their marketing spend is going. So these businesses we have set up from day one in other cases and the more common case where active investors where we're leading an investment round and putting in fairly small amounts of money to see the business that has got some traction before we get involved.”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “First of all, just talking about the same deals and kind of sharing views on deals that we could do. And we ended up setting up a vehicle called Charlotte Street, which over the years we've done quite a lot of investing. We've had some successes and we now find ourselves probably actively making five or six investments a year. And also these days we're trying to both lead the investments or sometimes actually set the businesses up ourselves because in some cases we spot a market opportunity or someone in our network spots a market opportunity and we help bring that create an opportunity around that by bringing in a team, putting in some funding and seeing where it goes. We've done that with something called Kids Locks and something called VisCore. Kids Locks is an app for parents to manage their children, use of devices and VizCool is to help companies work out”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “It did. And so just to talk through that part of the journey, so when I'd sold Sparts, it's not an obvious thing. There's no obvious next career step when you build a business and sold one. I mean, sometimes you might think that you would just start another business, but you need the right combination of opportunity and people and so on. So the first thing I did was get involved with something called SeedCamp, which is a program like an accelerator program here in London. And SeedCamp is very good at getting companies, particularly from kind of the far outreaches of Europe and bringing them into London and helping them get funded and mentored on the way to success. And I invested in SeedCamp as an investor. I also got involved with the mentoring. And through the seedcamp program, I got to, first of all, see a lot of very exciting companies, but also to meet my two business partners, Bo and Anton, and we just found ourselves.”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  27. “Yeah, it was the only thing I ever did. It pretty much still is the only thing I've ever done. So I never really had any, yeah, I never left university and got a job. That's what I did.”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  28. “So I spent kind of the next 15 years together with my partners and a team that we've built up around us of up to about 150 people, building a company called Smarts. And we sold that product, which is also called SMARTS, to stock exchanges all over the world, the London Exchange, the Zurich Exchange, Hong Kong, Moscow, so all over the world. And eventually we got an offer from the Nasdaq stock market to buy that whole company. So they wanted to acquire the software, they wanted the staff, the management, the customers, the revenues, but they didn't need the founders. So it took me a little while to understand what this meant, but it meant that I was free to go. It meant that smarts are grown up. So that was about four, four, five years ago that I sold smarts.”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source

  29. “And I think I qualify as the first non American but not quite the first English. So my background is I about 20 years ago, way back in the 1990s, when stock exchanges first started trading on computers rather than on a floor with people yelling at each other, together with a fellow student and our professor, I built a piece of software for analyzing the trading that was happening on computers. And we realized that that software could be sold to stock exchanges for market surveillance.”

    2015-02-09 · The Twenty Minute VC · 20 VC 011: London's Early Stage Funding Scene with Thomas Jones · IDENTIFIED FROM THE TRANSCRIPT · source