The Exchanges

Q So I, funnily enough, interviewed another VC the other day, and they said the reason for us not being in the same league as the US is sheer market size, and it's simply we don't have the same amount of people we can export our products to straight away. Do you agree?

A The largest GDP block in the world is the European Union. The GDP of the European Union is larger than America and China. If we were a country, we would have, I think, the highest GDP per capita of any, if you took any large company, I'm not talking about like Vatican City or Luxembourg, Uh, so, and I completely disagree, you know, if you just look at the stats, Britain has got the highest purchase rate of e-commerce products per capita of anywhere in the world apart from South Korea, well ahead of the US. Uh, Germany has got an incredibly rich domestic market, and, uh, I think we're seeing at every level, apart from, you know, current political rulings, we are seeing at a deeper level in the technology layer and also language layer and usability and everything else, a huge rush to, uh, of common acceptance and common usages across Europe. 10 years ago, maybe that would have been true, that you, you know, you would be worried about entering the US or entering China or entering Europe. But right now, the entrepreneurs I meet are thinking global from day one. So it doesn't matter about market entry into Germany versus the US. They launch on the App Store. They launch on the Play Store. They're global instantly. Um, and, you know, I think about CityMap, for example, one of our companies. There's 20 people in Farringdon. They're building an app which is used, you know, by millions …

AI assessment note: “and I completely disagree, you know, if you just look at the stats”

Q and this will surprise you, but I've been in many a VC job interviews, uh, and a frequent question I always got was, why this stage, Harry? Why this stage? And obviously it differed entirely on what fund I was at and which stage they were in. Uh, but why would you say this stage? What stage would you say balls are now? Series A, B? Having made some seed?

A Well, firstly, Harry, it doesn't surprise me that you've been in many VC interviews, uh, partly because obviously you're a very bright guy. But partly because you wear so much VC stash. I'm sitting next to a man dressed head to toe in free gear from VCs across Europe and San Francisco. But why the stage? So there's two reasons why I'm excited about the stage we're at. And, you know, we used to say series A to B, but in reality, those words have become pretty meaningless now. It used to mean you were the first institutional investor, but the way that the stack has developed for capital with professional angel investors and seed investment funds and everything else, pre-seed and post-seed and crowdfunding. What, what we really say is we're, we're early stage. We do one to twenty million dollars. I'm excited about that region for a couple of reasons. One is, as much as any of us like to think we're the perfect judge of people, we also, we're kind of slightly geeky as well, and we like to feel and touch product, and we like to see some data, and we like to play around with that data, and we like to try and hypothesize about how we can maximize X, Y, Z, and basically, we want to see which tiny cogs are going to turn in order to move a massive wheel. And you only really get those at a stage where you're ready to scale up and need that one to twenty million dollars. So doing pre produ…

AI assessment note: “What, what we really say is we're, we're early stage. We do one to twenty million”

Q Um, in that strand though, is crowdfunding not a competing Model of finance to venture capital?

A I think at some levels of venture capital, it is. Um, it's a different level. It's a different type of financing. Um, they, you know, you do obviously ultimately get cash, um, for equity if you're doing equity crowdfunding. Um, but it comes with different advantages and disadvantages, right? You get a huge new group of people. In fact, Just Park, who did their crowdfunding campaign recently on, uh, Crowdcube, they actually saw a three X increase in the number of downloads of the Just Park app. Uh, plus they've just taken on 2000 new, very, very incentivized advocates. Uh, so it's an incredibly powerful tool, but it's a different type of funding because, you know, you don't necessarily get the same structure of, of support and advice that, uh, a venture fund like Boulders and Aspires to be, uh, can give you. However, realistically, crowdfunding is a much, much bigger, uh, industry than just venture capital. Venture capital is a niche within it because crowdfunding, uh, Whether equity or debt or any other kind of various varieties of those kind of products can apply to many, many types of small businesses. Um, we really focus on specific types of high growth, predominantly, uh, for us, uh, technology-focused businesses, which is just a part of the market. Um, and we also focus within a range. You know, we have An amount of capital to deploy, an amount of capital we hope to return…

AI assessment note: “I think at some levels of venture capital, it is.”

Q Um, in that strand though, is crowdfunding not a competing Model of finance to venture capital?

A I think at some levels of venture capital, it is. Um, it's a different level. It's a different type of financing. Um, they, you know, you do obviously ultimately get cash, um, for equity if you're doing equity crowdfunding. Um, but it comes with different advantages and disadvantages, right? You get a huge new group of people. In fact, Just Park, who did their crowdfunding campaign recently on, uh, Crowdcube, they actually saw a three X increase in the number of downloads of the Just Park app. Uh, plus they've just taken on 2000 new, very, very incentivized advocates. Uh, so it's an incredibly powerful tool, but it's a different type of funding because, you know, you don't necessarily get the same structure of, of support and advice that, uh, a venture fund like Boulders and Aspires to be, uh, can give you. However, realistically, crowdfunding is a much, much bigger, uh, industry than just venture capital. Venture capital is a niche within it because crowdfunding, uh, Whether equity or debt or any other kind of various varieties of those kind of products can apply to many, many types of small businesses. Um, we really focus on specific types of high growth, predominantly, uh, for us, uh, technology-focused businesses, which is just a part of the market. Um, and we also focus within a range. You know, we have An amount of capital to deploy, an amount of capital we hope to return…

AI assessment note: “I think at some levels of venture capital, it is.”

Q Now, funding methods have been evolving rapidly since 2008. Uh, one such method is crowdfunding. Um, and with your recent investment in Crowdcube, the UK's leading equity crowdfunding platform, can you give us an insight first into how you see the crowd becoming more involved? With early stage backing of companies.

A Yeah, I think we've invested in a lot of fintech companies. I'm particularly very excited and involved in Crowdcube because I think what they're doing is opening up and making more transparent an asset class which previously was only available to a very small group of wealthy individuals controlled by small merchant banks. And they've built the technology and they've also created a culture which allows people to have access to those assets, which is investments, whether equity or debt, into small businesses. I think it's going to be It is already having a huge impact, right? I mean, the fastest crowdfunding campaign, I think, was done on Crowdcube itself for Crowdcube. I think they did a million pounds in 16 minutes.

AI assessment note: “opening up and making more transparent an asset class which previously was only available”

Q Now, Baldurton has an incredible portfolio, as, as we kind of briefly touched on there, and so, what would you say is your competitive advantage for winning deals?

A You know, it's difficult to, lots of friends will say the same things. Um, you know, their friends, you know, they're entrepreneur friendly, and they understand the markets. And the amazing thing is that is all true, um, because it really, really varies person to person, entrepreneur to entrepreneur. Um, so, uh, we, we don't think that you can necessarily have a very clear cut competitive advantage in every case, because every investment is different, and every relationship with a founder is different. You know, we normally know the companies we invest in for, I think it's just about two years before we invest, and we On average, hold our companies for 7.1 years before exit. So that's a long time to know and work with someone. And so ultimately, your competitive advantage is going to be about how you get along with that person or that team, whether you share her vision, whether you share her passion for what they're doing, whether you believe that the team can execute on what they're doing. And I think that that is a very personal judgment to make. You can use a lot of Data around emerging trends and around market and around looking at existing traction and public data points, but ultimately the decision comes down to that very core subjective belief. So what we hope is our competitive advantage is that we understand these people and we can work with them, but obviously that va…

AI assessment note: “statistically we have more of internally is people who've started their own businesses”

Q So now you've reassured me that it's a viable career, and I haven't wasted the last five years of my life. Um, well, what do you think in terms of next steps? Where do we go from here, and do we stay in, do I stay in Europe? Do we go to the U.S.? What's the move?

A So if you want to be successful, I mean, it's an interesting one. I was once told by a friend of mine who works in a Valley fund, uh, when I said, look, I'm thinking about working in venture in Europe. He said, well, that's great, but why would you want to be the top goal scorer in Division II, right? No one knows who the top goal scorer in Division II is. Why would you bother, right? Um, and I think that, yeah, exactly. And to some extent, that's clearly true, right? The best returns of European venture funds, uh, are dwarfed by the very, very top funds in the Valley. And I think that, When you're considering where you want to base yourself for an industry, just like an entrepreneur would when he's hiring his team or building his team, you want to consider where the best place for you is to maximize your returns. The Valley is still a really exciting place to be for anyone working in venture. Personally, I'd encourage you to stick around Europe for a couple of reasons, and anyone working in venture for a couple of reasons. One is, despite the fact that you can be a global investor now, because data has allowed us to collect information and share information on the global level, and you can learn from that and make good investments because of it. In reality, it's still a very, uh, person-to-person game, right? It's a very, very personal game, and I found it increased, incredibl…

AI assessment note: “Personally, I'd encourage you to stick around Europe for a couple of reasons”

Q Now, we've already actually had you on the show. For listeners who haven't heard, check out episode 19 to listen to that and listen to how James himself made his way into the industry. But today we're going to start more broadly now. And I want to ask you, one of London's youngest VC partners, is venture capital a viable career?

A Yeah, it's a good question. And I think there's, there's a couple of different schools of thought here, right? But I think the first thing to take into consideration is it's a tiny industry. I think for the amount of press that we get and the amount of coverage, basically people seem interested in industry in terms of career, it's actually tiny. There was 700 funds in Europe in 2007. After the crash, there were about 400. We're slowly building our way back up. It's only, I don't think you could fill a football stadium with the number of VCs there are in the world, possibly. Um, so that's the first thing. Is it a viable career? Well, first of all, do you really want a career in such a small industry? And especially one which is so, so variable. So it depends on what's right for you. In terms of, is it a viable career, which I think is your, what you're leaning on is if you start early and you can build your way up rather than, uh, what is a common piece of advice to go out and become an operator to start a company and learn the hard way. I think that the proof's in the pudding. And if you look at the most successful, uh, venture capitalists in the world in terms of the companies they've backed and the returns they've generated, it's a very mixed bag. There's people who were journalists like Mike Morris. There's people who are financial analysts like Bill Gurley. There's obviousl…

AI assessment note: “In terms of, is it a viable career... it's a very mixed bag.”

Q So I, funnily enough, interviewed another VC the other day, and they said the reason for us not being in the same league as the US is sheer market size, and it's simply we don't have the same amount of people we can export our products to straight away. Do you agree?

A The largest GDP block in the world is the European Union. The GDP of the European Union is larger than America and China. If we were a country, we would have, I think, the highest GDP per capita of any, if you took any large company, I'm not talking about like Vatican City or Luxembourg, Uh, so, and I completely disagree, you know, if you just look at the stats, Britain has got the highest purchase rate of e-commerce products per capita of anywhere in the world apart from South Korea, well ahead of the US. Uh, Germany has got an incredibly rich domestic market, and, uh, I think we're seeing at every level, apart from, you know, current political rulings, we are seeing at a deeper level in the technology layer and also language layer and usability and everything else, a huge rush to, uh, of common acceptance and common usages across Europe. 10 years ago, maybe that would have been true, that you, you know, you would be worried about entering the US or entering China or entering Europe. But right now, the entrepreneurs I meet are thinking global from day one. So it doesn't matter about market entry into Germany versus the US. They launch on the App Store. They launch on the Play Store. They're global instantly. Um, and, you know, I think about CityMap, for example, one of our companies. There's 20 people in Farringdon. They're building an app which is used, you know, by millions …

AI assessment note: “and I completely disagree, you know, if you just look at the stats”

Q Well, now you've convinced me that Europe is the place to be. Why did you choose Baltham? What was your, I'm sure you had a plethora of options. What was your reasoning behind choosing Baltham?

A No, you're fascinating. I had no options at all. I have to say, it's an interesting one for anyone considering venture, and also anyone working with a venture fund and taking capital, because this is a cliche now, but it is a very long-term game. When you think about making investment decisions externally in other funds, you know, you think about what's this relationship going to be playing out like in five to 10 years' time, because that's the timeframes we have to think about. And it's the same thing in venture. I thought to myself, well, what do I want to be doing in five to 10 years' time? Like, how am I going to improve myself personally? Who are the people I want to be around and supported by? Um, who do I think is going to be likely to support me if I'm doing badly or, you know, help me learn more? And, uh, I've worked with the Bolton team for three or four years now. Uh, I knew them before that, and it was partly because of our shared network with some of the, um, founders and, and, uh, principals here at Bolton that I joined Bolton. I think that's the decision I made is that these are the right people for me to be around. There is a huge, there's quite a big rush, actually, I've noticed of people saying, hey, I'm going to go and raise my own fund now. There's, you know, there's some money on the table. And I think it's great, but it's quite short-term view for what is …

AI assessment note: “these are the right people for me to be around”

Q And a good position and a good time. But what does that translate to in 10 years? Where will VC itself maybe be in 10 years' time for you? What does the future look like?

A Yeah, it's a really interesting one, and sort of I look back, I try and look back 10 years ago and think about how things have changed and how, you know, we've moved towards a far more operational model, we are far more active in deal hunting, we're far more specialised than we were before. And I can't see many of those trends reversing. I think there will always be the ability of individuals, the need for venture capital, To come in and provide high-risk capital in situations where you just can't yet fully apply a data, rigorous data model to a sector. And those sectors shift, by the way. If you launch a mobile game today, there are rigorous data models, which basically mean you don't need venture capital anymore. You know that there'll be certain targets you need to hit, and some growth investor or someone else will buy you. There'll be some other way to do it because that market is so rigorously thought out now. Five years ago, it didn't exist, and so you need a venture. At the moment, we're seeing that explosion in new sectors which are well beyond the capabilities of people that have been working in this space the last 10 years, right? It's looking at artificial intelligence, it's self-driving vehicles, it's UAVs, broad range of use cases for the blockchain, and, you know, on and on and on, you know, it's unique kernels and deeper into the stat tools. It's, you know, there…

AI assessment note: “I think that The way that the business will change is that they will have”

Q And then talking of the long run, for, for all the young listeners or potential, uh, business school graduates who, uh, listen a lot, actually, um, What would you advise them on getting into venture? What would you advise me? What would you advise them? That might be two very different.

A Um, no, no, I, I think. It's a really hard question to answer, because everyone in Bolton, at least, has come at it through different ways. You know, I, I'm quite fortunate to be, uh, here relatively young, so I, I got a few more years run at building a track record than most people, but, uh, you know, before that, I was doing something really different. Uh, I came from charity space. Rob, um, another one of my colleagues was, you know, came from Google and INSEAD, and we've got two colleagues who worked at Goldman and had founded companies in some cases, two, two other colleagues who only founded companies. So it's quite a different approach. I think today I can give a couple of tips. Which I really look for when we're recruiting, uh, new candidates to work at Bolton at least. So one is, you know, we want to see people who've got good judgment. We want to see people who are very passionate. And those are the two things I, I really, I really look for. And so for down the first leg of that judgment, how do you build a reputation for being someone who can actually spot companies early, right? Now, not everyone has money to go seed funding, right? Maybe you could do some crowdfunding if you've got a bit of dorm room money saved over or something like that, but not everyone's got the capital to do that. But you all have the ability to, uh, get in touch with CEOs of companies you re…

AI assessment note: “I think today I can give a couple of tips. Which I really look for”

Q First, I'm really curious about how you got into the technology industry and the venture capital industry. Could you tell us a little bit about that?

A Uh, yeah, of course. I mean, I actually have a bit of a different background to most. I guess where I started off was the same as, as many people interested in technology, was playing around with building websites as a teenager, and I was coached to do that by people I met at school, particular people who I sort of admired, and that's what they'd done, so I sort of played around with, uh, building websites and doing some work for small businesses and design and development, um, but to be honest with you, it was always a hobby, and I sort of progressed the career, and Did what most people do is end up, when you're really interested in business, end up becoming a consultant for a little bit. So I worked for McKinsey in various different parts of the world, in West Africa, Middle East, and London. And then, uh, after that, I, um, went on to work with a few different tech companies, um, but ultimately found that what I really enjoyed was, was helping build, uh, businesses and working with entrepreneurs. Um, but rather than go straight into traditional technology VC, I actually helped launch a social, uh, enterprise fund. So it was a fund which focused very much on maximizing social impact and social return, um, and building businesses that were targeting big issues facing our society as a whole, and not just in the technology sector. Um, so I did that for a couple of years, uh, and…

AI assessment note: “joined Bolderton, uh, just over two years ago.”

Q Now, funding methods have been evolving rapidly since 2008. Uh, one such method is crowdfunding. Um, and with your recent investment in Crowdcube, the UK's leading equity crowdfunding platform, can you give us an insight first into how you see the crowd becoming more involved? With early stage backing of companies.

A Yeah, I think we've invested in a lot of fintech companies. I'm particularly very excited and involved in Crowdcube because I think what they're doing is opening up and making more transparent an asset class which previously was only available to a very small group of wealthy individuals controlled by small merchant banks. And they've built the technology and they've also created a culture which allows people to have access to those assets, which is investments, whether equity or debt, into small businesses. I think it's going to be It is already having a huge impact, right? I mean, the fastest crowdfunding campaign, I think, was done on Crowdcube itself for Crowdcube. I think they did a million pounds in 16 minutes.

AI assessment note: “allows people to have access to those assets, which is investments”

Q Now, Baldurton has an incredible portfolio, as, as we kind of briefly touched on there, and so, what would you say is your competitive advantage for winning deals?

A You know, it's difficult to, lots of friends will say the same things. Um, you know, their friends, you know, they're entrepreneur friendly, and they understand the markets. And the amazing thing is that is all true, um, because it really, really varies person to person, entrepreneur to entrepreneur. Um, so, uh, we, we don't think that you can necessarily have a very clear cut competitive advantage in every case, because every investment is different, and every relationship with a founder is different. You know, we normally know the companies we invest in for, I think it's just about two years before we invest, and we On average, hold our companies for 7.1 years before exit. So that's a long time to know and work with someone. And so ultimately, your competitive advantage is going to be about how you get along with that person or that team, whether you share her vision, whether you share her passion for what they're doing, whether you believe that the team can execute on what they're doing. And I think that that is a very personal judgment to make. You can use a lot of Data around emerging trends and around market and around looking at existing traction and public data points, but ultimately the decision comes down to that very core subjective belief. So what we hope is our competitive advantage is that we understand these people and we can work with them, but obviously that va…

AI assessment note: “what we hope is our competitive advantage is that we understand these people”

Q And then do you think the Silicon Valley deserves the plaudits that it gets for its successful outcomes? Or do you think that's merely not luck, but, but not something that can be credited solely with geography?

A No, I, I think if you look at the market right now, I think, um, the, the, the geographic, the epicenter of, of the technology world is still in San Francisco, um, and around San Francisco and Silicon Valley, and I think that there's lots of, um, People growing and lots of hubs growing up in different regions, and that the actual model of needing to be based there is perhaps shifting. But without a doubt, the most important technology companies today are, on average, based in San Francisco. Not entirely, but there's a lot of them there. I think that makes a massive difference, because the technology, we recognize that all great tech companies are built on the shoulders of giants. Those giants are in open source. Those giants are in hardware. Those giants are in social platforms. They're people. You've built the, the tools you need to then build, uh, the next generation of technology, and a lot of that historically has been built in San Francisco and Silicon Valley, so there's a lot of, uh, knowledge there, and there's a lot of people there who can help you. Um, we're seeing a shift there, and we think that Europe, if you look at the tops of billion-dollar tech exits, or unicorns, or whatever you want to call them, uh, in the last, um, 20 years, there's been, or 10 years, rather, there's been over 30 coming out of Europe, and there's many more in the, in the, In the, uh, pipe. S…

AI assessment note: “without a doubt, the most important technology companies today are, on average, based in San Francisco.”

Q Now, what do you believe then makes the perfect Series A round? Would you say there's a metric or a particular aspect that makes the perfect Series A?

A Um, once again, I actually, I think it varies quite a lot by sector, right? You'll hear people saying, uh, the benchmark for a series A, if you're in social, social media, um, uh, service or, or a, a free service that relies on virality is 20% month to month growth in terms of your, um, active users and high retention. You'll see, um, people in SAS saying that you need to have, uh, you know, set, uh, revenue goals and, and sort of sub five percent churn rate. Um, so it really depends on the business model a little bit. But to be honest, I think that there's no clear definable metric for any business proposition at that stage of a business. I think what's really important is that you've, you've got to a point where you feel comfortable that the basic underlying unique economics of what you're doing, whether that's, um, the, the, whether you define that economics as just value you create. So, for example, um, I was involved in a company called Sunrise. We didn't charge for it, but we knew we were creating value because people were spending time using it and coming back to the app. So, whether that Is around the value you create or the actual financials that you, um, uh, get paid for the service, whether you feel that you're, you're almost ready, you're, you're, you're really, really close to cracking that, and the capital you require is there to help drive into new products and n…

AI assessment note: “I think that there's no clear definable metric for any business proposition”

Q And then the sector that you're most excited about right now and why?

A I vary on a daily basis. Um, I, I'm going to go cliched here and say, I think, um, narrow, narrow AI and applications of it. Uh, and I actually don't think it's the technology that, that really excites me. It's more around the specific use cases that are going to be developed. And obviously, you, you know, people argue that machine learning techniques, the stack behind machine learning and You know, the applications of that, uh, towards what people will call narrow AI are currently pretty poor, actually. If you go on Facebook chatbots, you know, they leave something to be desired at the moment. Uh, but I think there are some really interesting specific use cases which are developing, not trying to solve the whole problem, but instead trying to tackle specific instances, customer services, uh, uh, sales, marketing, like a whole range of different applications of it. Which are allowing people to free up their time from doing boring data analysis or create new ways of getting in touch with people through conversational AI in the process, creating a better experience. And so that's the area which I'm really excited about. I'm most excited about that because I also see the natural loop of, you know, anywhere where there's a stateful requirement in the process, anywhere where that conversation has to be remembered, and that information about you has to be captured. Right now, that's …

AI assessment note: “I'm going to go cliched here and say, I think, narrow, narrow AI”

Q Absolutely. And, um, sorry, going back to Crowdcube, we forgot to mention their recent introduction of mini bonds. Uh, Chalango, for example, obviously raised, I think, one and a half through the mini bond. Uh, do you see great potential through this introduction?

A Yeah, I think it's a fantastic new product, and, you know, a lot of criticism of crowdfunding at the moment is at its very, very early stage. It's very high risk, and I think very unfairly, if you're going to be really, really critical, people say that people don't spend enough time Reviewing the risk involved. And, uh, I actually think that's a bit of a misreading of the market, but it's something that we should always be aware of is, are we giving people the right information to make decisions? Um, and we, we constantly at Crowdcube, you know, assessing that and trying to improve that. But the great thing about mini bonds is it attracts into the market people who have a different type, or they want a different type of asset, and they want a different type of risk, and it allows them to be involved in businesses which they really, really care about and they have a passion for, but also not, you know, completely, um, Put money in, in a way which won't see, ah, a return for, for a very long period of time, because they immediately, ah, get money back in terms of interest on that bond. Ah, so it's a great new product. There's nothing has really existed like on the market, and we've seen huge uptake of it. Um, what I love the most about it is that it's seeing this mixed model where you have passionate investors who are investing in things like Chalango. There's, there's many other…

AI assessment note: “Yeah, I think it's a fantastic new product”

Q And then finally, your favorite book, and why it is your favorite?

A Um, that's a great question. Um, my favorite book... It's probably one more about people than, than about businesses though. Um, so an intimate history of humanity, uh, by Theodore Zeldin. It's, uh, it's an off, not perhaps the most courageous one, but it's a great book on the stories, um, of individuals. Uh, actually women, um, but, but humans basically, um, and sort of their life stories and reflecting on what that means in a broader historical context, and it sort of reminds me of the, uh, the importance of recognizing that, that individuals are important, but, you know, we all have our rhymes and reasons, and you should try and understand those, not just react to the, to the one person and at the one time in front of you.

AI assessment note: “so an intimate history of humanity, uh, by Theodore Zeldin.”

Q Absolutely. And, um, sorry, going back to Crowdcube, we forgot to mention their recent introduction of mini bonds. Uh, Chalango, for example, obviously raised, I think, one and a half through the mini bond. Uh, do you see great potential through this introduction?

A Yeah, I think it's a fantastic new product, and, you know, a lot of criticism of crowdfunding at the moment is at its very, very early stage. It's very high risk, and I think very unfairly, if you're going to be really, really critical, people say that people don't spend enough time Reviewing the risk involved. And, uh, I actually think that's a bit of a misreading of the market, but it's something that we should always be aware of is, are we giving people the right information to make decisions? Um, and we, we constantly at Crowdcube, you know, assessing that and trying to improve that. But the great thing about mini bonds is it attracts into the market people who have a different type, or they want a different type of asset, and they want a different type of risk, and it allows them to be involved in businesses which they really, really care about and they have a passion for, but also not, you know, completely, um, Put money in, in a way which won't see, ah, a return for, for a very long period of time, because they immediately, ah, get money back in terms of interest on that bond. Ah, so it's a great new product. There's nothing has really existed like on the market, and we've seen huge uptake of it. Um, what I love the most about it is that it's seeing this mixed model where you have passionate investors who are investing in things like Chalango. There's, there's many other…

AI assessment note: “Yeah, I think it's a fantastic new product”

Q And focusing on the technology market as a whole now, if you were to choose one sector which you're most excited about, what would it be and why?

A Uh, so I'm unfortunately overly, uh, curious and probably overly excitable, so there's lots of sectors. Uh, one area I spend quite a lot of time looking at, and I'm imagining you'll get this response at the moment quite a lot, is health tech. Health tech's an incredibly broad, uh, uh, statement or sector, because within that you obviously have consumer health, you have more clinical-led health, you have software, and you have hardware. So there's a lot of things, uh, interplaying. For me, there's two areas that sort of fascinate me. One is around, uh, patient care and getting them, uh, sort of the marketplace for services around people who are, who are ill and improving the efficiencies around delivering services to, to people, empowering them with data. And if you, I'm sure you will have seen this week, 23 and me, uh, have been given, uh, approval to allow people to identify whether or not they have Bloom syndrome. I mean, this is a huge breakthrough and a huge amount of, um, Uh, discussion has gone into this, and there will be a lot of, uh, debate about it, which there should be, because it's an incredibly important decision, and one we cannot afford as a society to get wrong, but it's about giving more information to people, um, who, who, who need it, and I think that's really powerful, and on the other side, more broadly, I'm really interested in this combination of behavio…

AI assessment note: “one area I spend quite a lot of time looking at... is health tech.”

Q Now, we've already actually had you on the show. For listeners who haven't heard, check out episode 19 to listen to that and listen to how James himself made his way into the industry. But today we're going to start more broadly now. And I want to ask you, one of London's youngest VC partners, is venture capital a viable career?

A Yeah, it's a good question. And I think there's, there's a couple of different schools of thought here, right? But I think the first thing to take into consideration is it's a tiny industry. I think for the amount of press that we get and the amount of coverage, basically people seem interested in industry in terms of career, it's actually tiny. There was 700 funds in Europe in 2007. After the crash, there were about 400. We're slowly building our way back up. It's only, I don't think you could fill a football stadium with the number of VCs there are in the world, possibly. Um, so that's the first thing. Is it a viable career? Well, first of all, do you really want a career in such a small industry? And especially one which is so, so variable. So it depends on what's right for you. In terms of, is it a viable career, which I think is your, what you're leaning on is if you start early and you can build your way up rather than, uh, what is a common piece of advice to go out and become an operator to start a company and learn the hard way. I think that the proof's in the pudding. And if you look at the most successful, uh, venture capitalists in the world in terms of the companies they've backed and the returns they've generated, it's a very mixed bag. There's people who were journalists like Mike Morris. There's people who are financial analysts like Bill Gurley. There's obviousl…

AI assessment note: “In terms of, is it a viable career... the proof's in the pudding.”

Q And then the sector that you're most excited about right now and why?

A I vary on a daily basis. Um, I, I'm going to go cliched here and say, I think, um, narrow, narrow AI and applications of it. Uh, and I actually don't think it's the technology that, that really excites me. It's more around the specific use cases that are going to be developed. And obviously, you, you know, people argue that machine learning techniques, the stack behind machine learning and You know, the applications of that, uh, towards what people will call narrow AI are currently pretty poor, actually. If you go on Facebook chatbots, you know, they leave something to be desired at the moment. Uh, but I think there are some really interesting specific use cases which are developing, not trying to solve the whole problem, but instead trying to tackle specific instances, customer services, uh, uh, sales, marketing, like a whole range of different applications of it. Which are allowing people to free up their time from doing boring data analysis or create new ways of getting in touch with people through conversational AI in the process, creating a better experience. And so that's the area which I'm really excited about. I'm most excited about that because I also see the natural loop of, you know, anywhere where there's a stateful requirement in the process, anywhere where that conversation has to be remembered, and that information about you has to be captured. Right now, that's …

AI assessment note: “I'm going to go cliched here and say, I think, um, narrow, narrow AI”

Q and this will surprise you, but I've been in many a VC job interviews, uh, and a frequent question I always got was, why this stage, Harry? Why this stage? And obviously it differed entirely on what fund I was at and which stage they were in. Uh, but why would you say this stage? What stage would you say balls are now? Series A, B? Having made some seed?

A Well, firstly, Harry, it doesn't surprise me that you've been in many VC interviews, uh, partly because obviously you're a very bright guy. But partly because you wear so much VC stash. I'm sitting next to a man dressed head to toe in free gear from VCs across Europe and San Francisco. But why the stage? So there's two reasons why I'm excited about the stage we're at. And, you know, we used to say series A to B, but in reality, those words have become pretty meaningless now. It used to mean you were the first institutional investor, but the way that the stack has developed for capital with professional angel investors and seed investment funds and everything else, pre-seed and post-seed and crowdfunding. What, what we really say is we're, we're early stage. We do one to twenty million dollars. I'm excited about that region for a couple of reasons. One is, as much as any of us like to think we're the perfect judge of people, we also, we're kind of slightly geeky as well, and we like to feel and touch product, and we like to see some data, and we like to play around with that data, and we like to try and hypothesize about how we can maximize X, Y, Z, and basically, we want to see which tiny cogs are going to turn in order to move a massive wheel. And you only really get those at a stage where you're ready to scale up and need that one to twenty million dollars. So doing pre produ…

AI assessment note: “So there's two reasons why I'm excited about the stage we're at.”

Q And then the final question, and that is the most recent public. Let's go for public. I love it when I get there. Oh, it's not public. So the most recent public investment and why you said yes?

A Uh, I can't remember which public and which aren't. Um, I can talk about one which I've, you know, I think we've, we've mentioned before possibly, but, uh, Magic Pony Technologies. Um, Magic Pony Technologies is a, it's a former entrepreneur first company. And it's a machine learning approach to, uh, working over video compression. And they've basically found a way to help predict what video is going to do next. I think that's a very simplistic way of describing it. Um, but the implications for this and the applications for this are huge. And if you think about, um, the way that the world consumes information now, video is outpacing everything else. And that causes huge problems to people in Um, parts of the developed world where they don't have a strong, uh, bandwidth and even parts of the developed world where, you know, my Netflix still doesn't stream properly. Uh, and if you look at the explosion of video on all platforms, I mean, I am a Snapchat addict and I must consume just so much video every day through Snapchat alone, let alone Netflix and everything else. You know, they are building a very smart solution to improve that through software rather than hardware. And I think that it's a, I think it's a great team. Actually, um, I used to work, we had a great guy working here called friends, our data scientist. And he was so blown away by what they were doing. He's gone to…

AI assessment note: “I'm in awe of both their technical capability, but the business sense”

Q And then talking of the long run, for, for all the young listeners or potential, uh, business school graduates who, uh, listen a lot, actually, um, What would you advise them on getting into venture? What would you advise me? What would you advise them? That might be two very different.

A Um, no, no, I, I think. It's a really hard question to answer, because everyone in Bolton, at least, has come at it through different ways. You know, I, I'm quite fortunate to be, uh, here relatively young, so I, I got a few more years run at building a track record than most people, but, uh, you know, before that, I was doing something really different. Uh, I came from charity space. Rob, um, another one of my colleagues was, you know, came from Google and INSEAD, and we've got two colleagues who worked at Goldman and had founded companies in some cases, two, two other colleagues who only founded companies. So it's quite a different approach. I think today I can give a couple of tips. Which I really look for when we're recruiting, uh, new candidates to work at Bolton at least. So one is, you know, we want to see people who've got good judgment. We want to see people who are very passionate. And those are the two things I, I really, I really look for. And so for down the first leg of that judgment, how do you build a reputation for being someone who can actually spot companies early, right? Now, not everyone has money to go seed funding, right? Maybe you could do some crowdfunding if you've got a bit of dorm room money saved over or something like that, but not everyone's got the capital to do that. But you all have the ability to, uh, get in touch with CEOs of companies you re…

AI assessment note: “I can give a couple of tips... we want to see people who've got good judgment”

Q And focusing on the technology market as a whole now, if you were to choose one sector which you're most excited about, what would it be and why?

A Uh, so I'm unfortunately overly, uh, curious and probably overly excitable, so there's lots of sectors. Uh, one area I spend quite a lot of time looking at, and I'm imagining you'll get this response at the moment quite a lot, is health tech. Health tech's an incredibly broad, uh, uh, statement or sector, because within that you obviously have consumer health, you have more clinical-led health, you have software, and you have hardware. So there's a lot of things, uh, interplaying. For me, there's two areas that sort of fascinate me. One is around, uh, patient care and getting them, uh, sort of the marketplace for services around people who are, who are ill and improving the efficiencies around delivering services to, to people, empowering them with data. And if you, I'm sure you will have seen this week, 23 and me, uh, have been given, uh, approval to allow people to identify whether or not they have Bloom syndrome. I mean, this is a huge breakthrough and a huge amount of, um, Uh, discussion has gone into this, and there will be a lot of, uh, debate about it, which there should be, because it's an incredibly important decision, and one we cannot afford as a society to get wrong, but it's about giving more information to people, um, who, who, who need it, and I think that's really powerful, and on the other side, more broadly, I'm really interested in this combination of behavio…

AI assessment note: “is health tech. Health tech's an incredibly broad”

Q And as one of the rare London VCs that we've had on the show, what would you say is the main difference between how VCs operate actually in Europe compared to the U.S., or are they fundamentally pretty similar?

A Well, our origins are actually from the U.S., so we started off as Benchmark Europe, um, Benchmark obviously a very well-known fund, an incredibly successful one, based out of San Francisco, and when we, uh, this was before I joined, but when we were operating as Benchmark Europe, we had some great successes, but we realized that It's really, really difficult to scale venture capitalists. Um, the companies we invest in, they have to scale, but we personally, we're not very good at it. Uh, so VC really, you know, struggles to scale in its current model, at least, and the reason why we love doing programs like this and going to events is it means we can, in effect, scale our message a little bit. Um, so we realized after a while that we wanted to focus purely on Europe. There was enough of opportunity here to have lots of people on the ground working with entrepreneurs here. Uh, and so we, uh, established a slightly different brand, and we, we brought in a slightly different partnership to reflect that, so that we have two partners here, both European, who've built, um, billion dollar plus tech businesses, um, in Europe, and then took them global, and we've been trying to replicate that. In terms of differences, I think we have similar goals. We want to be backing, um, businesses which really do have a, a global footprint, and the ability to entirely change, um, sectors and indus…

AI assessment note: “In terms of differences, I think we have similar goals.”

Q And as one of the rare London VCs that we've had on the show, what would you say is the main difference between how VCs operate actually in Europe compared to the U.S., or are they fundamentally pretty similar?

A Well, our origins are actually from the U.S., so we started off as Benchmark Europe, um, Benchmark obviously a very well-known fund, an incredibly successful one, based out of San Francisco, and when we, uh, this was before I joined, but when we were operating as Benchmark Europe, we had some great successes, but we realized that It's really, really difficult to scale venture capitalists. Um, the companies we invest in, they have to scale, but we personally, we're not very good at it. Uh, so VC really, you know, struggles to scale in its current model, at least, and the reason why we love doing programs like this and going to events is it means we can, in effect, scale our message a little bit. Um, so we realized after a while that we wanted to focus purely on Europe. There was enough of opportunity here to have lots of people on the ground working with entrepreneurs here. Uh, and so we, uh, established a slightly different brand, and we, we brought in a slightly different partnership to reflect that, so that we have two partners here, both European, who've built, um, billion dollar plus tech businesses, um, in Europe, and then took them global, and we've been trying to replicate that. In terms of differences, I think we have similar goals. We want to be backing, um, businesses which really do have a, a global footprint, and the ability to entirely change, um, sectors and indus…

AI assessment note: “In terms of differences, I think we have similar goals.”