The Exchanges

Q like, alright, done. That's it. Um, and so that was a big thing. You, you, you said there about, kind of, learnings. Um, I have to ask, um, you know, we see a lot of, uh, Scout programs. I think, you know, every big front has a Scout program. You, you did the Blossom Scout program. They didn't work. Why didn't it work? And what were the learnings from that?

A So we were really trying to innovate on this concept of Scout program and taking what has worked in the market and what hasn't. And so, uh, Blossom wasn't doing pre-seed or seed, and there were lots of founders that we thought deserved to raise capital that they just weren't for us. As we wanted to, on one hand, kind of enable some, enable them to be successful in their fundraising. And on the other hand, there were loads of operators in Europe that were starting to think about angel investing. And they might have a deal flow, but they wouldn't have time in terms of judgment, or they didn't have the capital, et cetera. So we said, we'll create an angel program where I think it was 15 angels, operators, and some really great names. And we said, we already have the deal flow. We're going to bring you the ideas. You, as a group, form the IC and decide whether or not you want to invest. And then we'll facilitate the administration and the capital, et cetera. And it was meant to be 250,000 per investment. And it was a great idea, but it was just as, as I said, all these angels, all these operators were starting to be angels, and actually what founders wanted was a 10 K check from one angel and a 10 K check from another angel. They didn't want to group at two 50. So it just didn't work for the market.

AI assessment note: “actually what founders wanted was a 10 K check from one angel”

Q or like now, when even you can have great companies, but Series B investors are kind of few and far between if you're not in AI. Are you worried that your reserves ratio or lack of will actually suddenly be very needed by a generation of Series A investors? Or Series A founders that don't have the Series Bs as readily available as they were in the last few years?

A No, because, and this is where I'm actually quite proud that our, uh, you know, how we've supported founders and how we've thought about capital efficiency and the way that you spend capital actually hasn't changed between, like, the rule of twenty-twenty to twenty-twenty-two from before that and to now, in that we've always said to founders, be in control of your own destiny. Manage your runway, annual burn, and don't expect that a raise is just, you know, automatically 12 months out. Like, you have to be able to control how fast you go or not. And when we fund them at Series A, we say, you know, here's enough capital for 24, 36 months post our investment. And let's be honest, if you can't raise capital after that point, you probably aren't building a viable business. And we feel that that's enough runway For you to really give it your best shot, and we'll work with you with all efforts beyond that. But if you can't after that, and you've run out of cash, you know, it's not our, we shouldn't be investing more to extend your runway. I think we just have to be honest at that point, there wasn't a viable business to be built.

AI assessment note: “No, because, and this is where I'm actually quite proud”

Q like, alright, done. That's it. Um, and so that was a big thing. You, you, you said there about, kind of, learnings. Um, I have to ask, um, you know, we see a lot of, uh, Scout programs. I think, you know, every big front has a Scout program. You, you did the Blossom Scout program. They didn't work. Why didn't it work? And what were the learnings from that?

A So we were really trying to innovate on this concept of Scout program and taking what has worked in the market and what hasn't. And so, uh, Blossom wasn't doing pre-seed or seed, and there were lots of founders that we thought deserved to raise capital that they just weren't for us. As we wanted to, on one hand, kind of enable some, enable them to be successful in their fundraising. And on the other hand, there were loads of operators in Europe that were starting to think about angel investing. And they might have a deal flow, but they wouldn't have time in terms of judgment, or they didn't have the capital, et cetera. So we said, we'll create an angel program where I think it was 15 angels, operators, and some really great names. And we said, we already have the deal flow. We're going to bring you the ideas. You, as a group, form the IC and decide whether or not you want to invest. And then we'll facilitate the administration and the capital, et cetera. And it was meant to be 250,000 per investment. And it was a great idea, but it was just as, as I said, all these angels, all these operators were starting to be angels, and actually what founders wanted was a 10 K check from one angel and a 10 K check from another angel. They didn't want to group at two 50. So it just didn't work for the market.

AI assessment note: “what founders wanted was a 10 K check... They didn't want to group at two 50”

Q Got you. So we've got 20 companies. Do we have, like, how do we think about reserves and reserves management?

A So we actually don't reserve the standard. Uh, and this is something I think I learned from previous venture experience when I was working for other funds is that I think actually like the follow on can really damage fund returns in that you should buy your ownership at the lowest possible cost, which is the initial cost of seed or series A. And then especially in the growth market that we've been on where, you know, the follow on is done at four or five X and not a lot I mean, you're somewhat de-risked, but you're definitely not completely de-risked to the point of a growth investment. So you could be spending an additional year. Say your initial cost was five or ten million, and you were spending an additional five or more in prorata, but at a much higher valuation, then your blended average suddenly looks a lot worse than having just bought your ownership at a lower cost. So we said we're just going to do initial investment with a very small amount of follow-on if our companies need help getting to an exit or struggle to raise. And so, 90, 95% of our investment will be for initial

AI assessment note: “So we actually don't reserve the standard”

Q Alright. Um, a lot of founders are like, I'm heads down, especially the ones who've got, like, great seed investors or, like, are hot. They're like, I'm heads down, and I'm not meeting investors. What do you do then when you want to build the relationship, but they're heads down?

A I get it from a founder's point of view. Like I've got better things to focus on, but I mean, you and I know this from fundraising ourselves. There was so much to be said for the relationship that you build. I don't know how people would decide on a VC that they want to work with within, you know, 48 hours or a week. Like you want to know how that person's going to be able to support you, how they're going to work with you, challenge you, open doors. And so I try and explain that to a founder who's heads down. It's like, okay, I would like, you know, 30 minutes of your time. I'm not going to come with the bog standard questions. I'm actually going to use this to show how Blossom can bring value or how we can help and kind of earn my seat at the table for the next four, six, eight months.

AI assessment note: “I try and explain that to a founder who's heads down.”

Q or like now, when even you can have great companies, but Series B investors are kind of few and far between if you're not in AI. Are you worried that your reserves ratio or lack of will actually suddenly be very needed by a generation of Series A investors? Or Series A founders that don't have the Series Bs as readily available as they were in the last few years?

A No, because, and this is where I'm actually quite proud that our, uh, you know, how we've supported founders and how we've thought about capital efficiency and the way that you spend capital actually hasn't changed between, like, the rule of twenty-twenty to twenty-twenty-two from before that and to now, in that we've always said to founders, be in control of your own destiny. Manage your runway, annual burn, and don't expect that a raise is just, you know, automatically 12 months out. Like, you have to be able to control how fast you go or not. And when we fund them at Series A, we say, you know, here's enough capital for 24, 36 months post our investment. And let's be honest, if you can't raise capital after that point, you probably aren't building a viable business. And we feel that that's enough runway For you to really give it your best shot, and we'll work with you with all efforts beyond that. But if you can't after that, and you've run out of cash, you know, it's not our, we shouldn't be investing more to extend your runway. I think we just have to be honest at that point, there wasn't a viable business to be built.

AI assessment note: “No, because... we say, you know, here's enough capital for 24, 36 months”

Q Can I ask one weird one? How quickly do you know when someone's special? Because often I worry that I'm taken in by the salesperson. How quickly do you actually get excited and lean in, versus it takes a bit of time to see how special someone is?

A I think about this a lot, and I think during a meeting, if you were kind of, if there was like a radar of like, I'm in, I'm out. I'm in, I'm out. I'm constantly trying to test myself. Like, okay, I've fallen in love within the 1:05 minutes, but is this love like real? Are they just too much of a salesperson? Am I caught up in the pitch? Or like, should I be more cynical here? And the constant questions are kind of going through my mind. And I think the, I mean, I hate pitches, right? Whenever I meet with a founder, I'm always like, tell me your journey and I want to understand why you're doing this and what your ambition is and what your drive is. I think I come with a lot of questions because I'm just trying to understand. I would say within, you know, the first meeting, for sure, I come out with a decision of go, no go.

AI assessment note: “within, you know, the first meeting, for sure, I come out with a decision”

Q Got you. So we've got 20 companies. Do we have, like, how do we think about reserves and reserves management?

A So we actually don't reserve the standard. Uh, and this is something I think I learned from previous venture experience when I was working for other funds is that I think actually like the follow on can really damage fund returns in that you should buy your ownership at the lowest possible cost, which is the initial cost of seed or series A. And then especially in the growth market that we've been on where, you know, the follow on is done at four or five X and not a lot I mean, you're somewhat de-risked, but you're definitely not completely de-risked to the point of a growth investment. So you could be spending an additional year. Say your initial cost was five or ten million, and you were spending an additional five or more in prorata, but at a much higher valuation, then your blended average suddenly looks a lot worse than having just bought your ownership at a lower cost. So we said we're just going to do initial investment with a very small amount of follow-on if our companies need help getting to an exit or struggle to raise. And so, 90, 95% of our investment will be for initial

AI assessment note: “So we actually don't reserve the standard.”

Q Alright. Um, a lot of founders are like, I'm heads down, especially the ones who've got, like, great seed investors or, like, are hot. They're like, I'm heads down, and I'm not meeting investors. What do you do then when you want to build the relationship, but they're heads down?

A I get it from a founder's point of view. Like I've got better things to focus on, but I mean, you and I know this from fundraising ourselves. There was so much to be said for the relationship that you build. I don't know how people would decide on a VC that they want to work with within, you know, 48 hours or a week. Like you want to know how that person's going to be able to support you, how they're going to work with you, challenge you, open doors. And so I try and explain that to a founder who's heads down. It's like, okay, I would like, you know, 30 minutes of your time. I'm not going to come with the bog standard questions. I'm actually going to use this to show how Blossom can bring value or how we can help and kind of earn my seat at the table for the next four, six, eight months.

AI assessment note: “I try and explain that to a founder who's heads down.”

Q Can I ask, how do you tell a founder that you're not going to reinvest? It can be a difficult one if they just even expect a little bit, but say a company's not performing, how do you deliver news that actually I'm not going to invest again?

A I think because our default upfront is, you know, we're not investing at the BCD, and this is why we want our ownership at the A. It's not actually a hard conversation. And also, we work so closely with the teams that I would say, the founders themselves normally know when it's working or not working. It's not coming as a surprise. Like, we're working through, like, you know, there's a budget, there's a business plan, these are the KPIs that we're working towards. Every month we're talking about what's working, what's not working, if not, like, beyond, uh, More frequently than that. And so I don't think it ever comes, like, the relationship, it should never come to a founder as surprised as what you're thinking. That's my philosophy. Like, then you've misled them somehow.

AI assessment note: “our default upfront is, you know, we're not investing at the BCD”

Q Can I ask, how do you tell a founder that you're not going to reinvest? It can be a difficult one if they just even expect a little bit, but say a company's not performing, how do you deliver news that actually I'm not going to invest again?

A I think because our default upfront is, you know, we're not investing at the BCD, and this is why we want our ownership at the A. It's not actually a hard conversation. And also, we work so closely with the teams that I would say, the founders themselves normally know when it's working or not working. It's not coming as a surprise. Like, we're working through, like, you know, there's a budget, there's a business plan, these are the KPIs that we're working towards. Every month we're talking about what's working, what's not working, if not, like, beyond, uh, More frequently than that. And so I don't think it ever comes, like, the relationship, it should never come to a founder as surprised as what you're thinking. That's my philosophy. Like, then you've misled them somehow.

AI assessment note: “founders themselves normally know when it's working or not working. It's not coming as a surprise.”

Q Can I ask one weird one? How quickly do you know when someone's special? Because often I worry that I'm taken in by the salesperson. How quickly do you actually get excited and lean in, versus it takes a bit of time to see how special someone is?

A I think about this a lot, and I think during a meeting, if you were kind of, if there was like a radar of like, I'm in, I'm out. I'm in, I'm out. I'm constantly trying to test myself. Like, okay, I've fallen in love within the 1:05 minutes, but is this love like real? Are they just too much of a salesperson? Am I caught up in the pitch? Or like, should I be more cynical here? And the constant questions are kind of going through my mind. And I think the, I mean, I hate pitches, right? Whenever I meet with a founder, I'm always like, tell me your journey and I want to understand why you're doing this and what your ambition is and what your drive is. I think I come with a lot of questions because I'm just trying to understand. I would say within, you know, the first meeting, for sure, I come out with a decision of go, no go.

AI assessment note: “within, you know, the first meeting, for sure, I come out with a decision”

Q Yeah. I think you're great. Um, but some don't, um, Does that upset you, and how do you respond to that, where people think you're abrasive or bloody challenging?

A I definitely care. I think there's ways that I come across that I don't think people necessarily understand. Like, the abrasive thing, I think people don't know that I'm actually much shyer than you would think. Like, uh, when we're at university or when we're doing our MBA, there would be always like, you know, a group of people getting drinks in the bar and being really sociable, and I'd be like, I'm gonna go and do my work. And I'm actually more comfortable in like a, you know, one-to-one setting than a group setting, but people think that means I'm a bracer. Um, I really do care what other people think, um, but also that doesn't prevent me from trying to be honest and be truthful and direct. So if I need to say something because I think it's important that you hear it, like, as long as that message is delivered in the right way, I feel that that's, that's how I should be. Um, but I've never tried to be, you know, rude, etc. The whole, she's aggressive, uh, you know, she's sharp elbowed.

AI assessment note: “I definitely care. I think there's ways that I come across that I don't think”

Q Yeah. I think you're great. Um, but some don't, um, Does that upset you, and how do you respond to that, where people think you're abrasive or bloody challenging?

A I definitely care. I think there's ways that I come across that I don't think people necessarily understand. Like, the abrasive thing, I think people don't know that I'm actually much shyer than you would think. Like, uh, when we're at university or when we're doing our MBA, there would be always like, you know, a group of people getting drinks in the bar and being really sociable, and I'd be like, I'm gonna go and do my work. And I'm actually more comfortable in like a, you know, one-to-one setting than a group setting, but people think that means I'm a bracer. Um, I really do care what other people think, um, but also that doesn't prevent me from trying to be honest and be truthful and direct. So if I need to say something because I think it's important that you hear it, like, as long as that message is delivered in the right way, I feel that that's, that's how I should be. Um, but I've never tried to be, you know, rude, etc. The whole, she's aggressive, uh, you know, she's sharp elbowed.

AI assessment note: “I definitely care. I think there's ways that I come across”

Q No, I mean, honestly, the patience that you'll have for putting up with this schedule, I'm very grateful, but I want to start with you. So I always start with the wonderful world of Venture in the entrance, but how did you make your way into Venture and come to found Blossom in, you know, short three to four minutes?

A I always hear that Blossom is long in the making and short in the making. Long in the making in that I think I always knew that I wanted to have my own company or build my own thing. My parents kind of taught me in the early days of, like, paying your own way. I started with a side hustle trying to wash car windows near our house before my mum put a stop to that. And then the big idea when I was a teenager was that I wanted to be a restaurant-owning DJ. Again, my parents put a stop to that. I went off to university, and when I started my MBA, I went off to INSEAD. I thought that was finally my journey into being an entrepreneur. And then I realized I had this pattern of bad ideas. And the latest one that I was working on was a peer-to-peer car sharing startup, like Zipcar without the assets. And I was beaten to market. And I thought, okay, we've got to kind of stop this.

AI assessment note: “I thought that was finally my journey into being an entrepreneur.”

Q Here's your B minus. Do you think like, ah, you know what? I should get better there.

A I think over the years I've come to realize there were so many different ways of looking at something and you really have to focus on broadening the mind. I think like narrow does not necessarily lead you to good places. You've got to have the courage of your conviction. You've got to be able to have judgment, et cetera, and you should be able to pay attention to what's important or not. But it really does take kind of thinking, oh, I wouldn't have looked at it that way, or Not assuming that someone just thinks like you. Um, I spend a lot of time focusing on that, and that's really why I like a diverse partnership, and having, like, you know, if you look at me, Imran, and Alex, we have very different backgrounds, very different views on things, but we don't necessarily see eye to eye, and that's a good thing.

AI assessment note: “I think over the years I've come to realize there were so many different ways”

Q Here's your B minus. Do you think like, ah, you know what? I should get better there.

A I think over the years I've come to realize there were so many different ways of looking at something and you really have to focus on broadening the mind. I think like narrow does not necessarily lead you to good places. You've got to have the courage of your conviction. You've got to be able to have judgment, et cetera, and you should be able to pay attention to what's important or not. But it really does take kind of thinking, oh, I wouldn't have looked at it that way, or Not assuming that someone just thinks like you. Um, I spend a lot of time focusing on that, and that's really why I like a diverse partnership, and having, like, you know, if you look at me, Imran, and Alex, we have very different backgrounds, very different views on things, but we don't necessarily see eye to eye, and that's a good thing.

AI assessment note: “I spend a lot of time focusing on that, and that's really why I like”