The Exchanges

Q he described Sequoia's culture as, uh, not a family, but as a team, where performance is number one. Um, and I, I thought it was, um, I thought it was brilliant as a product marketing message, honestly. Um, and I wanted to ask you, if you were to kind of describe Excel's culture that you want to build for Excel London in that same way, how would you describe it?

A Yeah, so, you know, the, the sentence that, We use is that we want to be hyper competitive on the outside. It's all about being that first partner to these exceptional founders everywhere, globally, but we're ultra collaborative on the inside. There are no sharp elbows here. It's not a star culture. It is a safe place. And there are written rules. There are unwritten rules on the, you know, on the written side at a young level. If one of the younger investment team members identifies a great company, A great founder that we actually end up investing in. Everybody gets a bonus because that's sort of a way to hard code collaboration, and that's kind of the team spirit we want to bring. Unwritten rule. Anyone here picks up their hand and says, you know, we really need to work with this founder. We need to do everything we can to convince him or her. We will all drop everything to get on a plane. Actually, that's the funnest part, the chase. And when we're all together, because as you know, venture can sometimes be a lonely business. So I think it's these, it's the code of conduct because we all know we're all very kind of aligned in terms of our mission. And I think what I want to say, which to me is astounding. If you walk into a Palo Alto or SF office, if you walk into London, you walk into a Bangalore, the vibe is totally the same, which is incredible. It's not a margin. It's j…

AI assessment note: “we want to be hyper competitive on the outside... but we're ultra collaborative on the inside”

Q he described Sequoia's culture as, uh, not a family, but as a team, where performance is number one. Um, and I, I thought it was, um, I thought it was brilliant as a product marketing message, honestly. Um, and I wanted to ask you, if you were to kind of describe Excel's culture that you want to build for Excel London in that same way, how would you describe it?

A Yeah, so, you know, the, the sentence that, We use is that we want to be hyper competitive on the outside. It's all about being that first partner to these exceptional founders everywhere, globally, but we're ultra collaborative on the inside. There are no sharp elbows here. It's not a star culture. It is a safe place. And there are written rules. There are unwritten rules on the, you know, on the written side at a young level. If one of the younger investment team members identifies a great company, A great founder that we actually end up investing in. Everybody gets a bonus because that's sort of a way to hard code collaboration, and that's kind of the team spirit we want to bring. Unwritten rule. Anyone here picks up their hand and says, you know, we really need to work with this founder. We need to do everything we can to convince him or her. We will all drop everything to get on a plane. Actually, that's the funnest part, the chase. And when we're all together, because as you know, venture can sometimes be a lonely business. So I think it's these, it's the code of conduct because we all know we're all very kind of aligned in terms of our mission. And I think what I want to say, which to me is astounding. If you walk into a Palo Alto or SF office, if you walk into London, you walk into a Bangalore, the vibe is totally the same, which is incredible. It's not a margin. It's j…

AI assessment note: “we want to be hyper competitive on the outside... ultra collaborative on the inside.”

Q slightly throwing in a grenade here. What do you make of the big US players all coming to London? We've sat on a panel before, and we agreed on this, and another delightful participant didn't agree, and I still think he's wrong. Uh, but my question to you is that everyone's like, oh, all the US, you know, teams are in London. How do you respond and feel about that?

A I think it is a sign of a maturing ecosystem, right? We all know, um, How vibrant and exciting it is here, and it truly is, right? I think the, the downturn here is not going to change the fundamental of the great entrepreneurs in terms of what they're building. So I, I think it's a sign of the fact that it's a very interesting market to be in, and how do you say you're a global investor if you haven't figured out Europe properly? So it had to happen. Um, But the reality is it takes decades to build the capillary networks, the relationships to, you know, to really honor that commitment, as I said, to the founders, which is what we've been doing. And what surprises me is that there are, I've heard some verbiage around, well, Europe has just happened, and we've discovered it. Isn't that interesting that we've discovered it? And, um, And that's surprising to me because we all know it's been two decades of hard building here, and I think the, you know, the first, second, third generation of founders don't know exactly who's sort of put in the blood, sweat, and tears.

AI assessment note: “I think it is a sign of a maturing ecosystem, right?”

Q Bondaman called you. I've honestly been taught by some of the greats, Harry, respectfully, it's not worth your time getting cents back on the dollar. Just spend time on the outliers given the impact they have on your portfolio value. How do you respond to that? And how do you think about like time allocation across the portfolio and bluntly the worthiness of spending time with companies where it is?

A Yeah. Really good question. Remember, I was a very young person. I don't even know what my title was at the time that I was doing all that. So, you know, in fact, I think it was a good use of my time, right? And I mean, look, what I will say to you, and I really believe it, we are in the, you know, we are in the business of partnering very, very early with founders, right? The majority of what we do is either seed, who knows whether it's pre-seed or seed. These days it all got sort of merged or series A. And those are 10 to 12 year relationships. There's only 10 to 12 year funds, and I think you only stay in business for 3040 years as we've done is if you have the references and those relationships and you know very well about that because you're at the epicenter of a lot of it. And I think we have kind of a commitment to part to really be there for the highs as well as the lows. Now, maybe we can Staff it differently. Maybe we can support them in different ways, but I don't think you could just check out. It's just, it's just not the right thing to do. And the question is then how do you do it at a fun level? So you allocate your time wisely, which is something we do spend a lot of time thinking about. Um, but, but I, I think the relationship with the founders matters a lot because that's what we're in the business of doing is backing them and, you know, backing repeat founder…

AI assessment note: “I think we have kind of a commitment to part to really be there for the highs as well as the lows.”

Q I do want to ask, we mentioned kind of, like, investing styles and, like, what I learned from, like, this challenge that I'm going through. When we think about your investing style, how has your investing style changed over the years, Sonali? And at that point, like, this one will be for me, my first company, not Going well and probably going bust where it really changed how you think.

A Yeah. So, you know, one thing that, um, I really honestly could not say I understood is how great, great was. I mean, yeah, we read about it. We all knew about these great, incredible businesses. I read the Facebook memo, but I wasn't on the Facebook board. And so it was, it's only when you're confronted with it in reality that I think you realize what uncapped kind of exceptional greatness looks like. And I think Spotify is a great example where we invested. It was unfortunately not, not the first money and, um, shame on us, but when we invested, it was sort of seventy-ish million in gross revenue. I mean, it's ten billion now. And, um, It was about a million and a half paying users to still tiny in a world of, you know, where, where it could have gone. And we had no idea that it could get as big as it ultimately got. Yes, we dreamed, et cetera, but it was never at the same kind of range of what it eventually of what Daniel like was able to achieve with that business. So I think it's only when you see it close up that you really start to believe it. And, you know, learning is all about seeing, so I think that's probably was my big learning in terms of how uncapped This business can be. People told me, but it's only when you experience it, do you, do you believe it?

AI assessment note: “that's probably was my big learning in terms of how uncapped This business can be”

Q slightly throwing in a grenade here. What do you make of the big US players all coming to London? We've sat on a panel before, and we agreed on this, and another delightful participant didn't agree, and I still think he's wrong. Uh, but my question to you is that everyone's like, oh, all the US, you know, teams are in London. How do you respond and feel about that?

A I think it is a sign of a maturing ecosystem, right? We all know, um, How vibrant and exciting it is here, and it truly is, right? I think the, the downturn here is not going to change the fundamental of the great entrepreneurs in terms of what they're building. So I, I think it's a sign of the fact that it's a very interesting market to be in, and how do you say you're a global investor if you haven't figured out Europe properly? So it had to happen. Um, But the reality is it takes decades to build the capillary networks, the relationships to, you know, to really honor that commitment, as I said, to the founders, which is what we've been doing. And what surprises me is that there are, I've heard some verbiage around, well, Europe has just happened, and we've discovered it. Isn't that interesting that we've discovered it? And, um, And that's surprising to me because we all know it's been two decades of hard building here, and I think the, you know, the first, second, third generation of founders don't know exactly who's sort of put in the blood, sweat, and tears.

AI assessment note: “I think it is a sign of a maturing ecosystem”

Q don't think the process in terms of the investment decision was wrong, and I don't think the business was bad. It was a change in macro environments and capital markets, which meant that a business that would have normally succeeded in a prior thirteen-year bull market no longer succeeds in a downturn. I kind of leave going, well, do I have any lessons? And that makes me feel quite guilty.

A Well, you know, I, there are some situations where you can do all of the right things, where the entrepreneur does all the right things. Go back to what I said, it was the bull market, grow fast, go, go, go big or go home. And, uh, you know, money was flowing into our system as we, as we, as we know why for a number of years and especially the last two years. So, but, but, but, but Harry, you have learned something. You have learned that capital was cheap for a while, but it's not forever cheap. So you think about the business models you back next. The role of what the cost of capital plays and the unit economics will be front and center. And the other thing I've learned in some of the situations I've been involved in is that actually, you know, how you do a memo, we do a memo because that's sort of part of being a responsible investor, um, for a, you know, over a long-term period, it helps you articulate your thinking. And we always, you know, you write down, oh, there's regulatory risk, or you write down this funding risk, or you write down this geopolitical risk, but you just write it down. I now have deep respect You know, I, I learned that over the years. If something can go wrong, and in a long enough period, it actually might go wrong. So don't just write it down, absorb it, internalize it. So maybe there was no learning, but I, I, I, I'm a hundred percent sure that you'…

AI assessment note: “Harry, you have learned something. You have learned that capital was cheap for a while”

Q that, I wanted to ask, like, do you think it's easier on the vulnerability side, bluntly, now that you are very successful? Like, you know, when I started, there's no way I would have been as vulnerable as I am now, but you can be more and you're afforded more luxuries with seniority. Do you find that that's the case? And is that the case for you, do you think?

A It's a really, Really good question because that's what you do. You ask good questions. I think so. You know, I was in a conversation with my Harvard Business School lead professor, leadership professor. She's incredible. And, um, she also happened to graduate from the same undergrad as I did. And I was sort of going on about being authentic and being the best version of yourself and show me Sonali. Why do you think people can be authentic and be the best version of yourself? You're just lucky. So Yeah, I, I thought that was good feedback, which is like, it's not so easy, so you're right, it's not so easy. I don't know, I've always been kind of a version of this, so I, I feel that I pushed the envelope on that front, but yeah, I think it is easier when you're more senior, and that's great, because you can role model it, and hopefully you can change that, change that discrepancy to be candid.

AI assessment note: “yeah, I think it is easier when you're more senior”

Q We talked before about, I'm very open in the show too, about the company of mine that's not doing very well. If you're advising me and you're advising a generation of young investors out there who haven't seen this before, About resilience and about what to do when a company goes bust and how not to lose confidence. What would your advice be?

A I'd, I do two things. The one is, and I think this is important is I'd really lean in onto your, into your early stage businesses, right? The vast majority of what we've done is seed investing pre-product or definitely pre-product market fit, or even if there's product market fit, it's super early. I think the joy there in terms of really supporting those entrepreneurs, you've already made those investments, right? So it's not about investing decisions, working backwards to what you need to get to. I think you need to keep that joy alive, if you will, during tough times to remind yourself what, what, what good looks like, what's possible, kind of the infectious enthusiasm around building something. So I think you need to really lean into those situations. And we all know the great companies get built In a downturn. And I think a lot has been said about it, but it's truly a special time to be kind of partnering with your entrepreneurs that you've already backed. So I think that for the psychology element is incredibly important. Of course, it's incredibly important for them. And I think the, um, you know, these, the, the, the, the, we all know it's not about the type one mistakes, frankly, it's all about the type two mistakes. So candidly, Yes, you could lose some confidence, but it's about distilling what you've learned and moving on. Because the worst thing you can do, and you…

AI assessment note: “it's about distilling what you've learned and moving on”

Q don't think the process in terms of the investment decision was wrong, and I don't think the business was bad. It was a change in macro environments and capital markets, which meant that a business that would have normally succeeded in a prior thirteen-year bull market no longer succeeds in a downturn. I kind of leave going, well, do I have any lessons? And that makes me feel quite guilty.

A Well, you know, I, there are some situations where you can do all of the right things, where the entrepreneur does all the right things. Go back to what I said, it was the bull market, grow fast, go, go, go big or go home. And, uh, you know, money was flowing into our system as we, as we, as we know why for a number of years and especially the last two years. So, but, but, but, but Harry, you have learned something. You have learned that capital was cheap for a while, but it's not forever cheap. So you think about the business models you back next. The role of what the cost of capital plays and the unit economics will be front and center. And the other thing I've learned in some of the situations I've been involved in is that actually, you know, how you do a memo, we do a memo because that's sort of part of being a responsible investor, um, for a, you know, over a long-term period, it helps you articulate your thinking. And we always, you know, you write down, oh, there's regulatory risk, or you write down this funding risk, or you write down this geopolitical risk, but you just write it down. I now have deep respect You know, I, I learned that over the years. If something can go wrong, and in a long enough period, it actually might go wrong. So don't just write it down, absorb it, internalize it. So maybe there was no learning, but I, I, I, I'm a hundred percent sure that you'…

AI assessment note: “Harry, you have learned something. You have learned that capital was cheap for a while”

Q So sorry, type one versus type two, what does that mean?

A Okay, okay, so for me, it's false negative versus false positive. The false positive, it doesn't work out, you can only lose one times your money, but the false negative, when you say no to an outlying, outlier business, right, to a founder that creates an exceptional business that could have returned the fund multiple times over, that really hurts. So those are the ones you really have to learn from. I think the one, the one mistake I've, uh, I made two mistakes, I think, you know, and I've really, I try to go back and really, uh, learn, and we actually do this as a group. We put all the companies down that we got wrong, and we really figure out why we got it wrong as a group, and we try to learn from each other's mistakes. So that's, there's real vulnerability there, and I think that allows people to kind of admit and put their hand up too. Um, but, but what, what we do is we, uh, you know, what my mistakes have been, one is I, I kind of fixated on market size. It's so silly because the great founders, They just create adjacencies. They change user behavior with beautiful products, and I completely got that wrong because the markets, they look small. Clearly, if it's very small, it's very obvious, but generally speaking, founders can do some magical thing in terms of creating multiple products or, you know, just delighting users in a way that they, they, they, they, they kind…

AI assessment note: “so for me, it's false negative versus false positive.”

Q it kind of prevents us being ambitious. We're going to see a reversion to high margin enterprise SaaS investing. Actually, we're going to see a retrenchment away from emerging markets. We're going to see a retrenchment away from capital intensive businesses. And then what are we left with SaaS and enterprise? I get it. Fine. But I don't know. It just saddens me because that's the takeaway that you have.

A Yeah. You know, it's true that after, um, in 2000, Because of the trillions raised, there was that all that infrastructure laid down, which means that the Amazons and the Ebays could do well, and then, then at one point it was started, and then, you know, the rest, you know. In 2008, all that money came in, but there was, it was the App Store, and it was cloud, all happening at the same time, so these waves just carried you through. I'm not worried about us losing confidence, not backing the outliers. I mean, you know, we invested in Spotify in the end of, uh, early, early 11 is when we were talking. To them, it wasn't kind of the most obvious time either. It was an incredibly bold plan. I think these exceptional founders absolutely are there. They have the confidence. They have the attention now. And yeah, maybe they're more capital intensive, less capital intensive, but there is enough dry powder, Harry, right now. I think it's like the numbers are two, three, four hundred billion that is out there in venture capital at the moment in dry powder. So I think You know, the trends, the secular, long-term secular trends are not going anywhere, right? You agree. Digitalization, AI, et cetera, the cloud. The founders are there. It's never been more vibrant. You know, after 2000, it was B to B and B to C. Do you know what that meant?

AI assessment note: “I'm not worried about us losing confidence, not backing the outliers.”

Q We talked before about, I'm very open in the show too, about the company of mine that's not doing very well. If you're advising me and you're advising a generation of young investors out there who haven't seen this before, About resilience and about what to do when a company goes bust and how not to lose confidence. What would your advice be?

A I'd, I do two things. The one is, and I think this is important is I'd really lean in onto your, into your early stage businesses, right? The vast majority of what we've done is seed investing pre-product or definitely pre-product market fit, or even if there's product market fit, it's super early. I think the joy there in terms of really supporting those entrepreneurs, you've already made those investments, right? So it's not about investing decisions, working backwards to what you need to get to. I think you need to keep that joy alive, if you will, during tough times to remind yourself what, what, what good looks like, what's possible, kind of the infectious enthusiasm around building something. So I think you need to really lean into those situations. And we all know the great companies get built In a downturn. And I think a lot has been said about it, but it's truly a special time to be kind of partnering with your entrepreneurs that you've already backed. So I think that for the psychology element is incredibly important. Of course, it's incredibly important for them. And I think the, um, you know, these, the, the, the, the, we all know it's not about the type one mistakes, frankly, it's all about the type two mistakes. So candidly, Yes, you could lose some confidence, but it's about distilling what you've learned and moving on. Because the worst thing you can do, and you…

AI assessment note: “the key is to extract some learning from that situation, and make sure you keep investing.”

Q Can I ask you, given that the best are so uncapped in many different ways, and that's something that I've learned from doing the series called The Memo, where, you know, everyone pegged, say Twilio at three billion and, you know, points last year it was sixty billion. Consistently, we always underestimate the size of our winners. Is there any point in doing outcome scenario planning in that case?

A No, totally not. You know, the truth is that when you have conviction, And this is my other big lesson. When you have complete, unadulterated, visceral conviction around a founder and what they're doing, just, you know, just find a way to partner with them. Just find a way. And, you know, I, I, it's great. We do the work, you know, we're, we're, we're very thoughtful in terms of, um, Prepared mind. This is what allows us to do that. I'm sure when you had the founders, Jim and Arthur, they talked about prepared mind, which just for the, for the benefit is, uh, it was a term coined by Jim and Arthur after the quote of Louis Pasteur, which is chance favors the prepared mind. And you have to have luck. You have to have serendipity, but you better be able to recognize what good looks like. You go to, you know, recognize what makes for a great founder in a certain business, right? Because it's also about whether the space is. And I think when you have the magic of, That founder and the magic of actually being prepared in some way or fashion around the category. It's really explosive. And I think that's also been a big learning is you can do all your outcome analysis. It doesn't really matter, especially if you invest. As early as we do.

AI assessment note: “No, totally not. You know, the truth is that when you have conviction”

Q I do want to ask, we mentioned kind of, like, investing styles and, like, what I learned from, like, this challenge that I'm going through. When we think about your investing style, how has your investing style changed over the years, Sonali? And at that point, like, this one will be for me, my first company, not Going well and probably going bust where it really changed how you think.

A Yeah. So, you know, one thing that, um, I really honestly could not say I understood is how great, great was. I mean, yeah, we read about it. We all knew about these great, incredible businesses. I read the Facebook memo, but I wasn't on the Facebook board. And so it was, it's only when you're confronted with it in reality that I think you realize what uncapped kind of exceptional greatness looks like. And I think Spotify is a great example where we invested. It was unfortunately not, not the first money and, um, shame on us, but when we invested, it was sort of seventy-ish million in gross revenue. I mean, it's ten billion now. And, um, It was about a million and a half paying users to still tiny in a world of, you know, where, where it could have gone. And we had no idea that it could get as big as it ultimately got. Yes, we dreamed, et cetera, but it was never at the same kind of range of what it eventually of what Daniel like was able to achieve with that business. So I think it's only when you see it close up that you really start to believe it. And, you know, learning is all about seeing, so I think that's probably was my big learning in terms of how uncapped This business can be. People told me, but it's only when you experience it, do you, do you believe it?

AI assessment note: “my big learning in terms of how uncapped This business can be.”

Q Can I ask you, given that the best are so uncapped in many different ways, and that's something that I've learned from doing the series called The Memo, where, you know, everyone pegged, say Twilio at three billion and, you know, points last year it was sixty billion. Consistently, we always underestimate the size of our winners. Is there any point in doing outcome scenario planning in that case?

A No, totally not. You know, the truth is that when you have conviction, And this is my other big lesson. When you have complete, unadulterated, visceral conviction around a founder and what they're doing, just, you know, just find a way to partner with them. Just find a way. And, you know, I, I, it's great. We do the work, you know, we're, we're, we're very thoughtful in terms of, um, Prepared mind. This is what allows us to do that. I'm sure when you had the founders, Jim and Arthur, they talked about prepared mind, which just for the, for the benefit is, uh, it was a term coined by Jim and Arthur after the quote of Louis Pasteur, which is chance favors the prepared mind. And you have to have luck. You have to have serendipity, but you better be able to recognize what good looks like. You go to, you know, recognize what makes for a great founder in a certain business, right? Because it's also about whether the space is. And I think when you have the magic of, That founder and the magic of actually being prepared in some way or fashion around the category. It's really explosive. And I think that's also been a big learning is you can do all your outcome analysis. It doesn't really matter, especially if you invest. As early as we do.

AI assessment note: “No, totally not. You know, the truth is that when you have conviction”

Q is when you have great young people sourcing great companies and they find something great. Sure. But you're on eight, 10, 12 boards. You know, I'm on a ton of boards. I have a ton of other commitments. I can't just drop everything and fly to Helsinki. It's, it's not that easy. Like it isn't for you. Like, how do you prevent yourself from being a bottleneck in decision-making consistently?

A I think the reason we, we've done such a nice job in terms of really nurturing kind of many generations is because we're all good at delegating. Um, you know, at the, at the end of the day, you have to empower the right individual to be able to make those decisions and help them, support them, help them win, but there's a time to start, right? So I think for the right person, they'll be on the plane, And they'll be making the call with, uh, you know, with a team. If we can't be there, one of us can't be there, but I think, you know, so we really empower people maybe earlier than they think they're ready, but they're ready. If that makes sense, because we've seen it, we have patent recognition. And that's the second thing is what I said. We genuinely drop things to support people. There's nothing more important than the team here and the team winning.

AI assessment note: “we've done such a nice job... because we're all good at delegating.”

Q people, honestly. Um, but I was shouting to them and pretty much everyone used the same word to describe you, which is the glue of Excel London. And I thought it was just a very striking thing that so many describe you in this way. What do you think they mean by the glue of Excel London? And what do you think you bring to bring that cohesion and stability?

A I think it's all of us, right? There's no one person who can be a glue. It's really a many to, to, to many relations. I probably just like articulated a lot and I'm very loud, unfortunately, so maybe my voice gets heard a lot more. Um, you know, I think what we care a lot about, what we talk about, I talk a lot about is creating an environment where you can really be the best version of yourself and do that authentically, because everything else, and you've discovered this, is so, so hard. You have to be comfortable with yourself, and you have to really kind of exercise your voice and figure out how you can be the best investor with what you bring to the table. And so that's easy said and done. And, you know, you need to do that over a 10 year period because that's your commitment to your founders. That's your commitment to investors. And so what is, what does that mean in practice? It means there's a lot of communication. So constantly pulling people in, giving feedback, asking how they're doing, kind of keeping an eye on when you see somebody sort of is not kind of as active or as happy as they were. I remember I had a review once and it was at the end of the year that I was giving this feedback, whatever the feedback was, let's not talk about that. And I, and, and, and I thought, why are you telling me at the end of the year, if you had just told me like, You know, in Q one,…

AI assessment note: “There's no one person who can be a glue. It's really a many to, to, to many relations.”

Q Bondaman called you. I've honestly been taught by some of the greats, Harry, respectfully, it's not worth your time getting cents back on the dollar. Just spend time on the outliers given the impact they have on your portfolio value. How do you respond to that? And how do you think about like time allocation across the portfolio and bluntly the worthiness of spending time with companies where it is?

A Yeah. Really good question. Remember, I was a very young person. I don't even know what my title was at the time that I was doing all that. So, you know, in fact, I think it was a good use of my time, right? And I mean, look, what I will say to you, and I really believe it, we are in the, you know, we are in the business of partnering very, very early with founders, right? The majority of what we do is either seed, who knows whether it's pre-seed or seed. These days it all got sort of merged or series A. And those are 10 to 12 year relationships. There's only 10 to 12 year funds, and I think you only stay in business for 3040 years as we've done is if you have the references and those relationships and you know very well about that because you're at the epicenter of a lot of it. And I think we have kind of a commitment to part to really be there for the highs as well as the lows. Now, maybe we can Staff it differently. Maybe we can support them in different ways, but I don't think you could just check out. It's just, it's just not the right thing to do. And the question is then how do you do it at a fun level? So you allocate your time wisely, which is something we do spend a lot of time thinking about. Um, but, but I, I think the relationship with the founders matters a lot because that's what we're in the business of doing is backing them and, you know, backing repeat founder…

AI assessment note: “Company number one didn't work, but company number two might be a blockbuster.”

Q We were talking beforehand a little bit about kind of what we're seeing in markets and how it's impacting my frail nerves. Um, talk to me, how did seeing the booms and busts, I mean, you saw it first with, you know, the dot-com early in your career, and then in 2008, 2009, how did seeing that impact your investing mindset first, before we get on to advice for me?

A Yeah, I'm sure you have advice for me. I think, I think we're much more a version in a version of 2000 than we are in, in a version of 2008. I sort of contrast it with sort of 2000, it was more wall street, 2000 was more main street. I think this is a version of more mainstream, clearly technologies at the epicenter. But if you, if you, if you allow me, I'll give you two anecdotes that sort of, I have imprinted Um, on my brain, one for each sort of downturn, if you will. So in 2000, you know, I joined in, in the summer of 2000, the, the, the, it was choppy, right? We had a big downturn, but it really, the bubble deflated in 2002, and things were really grim at that point in time. And so I was asked to go work with a group of founders, mostly e-commerce founders. This is the time of pets.com. Cosmo, boo.com. It was, it was all about eyeballs. And so it was us to sort of go into the trenches and I loved it, you know, working with these founders and really trying to figure out what did we do now? There was no follow on capital. There was not a drop of money available. So you either had to get to break even if you had a revenue model or you have to, um, frankly, give the cash back. Can you imagine? Or you have to sell the business. So this is what I was doing. And I was working with one particular company, an Irish company. The founder had done a nice job. He got the company to a f…

AI assessment note: “I'll give you two anecdotes that sort of, I have imprinted Um, on my brain”

Q it kind of prevents us being ambitious. We're going to see a reversion to high margin enterprise SaaS investing. Actually, we're going to see a retrenchment away from emerging markets. We're going to see a retrenchment away from capital intensive businesses. And then what are we left with SaaS and enterprise? I get it. Fine. But I don't know. It just saddens me because that's the takeaway that you have.

A Yeah. You know, it's true that after, um, in 2000, Because of the trillions raised, there was that all that infrastructure laid down, which means that the Amazons and the Ebays could do well, and then, then at one point it was started, and then, you know, the rest, you know. In 2008, all that money came in, but there was, it was the App Store, and it was cloud, all happening at the same time, so these waves just carried you through. I'm not worried about us losing confidence, not backing the outliers. I mean, you know, we invested in Spotify in the end of, uh, early, early 11 is when we were talking. To them, it wasn't kind of the most obvious time either. It was an incredibly bold plan. I think these exceptional founders absolutely are there. They have the confidence. They have the attention now. And yeah, maybe they're more capital intensive, less capital intensive, but there is enough dry powder, Harry, right now. I think it's like the numbers are two, three, four hundred billion that is out there in venture capital at the moment in dry powder. So I think You know, the trends, the secular, long-term secular trends are not going anywhere, right? You agree. Digitalization, AI, et cetera, the cloud. The founders are there. It's never been more vibrant. You know, after 2000, it was B to B and B to C. Do you know what that meant?

AI assessment note: “I'm not worried about us losing confidence, not backing the outliers.”

Q is when you have great young people sourcing great companies and they find something great. Sure. But you're on eight, 10, 12 boards. You know, I'm on a ton of boards. I have a ton of other commitments. I can't just drop everything and fly to Helsinki. It's, it's not that easy. Like it isn't for you. Like, how do you prevent yourself from being a bottleneck in decision-making consistently?

A I think the reason we, we've done such a nice job in terms of really nurturing kind of many generations is because we're all good at delegating. Um, you know, at the, at the end of the day, you have to empower the right individual to be able to make those decisions and help them, support them, help them win, but there's a time to start, right? So I think for the right person, they'll be on the plane, And they'll be making the call with, uh, you know, with a team. If we can't be there, one of us can't be there, but I think, you know, so we really empower people maybe earlier than they think they're ready, but they're ready. If that makes sense, because we've seen it, we have patent recognition. And that's the second thing is what I said. We genuinely drop things to support people. There's nothing more important than the team here and the team winning.

AI assessment note: “because we're all good at delegating.”

Q we're seeing this now where I was on the phone with LPs this morning and they're like, our private books are about to get obliterated. They're not yet, but they're about to. My question is, are we going to see managers be extremely proactive in revaluing their books? Are they going to be delayed in doing so? How do you expect this to Play out in the next six months.

A Yeah, so what I'm really surprised at, Harry, because I sometimes check where things are sitting, you know, because we're now, uh, going to be soon in our 40th year, uh, we've always seen that it pays to be kind of A combination of conservative and realistic, and so we always have had, you know, we don't make up our own way of accounting. It's, I think you know this in terms of the accounting methodologies, and so we're pretty proactive about taking down the valuations, but they're already sitting in pretty deep discounts. That's us, depending upon, we have various layers of doing the analysis, and I do think people will be proactive because you have to be, but it's going to take Time, and it's going to happen much more on the companies that have to have an outside mark, right, in terms of doing, doing around. And the challenge is that people are just not interested in going out and getting an outside mark right now. They much rather just put their head down and take the capital that they have and keep going. So I think you have to sort of really take a different view as to Is it going to be about a multiple change? Is it going to be about a business risk? There's two different things that are going on, this contraction multiples, and then then some, you know, businesses that are being affected. I think we're mostly just seeing our contraction multiples for the most part right …

AI assessment note: “I do think people will be proactive because you have to be, but it's going to take Time”

Q So sorry, type one versus type two, what does that mean?

A Okay, okay, so for me, it's false negative versus false positive. The false positive, it doesn't work out, you can only lose one times your money, but the false negative, when you say no to an outlying, outlier business, right, to a founder that creates an exceptional business that could have returned the fund multiple times over, that really hurts. So those are the ones you really have to learn from. I think the one, the one mistake I've, uh, I made two mistakes, I think, you know, and I've really, I try to go back and really, uh, learn, and we actually do this as a group. We put all the companies down that we got wrong, and we really figure out why we got it wrong as a group, and we try to learn from each other's mistakes. So that's, there's real vulnerability there, and I think that allows people to kind of admit and put their hand up too. Um, but, but what, what we do is we, uh, you know, what my mistakes have been, one is I, I kind of fixated on market size. It's so silly because the great founders, They just create adjacencies. They change user behavior with beautiful products, and I completely got that wrong because the markets, they look small. Clearly, if it's very small, it's very obvious, but generally speaking, founders can do some magical thing in terms of creating multiple products or, you know, just delighting users in a way that they, they, they, they, they kind…

AI assessment note: “so for me, it's false negative versus false positive.”

Q Can I ask, in terms of reserves, um, what have been some big lessons for you on reserves? Like, you know, I think prorata is quite a lazy one. I always think, like, you're always, you should either be all in and want to lead the next round, or not in at all. Um, what have been your lessons on, like, effective reserves management, deployment, decision-making?

A Yeah, the, you know, the challenge in this last cycle, um, was that the follow-on rounds Came so quickly that it was really hard to make the, the kind of the, the, the decision around, okay, what worked, what didn't work, et cetera, versus what, um, what we used to do, you know, if you, if you rewind a couple of cycles ago, um, I don't think it's as simple as all in or nothing. For one, the founders are looking for our support. Over a long-term period, if that makes sense. And I think we take that rule that we have on the board and the cap table very seriously and our support matters. That said, you know, we're very much for our initial investment decision. We're very much a conviction, not a consensus organization, right? It's all about, um, we get around the table as in prepared mind thinking, you know, you have to be first. That's the way we think about it, but it's about the intellect, intellectual integrity, honesty, lit all out on the table. But when it comes to a follow on, we think of the company as a we. That's also the reason why it doesn't go well. There's no like finger pointing. There's no naughty corner. It's our company. We collectively made the decision. Even if one person had the conviction, but we all asked the hard questions. There was real debate. There was real transparency. There was real trust, but we take the decision as a, we will really, um, look at it…

AI assessment note: “I don't think it's as simple as all in or nothing.”

Q people, honestly. Um, but I was shouting to them and pretty much everyone used the same word to describe you, which is the glue of Excel London. And I thought it was just a very striking thing that so many describe you in this way. What do you think they mean by the glue of Excel London? And what do you think you bring to bring that cohesion and stability?

A I think it's all of us, right? There's no one person who can be a glue. It's really a many to, to, to many relations. I probably just like articulated a lot and I'm very loud, unfortunately, so maybe my voice gets heard a lot more. Um, you know, I think what we care a lot about, what we talk about, I talk a lot about is creating an environment where you can really be the best version of yourself and do that authentically, because everything else, and you've discovered this, is so, so hard. You have to be comfortable with yourself, and you have to really kind of exercise your voice and figure out how you can be the best investor with what you bring to the table. And so that's easy said and done. And, you know, you need to do that over a 10 year period because that's your commitment to your founders. That's your commitment to investors. And so what is, what does that mean in practice? It means there's a lot of communication. So constantly pulling people in, giving feedback, asking how they're doing, kind of keeping an eye on when you see somebody sort of is not kind of as active or as happy as they were. I remember I had a review once and it was at the end of the year that I was giving this feedback, whatever the feedback was, let's not talk about that. And I, and, and, and I thought, why are you telling me at the end of the year, if you had just told me like, You know, in Q one,…

AI assessment note: “It means there's a lot of communication. So constantly pulling people in, giving feedback”

Q we're seeing this now where I was on the phone with LPs this morning and they're like, our private books are about to get obliterated. They're not yet, but they're about to. My question is, are we going to see managers be extremely proactive in revaluing their books? Are they going to be delayed in doing so? How do you expect this to Play out in the next six months.

A Yeah, so what I'm really surprised at, Harry, because I sometimes check where things are sitting, you know, because we're now, uh, going to be soon in our 40th year, uh, we've always seen that it pays to be kind of A combination of conservative and realistic, and so we always have had, you know, we don't make up our own way of accounting. It's, I think you know this in terms of the accounting methodologies, and so we're pretty proactive about taking down the valuations, but they're already sitting in pretty deep discounts. That's us, depending upon, we have various layers of doing the analysis, and I do think people will be proactive because you have to be, but it's going to take Time, and it's going to happen much more on the companies that have to have an outside mark, right, in terms of doing, doing around. And the challenge is that people are just not interested in going out and getting an outside mark right now. They much rather just put their head down and take the capital that they have and keep going. So I think you have to sort of really take a different view as to Is it going to be about a multiple change? Is it going to be about a business risk? There's two different things that are going on, this contraction multiples, and then then some, you know, businesses that are being affected. I think we're mostly just seeing our contraction multiples for the most part right …

AI assessment note: “I do think people will be proactive because you have to be, but it's going to take Time”

Q I, but I totally agree with you, and I totally get that. Can I ask one final one? What are the biggest challenges of firm building? You obviously know me now building the firm with 20 VC, but you're, you know, 10 chapters ahead with so many more learnings. What are the biggest challenges that you think people should know and what it takes to build a successful firm, really?

A Yeah, so it's, um, It's interesting because I think it's a, the timing, um, is quite unique in terms of European venture, right? We both know that. If you just kind of go back when we started out in 2000, we made the commitment to start Excel here because it wasn't just about Silicon Valley. It was our first step in going global. And then India was 2008, which has also been very successful. Um, so it took a lot of conviction. But you will know very well, Harry, that there were many folks who came here and everyone other than Excel left. And if you ask us why, you know, we stayed, it was the, why, why, why, why did we have the commitment? Why did it work well? And the answer is that we figured out the structure of how do you do global? Well, is that you have boots on the ground, you have local decision-making, you're investing in entrepreneurs. It's a relationship business. You need to be able to make that investment decisions sitting across the table and, you know, not from thousands of miles away. So we got that structure right, but it took a lot of blood, sweat, and tears to kind of evolve how we do global great, but local decision making very well too. So that was sort of a structural consideration, if you will, that has really stood the test of times, and we're very proud of what we've achieved, and I think that was always a challenge in terms of what we're trying to do her…

AI assessment note: “we figured out the structure of how do you do global? Well, is that you have boots on the ground”

Q that, I wanted to ask, like, do you think it's easier on the vulnerability side, bluntly, now that you are very successful? Like, you know, when I started, there's no way I would have been as vulnerable as I am now, but you can be more and you're afforded more luxuries with seniority. Do you find that that's the case? And is that the case for you, do you think?

A It's a really, Really good question because that's what you do. You ask good questions. I think so. You know, I was in a conversation with my Harvard Business School lead professor, leadership professor. She's incredible. And, um, she also happened to graduate from the same undergrad as I did. And I was sort of going on about being authentic and being the best version of yourself and show me Sonali. Why do you think people can be authentic and be the best version of yourself? You're just lucky. So Yeah, I, I thought that was good feedback, which is like, it's not so easy, so you're right, it's not so easy. I don't know, I've always been kind of a version of this, so I, I feel that I pushed the envelope on that front, but yeah, I think it is easier when you're more senior, and that's great, because you can role model it, and hopefully you can change that, change that discrepancy to be candid.

AI assessment note: “yeah, I think it is easier when you're more senior”

Q Can I ask, I have many insecurities investing. What do you think your biggest insecurities are today? Cause I think a lot of people will bluntly look at you and look at the incredible track, look at your position and go, no insecurities. And I think we all have them and it's humanizing. What do you think yours are today?

A So, you know, what's really, um, just beautiful about this business, but also quite difficult is this learning curve is so steep. It never, the slope Never goes down. You're learning every day. I was like, look, 20 years in, you could stop learning a little bit, right? You're always making mistakes. You always have insecurities. So, oh my god, there are, I think there are, there are so, so many insecurities. It's, um, it's probably around the fact that I don't know if I can always get it right in terms of the exceptional founder. I mean, that really hurts. At the seed stage, I spend a lot of time with seed companies, you know, because we exchange notes and that's so much fun. It's, um, it's difficult to get it right.

AI assessment note: “I don't know if I can always get it right in terms of the exceptional founder”