The Exchanges

Q Do you think when we look at the current state of venture, it is aligned sufficiently?

A I don't think it is in general. I think fundamentally the idea of collecting a two, two and a half percent management fee does not really make sense. It does not align us with the outcomes. At Plural, we charge about half the management fee, and we think we are much better aligned. And also what it enables us to do is make a few more investments per fund. So in fund one, we probably made two more investments because of this. Fund two, we think we'll make four more investments as a result. That's four more shots on goal. That is pretty damn important. And still, we have a fantastic team, we have five GPs, Everyone is being paid well, but not ridiculously.

AI assessment note: “I don't think it is in general.”

Q Do you think when we look at the current state of venture, it is aligned sufficiently?

A I don't think it is in general. I think fundamentally the idea of collecting a two, two and a half percent management fee does not really make sense. It does not align us with the outcomes. At Plural, we charge about half the management fee, and we think we are much better aligned. And also what it enables us to do is make a few more investments per fund. So in fund one, we probably made two more investments because of this. Fund two, we think we'll make four more investments as a result. That's four more shots on goal. That is pretty damn important. And still, we have a fantastic team, we have five GPs, Everyone is being paid well, but not ridiculously.

AI assessment note: “I don't think it is in general. I think fundamentally the idea of collecting”

Q Think the world of Torsten. Do you think, how do you feel about the value of serial entrepreneurship? Like, inherently, I find that I feel so much more comfortable backing a serial entrepreneur. There is so much learned through the scar tissue of the mistakes you've made before, but then others say about the benefits of naivety of being a first-time founder.

A We love repeat founders, and when we look at the people we've backed and the ones we haven't backed, what stands out to us is that So repeat founders, they typically go for a much bigger goal. You know, Torsten did a gaming company, then he went into defense. And we can talk about Danny Alecke as the first company was e-commerce. And then he took on a massive challenge of building Spotify. So we love the fact that these people, they go for a massively bigger goal next time. And again, I don't know if they have a bigger likelihood of success, but even if the likelihood of success is the same, the outcome is so much bigger. And they've learned a fair few things on the journey. Like, I don't think I would be that excited to back a founder who built Fintech company one and then goes on to build Fintech company two.

AI assessment note: “We love repeat founders, and when we look at the people we've backed”

Q Does every partner need to meet the founder?

A No, absolutely not. And I think there is probably no company where all the partners met the founders before the deal. It's typically one or few partners that meets, meets a company. But we give a lot of trust to the individual GPs. The bar for being a GP is super high. So we give them a lot of trust, and we kind of felt that it doesn't make sense to hire someone brilliant and tell them you have to come on Mondays to ask permission to do a deal. So going back, we have the IC, and after the IC, the lead partner goes back and thinks about the feedback. We have many cases Where after hearing the feedback, the lead partner is like, hey guys, you know, Ian, you raised great points. Karina, what you said about your experience in the market is very true, and I'm not gonna do the deal. Many cases where this happens.

AI assessment note: “No, absolutely not. And I think there is probably no company where all the partners met”

Q I would say that plural of built a brand as being, you do deep, hard shit that most other people are like, well, I, I don't understand that. Would you say that's a fair representation of the brand that you want to build?

A We are looking to back the most ambitious entrepreneurs, whatever they're building. So we're looking at Proxima fusion. That's maybe what you would call departure. You know, then we look on the other side, we have Teton, which is using CCTV cameras to monitor patients. You know, it's, it's not that complicated maybe. So I think, you know, we go the full, the full spectrum, but I think, you know, it's a character of the entrepreneur, which it may be the most Most important, you know, approximately half of the founders we back are repeat entrepreneurs. You know, we look at Torsten who built a gaming company. Then he went into building a defense company and he started Helsing in 2020 or 20 21. So, you know, you need to have something which makes you tick differently to go building a defense company four or five years ago, before this became a hot topic.

AI assessment note: “we go the full, the full spectrum, but I think, you know, it's a character”

Q Do you think the 10 and two traditional venture model in terms of timeline needs to be updated, especially for a generation of companies that you invest in?

A I mean, 10 years is short. I mean, if I look at, you know, maybe, maybe looking back now, Wise now looks like a simple fintech company. Everyone is doing fintech companies. You know, it took us, we started working on it with Christo in 2010. We launched beginning of 20 11. We went public in 2021. That was a 10 year journey. But also to be honest, the last three years were probably pretty liquid. Even we were private. So let's call it seven years. And maybe for deep tech companies, it's 10 to 12. You know, if you hit the bad patch in the markets, it becomes 15. We need to, I think we need to recognize this, but I think also maybe at some point people just need to be more disciplined in returning some capital early. You know, there are some, some investors outside who are very vocal, you know, I think Fred Wilson has spoken a lot about taking some money off the table.

AI assessment note: “I mean, 10 years is short. ... And maybe for deep tech companies, it's 10 to 12.”

Q How do you think about, when you say that we're here to have GDP level impact, we're going to get to Europe later, but just on the decision making, I hope that you don't have like traditional investment committees. That is like the hailed structure of decision making in venture. How do you think about investment decision making on a per company basis in the firm?

A It is super simple, and we have, it's very, actually very formulaic. There's a couple things. Every investor can only do a limited number of deals per year. You know, it looks, it looks at two to three deals per year is the right pacing. You know, if you come saying, I'm doing deal number six, we're going to be like, hey, you know, what's going on? So, limited number of shots on goal. Skin in the game, so you're willing to commit your personal money. Third one, you write a memo about the deal. The memo starts with, why is this company important to me? We kind of, like, every deal we do, we're testing, like, would you be willing to be a co-founder of the company? And all the 49 deals we've invested in so far, we feel about all of them, that the partner who did the deal felt like, bloody hell, this is so important, so exciting, I would love to be a co-founder of this company. So the memo starts with, why is this important to you? Let's talk about the founder. Why is it important for the founder? How can it be a hundred X from here? If we can't see that, we should not be entertaining it. A hundred X. If we can't imagine a hundred X, we should not be entertaining the idea of this deal. There are many great investments which are five X guaranteed. There are many great investors who should do this. It's not plural. And then once we have that memo, we have an investment committee. And…

AI assessment note: “given that we don't vote on deals, the committee discussions are very honest”

Q How do you think about, when you say that we're here to have GDP level impact, we're going to get to Europe later, but just on the decision making, I hope that you don't have like traditional investment committees. That is like the hailed structure of decision making in venture. How do you think about investment decision making on a per company basis in the firm?

A It is super simple, and we have, it's very, actually very formulaic. There's a couple things. Every investor can only do a limited number of deals per year. You know, it looks, it looks at two to three deals per year is the right pacing. You know, if you come saying, I'm doing deal number six, we're going to be like, hey, you know, what's going on? So, limited number of shots on goal. Skin in the game, so you're willing to commit your personal money. Third one, you write a memo about the deal. The memo starts with, why is this company important to me? We kind of, like, every deal we do, we're testing, like, would you be willing to be a co-founder of the company? And all the 49 deals we've invested in so far, we feel about all of them, that the partner who did the deal felt like, bloody hell, this is so important, so exciting, I would love to be a co-founder of this company. So the memo starts with, why is this important to you? Let's talk about the founder. Why is it important for the founder? How can it be a hundred X from here? If we can't see that, we should not be entertaining it. A hundred X. If we can't imagine a hundred X, we should not be entertaining the idea of this deal. There are many great investments which are five X guaranteed. There are many great investors who should do this. It's not plural. And then once we have that memo, we have an investment committee. And…

AI assessment note: “It is super simple, and we have, it's very, actually very formulaic.”

Q Well, dude, the pleasure is all mine. Now I want to start before plural. You were a prolific angel. Can you just start on the investing career there, how it went, whether you liked it and the transition to plural?

A So I made my first angel investment probably about 20 years ago. And I think, you know, through the years of building, building wise and still working at Skype, I was like, I met other people who were building businesses. I was excited about what they were doing. I wanted to be part of the journey and wrote a small angel ticket. I went into overdrive once I stopped running wise, doing 30, 40, 50 deals a year. That was fun, you know, but I think it was, it started feeling to me a little bit wall street esque, high speed deployment. I think it's been, it was a great portfolio strategy. I think the portfolio has done really well, but it felt it wasn't, it wasn't very kind of mission aligned. I thought there is something more that can be done. And that's kind of what's the beginning of thinking, hey, we should start plural. We should really think about getting founders who have scar tissue from building companies to become investors.

AI assessment note: “That's kind of what's the beginning of thinking, hey, we should start plural.”

Q You said before, I saw this and I was like, this is just too good not to start with it. You said VCs are spreadsheet monkeys who have no idea how to run a business. Um, can you unpack that for me, Tavit?

A I think What I meant by this is that if you are looking at a mid-stage SaaS company, consumer company, where all you need to do is stack up the cohort curves, take away the CAC, multiply by LTV, and then pay a very high price to win the deal. That is not very exciting to me. And that's what I mean by spreadsheet monkeys. You know, I think, but if you're talking about early stage, when you're really looking, looking at the founder deep in the eye, trying to figure out why is he doing it? What is his unfair advantage to build a generational business? I think that's very different. And some things that I, you know, I've said many times is that if you look at the European landscape, majority, vast majority of the European GPs have not spent a single day working in a real company. They've worked in consulting firms, banks, but they haven't worked in a real operating company. And I think the scar tissue you have from working in an operating company, or even more, the scar tissue you have from building, being the founder, being the CEO, is very different.

AI assessment note: “What I meant by this is that if you are looking at a mid-stage”

Q Think the world of Torsten. Do you think, how do you feel about the value of serial entrepreneurship? Like, inherently, I find that I feel so much more comfortable backing a serial entrepreneur. There is so much learned through the scar tissue of the mistakes you've made before, but then others say about the benefits of naivety of being a first-time founder.

A We love repeat founders, and when we look at the people we've backed and the ones we haven't backed, what stands out to us is that So repeat founders, they typically go for a much bigger goal. You know, Torsten did a gaming company, then he went into defense. And we can talk about Danny Alecke as the first company was e-commerce. And then he took on a massive challenge of building Spotify. So we love the fact that these people, they go for a massively bigger goal next time. And again, I don't know if they have a bigger likelihood of success, but even if the likelihood of success is the same, the outcome is so much bigger. And they've learned a fair few things on the journey. Like, I don't think I would be that excited to back a founder who built Fintech company one and then goes on to build Fintech company two.

AI assessment note: “We love repeat founders”

Q Does every partner need to meet the founder?

A No, absolutely not. And I think there is probably no company where all the partners met the founders before the deal. It's typically one or few partners that meets, meets a company. But we give a lot of trust to the individual GPs. The bar for being a GP is super high. So we give them a lot of trust, and we kind of felt that it doesn't make sense to hire someone brilliant and tell them you have to come on Mondays to ask permission to do a deal. So going back, we have the IC, and after the IC, the lead partner goes back and thinks about the feedback. We have many cases Where after hearing the feedback, the lead partner is like, hey guys, you know, Ian, you raised great points. Karina, what you said about your experience in the market is very true, and I'm not gonna do the deal. Many cases where this happens.

AI assessment note: “No, absolutely not. And I think there is probably no company where all the partners”

Q Speaking about putting in the effort, I do want to move to Europe. You said that now is the time of all times for European sovereignty. On the why now, why is it so important now, more than ever, that Europe stands on its own two feet, do you think?

A Even zooming out when we were starting to think about plural in 20, 21. So we raised our first one in 20, 22. So thinking of creating plural, we were, we had two things which were really important. European sovereignty and GDP level impact. So that was true four years ago, and it's even more true now. Two things which have happened in between. One is the Ukraine war. Which, you know, before that investing in defense felt strange after the Ukraine war, it feels like we need to do this in Europe. And I think the other thing, second thing which has changed is I think really what happened in the White House in February where Zelensky was taken for a grilling And the ways that US cannot be trusted anymore to be the protector of Europe. You know, we, this kind of results in a world where we need to rebuild a lot of things on our own. We need to build our defense sector. We need to build our space sector. We need an independent energy sector. We need security intelligence. A lot of sectors where I think we're going to be living in a, It's a tripolar world. Is that a word? Did I make it up? So there's gonna be an American version. Let's call it Android. There is a European version, Helsing, a Chinese version. Defense, space, energy, security, intelligence, everything, all of the critical services. And these critical services, they make up a vast portion of GDP.

AI assessment note: “US cannot be trusted anymore to be the protector of Europe.”

Q You said before, I saw this and I was like, this is just too good not to start with it. You said VCs are spreadsheet monkeys who have no idea how to run a business. Um, can you unpack that for me, Tavit?

A I think What I meant by this is that if you are looking at a mid-stage SaaS company, consumer company, where all you need to do is stack up the cohort curves, take away the CAC, multiply by LTV, and then pay a very high price to win the deal. That is not very exciting to me. And that's what I mean by spreadsheet monkeys. You know, I think, but if you're talking about early stage, when you're really looking, looking at the founder deep in the eye, trying to figure out why is he doing it? What is his unfair advantage to build a generational business? I think that's very different. And some things that I, you know, I've said many times is that if you look at the European landscape, majority, vast majority of the European GPs have not spent a single day working in a real company. They've worked in consulting firms, banks, but they haven't worked in a real operating company. And I think the scar tissue you have from working in an operating company, or even more, the scar tissue you have from building, being the founder, being the CEO, is very different.

AI assessment note: “And that's what I mean by spreadsheet monkeys.”

Q Do you think you'd have a pricing premium if you're in the US?

A I don't believe Wise would have a pricing premium in the US. We spent a lot of time agonizing this over the years before the IPO. So I think for Wise it has worked out well. However, structurally, we have a lot of issues here. We don't have enough retail participation in the UK. We don't have enough institutional participation from the pension funds. So I do think UK stock market is subprime in that sense. And I think, you know, if you are, if you're a retail product, you want your consumers to buy you. So makes sense to go public in the US. But I also think in some sense, maybe some of this is a bit of a wrong thing to spend so much energy on. Why is it open public in the US? Result would be the same. We would not be paying more tax in the US. We would still be headquartered here. So sometimes it feels to me, people love to talk about this. But I'm not sure how big is the actual difference for certain companies.

AI assessment note: “I don't believe Wise would have a pricing premium in the US.”

Q Speaking about putting in the effort, I do want to move to Europe. You said that now is the time of all times for European sovereignty. On the why now, why is it so important now, more than ever, that Europe stands on its own two feet, do you think?

A Even zooming out when we were starting to think about plural in 20, 21. So we raised our first one in 20, 22. So thinking of creating plural, we were, we had two things which were really important. European sovereignty and GDP level impact. So that was true four years ago, and it's even more true now. Two things which have happened in between. One is the Ukraine war. Which, you know, before that investing in defense felt strange after the Ukraine war, it feels like we need to do this in Europe. And I think the other thing, second thing which has changed is I think really what happened in the White House in February where Zelensky was taken for a grilling And the ways that US cannot be trusted anymore to be the protector of Europe. You know, we, this kind of results in a world where we need to rebuild a lot of things on our own. We need to build our defense sector. We need to build our space sector. We need an independent energy sector. We need security intelligence. A lot of sectors where I think we're going to be living in a, It's a tripolar world. Is that a word? Did I make it up? So there's gonna be an American version. Let's call it Android. There is a European version, Helsing, a Chinese version. Defense, space, energy, security, intelligence, everything, all of the critical services. And these critical services, they make up a vast portion of GDP.

AI assessment note: “Two things which have happened in between. One is the Ukraine war.”

Q Do you think you'd have a pricing premium if you're in the US?

A I don't believe Wise would have a pricing premium in the US. We spent a lot of time agonizing this over the years before the IPO. So I think for Wise it has worked out well. However, structurally, we have a lot of issues here. We don't have enough retail participation in the UK. We don't have enough institutional participation from the pension funds. So I do think UK stock market is subprime in that sense. And I think, you know, if you are, if you're a retail product, you want your consumers to buy you. So makes sense to go public in the US. But I also think in some sense, maybe some of this is a bit of a wrong thing to spend so much energy on. Why is it open public in the US? Result would be the same. We would not be paying more tax in the US. We would still be headquartered here. So sometimes it feels to me, people love to talk about this. But I'm not sure how big is the actual difference for certain companies.

AI assessment note: “I don't believe Wise would have a pricing premium in the US.”

Q Another that I never have an answer for, and it's like the regulatory hurdles that come from a fragmented Europe being a barrier to stopping us. To what extent do you think that is a very valid problem?

A Two ways to look at it. No entrepreneur ever Has not started a company because of regulation. So best entrepreneurs say goes through walls made out of titanium to make it happen. So I think, you know, in some sense, you know, it's, it's an excuse. But on the other hand, I mean, Europe is a fragmented market of, I don't know how many countries, you know, we need to streamline things. I'm, I'm excited to see there is like, what is it, the 28th regime that Andreas Klinger is doing with EU Inc. That's great, you know, but we need to, we need even more to make Europe a more unified market. Labour, capital. Like, why do we need to have a stock exchange in Amsterdam. Great companies listed, sir. London. Estonia. I mean, I would, I would love her to be.

AI assessment note: “So I think, you know, in some sense, you know, it's, it's an excuse. But on the other hand”

Q Do you worry about the elongated window to DPI and liquidity, especially for some of the projects that you do? These are such hard projects. These are multi-decade journeys. Isn't it even longer for some of these projects?

A I do worry. And I think, like overall, we need to come up with better solutions for some of the long liquidity problems. Some of these companies may need billions. But I think at the same time, if the companies are well capitalized, so you can reach milestones, then you have liquidity. You know, the best example of all is maybe SpaceX today. It's a private company has had zero liquidity issues. So there is a secondary market always open. It's because say, I mean, the journey in the beginning was very hard, but being able to attract the capital to get to a place where you hit your milestone and make progress. So especially in, in the, what you call crazy companies that we back, it is definitely harder, but I think, you know, we need to make sure these companies are hitting milestones. Deliver, creating value, even if revenues take longer. And I think there will be opportunities.

AI assessment note: “I do worry. And I think, like overall, we need to come up with better solutions”

Q or whatever that actually had like operating experience in real companies in venture in Europe. How does just pre service and working with founders, how does the mindset differ when comparing An investor who doesn't have any operating experience to someone who does have a lot of operating experience when it comes to actually investing and picking the companies to work with. How does that mindset differ, do you think?

A It's about the ability to assess the founders and think about what could this look like once we get to product market fit. You know, one, when you have product market fit, when you have metrics to look at, I think everything becomes a lot easier. So the challenge is really Before that. And then a big part of it is also, you know, we're, we're five partners at plural. We've all built companies before. We've all raised money. We've, we've either raised money or tried to raise money from pretty much everybody who was around 10 years ago. The best of the best and the worst of the worst. And every time we were, we had the most insightful conversations with the people who had built their own companies. You know, we got in the seed round, we got Max Levchin when we were raising money for Transferwise, as it was called before, Beforewise. You know, then we raised money from Ben Horowitz. So, and same, same for my partners. We had the most insightful conversations with people who had been on operating journeys. And that's why we were always looking for people who were a couple years ahead of us. And we feel also now You know, even so, like, even now, when we speak to founders, they really appreciate the fact that we've been in their shoes. Does it make us a better investor? Frankly, I don't know. Time will tell. But I think it makes us better partners for the people we invest in.

AI assessment note: “It's about the ability to assess the founders and think about what could this look like”

Q On the deal structure itself, We spoke about misalignments earlier. Lickprefs, liquidation preferences, are often now more and more under scrutiny. Maybe it's, I'm seeing in the US, but people are now often doing deals with no Lickpref. How do you feel about Lickprefs as a former founder and now VC?

A I don't think it makes that much sense. Like, you know, we are here for unlimited upside. One next downside. The difference is purely marginal. You know, it's something if you think about, we spoke about this when we were starting to play around with idea for plural and thinking like, what are the structural misalignments in the industry we want to fix? I think this is one of the next things we should work on. We haven't like, ultimately haven't felt it important enough. And I also, to be honest, As a founder, it feels shit. What we need to think about in the industry is how much capital gets deployed for a size of an outcome. You know, I think founders too often think fundraising and large fundraisers is ultimate measure of success. You know, which I think is BS, you know, something that hasn't been spoken widely, even so wise supposedly raised a shit ton of money. We probably raised a billion or more. Wise only raised hundred sixty million primary capital, and we only burned through about a hundred million of primary capital. Hundred million primary capital to build in excess of ten billion of value. If you look at companies outside where you've raised two and a half billion to create ten billion of value, and then if you deploy, if you, if the company raises a billion at five billion with the possibility of getting to eight, nine, 10, maybe the LickPref is different, but ear…

AI assessment note: “I don't think it makes that much sense. Like, you know, we are here”

Q Do you worry about the elongated window to DPI and liquidity, especially for some of the projects that you do? These are such hard projects. These are multi-decade journeys. Isn't it even longer for some of these projects?

A I do worry. And I think, like overall, we need to come up with better solutions for some of the long liquidity problems. Some of these companies may need billions. But I think at the same time, if the companies are well capitalized, so you can reach milestones, then you have liquidity. You know, the best example of all is maybe SpaceX today. It's a private company has had zero liquidity issues. So there is a secondary market always open. It's because say, I mean, the journey in the beginning was very hard, but being able to attract the capital to get to a place where you hit your milestone and make progress. So especially in, in the, what you call crazy companies that we back, it is definitely harder, but I think, you know, we need to make sure these companies are hitting milestones. Deliver, creating value, even if revenues take longer. And I think there will be opportunities.

AI assessment note: “I do worry. And I think, like overall, we need to come up with better solutions”

Q What do you mean, sir, when you say fund composition?

A Like do you like how many SaaS companies, how many carbon companies, you know, you don't, you don't want to have the same risk everywhere. You know, you can, you know, a company's outside and like, fuck, we have too many deep tech companies. We need a SaaS company. Like, you know, We're kind of okay, mostly with the fact that we follow the most ambitious entrepreneurs, whatever they're building, but I can start sympathizing with the people who are saying, hey, like, you know, you have this great carbon capture company. I love you, but we have three already in the fund. We can't add a fourth one because it starts skewing the fund composition. Like you start learning the ones like that, which, you know, on a deal by deal basis isn't relevant, but You know, if the whole fund is then subject to the carbon markets, for example, you know, someone should think about, somebody should think about it then.

AI assessment note: “how many SaaS companies, how many carbon companies, you know, you don't want to have”

Q What do you mean, sir, when you say fund composition?

A Like do you like how many SaaS companies, how many carbon companies, you know, you don't, you don't want to have the same risk everywhere. You know, you can, you know, a company's outside and like, fuck, we have too many deep tech companies. We need a SaaS company. Like, you know, We're kind of okay, mostly with the fact that we follow the most ambitious entrepreneurs, whatever they're building, but I can start sympathizing with the people who are saying, hey, like, you know, you have this great carbon capture company. I love you, but we have three already in the fund. We can't add a fourth one because it starts skewing the fund composition. Like you start learning the ones like that, which, you know, on a deal by deal basis isn't relevant, but You know, if the whole fund is then subject to the carbon markets, for example, you know, someone should think about, somebody should think about it then.

AI assessment note: “how many SaaS companies, how many carbon companies, you don't want to have the same risk”

Q I would say that plural of built a brand as being, you do deep, hard shit that most other people are like, well, I, I don't understand that. Would you say that's a fair representation of the brand that you want to build?

A We are looking to back the most ambitious entrepreneurs, whatever they're building. So we're looking at Proxima fusion. That's maybe what you would call departure. You know, then we look on the other side, we have Teton, which is using CCTV cameras to monitor patients. You know, it's, it's not that complicated maybe. So I think, you know, we go the full, the full spectrum, but I think, you know, it's a character of the entrepreneur, which it may be the most Most important, you know, approximately half of the founders we back are repeat entrepreneurs. You know, we look at Torsten who built a gaming company. Then he went into building a defense company and he started Helsing in 2020 or 20 21. So, you know, you need to have something which makes you tick differently to go building a defense company four or five years ago, before this became a hot topic.

AI assessment note: “we go the full, the full spectrum, but I think”

Q or whatever that actually had like operating experience in real companies in venture in Europe. How does just pre service and working with founders, how does the mindset differ when comparing An investor who doesn't have any operating experience to someone who does have a lot of operating experience when it comes to actually investing and picking the companies to work with. How does that mindset differ, do you think?

A It's about the ability to assess the founders and think about what could this look like once we get to product market fit. You know, one, when you have product market fit, when you have metrics to look at, I think everything becomes a lot easier. So the challenge is really Before that. And then a big part of it is also, you know, we're, we're five partners at plural. We've all built companies before. We've all raised money. We've, we've either raised money or tried to raise money from pretty much everybody who was around 10 years ago. The best of the best and the worst of the worst. And every time we were, we had the most insightful conversations with the people who had built their own companies. You know, we got in the seed round, we got Max Levchin when we were raising money for Transferwise, as it was called before, Beforewise. You know, then we raised money from Ben Horowitz. So, and same, same for my partners. We had the most insightful conversations with people who had been on operating journeys. And that's why we were always looking for people who were a couple years ahead of us. And we feel also now You know, even so, like, even now, when we speak to founders, they really appreciate the fact that we've been in their shoes. Does it make us a better investor? Frankly, I don't know. Time will tell. But I think it makes us better partners for the people we invest in.

AI assessment note: “I think it makes us better partners for the people we invest in.”

Q Do you think the 10 and two traditional venture model in terms of timeline needs to be updated, especially for a generation of companies that you invest in?

A I mean, 10 years is short. I mean, if I look at, you know, maybe, maybe looking back now, Wise now looks like a simple fintech company. Everyone is doing fintech companies. You know, it took us, we started working on it with Christo in 2010. We launched beginning of 20 11. We went public in 2021. That was a 10 year journey. But also to be honest, the last three years were probably pretty liquid. Even we were private. So let's call it seven years. And maybe for deep tech companies, it's 10 to 12. You know, if you hit the bad patch in the markets, it becomes 15. We need to, I think we need to recognize this, but I think also maybe at some point people just need to be more disciplined in returning some capital early. You know, there are some, some investors outside who are very vocal, you know, I think Fred Wilson has spoken a lot about taking some money off the table.

AI assessment note: “10 years is short. I mean, if I look at, you know”

Q We're seeing an increased dilution sensitivity from founders where, especially at the early stage, they don't want to dilute more than say a 10% on the first round or the first proper seed round. Are you seeing this increased sensitivity around dilution from founders?

A We are a commoditized product, Harry. VCs are a commodity. You can press them down. Someone told me early on, which I took pretty seriously, the only person to, to fight for your ownership is yourself. No VC will ever fight for the founder's ownership. You need to fight for it. So, so there's a lot of truth in it. So, you know, the founders say need to fight for the ownership. Absolutely. So other side of it is, It is very, it was, and still is. If you're a good fundraiser, you're building something which is deemed to be hot. You're building an AI SaaS company. It's easy to put a party around together, dilute 10%, and nobody gives a shit about the business. So I think you need to think about, do you have people involved who will help you through the good times and the bad times? In the good times, you don't care about their advice. You don't need their help. But you want someone to pick up the phone when it's the bad times. Yeah. So there are plenty of stores outside of respectable VCs not picking up the phone when it's the bad times. Do not be that asshole. So, but I think it also goes back to founders of like actually creating a round where you have, people have enough skin in the game to feel Interested. To feel the company is important.

AI assessment note: “It's easy to put a party around together, dilute 10%, and nobody gives a shit”

Q Another element of term sheets is also boards and involvements on boards. Do you need a board seat with every deal?

A We do not love boards. I think is a fair starting point. The things that I don't like about boards, they oftentimes become way too big, way too quickly. You know, your C round investor takes a board seat, your A round investor takes a board seat, your B round investor takes a board seat, your C and D. So you end up with five VCs on the board and two founders. I don't think these boardrooms are any good. The other thing I think that you want more, why are they not good? Because you have five people with a relatively similar, similar mindset, similar view of the world. You know, they will be looking at maybe the guy with the biggest fund or then the guy who wants to be the smartest guy in the room. They will dominate too much of the discussion. I think the right boards are slightly more balanced. Like I'm very much in favor of the idea that Also, founders who are building companies, at some point it might be good for them to be on one, one board of another person building a business. You know, I think it's good for both.

AI assessment note: “We do not love boards. I think is a fair starting point.”

Q Is that the right approach? Just like Germany saying here's a trillion. What does that mean?

A I mean, I do believe that we need to work together in Europe. But we need to work together maybe in ways which are slightly more, slightly faster than the way we've done it before. Like if you think about some of the defense collaborations that have happened in Europe, they're very painful. Italy says we will take part in this project, but this widget has to be produced in Italy. And that makes things very slow. Like if you look at how the, how war has happened in Ukraine, You know, you don't have time to go and bring some, like you need to be building, iterating constantly. I think we need to be a little bit more modern about the way collaboration happens, but we do need to collaborate around Europe. And I think there's the capital, everyone is realizing that, uh, defense contributions, you know, we were not at two percent in Europe before Estonia was ahead, but in, and Poland was ahead, but, you know, we need to get to three, four, five percent everywhere. And same in other critical industries.

AI assessment note: “we need to work together maybe in ways which are slightly more, slightly faster”