The Exchanges

Q Interesting. And then what about Matt Ellis? Did he use you well at CloudAbility?

A I mean, in the early days, for sure. I mean, I think, you know, once, once you do Series A, Series B with, with people like, you know, the Foundry, uh, you know, it all changes, and it's, it's kind of hard for early angel investors. I mean, I've had, um, not with CloudAbility, but with other companies, I've had sort of the email from, from CE saying, hey, we've, we've done Series A, B, C, whatever, uh, from now on, we probably won't be updating you ever, and I won't reply to your emails, kind of thing, which is, which is a little bit jarring. That wasn't the case with, With Matt and JR at CloudAbility, but the relationship absolutely changes. But I mean, for me, I think the, the important thing is outside of, you know, I mean, that's a, that's a validation that you've done a good job, right? Because they, they're leaving home, they're growing up, your kids are finally fledging. And that's a good thing. But the relationships in terms of the respect and the friendships, those remain. And so I, I catch up with JR, co-founder at CloudAbility. I saw him at AWS reInvent only a few months ago, him and his wife. He's a great guy. I deeply respect him. He stayed at my house in New Zealand. Uh, and, and that stuff, that stuff endures outside of that kind of startup cycle.

AI assessment note: “I mean, in the early days, for sure.”

Q angel checks that went south as well. We'll get to those in a second, but for cloudability, there's a lot of, you know, early stage, even angel investors, solo funds listening, going, how do I get to a JR on a mat? How do I get into the next cloudability? How did you get into that deal specifically? And if you can share, what was the check size you wrote?

A Yeah, I was super lucky. I mean, the chick size was, from memory, it was like, 20, 30 k, so not much at all. I was super lucky because I was working in, in the valley, living in New Zealand, working in the valley as an industry analyst. I went to, to all the shows, I, I put on shows, and so I had fantastic deal flow. Um, that's totally not the case for other people. So, you know, one option is to get involved in an angel network. I'm not so big on that because it's kind of douchebaggy. Um, just, just swim in the waters. Just, Go and meet some folks, go hang out at, at open nights, go to, go to pitch days or whatever, and, and get to know people because it's about the, the relationship is the key thing. And so, you know, you might not have the fantastic deal flow that I've been fortunate enough to have, um, you know, individuals may not have, but, but just swimming in that sea, you start to get a, an affinity and start to pattern match really.

AI assessment note: “the chick size was, from memory, it was like, 20, 30 k”

Q That's right. That's right. Very interesting. Okay. So, so any itch to get into the operating side and stop investing and maybe launch your own SaaS company?

A No, so the thing for me is that, um, I like having a bunch of things on the go, so I'm, I'm on maybe 10 or a dozen boards, I, I own my own, I do own my own manufacturing business in another sector, I do a lot of analysis, and the thing for me is that when I'm only doing one thing, you know, you know what business is like, especially early stage businesses, they're up and down, and sometimes things are going really badly, and I kind of, that's all a bit depressing, and the great thing about having a portfolio of stuff is that there's always something doing well, and so it kind of evens that up for me, so no, I don't, I wouldn't, I wouldn't go and start my own thing now. I'm kind of, it's a young person's game. I don't, I want balance. I don't want to work 20 hours a day. I mean, I do work a lot. I'm, you know, I was up at four o'clock this morning to record this call. So, so I'm happy to work a lot, but I also want some balance and optionality. And the reality is that as a SaaS founder, no matter what people say, you don't have that balance because you have to, you have to focus because it's a short life cycle. And in order to scale to the level, To see the outcome you need to be, you need to be hustling.

AI assessment note: “no, I don't, I wouldn't, I wouldn't go and start my own thing now.”

Q would be, I think that would be good to ask you is there's a lot of folks that have boards, but they just do a terrible job of using board members, right? For strategic reasons. What founder have you worked with in the past that is just, you think has done a brilliant job at treating you like an employee, almost getting you to do stuff that really helps them.

A Yeah, so what the first thing I'd say is it's super important to know the difference between governance and management, and it's, it's important for board members to understand where that lies, and it's super important for, for governors, for directors to, to, to, to be involved, but to be, to be hands off, I guess. Uh, you know, they say, well, they do say, uh, you know, noses in, uh, hands out. Um, you know, the, the, the CEO of Swiped On, CEO and founder, Hadley, uh, did a great job of, of kind of leaning on me when it was appropriate, but also, You know, having that arm's length separation. Um, and so that was, that was a fun process. It was a really fun process to walk alongside him from, from the very early stages to the acquisition. Yeah, so in the early days, uh, before I came on board, when it was a very, very early product, they had outsourced some development, uh, to, uh, uh, an individual in, in Pakistan, I believe, uh, and that, uh, these horror stories sometimes happen, that kind of, kind of went south, that relationship went south, uh, and there was, this is a long, long time ago now, and there was a bunch of stuff that happened around, you know, people threatening to steal source code and out people and rip off software and stuff like that. And, um, you know, that stuff is, is, is super scary for, for anyone. And so I think that's not example where as a board me…

AI assessment note: “the CEO of Swiped On, CEO and founder, Hadley, did a great job”

Q Yep. Okay. Interesting. And so you got 40% still in play. Now those founders that are so big, they don't give you updates anymore. How do you know what to mark them up at? How do you go? What's my 10 K? What was my 10 K? What's it worth now?

A Yeah, so, like, I'm not a fund. For a fund, obviously, you have to keep on top of that stuff. For an angel, don't, don't invest anything you're not prepared to lose. When you do invest, really enjoy the ride, but you, you're kind of paying for the ride, and if you have an outcome at the other end, that's a bonus, and so I don't think about that money. I don't, you know, I don't, ah, yeah, of course, I track it. I have a spreadsheet and all that sort of stuff, and I have some crazy stuff around what I think it's actually worth and what I might realize, but, But that isn't, that isn't real until the money hits the bank. It's not real.

AI assessment note: “I'm not a fund... I have a spreadsheet and all that sort of stuff”

Q Did you get in Canva? No Canva. And can you name the company that maybe you don't, your founders don't talk to anymore because they're so big, but you think it's going to be your biggest win?

A No, I've had some big ones which have been, in percentage terms, which have been kind of invisible. So a company called Store Reduce that, that, that sold to Pure Storage, um, you know, no one's ever heard of and, and, and whatever, but in percentage terms, it was, it was super good. Um, I, I'm, you know, like, so Canva, you know, um, if only I had, had been in there, uh, there's another, uh, company in New Zealand that does kind of, um, you know, democratizing share trading, uh, and, I, I, you know, I talked to those folks super early on. I was a mentor. I had a program they were on. I just didn't, didn't kind of work for me and they've done super well, but you know, you, you, you can't be in everything and hindsight has 20, 20 vision, right? You, you always say, oh, well, I should have been in that one. Well, yeah, maybe not. Who knows at the time.

AI assessment note: “so Canva, you know, um, if only I had, had been in there”