The Exchanges

Q You're headquartered in the US. You're currently based in the EU because you said you're trying to raise another round of funding. What has been that experience trying to raise funds in Europe?

A It's been quite easy To raise funds, uh, a lot easier than it was, let's say five years ago. There's, uh, many more funds that are active in, in Europe and are actively looking for cool investments. It is a little harder than it is in the U S just given the fact that the whole venture capital market is a lot larger in the U S uh, than it is in, in Europe, but I think things are changing. So basically we're right now, we're a company that has raised money, both in the U S and So this works. It seems to us that if you have a proper backing from a traditional VC, it's a lot easier to raise funds in the EU than it is to bootstrap. So that's been our experience so far.

AI assessment note: “It's been quite easy To raise funds, uh, a lot easier than it was”

Q If you have a company that's profitable, why would you really want to raise funds from investors?

A Yeah, that's a, that's a very good question, and I've been struggling with it for the past 15 years, uh, and initially I started as a bootstrap entrepreneur, because, you know, that, that, that was exactly my, my question, especially when I noticed the first invoices getting paid, I was, I was making a lot of money, and I said, yeah, I can hire some people, and can make more money, and create better products, and so on and so forth, but, uh, the world is moving very fast, so we will not wait for you to update your product organically. It will not wait for you to just wait two years, get an understanding of how things are working, and then, you know, build on top of what you already built. Basically, venture capital funds or, you know, investment funds help you have a faster go-to-market strategy. Obviously, this helps when you have a go-to-market strategy and you have a pretty good idea of a product. And the second idea is that it offers you a longer vision, right? So when you're bootstrapping and you're operating even a mid-sized Level team. You're always worrying about how you're going to gonna pay salaries, how you're going to gonna cover costs, what kind of money are you taking home? Is your product growing decently fast? So you're always stuck with this one month vision term. Whereas with, uh, investment funds, you can increase that to, I don't know, six months or one year…

AI assessment note: “investment funds help you have a faster go-to-market strategy”

Q next 20 years? Because we've had smartphones, and smartphones can't get any better unless you fold them, or you twist them, or you get rid of the battery so you can make them basically ultralight. They're already in the 120, 150, maybe 200 grams max, but that damn battery is preventing us from really doing something good with the tech. So, like, what, what do you think is gonna happen?

A So I think there's going to show up some, some sort of glass-like technology, glasses-like technology. I think Google Glasses, uh, failed not because of Privacy issues, but because the technology sucked and it made you look weird. We need some sort of technology that makes you look cool, right? So the, the earbuds from Apple worked because people wanted earbuds, but it made them look cool, right? So it was this whole statement. So I think there's going to be some technology in that aspect, which is going to blend augmented reality and something like, you know, extended reality, right? So you're looking at a shoe and you get information on how You know, this, this is getting thrown around quite a bit, you know, how's the sourcing being made? Where's the materials coming from? Is it ecological and so on and so forth? But this is probably something that's going to happen in the future.

AI assessment note: “I think there's going to show up some, some sort of glass-like technology”

Q That seems like such a waste of potential. You, everyone thinks about, or as you said, EU has massive potential, but if everyone is so tribal, even though everyone shares a single currency, the political systems, the financial systems are effectively separated. Then it sounds to me like being an EU company is, is almost not worth it. Am I wrong? Is there something I'm missing here?

A For now, for now. It depends on your timeframe you're looking to invest in. The path for it is clear. All of the countries will work together. People have started to move from country to country. The younger generations, millennials and Gen Z's don't think of Europe as something that is, you know, either German or French or whatever. Their understanding Europe, the, the, the European continent as a whole. They understand the mistakes of the past. So probably in, I think the near future, things are going to become a lot easier in terms of cultural adoption, buying things from other countries, working in other countries, and so on and so forth. But for now, it is a bit harder than you would expect, especially if you're coming from a larger market such as the U.S. You're not going to be able to do businesses as easy as you would in the U.S. from state to state. But In the future, I expect everything to be a lot easier. So that's where the potential is coming from. This whole types of transactions that are not happening at the moment, which I would say we're doing about five percent of what's possible in the European Union at the moment. So the other 95% in terms of transactions between countries is something that I would call the high potential of the European Union.

AI assessment note: “For now, for now. It depends on your timeframe you're looking to invest in.”

Q Do you have to have a physical presence, like even if they invest in you and they've never met you? Do you have to be physically living and operating out of Europe for them to be willing to invest?

A I don't think so. They're very interested in return. So the key difference is, um, between the U.S. and European-based investment is that the U.S. is looking at large volumes and potential outcome in the future, whereas the European investment strategy is more based towards profit. So if you're showing profit and you're showing you have real traction and you're actually generating profit, you will probably get funded No matter where you do operations from. I think, I think you, you can technically set up a European based company, do business in Thailand, but also leverage your European presence to do business in Europe. I mean, it's a pretty big market. If you're setting up your company in the right place and have some good connections, you know, pairing these two things can work wonders.

AI assessment note: “I don't think so... you will probably get funded No matter where you do operations from.”

Q one month interval, and I was thinking, isn't every company's goal to be nimble? If you have a 12 month plan, but then every month you're You're making tiny changes to what you're doing based on that plan in order to get to where you want to go as quickly as possible. And with the additional data and knowledge you have, what's so wrong with thinking in one month intervals?

A Well, technically everything that we have around us hasn't been built month over month. I mean, I'm holding a computer in front of my face. You would say that's an Apple computer. And you would say that the Apple computer has been brought to reality within the past, I don't know, 20 or 30 years. It's been Ada Lovelace in the 17th century that theorized how a programming language would work. So it took 300 years to get this thing working. You know, there's been shifts and movements, and it's like, you know, when you're planning on going somewhere and you're walking there, you will set a foot in front of the other. But you have an idea of where you're going. But if you just walk out the house and say, I'm gonna walk, it doesn't really make sense. It doesn't really take you anywhere unless you have At least an idea of where you want to go. Of course, you need to be nimble. If there's a dead cat in front of you when you're walking out the house, you should stay the other way around. If there's a car blocking your way, you move around it. There's a new construction place. Just avoid it because there's noise and so on and so forth. But you know where you're going. And I think, you know, this whole idea of thinking about what you want to do is underrated in terms of entrepreneurship.

AI assessment note: “technically everything that we have around us hasn't been built month over month.”

Q What's something that you've learned recently that you're implementing?

A There's some SEO tactics. That we're implementing, but that's, that's a bit boring. It's WebRTC. So basically what we're doing right now, the way we're connecting is through a real-time video broadcast and, you know, messaging protocol called WebRTC, which enables a lot of telecommunications through web conferencing apps, such as Hangouts or Zoom, basically all of that. So basically they're, they're using a flavor of this type of protocol. So basically that's what we're implementing Right now. It's amazing. I mean, it allows you to do so much, and so far I think it's been used to its lowest potential. I mean, just directly communicating with someone else. I mean, just imagine doing, you know, commerce, or telemedicine, or real-time robotics operations, or, you know, deep dive exploration, or space exploration, or, you know, there's so much stuff that you can do with this protocol, and That's what we're implementing right now.

AI assessment note: “It's WebRTC... basically that's what we're implementing Right now.”

Q Are any government setting up grants, or do you have to just get lucky and find a VC that's looking for you?

A No, there's, uh, there's plenty of Funds, grants, and VCs that are willing to, to invest in companies that are interested in, in setting up shop in, in the EU. So from, um, investment perspective, I think things are only going to get better in the EU. Plus there is one untapped resource that, you know, no one is talking about in, in Europe. And most of the wealth in Europe, in terms of private wealth is still tied to pretty old families that have Kept the wealth blocked and not really moving. And they're tending to, to change this perspective as, you know, both inflation, given the outcome of COVID seems to be shrinking their wealth, as well as newer technologies and new ways of doing business are appearing. So they need to invest their wealth. Otherwise they'll just lose it. There's a lot of potential in terms of investment in Europe that is just beginning to get unlocked. So if you're looking to raise maybe additional funds, Europe might be a good place to start. Plus, property is definitely protected as opposed to other places in the world.

AI assessment note: “there's plenty of Funds, grants, and VCs that are willing to, to invest”

Q Let's move to something slightly different, but still related to the EU. I have personally done a little bit of research into registering companies in Estonia and Malta. I personally decided not to go that route. Can you speak to the experience of an average entrepreneur in the EU trying to set up a company? What is the process of forming a company, getting a bank account? Let's start there.

A It is similar in most EU countries. There are some differences, uh, mostly between Western, the Western part of Europe and the Eastern part of Europe. So for example, you need a little bit more starting capital in the Western part. So for example, in, um, in Germany, I know it's, uh, somewhere around 25 K Euro. Uh, so that, that would be around 30,000 dollars. Uh, where yes, with, uh, Eastern countries, uh, you can start for as little as I think nothing in some countries or You know, somewhere around 50 dollars. It's quite fast, and in some countries, such as Estonia, it's actually done digitally, and most of the countries are moving towards this type of starting a company digitally. There's some advantages to starting a company in, uh, in the EU. For example, it's a large market with a lot of potential, but there are some pitfalls that you need to look into very carefully. One thing that is not seen outside of the EU is that even if The whole political system is quite well set up. There's a lot of cultures and a lot of languages, and basically it's quite hard to move from one country to another. So it's a lot easier to start a company in the UK and then start doing business in the US or Australia or New Zealand, because there are very similar cultures. Whereas if you're starting a company in France, for example, you, you're basically looking to develop The French market. It's …

AI assessment note: “It is similar in most EU countries. There are some differences”

Q the pros. What does it look like in terms of how long does it take to set up a company in one of these countries? How much does it cost to set up one of these in Asia? Often that you've got a registered address. If you're not physically there, is there anything related to registered addresses or corporate secretaries or local nominee directors? Like, is there anything like that?

A In most countries you have to have a local administrator or business manager, someone that represents the company officially in the face of the government. Uh, so you need to Either you are that person, or you set up a representative for that particular country. It's, it's not very complicated in terms of forms, and a lot of countries have electronic forms to start companies. One very good example, as you mentioned, is Estonia, which has made a lot of steps in, into digitizing their economy and the way you set up companies. You know, some countries are more conservative when it comes to businesses. Talk about Germany. If you want to set up a company in Germany is a bit more complicated. While technically you can set up a company as a foreigner, it works very well if you have like a local partner and you understand the whole system a little bit more in depth. So it's easier to set up a company, let's say in Eastern Europe or in the Baltic countries than it is to set up a company in France. And Germany. There's also differences in taxation. So you might get a lower corporate tax in, uh, in Eastern Europe than you would get in France, which is, uh, I think, I'm not exactly sure, but I think it's the, the country with the highest taxes in the EU. They're pretty social oriented, so they tax a lot, which, you know, sometimes makes companies leave the country in terms of tax residence…

AI assessment note: “In most countries you have to have a local administrator or business manager”

Q Do you imagine that the ECB would seek to institute a central bank digital currency in order to replace the paper currency that currently is being used as a means for deeper integration between the economies?

A I think that's being done, but one of the other things that I've noticed, uh, which has, you know, also impacted us, uh, is the fact that the European Investment Fund, which is kind of like central investment institutional Fund has been pushing a lot of money in terms of collateral for VC firms with the goal to invest in small and mid-sized startup tech companies, which means that they're basically subsidizing venture capital companies to come into existence. And I think this will do a lot more in terms of connecting the economies than all of the projects Uh, in the past combined. So there were in the past, uh, the central bank and the central government of Europe has issued all sorts of, uh, development funds, uh, that were used, uh, on a central level, central administration level to, I don't know, create roads or the repair stuff or, you know, subsidize state services and so on and so forth. But, you know, a lot of them has been spent on crap. Whereas when you're investing in, uh, In VC firms, they tend to be really careful with how they're spending the money and the, the, the companies that are receiving the money tend to work on high value technology, high value services. They tend to want to go at least regional, but usually global. So I think this is the best project in terms of economic development in the European Union.

AI assessment note: “I think that's being done, but one of the other things that I've noticed”

Q money to do it. So I think it's amazing that EU is, is turning things around and starting to invest in the younger generations in tech. Have they set out any guidelines for what they're specifically looking for For in terms of startups that they want these VCs to invest in? Is there any specific industries that are high value targets for the next five or 10 years of investment?

A The comparison between the Chinese government and the European, you know, central government, they're pretty similar because Europe has also a similar background in terms of ideology. Both territories are at the core socialist. That's one of the core things, which you can look at it from multiple perspectives. I'm not exactly sure that the capitalist approach Is worse. I mean, from my personal experience, I know that there are a lot of things that are not working at the moment in the European Union, and you have to understand that this continent is a continent that until 150 years ago was mostly monarchy based. So there was like this dude or woman on top that would rule the other people just because she was born in the right spot, which is something that I noticed is not Happening in the US. It's a culture where you can actually rise to the very top and different from the background you've came from. A lot of companies are moving from the European Union to the US in terms of incorporation, because there's a whole lot more potential there as a market, but also as a social type of organization. I know that, you know, Joe Biden comes with a more, let's say, you know, the US would call it a socialist agenda, but The U.S. is very far right in terms of economic development, so, you know, just shifting it a little bit to the left doesn't make it socialist. Europe has had guillotines, …

AI assessment note: “The comparison between the Chinese government and the European, you know, central government”