The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:39:48 · Luca Ferrari, Harry Stebbings
[00:39:48] S0: I don't think anybody should live to work. I I don't know that you should even try to make a distinction between life and work. You know, life includes work, includes play, includes love, includes exploration, includes sorrow, happiness. So I think they're just on two different dimensions, and it's just illogical to compare them. But having said that, I don't have a lot of certainties in life. But this is one of the strongest opinions I have. And that's that if you want to have a chance to be the best or one of the very best at what you do, not only do you need to be very talented, whatever talent means for relevant to that particular pursuit you have, but also you need to work your ass off for a very long time. In a competitive world, this seems pretty straightforward to me and I've seen it proven out with a track record of almost a 100% in in the people I've seen being great at what they do. It is very rare that they haven't tried very hard to be great for a very long time. So that's my general appreciation for hard work. I don't think it should be imposed on anybody. I don't think it's either morally good or morally bad to wanna try hard to be great. I think it's really arbitrary, whatever you wanna do with your life. [00:40:53] S1: Forgive me if this is too direct. You feel like you're quite hard on yourself. People say the same to me. Do you ever give yourself a bit of a break?
00:40:53 · Harry Stebbings, Luca Ferrari
[00:40:53] S1: Forgive me if this is too direct. You feel like you're quite hard on yourself. People say the same to me. Do you ever give yourself a bit of a break? [00:41:00] S0: Maybe I am, maybe I'm not. I think as I said before, I feel very privileged. I don't wanna sound like I pity myself or being hard on myself. It's okay. I'm I'm as luck as it gets. I have a big dream. I've been very fortunate to find and and be found by amazing people I love working and living living with. I get to pursue my dream to be part of a team, you know, with a big ambition. Love my job. And, yes, it's it's it's a sacrifice, including the the hard truth of not being great at many things and trying to be better. I think I wouldn't want any other any other way, to be honest. [00:41:34] S1: Final one for you before we do a quick fire, but many mutual friends said I had to ask about your cofounder relationship saying that it's a very unique pairing. What have been some of your biggest lessons on what it takes to have a great relationship with your co founders in the way that you do?
00:41:34 · Harry Stebbings, Luca Ferrari
[00:41:34] S1: Final one for you before we do a quick fire, but many mutual friends said I had to ask about your cofounder relationship saying that it's a very unique pairing. What have been some of your biggest lessons on what it takes to have a great relationship with your co founders in the way that you do? [00:41:47] S0: If you were Italian, I would I would tell you that it takes a lot of cullo. You know what it means? No. So that that translates to as, like the body part and it means a lot of luck, a lot of luck. But the the truth is I got lucky. I had been friends particularly with one of them for the longest time before we even started the first startup. We went through, again, from the entrepreneurial perspective, quite a bit of hardship together, failed startup in which we had poured our hearts and souls for multiple years. And the relationship didn't fracture, but actually got stronger in those lowest moments. And that is the best proof that you have something to build upon. [00:42:26] S1: How did you choose your investors? They're another form of partner, capital partner. How did you choose your investors?
00:42:26 · Harry Stebbings, Luca Ferrari
[00:42:26] S1: How did you choose your investors? They're another form of partner, capital partner. How did you choose your investors? [00:42:31] S0: Oh, I mean, was easy. Nobody else would give us money. So we... No. Sorry. I'm joking. I mean, have been different moments in which we welcome new investors, and the the answer would change a bit. But for the sake of brevity, I will say we have some advisers we we trust. One, for example, is called Allen and Company, an equity m and a financing advisor from The US. Excellent. You know, they know a lot of investors. They've seen them in different situations, particularly the shitty ones where you really see what sort of principles they abide by. Because it's easy to be lovely when you've been generating great returns, but a it's lot harder to be professional and fair when things aren't going that well. And so they provided us with a short list of firms they thought highly of, and then we we had a few relationships. So we added a few names to that list, and then we went through a process of they studying us, us studying them, and talking to people who had them as investors for a long time and had difficult moments with them on board, and ultimately, it was a mutual selection. [00:43:29] S1: Is there anything that you do differently about the fundraising processes having been through them? Different things on negotiation, on price, on length, anything that you would do differently?
00:43:29 · Harry Stebbings, Luca Ferrari
[00:43:29] S1: Is there anything that you do differently about the fundraising processes having been through them? Different things on negotiation, on price, on length, anything that you would do differently? [00:43:38] S0: Yeah. I think you wanna create a certain level of competition if you can. I'm very happy with the investors we have. We could have obtained better terms early on and we could have closed faster and create a little bit more competition. Because often what they tell you and they might actually mean it, the initial enthusiasm. You always hear this is awesome. We definitely gonna invest. We're gonna cover the whole round. You don't need to talk to anybody else. This would be amazing. And then once due diligence starts, there's always a tendency to then commit a little bit less capital, try to walk back on a few of the key terms. And if you don't have any competitive tension, it's hard to avoid that from happening. But if you have a reasonable amount of competitive pressure then... And and you keep it up all the way to the end. Big mistake is to just base your selection on the early feedback and then wave goodbye to all those you don't plan to take on board and proceed only with the one or two that you plan to take on board, you shouldn't do that. Just keep a broader spectrum of parties involved up to the very end when you're signing. [00:44:35] S1: What's the immovable term for you? You mentioned terms that are important. Is there one that's like, hey, no mas, not gonna budge on that one?
00:44:35 · Harry Stebbings, Luca Ferrari
[00:44:35] S1: What's the immovable term for you? You mentioned terms that are important. Is there one that's like, hey, no mas, not gonna budge on that one? [00:44:43] S0: Well, it changed each time, but I would say one that stayed the same throughout our rounds was liquidation preferences. All our share owners, myself, our institutional investors, our colleagues who got equity through their working at the company. Nobody has any liquidation preferences, so we're all on equal terms economically. The reason why we fought very hard to avoid that is we didn't want our colleagues who, despite our efforts to educate them financially, of course, are not as financially savvy as an investor. And unlike an investor, which has maybe dozens or even hundreds of investments, many of them bet their, metaphorically speaking, their house on the company. We really didn't want to be in a situation where had things gone poorly, then everybody would be left empty ended by one or two investors. That was something we really pushed against. [00:45:31] S1: Well done. That... That's a good thing to be able to push against, and that's not an easy one with the scale of cash you raised. I do wanna move into a quick fire, Luca. I say a short statement, you give me your immediate thoughts. Does that sound okay? [00:45:42] S0: Yeah. Alright. Let's do that. [00:45:44] S1: What have you changed your mind on