The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:39:08 · Harry Stebbings, Alan Chang
[00:39:08] S2: What does your direct report structure look like? Jensen has popularized the... Having, you know, 50 and being so involved in the minutiae of a large amount of the business in terms of surface area. To what extent do you agree with that versus to delegate to fantastic leadership like you kind of mentioned there in terms of increasing surface area? [00:39:26] S0: Yeah. So I would say... Yeah. I I think I've made direct reports. I I don't know how many. I I would probably lean towards what Jensen's doing because ultimately, I I don't even think of them think of them as direct reports. Right? I think of them as... You know, going back to self guiding missile analogy. Right? You don't need to manage those people. Like, you discuss and you debate about the target. Right? But once you both agree on the target, then that's it. Right? You don't really have to manage them. You just monitor and make things that are okay, but that's about it. [00:39:55] S2: Talking about monitoring and management, your offices are in Canary Wharf. Not the obvious place for startups in London. Mean, Shoreditch became the most famous Silicon Roundabout. Why are you in Canary Wharf?
00:39:55 · Harry Stebbings, Alan Chang
[00:39:55] S2: Talking about monitoring and management, your offices are in Canary Wharf. Not the obvious place for startups in London. Mean, Shoreditch became the most famous Silicon Roundabout. Why are you in Canary Wharf? [00:40:06] S0: So first of all, it's it's probably the only place in London where you can keep expanding offices. Right? So you can keep upgrading office without incurring a big penalty in a lease. Second reason, it's it's far away from party. You know, there... If you if you if you work around here, it's... There's this thing going on this bar, right, or this this club. Right? I think there's too much going on in West London. Too many distractions. What's going on with the... There's nothing going on. It's just work and nothing else. So [00:40:32] S2: Do you not think that, like, I live here, but I'm fucking disciplined? I don't go to parties. I don't drink. I I don't do anything but work and gym. Is that not the secret to being a great entrepreneur? Discipline. [00:40:42] S0: I think so, but I'm talking about other people in the team. You know, it's like if you see a, you know, a full bar downstairs, I think you're tempted. Right? You might, oh, I'm gonna, you know, pop down for a pint. [00:40:53] S2: Right? Do you expect people to work weekends?
00:40:53 · Harry Stebbings, Alan Chang
[00:40:53] S2: Right? Do you expect people to work weekends? [00:40:57] S0: Yeah. I'd say, like, as I said before, like, this is very hard. Like, this only way to do it... Like, we... We're going against big, big, big energy companies with, like, huge balance sheets, you know, billions in revenue. Only way to win is with much more balance sheets, much less cash, much less resources is is work ethic. [00:41:15] S2: And work ethic gets you a long way. In the early days, you built the MVP with just a million bucks, right, before any outside funding. Can you just talk to me about that? And what you'd advise founders on MVPs and going to v one with minimal resources having done that? [00:41:31] S0: Yeah. So at the time, we wanted to build a full stack energy company, and we had a million bucks. So what we need for full stack energy company, we need power generation, we need a license. We need someone to help us guide for regulation. We need a qualified trader, so you need to be qualified to, to trade energy. And we also need a qualified electrician. So we found a single wind turbine in North Of Scotland that the seller is willing to sell for $7.50 ks. We found a license for 75 ks. We convinced the former CEO of Ofgem to become an advisor with just equity and no cash. My co founder Charles became a qualified trader and electrician. So we acquired all the skills and assets we need to build a MVP for a second energy company. So my advice is I don't think you need a lot of capital. You don't need a huge seed round to get started.
00:41:31 · Alan Chang, Harry Stebbings
[00:41:31] S0: Yeah. So at the time, we wanted to build a full stack energy company, and we had a million bucks. So what we need for full stack energy company, we need power generation, we need a license. We need someone to help us guide for regulation. We need a qualified trader, so you need to be qualified to, to trade energy. And we also need a qualified electrician. So we found a single wind turbine in North Of Scotland that the seller is willing to sell for $7.50 ks. We found a license for 75 ks. We convinced the former CEO of Ofgem to become an advisor with just equity and no cash. My co founder Charles became a qualified trader and electrician. So we acquired all the skills and assets we need to build a MVP for a second energy company. So my advice is I don't think you need a lot of capital. You don't need a huge seed round to get started. [00:42:23] S2: If you can, why don't you? There's so much venture money, so dude. If you can, why don't you? [00:42:28] S0: I think you could. If you could, you should.
00:42:28 · Alan Chang, Harry Stebbings
[00:42:28] S0: I think you could. If you could, you should. [00:42:30] S2: But you could. Anyone would have written you... Like, you could say, I'm I'm doing a fart app. I'll give you $10,000,000. The disgraceful thing about you, Alan, is I would have given you money for almost anything but this. And this is, like, my biggest last name mistake. I listen to you, and I just die inside, honestly. I do also remember, dude, you had the token element, which just... It was hard to digest. Yeah. We chatted about... When you were racing your first round, and one of your investors said that I had to ask you. No. It wasn't. It was actually Antoine who said, is it true that you rocked up to Baldleton with your Ferrari parked outside and then strolling and saying, I'm gonna raise a $60,000,000 seed round? [00:43:12] S0: Yeah. There's some truth to that. [00:43:13] S2: Yeah. How did it go down? [00:43:15] S0: I think it went pretty well. [00:43:16] S2: You raised 78 in the first round. [00:43:19] S0: Yeah. I think they they really, really like the concept, and I think what they realize is is a pretty good strategy. And I I I realized after the, you know, a lot a lot of the investments... Because they made so much money from the Rebel investments, they just keep investing ex Rebel teams. [00:43:34] S2: Is there anything that you would do differently about the early rounds of funding with the benefit of hindsight that you have today? [00:43:40] S0: Yeah. I think raise that too low price. [00:43:43] S2: Could you have raised it higher? Could have. Why didn't you?
00:43:43 · Harry Stebbings, Alan Chang
[00:43:43] S2: Could you have raised it higher? Could have. Why didn't you? [00:43:46] S0: So we had a we had a price in mind. [00:43:48] S2: What was the price? [00:43:49] S0: It was roughly where we were at, about $1.40, actually. We had a oral agreement with Bulletin. We'll take the we'll take the time sheet, but we haven't signed the time sheet yet. And then later, there was another investor that came that came and said, I will offer you a a higher time sheet. We said no because we already agree with Bulletin. We'll take the time sheet. [00:44:07] S2: And you regret that? [00:44:09] S0: No. Like, I'll say... I I regret saying yes. It's too early because we could have raised the better terms. [00:44:14] S2: So what would you advise founders on the back of that? [00:44:17] S0: Like, ultimately, I would say the... I underestimated the value of the company at the time because I didn't realize, you know, investors put such a high price on it. I'll say, wait for a bit longer. At that time, it was, like, effectively the second term sheet we had. By the same time, I I I believe, like, if you say you're gonna do something, you should do it. And that's why we we took Bulletin's term sheet, even though we could have received a better one. [00:44:41] S2: You raised a recent round, 75,000,000,000. Yep. That that's often what's referred to as a suicide round, which is like a very high price with not actually that much money going into the business. Why is that a good round for the company? [00:44:57] S0: Yeah. So the company is doing over 400,000,000 revenue, annualized revenue.