00:35:12 · Martino Cadoni
[00:35:12] S0: Well, I mean, I I will say every case is quite different. Definitely, the board is involved in this type of things. They usually is a is a deep discussions between the board and and and the founders. And you also need to be strategic even that. Right? Because every time you raise money at specific valuation, you need to think about the next round. Right? So if I'm a company which was value 1,000,000,000, let's say, back in the back in the days, and then they say, hey. I need to do a a down round at 500. I think you need also to think very deeply about what's the next round and what's your ability and your conviction to get to the next round and the valuation which makes sense for your investors. Right? Because if you were value 1,000,000,000 and then you got... You do a down run at 500, you have a new investor. Let's say you are... You wanna be my new investor at 500. I need to give you enough buffer so that that you can make money, you know, from from my specific situation. Just like, hey. If it's 500 today, do I have a clear path to 800 or back to 1,000,000,000 in in a couple of years because that's the math you as investor will do. It's like, hey. I'm gonna invest at 500 only if I see a path to go back to 800 or to 1,000,000,000. So there is... Is every time you do... And that's having another learning over the time. Every time you do these double transactions, it's not about that transaction per se, but what does it mean for the next transaction. Right? And the next transaction could be a new round, could be an IPO, because you always wanna give buffer to the investors. And also, you need to make sure you convince the investors. So the... If the valuation is too high and they don't see the upside, they simply will not invest on you. Right?
00:37:30 · Guillaume Moubeche
[00:37:30] S1: And how exactly do you like manage your relationship with the founder or management? Because obviously for people who are already shareholders, they want to maximize like their upsides at every round, like some people might do like secondary, etcetera. So you have like essentially different, I would say, yeah, everyone has different needs. So a super early investors would want maybe this round to be at the highest valuation because they want to exit half of their position, maybe the founder wants to do cash out, maybe the founder that doesn't want to get too diluted. So how as a CFO, because you're the one who's gonna prepare for the next round, so how exactly do you manage everyone's expectation and make sure that the valuation is not too high, so the investors are actually like in it for an upside, and are not just like the the bottom of of of the one paying the highest valuation basically.
00:38:29 · Martino Cadoni
[00:38:29] S0: Yeah. I think another very important thing is that's part of my job is to truly be close to those investors. Right? Is to listening to their needs and to their feedback. Because as you said, everyone has different needs. Right? Someone might be, you know, they have very patient capital, so it's all good. Some others, maybe they've invested in your company long time ago, and now they have their own LPs pushing for an exit. So how can you help those investors to make an exit? Sometimes you can do it, you know, facilitating a secondary or, like, either through employees or with with other investors. In some other case, you need to explain what the situation is, and you need to help them managing their own LPs. Right? I think the best way as a CFO is not understanding only your investors' needs, but their... Your investors' LPs' needs. Because at the end, my job as CFO is very similar as the job as a GP in a fund. Because I'm managing my investors, the GP is managing their own investors. And often those needs and those questions are quite similar. So the better you understand what's going on in the LP population of your investors, the easier it's gonna be for you to support your investor. Also, to build that empathy, understanding, because it's... A lot is also managing emotions, particularly in volatile markets. You you need to be able to, you know, to keep calm and to inject that calm across the investors so that they can, you know, keep and manage their own LPs. Right? But I would say, yeah, communicating and managing them actively is very important. And that's why I would say one advice to fund, they will say try to keep your cup table manageable and not too crowded. Because it's... You know? Now, for example, at DeepL, I'm very lucky because I have a fantastic cup table. It's very concentrated. So I don't have hundreds of investors. So I'm able to manage them almost one to one. I can have catch ups and one on ones. But then if you have 100 investors or 200 investors, it's impossible, and then things gets much more complicated. Right? So I think it's good to have a more concentrated cap table if you can.
00:41:12 · Guillaume Moubeche
[00:41:12] S1: And why did you like chose DeepL? Because you had like a lot of choices, I assume, you know, like you... You've worked at amazing companies, did IPOs, etcetera. So why did you decide to to move to to DeepL?
00:41:26 · Martino Cadoni
[00:41:26] S0: Yeah. I think several reasons. Right? First of all, is the sector. Right? So when I was I was definitely too young when Internet came up, right, in the early two thousands, then I missed the mobile revolution because I was in in banking and AG back then. Now it's the really the era of AI. So I say, I don't wanna miss this train. Right? I'm young enough, and, really, I wanna be an active part of this new revolution. I wanna be in the driving seat. So the fact that DeepL is a global AI company built in Europe was definitely a big incentive for me to join. The second one is Jarek. Right? I... I'm very privileged because I... Alongside... Yeah. In my career, I worked alongside amazing leaders, both CEOs, CFOs, founders. And and Jarek is is an amazing leader. Right? He's obviously is a scientist, so deep thinker, technical founder, but also most importantly, is is a great listener. Right? He's very humble, down to earth, and he really is a is a great leader that can really trust others. And he has built a fantastic team around him. So being part of this team, I I work from him was definitely another big plus. And then another reason was the cap table. Right? Having a... Being a CFO in a company where you have in the cap table investor like Benchmark, Index Ventures, IVP, Iconic, B2Venture, GIC, Atomico, Ontario Teachers is like... Is a cap table second to none. So the opportunity to work alongside these great investors, learning from the best, from legends in the industry like Matt Cohler and Danny Rimer and and others, Again, fantastic opportunity. And then last but not least, I think... I truly think, you know, there's a huge opportunity in AI. There's a huge opportunity in Europe. So being part of of a company which is still in the middle of this journey, it was like, you know, an opportunity I couldn't say no to.
00:44:09 · Guillaume Moubeche
[00:44:09] S1: Super interesting. And I'm quite curious because I think I heard you like discuss also about the the costs related to to AI. And we're seeing this, you know, with... I mean, there's a lot of controversy around, like, the models, like, requiring more and more compute. Like, some people say that they will never be able to become profitable, etcetera, etcetera. Like, you've been in companies that were like banking and based on software, and now you're like in the AI company. Can you maybe like give the difference in term of cost and how exactly do you like balance the the cost of AI? And what's the long term vision? And how do you make it align with the the financial prediction basically?