Luminate with Lan Anh Vu
00:28:08 · Luca Ferrari, Lan Anh Vu
And then hopefully, thankfully, we came through and step by step, little by little, we, we got to the place where we are now. [00:28:16] S1: So if you'd known it would be that hard, would you have started, you know, thinking about your toughest moment? If you'd known you would have had to go through that, would you have started Bending Spoons? [00:28:31] S0: It's hard to tell, but probably no. I mean, I expect it to be hard, super hard, but one thing is to think about a, let's say, hypothetical virtual hard. One thing is to know exactly how it feels, the real concrete practical hard. Had I been able to pre experience truly feel what it would feel like, I don't think I could have forced myself to or discipline myself to doing it. It's been really, I feel very privileged to be clear of the opportunity I've had and the results we've had. Very lucky, very lucky. As I said, I think luck is a big element. In our case, but in almost every case, in my opinion. It is being brutal, sometimes incredibly brutal. So, a little bit of naivete helps, I think, to take it step by step. So, you look at your feet one more step, one more step and then you look back after a few years and you have actually climbed a lot of stairs but you took them one, one step at a time. It's the only way to make it work, I think. [00:29:40] S1: Yeah. Entrepreneurship is very, very hard, right? So when you had a difficult, tough moments like that, you said you even cry and you had a breakdown. What did you do? How did you get back up again?
00:29:40 · Lan Anh Vu, Luca Ferrari
[00:29:40] S1: Yeah. Entrepreneurship is very, very hard, right? So when you had a difficult, tough moments like that, you said you even cry and you had a breakdown. What did you do? How did you get back up again? [00:29:56] S0: I think I had, support from the people I work with whom I admired and had a great relationship with. As I said, We helped each other. Think it's critical to it really helps a few co founders, at least another co founder, I think too. Hopefully, you're not synchronized on your ups and downs so you can support each other or one another as they happen. Then I think I had a little bit by nature, I tend to be quite tenacious in the things I do. So that I think that I was lucky to have that quality. I think it's arguably one of the most important qualities to have a chance as an entrepreneur. But also, I was extremely fortunate that, especially one of my co founders is even more tenacious than I am. So over the previous couple of years working together, I had observed that quality of his and emulated it or made it mine to a greater degree than I would have had, let's say naturally on my own. As all together, I think I, you know, I made it. But again, I don't want to make it sound like there are harder challenges in life. Of course, this is all first world problems, to be clear. But, yeah, was hard for sure.
00:29:56 · Luca Ferrari, Lan Anh Vu
[00:29:56] S0: I think I had, support from the people I work with whom I admired and had a great relationship with. As I said, We helped each other. Think it's critical to it really helps a few co founders, at least another co founder, I think too. Hopefully, you're not synchronized on your ups and downs so you can support each other or one another as they happen. Then I think I had a little bit by nature, I tend to be quite tenacious in the things I do. So that I think that I was lucky to have that quality. I think it's arguably one of the most important qualities to have a chance as an entrepreneur. But also, I was extremely fortunate that, especially one of my co founders is even more tenacious than I am. So over the previous couple of years working together, I had observed that quality of his and emulated it or made it mine to a greater degree than I would have had, let's say naturally on my own. As all together, I think I, you know, I made it. But again, I don't want to make it sound like there are harder challenges in life. Of course, this is all first world problems, to be clear. But, yeah, was hard for sure. [00:31:10] S1: Yeah. Now let's talk about growth. And you talked a bit about that earlier. So you bootstrapped the business ever since the beginning. You had about $45,000 as a seed money. Why many startups, they choose to fundraise? Why did you decide to bootstrap the business?
00:31:30 · Luca Ferrari, Lan Anh Vu
[00:31:30] S0: So, first of all, there's a lot of reasons. So one is about opportunity, like capital as a cost. The lower the cost, the more attractive it is. In our case, we came from a complete failure with a previous startup. We didn't have a pedigree as founders or nothing to show for that would give us a really good chance of raising. So we felt that it would be very hard at that stage to raise more money. And we'd probably have to either fail entirely at it or pay a hefty price for it in terms of low valuation really, great dilution of governance rights. So that was one reason. Two, we had this dream, we didn't talk about it, I don't think we have so far in the interview, but our dream was to in the long run create an institutional company, one of the best companies ever, a company we could be proud of. We expected that to take decades and we felt that it was really risky And to get an investor early, give them a lot of governance rights. And then we knew that they would understandably and fairly have potentially different incentives, and make it difficult for us to push the company in that direction. So we added an extra cost on the opportunity of raising equity because of these potential misalignment between what we wanted to accomplish in the long run and what the vast majority of potential investors would be willing to support. And third, we managed to be profitable early on, which simply made it possible not to raise money because otherwise we would have had to raise it or fail. [00:33:07] S1: So you already surpassed $100,000,000 in annual revenue.
00:33:07 · Lan Anh Vu, Luca Ferrari
[00:33:07] S1: So you already surpassed $100,000,000 in annual revenue. [00:33:12] S0: No, we're a little bit above $300,000,000 right now. [00:33:16] S1: Wow. Amazing. But so why did you decide to fundraise?
00:33:21 · Luca Ferrari
[00:33:21] S0: So we raised we have raised debt for years. We use it to finance acquisitions, other investments. So that's not new, but we have definitely raised substantially more over the past two years than we had previously. I think we have now raised over $500,000,000 in debt. So that's just, know, cheap, cheap capital, particularly up to recently now a bit less so, but up to recently, that has been really cheap. You probably know that. So the opportunity was amazing and that we had really good ways of investing that capital at far higher returns than the interest rate. So that was a no brainer. We raised as much as we could. And then equity, we raised, we didn't raise all that much. Think historically, we probably raised, I would say 70,000,000 or $80,000,000 in equity. Of it, pretty much all of it has been financed secondary transactions, so transactions where some of the existing share owners sell some of their shares to the new investor, thereby achieving some liquidity. But that's not capital that has gone into a capital increase. So that was just to we are not a publicly traded company, at least not yet. And we felt it was important to create some liquidity band for our share owners as that would be good for them. So if you can do it, why not? And also would show people who have a chance to invest in Bending Spoons that it can be a fairly liquid investment or at least not too illiquid. Whereas in some cases, you know, private companies wait for eight years before you can have a chance to liquidate some of your investment. That's not necessarily attractive to people, Spoons ourselves as we choose to invest in the company, but also other more institutional investors who choose to come in. So