You started your career with later stage technology investing in the US and have transitioned to early stage investing in Europe. How has that progression impacted your approach as an investor
Before joining Eight Roads, I invested in more mature technology companies at Warburg Pincus in New York and San Francisco, and then earlier stage ones at Accel in London. At Eight Roads, we partner with founders in the scale-up stage, which is typically somewhere in-between my prior experiences. Understanding the earlier stages of a company’s journey helps me empathize with founders, while insights into what comes next enable me to offer practical advice on what to anticipate. More broadly, I’ve had the chance to learn from some great investors along the way, and the lessons have been surprisingly similar regardless of stage or geography. For example, I firmly believe that innovation is a global phenomenon, and great ideas and founders can emerge from anywhere, that investment decisions hinge on a blend of data-driven analysis and intuition, and that it’s all about backing the right people.
Like yourself, Ben Silbermann (Pinterest), Anne Wojcicki (23andMe), Eric Ries (Lean Startup), Kevin Ryan (Doubleclick, Business Insider and MongoDB), Jonathan Swanson (Thumbtack), and Jack Schwartz (General Assembly) all went to Yale! What do you think are the key fundamental characteristics of a successful entrepreneur?
It seems that attending Yale may be a good start, although I’d be the exception that proves that rule 🙂
We spend a lot of time pondering what makes a successful entrepreneur, and so far, it seems that entrepreneurial greatness transcends backgrounds and experiences. A few factors I pay attention to when speaking to founders are a deep understanding of customer pain points combined with unique insights into why those issues persist, the ability to attract and retain top-tier talent, and whether I would want to work with (or for) them. I’m curious what they look for when speaking to potential investors!
’Tech investors are tentatively returning to a market that has turned down since 2022.’ (FT 17.09.24). Do you see the liquidity drought, partly due to the lack of IPO’s, as no longer being a major barrier to confidence?
I don’t believe it ever was a significant barrier, at least for early stage investing. Technology investors understand that it’s a cyclical market. However, these cycles are more driven by innovation waves than capital markets. When I began investing, it was all about the internet; then mobile took the stage, now it’s all about AI. Each these waves has given rise to great entrepreneurs who have built category-defining companies. I’m confident that these waves of technological innovation will persist and am eager to partner with founders who have a compelling vision for what these trends make possible. The state of the capital markets at the time of our investment is secondary – we are long-term investors and have partnered with many founders for well over a decade as they build their companies. As the voice meant to say to Kevin Coster in Field of Dreams, “If you build great companies, exit opportunities will come.”
Vinod Khosla once said ’70-80% of Venture Capitalists add negative value to startups’. Was he right?
I sincerely hope not! The debate about the value that minority investors bring beyond capital is as old as the industry itself, but instances of value destruction should ideally be rare.
I’d like to think that we all aspire to add value, but the extent to which we succeed often depends on how well a firm’s value proposition aligns with a company’s needs, as well as on the personal chemistry between the investor and founder(s). At Eight Roads, we focus on helping a select group of entrepreneurs scale their companies globally, leveraging over 50 years of scale-up expertise, a dedicated team of operating partners, and our global reach and network. When speaking to entrepreneurs, we together explore how they may benefit from our support and how we work with founders and they with investors. This exercise helps align expectations and establish a strong foundation for long-term collaboration. Our latest NPS across the portfolio is 84, so we must be doing something right!
’New AI Safety Bill causes a stir in Silicon Valley’ (FT 16.09.24). As California pushes to regulate – how can you balance innovation, competition and mitigate the risks of the unknown?
I view regulation as a natural by-product of innovation; when done correctly, it establishes a solid foundation for adoption by building trust, reducing uncertainty, and ensuring a level competitive playing field. The challenge often lies in defining what “done right” truly means, which typically involves finding a sensible compromise that balances the need for innovation with the establishment of ethical, economic, and safety safeguards.
It may be too early to determine what this compromise will look like for AI, given the rapid evolution in this space. However, I think that potential customers, especially larger enterprises, are increasingly concerned about the potential legal pitfalls of AI usage, which makes them, and thus any company that wants to sell AI-based products to them, hopeful for a clear set of standards to emerge soon.
