Lessons Learned from Venture Capital Episodes of the Scaleup Valley podcast

On the Scaleup Valley podcast, our personal drive and mission is to find, build, and share a better understanding of what it takes to scale up a company. From leadership to business model to product, marketing, customer success, and beyond, we work every day to uncover the processes, cultures, and behaviours that lead to stunning growth. 

One of the most important ways to get a full picture of what it takes to scale up is not only to speak with the people who create the companies – but the ones that see and support their growth from the other side of the table. We’re talking about venture capital investors.

Their insights help us to build a more comprehensive understanding of what it takes to grow and that’s why we’ve taken this opportunity to resurface some of the highlights of lessons learned from the VC episodes of the Scaleup Valley podcast. 

Through doing this, we hope to impart some of the key insights, tips, and models presented by investors that you can introduce into your company to create better systems for achieving scale. 

The role of the investor – Donal Stalter, Global Founders Capital 

To start, it’s important to establish a positive working relationship between the investor and entrepreneur. Because, just like with any business partnership or relationship, it affects the culture of the company, the fluidity of communication, and the ultimate success of the business. 

Donal Stalter of Global Founders Capital provided us with a useful description of what he believes to be his role as an investor, built from his extensive experience in this role. 

“As an investor, you’re actively supporting great entrepreneurs and, if you’ve done it before, I think you can ask questions that resonate with the founders. But at the same time, I think you have to be nuanced and thoughtful and not expect that you actually know what’s going on. Because fundamentally you’re still on the bleachers, you’re not on the playing field. So I think it’s a sort of juggling act to a certain degree where you have certain information, certain hunches because of experience – but also you recognize that you don’t know everything. So you have to listen really well, you have to be active in terms of your listening. And hopefully, you end up collaborating with the founder. They identify areas where you can be supportive and you sort of fill in those gaps. And it’s just constant interplay.” 

Listen to the full episode here. 

Preparing for all market conditions – Olav Ostin, TempoCap

Now that we’ve established the role of the investor in the entrepreneur/investor relationship, let’s take a closer look at what creates the conditions for success. 

In today’s world, the challenges are far greater than they were even a year ago, something that Olav Ostin of Tempocap alluded to when he joined us on the Scaleup Valley podcast pre-pandemic. 

“There’s an important point that we very often forget as investors. A company is made up of everything that you do within a company – but it’s also the market. And we, as investors, need to remind our entrepreneurs that a good reason why that economy will grow is that the macroeconomic environment is also positive. And today, investors like me who have a bit more experience having gone through 2000, 2001, 2007, 2008…we are also telling our entrepreneurs: you can execute everything perfectly well, you can do everything exactly right but if you have the headwind with the macroeconomic environment – you’re going to be challenged.”

While we find ourselves in War Times today, the main remedy that Ostin shared with us still stands strong:

“What is the most important for us, when you think about a business that is around 15 million in revenue is the team. Because the concept is proven, the technology is proven. Can the team scale the business in the rest of Europe?”

Listen to the full episode here. 

Being a strong leader means hiring strong team members – Stephan Morais, Indico Capital

Speaking of the team, as an investor, a lot of focus is put on leadership, who create the backbone of the company’s vision, product, and culture. But a leader is only as good as they let their team be. 

We often see leaders attempting to wear every hat at their company, warping their role, responsibilities, and even their personality to control every aspect of the business. While understandable especially at the start of the company, this kind of behavior could be detrimental to its growth. 

This is something that Stephan Morais of Indico Capital called attention to on his episode of the podcast. 

As a CEO you don’t have to change your personality but rather build extra support by surrounding yourself with great talent – complementary people that could be even stronger than you in different fields. It’s all about the people they hire. The founder needs to adapt, reskill and build up what’s needed for the company.” 

Listen to the whole episode here. 

The entrepreneur is the key when investing – Nader Sabbaghian, 360 Capital Partners

Speaking of leadership, Nader Sabbaghian of 360 Capital Partners shared a similar perspective on putting a focus on thel leader. In fact, he dubbed considering the entrepreneur the key consideration when investing. 

With similar ideas for solutions floating around, more often than not it’s the drive, passion, and ability to share that with others that creates the foundation of a successful company. 

“The obvious side for me is assessment of the capabilities and ambition of the entrepreneur. For me, the entrepreneur is the most important point. So we focus on the leader, on the person. Because it’s pretty common that we get similar ideas, my view is that ultimately we are in the business of talent management. It’s not enough to look for good ideas, you have to look for the individuals with their ambitions, dreams and good ideas.”

Listen to the whole episode here. 

Support projects that make an impact Gonzalo Tradecete, Faraday Venture Partners

Another way to find projects that are worthy of investments is supporting ventures that have a real impact on the world. This is something that Gonzalo Tradecete of Faraday Venture Partners strives to do every day. 

“I believe in the value that our investments provide, not just to the companies that we are choosing to support – but to society.”

This impact applies not just to the global view but also to the personal impact that these projects will have internally. For Tradecete, this means working with leaders that establish clear and positive company values.

For example, at Faraday they may love a product, but if they feel like they’ll be spending board meetings in yelling matches with the leadership team, then that’s not a company that they wish to invest in. This is incredibly important to keep in mind as one establishes working relationships and a healthy company culture. 

Listen to the whole episode here. 

Leading through War Times – Alexandre Nunes Teixeira dos Santos, Sonae IM

Speaking of company health, 2020 was a year of high-stress as we tredded together into War Time. This has had a profound effect on mental health, company alignment, and, of course, the ability to grow during an economic slow down. 

This is something that still remains a part of our everyday life and could continue to do so for months to come. 

In the height of the pandemic, Alexandre Nunes Teixeira dos Santos of Sonae IM joined the War Time edition of the podcast to share his insights on leading through difficult moments in life. 

“We’re in War Time and under really extraordinary circumstances. Anxiety is high. We’re with our families at home, and it’s not easy. And it’s going to get tougher over time. So we have to talk with each other, we have to guarantee that all employees are well and to motivate those that are starting to lose grasp.” 

Listen to the whole episode here. 

Three areas of focus when losing grasp – William Kilmer, C5 Capital

If you’re looking for more ways to find this grasp and focus during War Times, you can follow the lead of William Kilmer of C5 Capital. He advises three particular areas that need our focus during this worldwide crisis:

  • Realistically assessing what the company is facing in terms of business and what they need to survive. Or what he calls ‘operational resiliency.’
  • Turning to your people. Meaning putting the focus on the wellbeing of employees and your own wellbeing. Everyone needs to be doing well to thrive under these circumstances, both emotionally and mentally, and so a focus should be put on providing support and resources.
  • Finally, looking at the landscape of what’s happening within the market so that the team can take advantage of the possible opportunities.

Listen to the whole episode here. 

The data engine as a tool of focus – Amelia Townsend, Burda Principal Investment

Amelia Townsend of Burda has another tool that she uses to focus her team despite the unprecedented times: data engines. 

The value of providing important information to your team is huge when scaling up a business, especially through challenging moments. It allows each team member to watch their progress, create new goals, and see how they are actually contributing to the growth of the company. 

The more this data is readily available, the more focused your team will be on pushing ahead to the next finish line. 

Data is really your friend because it helps you to identify what direction to take. It gives you signals to identify opportunities, so I think that getting that date and insights in place is really important in the beginning. Companies need to build the capability to get the data in an immediate way.” 

Listen to the whole episode here. 

The importance of vision while making decisions – Samuel Gil, JME Ventures

On the other side of the spectrum, Samuel Gil of JME Ventures does recognize the value of data but doesn’t encourage his employees to lose themselves analyzing it. 

From his point of view, data can be a powerful tool – but leaders need to put a focus on vision and the future when they make choices, rather than obsessing over each data point if they want to successfully scale up their product or solution. 

“Numbers and indicators are important, but they aren’t everything. For me, it’s important to distinguish between data driven and data influenced. You cannot make decisions based only on data. You have to take into consideration things such as long term strategy, your values and your vision. They are key.” 

Listen to the whole episode here. 

Learning to evolve your culture without losing your DNA – Jordi Altimira, Lanzame Capital

In fact, vision is often the defining factor of company culture. As the vision of the leader changes so does the culture of the company. This can be disorientating, but a strong leader is able to evolve with this change without losing the core ideals of the company.

This is, at least, what Jordi Altimira of Lanzame Capital shared on his episode of the podcast.

“One you’re the founder of the company, you need to accept that the culture is going to evolve but you have to keep in mind what the red lines are, what’s in your DNA and what is never going to change. When a new person joins the company, they bring their values and luckily it enriches the company, so you need to embrace the change without losing your roots or your core values.” 

Beyond that, the most important thing to keep in mind is that no company is perfect. In fact, perfectionism only stands in the way of scaling, as we waste time on perfect. 

Instead, focus on solving problems with efficiency. Fixating on perfect will only slow down your growth, as it truly doesn’t exist. 

Altimira concluded, “Creating a business is probably the hardest thing you will do in your life. You need to be really passionate to solve problems. All the companies that we have invested in always have critical situations. You need to understand that that’s normal and you need to be passionate enough to solve and overcome that. As an investor, we also need to be aware of that.” 

Listen to the whole episode here. 

 

For more insights on the VC perspective of scaling up, follow the Scaleup Valley podcast wherever you listen to your podcasts. New episodes are published weekly featuring voices from the leadership teams of Scaleups, Corporate Scaleups, and VCs.