Nic Brisbourne of Venture Firm DFJ Esprit on Entrepreneurs Wanting to Take Over The World and Convincing Investors Thereof
This interview is with Nic Brisbourne, Partner of Venture Firm DFJEsprit.
Nic has been in venture capital since 2000. In that time he has worked in London, Europe and Silicon Valley. His main areas of focus have been software and media. Prior to DFJ Esprit he was with Reuters Venture Capital. Nicís investment experience includes buy.at (sold to AOL for $125m) and UltraDNS (acquired by Neustar NYSE NSR). Prior to joining Reuters Nic worked for Operis, a software and services start-up, and Cap Gemini. You can find Nic on his blog The Equity Kicker on Twitter @brisbourne
Pemo: What is your sweet spot, in what kinds of businesses do you like to invest?
Nic: Personally I'm focused on web & software businesses, so companies in the AdTech space. I've been looking at a lot recently, the consumer internet. And then SAAS plus web services kind of in & around the social media world & advertising technology world is most of the stuff that interests me. As a fund we're broader than that so we invest in a wide range of IT businesses. Also including more traditional software, electronics, semi conductors, CleanTech, MedTech.
Pemo: Wow, brilliant, fantastic, very interesting stuff!
Pemo: What percentage of women startups do you get pitches for? And what percentage have you funded as a firm?
Nic: We don't track the percentage of startups that are pitched by women but I'm thinking it's very low. We had a pitch from a female CEO founder last week. I don't think I've had another one this year.
Pemo: This would be the case with most firms I have heard?
Nic: Yes exactly you would know this better than I do by now.
Pemo: Yeah nothing new there!
Nic: Have you noted differences with women entrepreneurs in how they pitch & build businesses? I'm going to give you an answer & I'm going to qualify first by saying I'm wondering if I'm projecting my own stereotypes onto the world here.
Pemo: I guess none of us can help doing that, it's really fine, you've got permission.
Nic: Sure but it makes me wonder if what I'm saying is actually accurate, but anyway. For what it's worth my perception is probably better organized, more thorough, maybe less aggressive, maybe a bit less asking us to take stuff on trust. There you go!
Pemo: So generally they like to deliver what they promise rather than puff things up?
Nic: Yeah I think hopefully everybody likes to deliver what they promise hopefully but the point I was trying to make was that maybe presenting a more thorough case, so their research is more backed up.
Pemo: And I have heard from most vcs & women founders that women feel they have to work harder or deliver more again just as that cultural impetus to prove ourselves or something.
Nic: I don't know, I've read some of that same stuff & so if it is the case that people are prejudiced against women founders & female entrepreneurs then inevitably you're going to have to work harder to overcome that. I'd hope that we're not here & that hopefully the level of work required is the same. And hopefully we make the same sort of decision.
Pemo: Yes & I understand that there are a lot of firms that have no conscious bias at all but that possibly the general consensus bias in the culture prompts women to over perform possibly. So the onus isn't really on the individual venture capital firm or angel investors but more really us trying to elevate the culture generally.
Pemo: What do you see as the obstacles for inclusion of women entrepreneurs in achieving funding?
Nic: Hopefully it's the same as for any business. We invest in about 1/2 to 1% of businesses that we actually see. So there's a big burden of proof or a job of convincing to be done. There's big market, great product, great team & hopefully that's the same for everybody? You want to see real commitment & real passion from your founders & your CEOs. That needs to be the same, real belief.
And we probably are attracted to entrepreneurs that are aggressive about that. And maybe that's a more male characteristic than a female one? Maybe that makes it a little more difficult? Someone who presents the big plan & tells you you can walk through walls & when you question the detail can be a little bit impatient with you sometimes. I'm painting the stereotype of the aggressive male entrepreneur who can be a little bit impatient with you for wanting to question the detail & why don't you believe? And those sort of characters give us pause for thought as well, questioning if they're going to be too aggressive & so on.
But we look at that & say crikey this guy really does want to take over the world! Maybe there's a challenge there for women who are less inclined to be that way.
Pemo: And would you include the technical piece there? Obviously there are not enough women in tech both in Europe & the US. Many vcs say that it improves your credibility if you have a technical background. Would you say that would be more impressive to have the technical background?
Nic: Yeah definitely
Pemo: Often advice for sourcing venture is equated with dating, implying that there is a matching that needs to happen with entrepreneur & investor. Have you noticed a general psychological profile of venture capitalists and also of entrepreneurs that promotes the attraction & synergy between them to develop a great startup?
Nic: When I look around the vc community in London, I see an eclectic collection of characters, if you can put it that way. There's a lot of very different sorts of people here & each of the funds is a different sort of personality. It's a young industry here.
It's a very small industry here in London & I think the big people who are leading the funds are largely entrepreneurial in their own right. That's where some of the quirkiness comes from I think. There's still no established career paths here or anything like that. So it's all kind of different. That's a long way of saying I don't think there's a general profile that I see here. When I go to the valley then theres certainly a homogeniety to the people there.
Pemo: Interesting & I did live in London for a couple of years. Maybe it's just the whole quirkiness to the London culture too?
Nic: Well maybe? Maybe we're quirky Brits? I don't know? I rile against that somehow.
Pemo: Well it's also very multicultural in London so the quirkiness comes from the international.
Nic: Yeah, yeah that's true! If I look at the vc community here there are a lot of different nationalities. Probably more multicultural than London on average, if you know what I mean.
Pemo: I understand.
Nic: I think that quirkiness comes more from the fact that we're still pioneering here. We're still building a venture capital industry. So the people leading the funds are very entrepreneurial in their own right rather than fitting into a mold.
Pemo: That's really great feedback. Thank you for that.
Pemo: In the dance with an entrepreneur both in the decision making process of funding a startup & then in working with those startups what are the necessary qualities that make a good venture capitalist. Some of the talents mentioned: Would you trust your gut instincts & feelings that happen within the relationship with the entrepreneur as signs about what's happening in the business, in the startup? Or would you manage by influence or persuasion? Obviously this is when there are difficulties in a startup that this would be more obvious.
Nic: Most of the time we have minority stakes in these companies 20 to 30% so you have to manage by influence. You're also working in an environment of incomplete information nearly all the time. That's startup life in general. So you have to trust your gut instincts but you also have to try & find as many inputs into that gut feeling as you can get.
Over reliance on a single relationship with the founder, I think can be a mistake. You want to get wider into the company. You want to make sure that you've got dialogue with other members of the exec team & so on.
Pemo: That's great so basically broadening those connections actually supports you in having some sort of influence if things are difficult?
Nic: Yes & having influence so you have a proper understanding. One of the things we do a little differently in the UK to the US is that it's common to have 2 or 3 members of the management team on the board. Whereas in the States it's common really just to have the Chief Exec. It's easy to broaden out the relationships if you're seeing people regularly for the entire board meeting.
Pemo: That's really great info. Thank you so much for your time today & I know that you're really busy.
Thanks to Alexander Blu for music 'Electricity'
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