 Hello everyone and hello Beezer. Hello Colette. So we're here to talk a little bit about where we've been and where we're going And so the first and natural question it is to Beezer Which is tell me a little bit about how long you've been investing in Europe and what the ecosystem was like way back then Well, I think if I start doing my math correctly I first started looking at European venture in 2006 So a little over 12 years ago And then I came here as sapphire ventures to launch our business of investing in early-stage venture funds in 2012 So that was six years ago there. So Collectively 12 ish and wow have things changed. What would you do you agree? I completely agree, but I happen to know that, you know, we have kind of the same opinion on UK and Ireland and the Nordics have up and come but I believe the first place you came with sapphire was Berlin Yes, tell me why So we launched the business of investing in venture funds in 2012 and we do it in US and Europe in Israel And when we looked at Europe, we looked at exactly the ecosystem. You're talking about the UK has always been a Center of activity in venture investing. So we got that the Nordics are awesome We came here to but we wanted to go to Berlin because we heard things were changing there And we wanted to understand what that looked like because we a change is always an interesting investment opportunity And another important data point about sapphire is that our money originates from SAP the German software enterprise Company and we have a core belief that who your investor is matters So we wanted to go to Germany and see the world that our LP saw and we started investing in Berlin But first we spent a number of weeks walking around and looking at it and even that ecosystem Can we talk about that and how much that's changed in 2012? Yes, I mean just in six years, right? So do you want to start? I mean Well, I mean it was rocket internet It was all about rocket internet back then and and the ecosystem they had created It was mostly e-commerce focused as well Which I thought a lot of people thought we were gonna live and die by e-commerce, but instead they have not I mean now what it looks like it's a really full range So we've been investing in Germany now for six years and we look at our underlying portfolio and to your point When we first got there it was all selling things online in a pretty pretty replete But very directed way and now we have drones. We have crypto We have enterprise software selling into other enterprise You have a whole range of activities, which again six years is like nothing It's a blink of the eye and you could just I know we're talking a lot about Berlin But it's a really interesting microcosm to understand that what the past look like is a good Predicator for the future but no way limits the potential and we believe that things for Europe in general are going to continue to grow and expand And that's just one small example, right and you have great examples. Can I ask you about Paris? Yes so when I first got to Paris in 2002 I Remember and I'll never forget. There's a there's a great university there called Polytechnique Polytechnique one of the top universities and I was speaking to two founders something about 2005 and talking about their business and I for some reason I said so what are your parents think about this and they said oh we don't tell our parents that we're entrepreneurs and I Don't think I even registered that I was like are you kidding? No, because they explained to me that this would as a point of shame in French culture to be an entrepreneur meant that you couldn't get a decent job as an investment banker or a consultant again back in 2004 2005 and And and you know, I think I think today Well, actually, I don't think these same two entrepreneurs are shouting from the rooftop about their success And I mean what what a change, you know in a huge in a decade plus It's a day It's huge change and it makes me think of two things that we've seen evolve in the past and are kind of interesting Tells for where things might go in the future is not just the change in the embracing of entrepreneurship in Europe in general But what that means for the venture capitalists and the types of people that are venture capitalists and how that works, right? Because as you've seen entrepreneurs come up You've seen entrepreneurs and I'm teeing you up so you can tell your story because you're a living example of this And I'm just you know the peanut gallery, but you see entrepreneurs coming up making successful businesses Generating financial stability and then putting that money back into other entrepreneurs and the the reflection of what we've seen happen In the venture community is that when venture started 2015 ten years ago. It was all bankers, which is logical, right? I mean venture is a kind of financial instrument But what you've seen over the last really over the last five but starting ten years ago was operators They were successful putting money in the ground as angels and then becoming experienced and becoming venture capitalists And now I'm gonna have you tell your story because you lived it and I'm just observing it Well first and foremost I am the founder of a PR firm and when I started back in 2002 I left California and came to France with basically sold my car sold stocks I sold everything I owned to start the company and You know and there and when I came to France I tried to use LinkedIn to network and to build and it wasn't a thing For those of you who remember France back then there was a networking platform called via Dale in Germany. We had zing But networking really wasn't a thing So I remember watching my bank account go down down down and I said, you know if it hits 800 euros I need to go home and live in my father's basement and I came really close to that and it was really scary and Eventually we got our first really big client and that led on to getting Facebook as a client, etc But what I realized is there was there was no safety net back then none And that's what a lot of our entrepreneurs faced. You know, it was really it was actually horrifically scary well if you fast-forward to today the Embracing of risk and innovation is wildly different and the amount of venture capital dollars available for all kinds of businesses, right? Is wildly different so as we were chatting backstage and I was sharing with Colette this fact that is referenced in the Atomico report But I would thought would pull out some data on it was a decade ago The majority of funds were sub 50 million which just means you're just not that much money to go into startups now In 2017 60% of the venture funds raised were between a hundred and five hundred million Which just means a lot more and that's just the money that comes from LPs like ourselves That go into venture funds that then go into companies There's actually a whole other huge pool of capital that skips the venture capitalists completely and comes in from strategic from corporates from ICOs right and all that goes into companies as well So what you have today is an wildly different landscape than what you had 10 years ago for entrepreneurs different kinds of funds different numbers of funds I Think going forward you'll see even more Creativity in the kinds of financing vehicles Different platforms will come up. You've got entrepreneur first. You have the family and in France Yeah, I think all of these are hallmarks of people starting to play with the idea of not just let's innovate on the company side But let's innovate on the financing side and in fact You know one thing that really struck me is the Balderton's liquidity fund which was announced not too long ago I mean huge kudos to Laura and Daniel because that's brought a level of maturity to this ecosystem That's allowing liquidity I think I remember correctly one of the Balderton portfolio founders from go-card lists actually use that fund To get some liquidity and then go and start a new company nested This would not have been possible ten years ago even five years ago So it's a hallmark of a maturing ecosystem I want to talk a little bit though about where we have been so And and you know we were talking about sub, you know, 50 million funds wasn't indexes first fund 1996 I think it was 1720 million yeah, and if you think about that it's kind of amazing I mean indexes a really incredible Participant in the venture ecosystem here and if for those of you who aren't as familiar There is an early-stage fund a growth fund a life sciences fund They originated in Europe and and have moved to the United States and opened up some offices there, which is Pretty interesting right when you look at the evolution of firms and who goes from Europe to the United States and who from the United States comes here So and there's been Excel obviously 2001. Yeah, so 2001 when you had another big upswing and venture you had folks like Excel and benchmark and Greylock that started in the United States Remember that like a yeah, not that long ago sort of I guess kind of data ourselves But they all came here and started put up offices in Europe and the Interesting thing is that two of those three have now gone independent and created their own brands and their own their own businesses right so Greylock Europe Israel is now 83 north and Benchmark Europe is now Balderton Excel as just saw Lucian on the last panel is still Excel and that's great more than alive and kicking like Just kicking kicking I think for me and when I look at the venture ecosystem I think that just speaks to the health of it Yes, because the fact that you can get more diversity in types of funds just tells you there's a really rich pool to pick from and Also, you were talking about this earlier. There are more operators who are now involved in the funds, right? It's not just investment bankers or You know consultants, it's people who have actually run startups and that's another sign of a maturing ecosystem And I'm really a healthy sign you have people who've been in startups I mean it you know for example again I'm an LP and I advise my funds on things as far reaching as creating a healthy culture because I've had to do it Across three markets in France and Germany in the UK I didn't you know before that kind of knowledge wasn't out there It wasn't something they could tap into so you see these operators now True operators coming in and joining as you know, maybe joining as associates or maybe even starting as GPs We see millennial funds now like backed Etc. I know folks who have you know really just jumping in yes, you're seeing What's really a great time to be an entrepreneur honestly in my opinion? Hopefully and in yours too because the range of funds that are starting in the last five years in Europe If you think about it, you've got larger funds that are there for the growth stage You've got funds that are thematic Blue yard in in Berlin that's doing decentralization of software You've got point nine that's focusing on sass and marketplaces Felix in you in London that does the next generation digital life Those are again just characteristics of a mature Exist in 2005 2006 They were just kind of generalist funds that weren't especially risk-taking You can speak better to that as an entrepreneur in Europe. I didn't have it I was not an entrepreneur so I can't speak to that but I can say when we study venture capital I don't know if there is a rule of law so much But they're do seem to be some pretty repeatable evolutionary Characteristics what and one of those seems to be when you when an ecosystem starts They tend to be generalist funds because that's what the ecosystem needs right they tend to be smaller funds They tend to be ex bankers or consultants and then as it matures and gets deeper You see the funds specializing a bit and there's always a role for the generalist fund But you can have thematic ones you can have ones focusing on frontier tech now Which you have in Europe you have all of these different kinds Which means if you're an entrepreneur you have a great wealth of types of investors to pick from right? Which is wonderful. You have been a whole new angel ecosystem that did not exist as an angel It is really interesting But as we talk about kind of like what fueled the change in the ecosystem and you're saying well, you know first of all It's just a maturing ecosystem. Is there anything else that you like have identified that you said This is what fueled that or maybe this is atypical about Europe. Well, I think I'm repeating something I don't know how many folks listen to the Atomico report this morning But they talked about the importance of having successful company stories, right? It produces a Significant number of wonderful things the least of which is it shows as a lighthouse example that things are possible and Europe has really had an amazing run the last few years of exits of companies that of course started eight or ten years ago But are now proving the point that is possible Of course to have a European started company be successful in Europe or be in Europe and move globally and that draws in more investors It draws in more entrepreneurs it trains more Professionals to then go and work in other startups and it's that activity that makes the ecosystem so rich So we are very bullish on the future of venture and entrepreneurship in Europe You look at what's come before and you can look at the tea leaves going forward and say that you've got a Real extraordinary number of more experienced people than you ever had before who are seeing what's possible The first thing I did was turn around and invest when I started like I just Automatically turned around and invest in technology and in European technology on top of it. So yes So then you have more LPs coming in that's true, right? Because it's Lp individuals like individuals and and institutions like Because as they rise the Tomica report is saying the European venture capital is starting to deliver returns equivalent to the US And if you're an investor, that's that's great news Like why why would you not come and participate in that and it there was a definitely a focus this morning on the pension funds in Europe and there's certainly one source of capital But you also have a number of other sources that can come into play and that's seeing what's possible It's will dictate future success Speaking of the future What can folks who are looking to fundraise entrepreneurs or VCs? Learn from the past or maybe to put it in a different way What should folks be looking for? When they're fundraising and this is a there many answers and I ask I think this audience like to hear them So dig in well as I said before Our core belief is that who your investor is matters, right? Where are you going to get money from be it as an entrepreneur as a venture capitalist? And this is a great market for that because sometimes, you know, unfortunately, you don't have a choice, right? And that's that's just reality. We don't always have a choice for where we can fundraise But when you have a choice Be be in choice, right? And we believe that if you can choose Why would you not choose an investor that can bring strategic assets to your firm right to be a strategic asset of your company and to deliver more than money? Because money is green and your money looks like my money looks like your money looks like your money And what else can your investor do besides that? What is there? What's their orientation? How permanent is their capital? Wait, that's an interesting one permanence. How are you going to be there for me? Yeah, what how do you ask that question of your investor? It's a great. Well, we always we ask these of our of our investors, too So what's your interest in this category? I'm gonna use broad terms so people can flex it based on their situation But you want to know from your investor why they're investing in your space. How long have they been investing in your space? It's hard to predict the future, but you can certainly ask people what they have done in the past So during downturns, how did they behave? Were they able to continue investing or did they have to switch to some other form of capital or And if they refused, I mean so one thing that we're imploring the audience whether you're on an entrepreneur or Venture capitalist is ask the questions. These are not off limits You're you will not put off a good investor by asking these questions In fact, you will attract that any smart investor will really appreciate that you're asking these very difficult questions And we should answer them for you quite frankly, so don't be afraid And you should be asking again I like the one you did bring up which is you can't ask them you're gonna get one story in a downturn How are you? Oh, we were great to all of our companies or oral or a portfolio But you need to actually do your due diligence and find out How they really were you know in a bad so that means not asking them asking around look at their past portfolio Find companies who have failed find entrepreneurs who have failed with these investors And dig out what they really were like what was like things do go bad They can go bad badly or they can go bad as well as they possibly can it's your job to find out Agreed other aspects that we've looked for both when we invest or when we work with other folks is What's their thought leadership? What's their perspective on the market if someone's gonna come and invest in your company? My my hope is that you're gonna use them as some sort of advisor and you'd be in contact with them enough conversations And wouldn't you want to pick somebody that you think brings an interesting mindset that might be? Complementary, but maybe slightly different from your own right There's also a whole new and you see this in venture capital writ large Bringing of additional business services to the table, so it's not just here's my checkbook Right, but let me help you and you see many venture firms doing this You see fewer LPs not many are set up to do it, but there you're seeing more and more folks do this Where can I make a business introduction? Can I help you with recruiting? Can I? Sales right can I connect you with other investors? These are all things that given the Depth of the investing ecosystem today is possible, which it just wasn't as viable ten years ago It's just you wouldn't hadn't seen it done And then as people started to do it you realized you could up and down the stack was possible And do you see consistently? Let's go specifically back to GPs and venture capital funds. Are there any? Mistakes that they're making and choosing their LPs that you would again if you could advise them I think the questions you brought up are really good ones, which is it no understand who you're taking money from and then be in choice right and it's It's hard to speak what everybody wants we get asked. Let me make it personal Do you get asked? Yeah, we get asked a range of questions. We get asked, you know Where does your money come from? How do you know it's good? How do you like how do you know you're gonna have it for the future, right? Because our belief is if we're investing in a venture firm We should be there for you for as long as you as long as you need capital We should be able to look to the future and see what our capital looks like to versus saying Oh, no, I have no more money after two years like that's it's less good We also get asked what do you do besides bringing capital to the table we get asked that like what do you bring? We have sapphire in particular sapphire in particular has developed what we call portfolio growth Which is a range of services that we bring to bear for our VCs and underlying companies that include the business development The recruiting and the talent because we believe that it's important and we have that as a benefit from our LP We get asked who who we've invested in when and when times have been tough How do you stand up and to your point sometimes you have to have tough conversations? People want to talk to the folks that we've invested in and that's all that's all good. We think all that's important Have you ever been put off by somebody asking these questions? What's your perspective? No, we feel the same way what you're talking about which is if we're gonna ask questions You should be able to ask questions too and and I've never it's never been an issue and I cut you off I didn't mean to what else do you get asked? Is there any other pertinent questions that you get asked or is there anything that you don't get asked that you Think people should be asking Folks are focusing on that they shouldn't be well it doesn't matter It's a there's a range of questions and what I have found is that everybody's different And so what who we are is the same right? It's an absolute We just are who we are but what people will come for and look from us varies which actually speaks more about the fact that you as Someone who's fundraising should think about what you need and you might be able to find different institutions that provide that or maybe the Same institution right some folks come to us for portfolio growth some folks come to us for our thought leadership Some folks come for different reasons and we're no different We're this we the same array of capabilities, but people want different aspects, so they'll pull on different parts Similarly, I suspect when folks come to fundraise from you. Yeah, yeah, they do I mean in fact, I'm super clear that if you're only coming to me for money. This probably isn't a fit because Just I mean there's a lot more that I can do and in fact you might I'm a very active LP Would never have guessed Some people might say a little overactive. I'm you know, I'll ask questions I'm I am up on one of my funds very much because I don't think they have enough diversity I am really up on them And but I also get into their portfolio when they when they bring me in they'll bring me in across their portfolio And I'll help so that question or answer that or figure out that question and I I swore I would be an active LP and it's Probably more valuable. I think than the money I bring to the table. I would really hope so actually excellent You know, it's interesting. We do get told by some folks They just want someone to show up with money and they don't want me I am the last person they want to see so other and I'm gonna push you on one question because you didn't answer it And you may not want to but are there any questions that people ask you that you feel are not relevant or that you'd be like You know or anything that they're looking for in an LP that you're like No, you really you need to change your your thinking on this one Well, I think a lot of folks believe that capital is forever and the reality is that's never true So you should always understand from your LP when in times things have changed or under what function or where you're your VC Right, if there's a protracted downturn, everyone's affected. It's gonna be hurt right if and that's just true And if there's you know, there's different different business models be it a pension fund or a university or a fund of funds Or a family office. Everybody has different business models So just understand them and I think that's all we have time for Beezer. Thank you so much It's always a pleasure to have a chat with you and thank you Thank you