 Well it's exciting to be here. It's been a few years since I was on stage at Slush There's so many of you this year The being here is a personal highlight for me Thank you for joining me today Of course a lot has changed since I was on stage at Slush last time in 2019 there are many new challenges market volatility macro uncertainty Things look very different But in some ways this feels familiar I Started Kassar in 2000 and Skype a few years later just after stocks crashed 80% in the dot-com crash And at first I thought wow I missed the boat Seriously, it was scary much worse than it is today I'd given up a good job stock options my career to become an entrepreneur to get it with a colleague It was nearly impossible to raise funding for Skype We did manage to get a check of hundred thousand dollars from Bill Draper Even back then it wasn't a lot of money So sometimes actually many times we were really worried about making payroll But then a funny thing happened We managed to find a way through as our bank balance dwindled We became scrappy and cost efficient So what I realized was that? More resilient and enduring companies are created in downturns I'm based on what I saw then and I'm experiencing today I've never been more excited about what Europe is building The reset presents Europe's first real test since the global financial crisis and I believe It's also one of the best opportunities in the last 20 years Because we're here today United by one common goal We're all in the business of talent innovation and long-term company building and Innovation by talented founders is De-coupled from the financial market You wake up you see a problem you try to fix it That's got nothing to do with Nasdaq That means that the strength of European tech is about building a future-facing ecosystem One that can withstand economic cycles and come through stronger an Ecosystem that supports the boldest founders whatever is happening in the world At atomico we spent a lot of time speaking with our founders over the last several months a Few of them are facing really tough decisions cuts layoffs Down rounds and even closing down We must not be afraid of the difficult choices that this reset brings Just look at Google's layoffs in 2009 or Amazon's stock price crashing by over 90% in 2002 They made some tough decisions in this period of turbulence and they come through stronger and It was just a bump in the road so We see over and over that great companies find a way through these difficult times European founders created Stripe Supercell and true caller after it to the 2008 global financial crisis It's worth remembering that From that one small check and a few tough years Skype became the biggest tech M&A after the dot-com crash So Starting a company in a more challenging funding environment Forged the resilience that made these companies special So this is where context is critical We all been trained to believe that a company's ultimate value is reflected in its valuation today Well as an entrepreneur and an investor I can't say this Your valuation today Matters less than you may think It's just a reality. The cost of capital is more expensive But it is still available So we shouldn't lose sight of the ultimate goal to build for the long term and That will ultimately mean that you will have to sustain through different cycles to different environments the winning path Isn't always a straight line and it wasn't for me We rarely acknowledge that the ecosystem need the firms which don't make it 50% of startups failed to raise the second round and only 1.2% Can scale to billion dollar plus valuations? We learn through adversity Even if we fail we learn how to build a business how to develop technology How to solve hard problem and give a team an opportunity to experience a high-growth environment And I've learned when something isn't working you have to change it That could mean Making cuts taking a down round or even being acquired Even shutting down can be healthy as it release founders and talent From stagnant firms to take chances on other companies with greater potential This is a time of tough choices It's also a period of enormous potential a Whole generation that has only experienced the good times in the bull market is learning an important lesson and When applied This was strengthening the ecosystem so What happens if you choose not to make these hard decisions? Keeping a company on live supports traps scarce resources talent and capital in a company that will not achieve its goals That's bad for everyone. I Know how hard it is because I founded and folded a couple of companies prior to Skype Each time I failed was scary. It was painful. I Spent a lot of time beating myself up about my obligations to my team To my investors my customers and my family In reality It wasn't as big a deal as I thought it was My team they had a great experience and they got amazing jobs Of course, I brought the best ones with me to the next idea The only thing that crashed was my dream and okay, maybe my ego but Once it was over. I had the opportunity to start afresh and I was even more motivated to prove I could build a successful company So let's talk about the thing that usually no one of us wants to discuss and one of the hardest choices That's down rounds There's a stigma We turned the down round into the worst case scenario We're embarrassed what it may say about our business that is worth less today than it was a year ago Data shows an uptick in down rounds in the third quarter of this year with almost 19% of all European VC rounds are fitting this criteria and this is up from 12% in Q2 The trend is of course continuing in Q4 But I like to challenge you to think about down rounds in a different way Because in a downturn a lower valuation means something quite different Firstly Down rounds are just a function of the broader market is the reality we're facing right now People aren't willing to pay the same amount for a technology company as they were a year ago Technology investments in Q3 is done 30% for Versus the same period previous year at series a Premon evaluations in Q4 so far has fallen as much as 62% from the heights in the beginning of this year Series B valuations are down 57% and there's no sign of this changing anytime soon In this environment a lower of elevations is no reflection on you It's just market dynamics Secondly, if you need to raise do it right away The biggest issue with down down rounds. It is that people leave them so late It's easy to hope that market will improve and I've seen plenty of founders Putting off the fundraising hoping that things will change For a company that is pre-profit that means eating into future runway and the less Runway a company have the more risk is associated with it in just six short months the fundraising prospects May shift from having a choice of clean term sheet sheets from supportive investors To rescue financing littered with aggressive terms such as liquidation preferences and exit vetoes And that's not a situation that I would like for a founder. So don't let that be you Thirdly Down and flat runs are really about growth Raising money strategically before the point of no return could prove a master stroke Any founder would encourage to raise money early on clean terms Can continue to scale at a time when others are pulling back and losing talent This may be the single best time to hire great talent away from Competition and consolidate your market position Whether the market is shifting in one or three years these firms won't have stood still but What if you have to make the ultimate decision to close down your business in my experience When you come back as a repeat founder of companies that didn't work You come back differently You have a stronger determination to succeed because you have a stronger will to prove that you can't build a successful business And actually we need that For me the third time we started a business we invented Skype The lessons that we learned the first time around and the second time around made Skype what it was I'm sure there are some second and third time founders in the audience here today. So give me a wave Hello Awesome, I'm sure some of you can relate to this because Four in ten founders who achieve some venture funding are in first-timers and this raises to six in ten unicorn founders Those who have the guts to come back fighting are more likely winners I know this from experience so the reset is an opportunity it can help Europe to to Mature exponentially quicker by developing this resilience much muscle fast We can't create a stronger ecosystem founders and talent with extra grit to sustain the difficult times with speed matters The sooner we recognize that this is the new norm new normal at least for the foreseeable future and Take the necessary steps to ensure the longevity of our businesses the sooner We can move to solid foundation and keep building our Expectations may have to change Time tables most certainly will But this does not diminish our ambition nor potential There are fewer distractions and no one is talking about froth anymore We need true vision more than ever We can now focus our resources on technologies that can solve large-scale problems with greater urgency We must show the next generation of talent the true potential of technology in solving large problems but Let's talk for a moment about monetary value When I need some perspective, I look at the NASDAQ composite index over time These companies have grown their aggregate revenues from less than one trillion in 2000 to almost seven trillion today of Course over these 20 plus years there have been periods of time with less growth When you zoom in to the global financial crisis order.com crash, we can see that revenues plateaued but when you zoom out we see the trend consistent long-term growth and The bumps in the road are barely visible Europe's take ecosystem. It's the best it's ever been. We have the toolkit to succeed This talk today may mean different to each one of you Economic environment actually affects all of us for some of you. Maybe it's less extreme Nonetheless, I hope that hearing about my experience Gives you a different perspective about the challenges that you face Whatever is happening in the market. There are fundamentals that don't change Entrepreneurs are the game changers for a more imaginative and sustainable world Do not change your vision. We need your bold ideas more than ever Keep building keep believing There will be those who say that now is a time to play it safe But I truly believe this moment right now Could be the best time to deliver inspired solutions to the significant challenges the world is facing There's so much important work to do So I'm excited to see what you will build from this reset Thank you