Last year, I got to know a young venture capitalist in London who is an investment manager at Oxford Capital. It has been said that venture capital is typically a playing field for seasoned professionals, and there hasn't been much in the way of diversity in age and gender at many top VC firms, but it could be that Will Orde may be one of a few, select VCs who is shaping a new perception of how venture capitalists interact with founders.
The first thing one might notice about Will is that he is very humble and down-to-earth, and enthusiastic to meet with founders from all sorts of different backgrounds. Typically, one can easily discern between investors who secretly despise founders and take every opportunity to cut them down vs. those investors who are actually interested in the kinds of products and services the founder is trying to build. Will is the latter sort, and although he has a very discerning intelligence, and is a graduate of Eton College and Cambridge University, where he studied Experimental and Theoretical Physics, he has a very keen ear for listening to founders and what they have to say.
Will Orde, Investment Manager at Oxford Capital wants to see founders with audacious plans to build a company of serious scale and solving hard problems.
Although, Will studied theoretical physics, he soon realised that he didn't want to become a research scientist, and entered a boutique corporate finance firm, which he recalled was a "cutthroat experience." He felt stuck in the middle, then quickly joined Oxford Capital as an intern, where he is now an Investment Manager.
There are many investment professionals and VCs who like to talk over founders and begin lecturing straight away and pointing out all the things wrong with a potential new startup. Therefore, one of the necessary skillsets of founders has typically been developing a thick skin, due to being continually under the criticism of traditional modes of thought and defending their strategy against the established elite. People might throw buzzwords around, such as disruption, probably one of the most overused words in venture capital, but many investors actually prefer the safety of established models of companies who are copies or clones of other companies and don't particularly like it when founders are attempting to cross into uncharted territories.
One iconic founder, Jack Ma, Chairman of Alibaba, has said that when he came up with the escrow service idea for Alipay, many investors shot him down and told him it was "the stupidest idea" they'd ever heard.Now in 2017, more than 400 million people use Alipay and it moves around $519 billion in total pay volume annually.
Will is the sort of venture capitalist that founders typically like because founders can build upon existing ideas and strategies with him. Will doesn't sit there and begin a critique to wear down on the ego of the founder; instead he asks many questions, then refines and asks more questions. It is this type of "question and discussion" or rather Socratic method of problem-solving that most founders prefer than having to deal with investors who can have a discouraging, superior attitude and inability to listen. I've had many discussions with founders who dislike dealing with venture capital firms or investors in general because that itself becomes a source of external stress, and depleted energy that is taken away from building and running their companies.
It doesn't need to be said that most investors care about their ROI and will ask the tough questions, but there is a fine line between practical output and being grounded in strategy than being the brunt of an investor's continual frustrations and object of an investor's ego-tripping ways of usurping the founders' company away from them. Finding the right venture capital team and investors is like getting married; often there can be separations and ugly divorces and many founders wished they hadn't raised capital at all.
Will Orde believes that more late stage funding for U.K. startups will help them to scale before being acquired early on by incumbents such as Google, Apple and Twitter.
I had a chat with Will just before he went on a trip for spring break, and asked him for some insights in the oncoming post-Brexit era:
"Thus far, I don't think there will be any immediate change," he tells me. "Brexit will take another two years before it is fully implemented and venture capital funding isn't slowing down at all. However, I do think that in London, there could be more late stage funding. There is plenty of angel money, but in terms of late stage funding, there could be more done there...Many of the reasons why London-based tech startups get acquired quickly by U.S. corporations before expansion is because there is a lack of late stage funding for U.K. startups to scale."
What about startups or companies that exit into IPO? I asked him.
"One problem about the public markets in the U.K. is that they don't function for tech companies. When tech companies want to IPO, they don't aim for the London Stock Exchange (LSE) but for NYSE or NASDAQ." -Will Orde, Investment Manager, Oxford Capital
What is a typical day in the life of Will?
"Most of the time I look into new investment opportunities and have two or three meetings a day. I really enjoy meeting with founders. When I'm at my desk, I mainly work on due diligence and researching models...then of course, there are the tech events and talks that I go to twice a week, mainly in the evenings. I like chatting with founders and having a beer with them."
What do you do outside of work?
"I mainly like going to the countryside, talking walks and getting outside. Of course, you know I love skiing and watching rugby. In the last couple of years, I've quite enjoyed skiing in France and Austria."
What do you think about AI automation?
"In terms of automation, I think many SAAS companies will have to adopt automation to keep pace with competitors. AI will go from being a standalone vertical sector to a ubiquitous horizontal tool that everyone uses, a bit like cloud computing did. There is a movement towards big data in biotech, genetics, genomics that revolve around data analysis and storage...in terms of sectors that will be resistant to automation, I think will be EdTech. EdTech is a very small sector, and people-driven. When people learn, they want a human touch and material that is accessible with human interaction. People tend to want to learn within social groups and distance learning without social interaction hasn't proved to be very successful."
Which sectors do you think are the hot sectors in London?
"I think one hot sector is Consumer FinTech, especially in the way of new finance applications, and core banking - such as current accounts, credit cards, mortgages; it is supposed to be looked over by E.U. legislation and we will see what happens after Brexit, but I think direct consumer brands and marketplaces will benefit from consumer FinTech and people will find it easier to move their money around different currencies."
Will is currently on the board of directors for Spoke, an eCommerce menswear startup.
We discussed a little more about fashion and eCommerce, as that is one of the sectors that Will specialises in, and is currently on the board of Spoke, an online brand that specialises in menswear products. "They have a great engagement with their customers and seem to have created brand loyalty in an era where our generation doesn't really have loyalty to brands."
I asked Will why doesn't the U.K. have its own Google?
He pauses momentarily before telling me that, "I think because the incumbents tend to acquire companies early on in the U.K., before they have the chance to prove themselves as stand-alone entities and grow to global scale...however, I don't think it's impossible, and that is something I think I would like to see; and if founders came to me with a big audacious plan to build a company of serious scale and solving hard problems I'd be open to seeing how it would work."
By Sierra Choi
As winter gave way to the beginning of spring, I had spent the first part of the month in Athens, Georgia. The South always had a certain fascination for me; being a city girl for most of my life, I had learned to get by living in small, cramped places. My 600 sq ft walk-up flat without a lift in the West Village in New York City was my first grown-up place during my undergraduate days, and later in Berkeley and also in London, I had learned to live in a very compact, mobile, and almost transitory manner. I had never spent time in the South, as I had always been traveling in between the West and East coasts, from Europe to Asia, Seoul to Los Angeles and back again, and the Southern part of the United States was somewhere I had never thought of visiting.
University of Georgia's main campus. UGA is the oldest public university in the United States, having been established in 1785.
However, one of my cofounders for a startup we are launching had spent a year teaching at the Terry College of Business at the University of Georgia (UGA) and he had many positive things to say about Athens as we were contemplating our U.S. headquarters. My perspective is that it is much better to take advantage of a place with a highly proportionate technical talent with low cost of housing and overhead and Athens fit that bill quite nicely.
In my perspective, the major cities seemed overrated - places like San Francisco, Los Angeles and even New York City or Boston were major places where VC funding existed, but the atmosphere in which to grow with the population was not there. It has been said that the average Millennial stays in the same job for an average of 2 years before moving onto another job. My partners and I wanted to shift that perspective, and create a company culture of not simply retaining the best talent, but to recruit the local out-of-work population, and grow with them. Similar to how the energy/ oil industries provided secure jobs for people in my father's generation; so that during that era, people were able to live comfortably under one income; that is something I aspired to re-create.
One of the things I had discussed before my trip to Athens was with the former Executive Director of Four Athens and VC, Jim Flannery, in which I had expressed my desire to create regional jobs in the area where we would be headquartered, to lift the poorest people out of poverty, and not simply be headquartered somewhere and then bring in external talent from elsewhere whilst inflating the local real estate to unsustainable proportions, such as what had happened in San Francisco and Seattle. Although, the San Francisco Bay Area is my hometown, the place that I grew up had lost much of its appeal, mainly due to the out of control homelessness and rising living costs, in addition to a certain kind of attitude there that exacerbated elitism and careless disregard for people who were struggling in their lives; where some tech founders preferred to write long letters complaining about underprivileged people, instead of thinking of how to solve the overwhelming social problems that plague us today. I longed to find a U.S. headquarters that had a sense of community, and deep respect for its people; not just the young or talented, but also the elderly population and the people who had been living there for many years.
Jim had told me before that Athens had "a world-class research University, unmatched human talent, a vibrant community steeped in food, music, the arts, the outdoors, and a major city (+ the busiest airport in the world) an hour away, and really, all of the necessary components to build high-growth companies."
Jim Flannery, former Executive Director of FourAthens will be heading a new VC fund to highlight Athens' best startups.
I went to Athens, Georgia, not really expecting too much on a first trip, but I have to say, it really opened my eyes to Southern hospitality and a sense of community. The first thing one notices about Athens is the beautiful architecture, and the how much space there is everywhere. There are no crowded buildings or small, cramped flats, there is fresh air abound, and a kind of quiet that is indicative of a return to nature.
Post-modern, Warhol and Françoise Nielly influenced art at the Classic Center in downtown Athens.
Athens is also the ultimate dog-friendly town. Everywhere, you will see people walking their dogs. It is also a town where everyone might be jogging late at night, as several running clubs meet after the sun goes down, so you will always see people in their trainers hiking up and down sidewalks in different neighbourhoods. It's a place where people are very open to ideas and change, whilst still paying homage to history. The UGA campus is spread out in the heart of Athens, and which I learned was the oldest public university in the history of the United States, having been established in 1785.
The bulldog is the mascot of the football team and the entire city, referred to as "dawg." Athens is an overwhelmingly dog-friendly town, with many people walking their dogs in every part of town.
I also met a lot of different founders. We spent one evening at one of the bars downtown during Happy Hour where I became acquainted with founders who were working in all sorts of different sectors, from biotech to eCommerce.
Currently, Georgia offers a 35% tax credit (up to $50K per person annually) for angel investors who invest in Georgia-based startups. For startups, they can also take advantage of Georgia's 10% R&D tax credit.
Another advantage Georgia offers are its great office spaces in the downtown area and the affordable cost of housing and living. I spoke to a founder who said that he would not be able to pay for a similar 3000 sq ft loft space in a city like New York or Los Angeles. I also had the pleasure to hang out with Jordan Burke, the current Executive Director of FourAthens, at a local coffee shop where many founders can be located in the mornings, as he gave me many insights into the Georgia startup landscape and told me there is no lack of technical talent there, but that there is a lack of business management and marketing talent.
"Aside from the University, Athens has always seemed to get the reputation of a being a bunch of folks hanging out and playing music. And while the music scene is foundational to Athens' character, it only scratches the surface of the wealth of creativity and talent here." Jordan Burke, Executive Director, FourAthens
Jordan Burke, Executive Director of FourAthens is on a mission to make Athens the new U.S. headquarters for tech startups.
We spoke a bit more about Athens' growing landscape and the primary difference between Athens startups vs. Silicon Valley startups. Whereas, in Silicon Valley, startups are often pushed to become unicorn companies and scale before they might be ready, Athens startups have more of a bootstrapping mentality and focus more on the development of the revenue model as opposed to growth. This can be both advantageous and disadvantageous, but the founders in Athens are not prone to gambling with investors' funds, and typically do not raise more than what they need.
One of the founders I spoke with, Ty Frix of Ichor, a health and wellness, biotech startup, and who is currently raising $1.5 million to scale into the Southeast U.S., told me of the various lessons he had learned with the first $2 million he had raised to launch his company. There had been a steep learning curve as a product company, and attempting to develop wearable devices that monitor the health of athletes.
Ty Frix, founder of Ichor, used his past experience as a football player to develop monitoring devices for athletes.
In the beginning, he told me, they had made the devices quite complex with many features, and ended up becoming toppled by Apple and FitBit, in addition to encountering production problems in which he told me that for any device, there is usually a 10% failure rate straight out of the factory. These are things he learned right before making adjustments to his revenue model, in which he attained clients from three different verticals.
Currently, Ty is shifting from being purely focused on athletes to transition into nursing homes, to monitor elderly people living in senior communities. His grandfather is one of his test users, and who is also Ty's inspiration. His grandfather had been a sharecropper who had picked cotton, then worked on a farm, and also had a 12-mile postal route in which he would walk everyday to deliver people's mail. He was able to provide enough for his family and to send Ty's father to medical school, the first in his family to attain a degree. This kind of legacy has now fallen on Ty, and he wants to focus his startup to work with elderly people; people like his grandfather, who had sacrificed their lives and spent all their lives working to provide for their families.
I think oftentimes in our contemporary society, we are so hyperfocused on creating beautiful lives for ourselves that we often don't appreciate our families and the incredible sacrifices they made for us to give us a better life than they had. I look at my own parents, and I feel a great sense of responsibilty towards them. I think one of the things about Athens is that people aren't disposable or inter-exchangable; there isn't this attitude of quickly hiring someone then firing them; instead there is this respect for the individual, to respect employees as human beings and not merely people to cushion the bottom line.
I think for U.K.-based startups who are also looking for a U.S. headquarters, they might consider Athens a possible choice. Certainly, it's not living in a busy, crowded, bustling kind of city life, but the there is something quite similar about the British mentality with that of the Southern United States, in that people carry a deep sense of responsibility about their communities and have a way of helping out their neighbours without any expectation, a kind of philanthropy that is a natural part of life.
This is what Athens has that San Francisco does not.
By Sierra Choi
With the interesting melodrama surrounding Article 50 in Parliament this week, and the impending Brexit, there has been talk of London no longer being the no.1 financial centre of the global world, especially in light of financial institutions, such as HSBC and UBS, as they have been shifting thousands of jobs to Paris earlier this year.
However, it hasn't stopped tech corporations, such as Google from moving forward with its £1 billion plans to build a new headquarters near King's Cross in central London, complete with a rooftop pool and indoor football pitch. Apple's plans for a new headquarters in London at Battersea Power Station is also part of a £8 billion regeneration mega-development project.
Apple is taking over the Battersea Power Station in London to build its HQ as a part of a £8 billion renovation project.
Google's £1 billion investment into its eco-friendly London headquarters at King's Cross will further cement London's global position in the tech industry.
Although Londoners may whinge about living in the city, the smog, the Tube and various tariffs placed on driving cars, London is still one of the best places to live in the world, regardless of Brexit due to its proximity to research universities, such as Cambridge, Oxford and UCL, where American tech corporations have been busily acquiring technology startups. In addition, with Japanese SoftBank's £24 billion cash acquisition of Arm Holdings, and its recent 25% shift to SoftBank's £83 billion Vision Fund, headquartered in London, it is clear that although financial institutions may be moving their jobs to Paris, in the next decade, London will most likely become the tech capital of the world, potentially usurping Silicon Valley's dominant position in the world market.
Just recently, Chancellor Phillip Hammond unveiled plans to introduce T-levels in British education (the technical version of A-levels) to prepare British youth for a technocratic society. Whereas, the United States has been slow to invest in elementary and high school education, with continual budget cuts in public education whilst more focused on the recruitment of technical talent from nations like China, India and South Korea into its top research universities, the British government will be spending £12 billion to overhaul its entire state-funded sixth form (the equivalent of high school in the US), in addition to expanding its free school programme and free school transport for grammar (elementary) school students. By opening new free schools and working to integrate technical education into its educational system, the British govt is paving the path towards making education free and accessible for all its young citizens beginning in 2020.
Former Prime Minister David Cameron poses with the students at Cobham Free School, a top-rated publicly funded school with free tuition.
It has been said that a nation's youth is the future, and it seems pretty clear that London is making a large investment into becoming the tech capital of the global world. I think one of the advantages of a British education, as opposed to a South Korean education or an American education, is its ingrained system of Socratic thinking, beginning at the elementary school level - learning to question, to think critically and to be aware and respectful of others' viewpoints as opposed to learning to memorise or solely focused on performance on multiple choice tests or developing an unhealthy obsession of always being "right."
South Korea, Germany and Japan are the leading nations that have the highest pay for primary school teachers. In comparison, teachers in the United States work the most hours whilst being paid in the bottom percentile.
In the United States, federal cuts to the education budget by Congress have created a bereft of jobs whilst student enrolment has skyrocketed.
A 6th grader protests against statewide budget cuts in education in Illinois. Although, the U.S. govt has increased its R&D output at top research universities, and has propagated active campaigns to recruit top students from China, India and South Korea to attend its top universities, the U.S. has not invested in its own young citizens and their education, and this most likely will have dire consequences in the next several decades as the U.S. plays catchup with other nations that have actively invested in its elementary and high schools.
Having been a product of both an American and British education, although I have been lucky to attend some of the best schools in the United States, I can say that I spent a significant portion of my time at U.S. schools in a state of ennui, with a skewed, competitive focus on getting A's, whereas in London, it was expected that I go against the grain of traditional thinking, experiment, practice and develop new theories under my own self-discipline. I think it is this self-agency that is lacking in education at other nations, such as South Korea, whose students are often silenced or reprimanded if they go against the grain of traditional thinking or punished if they question what they are being taught. Although, American education is primarily based on a post-industrial society whose goal was outputting students to work in factories, I think the main problematic feature of U.S. schools is that teachers at U.S. public schools are often underpaid and educational institutions at the elementary and high school levels do not attract the best talent, which ultimately reflects on the students. Although, there are startups developing a new model of education, such as the AltSchool, and San Francisco has moved to make its 2-year community college free for all its residents (ie, for people who can afford to live in San Francisco in the first place) it is becoming more apparent that in America, there is a growing divide between the wealthy and poor, and the average American who is an elementary or high school student will not be able to afford the expensive price tag of going to schools like the AltSchool or the Montessori School and will more likely end up with a mediocre education at a public school with multiple budget cuts. This is in stark contrast to the direction that the U.K. is taking, by actively investing in their young students.
Chancellor Phillip Hammond with a student from a top-rated, specialised, grammar school, Stepgates Community School, which has a tuition of £4,653 per term. In contrast, in the United States, a comparable elementary school, The Alt School, has a tuition of $25-30K per year, further adding to the criticism that education in the U.S. only caters to multi-millionaires and billionaires, creating an unfavourable climate of elitism that is at odds with democracy and innovation.
I also think that in England, there is a focus on a "holistic" education with many developers and engineers having specialisations in both the liberal arts and computer science, and this leads to creative problem solving as opposed to a purely mechanical one that functions for a limited time frame. As Steve Jobs said, "technology alone is not enough - it's technology married with liberal arts, married with the humanities, that yields us the results that makes our heart sing."
By Sierra Choi