In episode 19 of the "20 minutes VC," Harry Stebings interviews James Wise, an investor and advisor from Balderton Capital, who shares his unconventional path into technology and venture capital, starting from building websites as a teenager to working with McKinsey and then moving into social venture funds before joining Balderton. Wise discusses the differences between European and US VCs, emphasizing the cultural and structural nuances, and the potential for crowdfunding platforms like Crowdcube to democratize investment opportunities. He also touches on the importance of team dynamics over individual heroism in entrepreneurial success and expresses his excitement for health tech and consumer apps that incentivize behavioral change. Wise concludes by highlighting the importance of understanding the underlying "unicornomics" and the team's ability to iterate and problem-solve as key to successful Series A funding.
"James is an investor and advisor to early stage technology startups with Bulldog and Capital. James holds board member and observer positions at three dhubs.com, c nine IO, sketchfab.com, crowdcube.com, mytomoros.com, upbeat.com and finally, Sunrise AM, which was recently acquired for 100 million by Microsoft."
This quote introduces James Wise, his role in the venture capital industry, and his involvement with various technology companies, highlighting his experience and expertise.
"I actually have a bit of a different background to most. I guess where I started off was the same as many people interested in technology was playing around with building websites as a teenager."
This quote explains the early beginnings of James Wise's interest in technology and how it started as a hobby which later influenced his career path.
"VC really struggles to scale, in its current model at least. And the reason why we love doing programs like this and going to events is it means we can, in effect, scale our message a little bit."
This quote highlights the scaling challenges within the venture capital industry and the strategies used to overcome them, such as participating in programs and events.
"No, I think if you look at the market right now, I think the epicenter of the technology world is still in San Francisco and around San Francisco."
This quote recognizes Silicon Valley's significant role in the technology industry while also implying that its success is not just a result of its location.
"But without a doubt, the most important technology companies today are, on average, based in San Francisco."
This quote emphasizes the current concentration of leading tech companies in San Francisco, highlighting the city's significance in the tech industry.
"Those giants are in open source, those giants are in hardware, those giants are in social platforms."
The quote points out that the foundational elements of great tech companies, such as open source, hardware, and social platforms, have strong roots in Silicon Valley.
"We think Europe has got great potential, and we think there is a shift away from one ecosystem just in the valley."
James Wise indicates a belief in Europe's potential to be a major player in the tech industry and acknowledges the shift in the tech ecosystem from being solely focused on Silicon Valley.
"I think what they're doing is opening up and making more transparent an asset class which previously was only available to a very small group of wealthy individuals controlled by small merchant banks."
James Wise explains how Crowdcube is transforming investment by making it more accessible and transparent, previously limited to a select group of wealthy individuals.
"The fastest crowdfunding campaign, I think, was done on Crowdcube itself. For Crowdcube, I think they did a million pounds in 16 minutes."
This quote highlights the efficiency and speed at which crowdfunding can operate, as evidenced by Crowdcube's own rapid fundraising success.
"You get a huge new group of people, in fact, just park, who did their crowdfunding campaign recently on Crowdcube. They actually saw a three x increase in the number of downloads of the Just park app."
James Wise illustrates the marketing benefits of crowdfunding, where a company not only raises funds but also gains advocates and sees increased product engagement.
"Crowdfunding is a much, much bigger industry than just venture capital."
This quote clarifies the scope of crowdfunding, which extends far beyond the realm of venture capital, affecting a diverse array of small businesses.
"Difficult to lots of funds will say the same things. They're entrepreneur friendly and they understand the markets."
James Wise acknowledges the challenge of establishing a competitive advantage when many venture capital firms claim similar strengths, emphasizing the need for a personalized approach.
"And the amazing thing is that is all true, because it really varies person to person, entrepreneur to entrepreneur."
This quote reinforces the idea that the effectiveness of a venture capital firm's competitive advantage is highly dependent on the individual circumstances of each entrepreneur and investment opportunity.
"So that's a long time to know and work with someone. And so ultimately your competitive advantages are going to be about how you get along with that person or that team, whether you share her vision, whether you share her passion for what they're doing, whether you believe that the team can execute on what they're doing."
The quote emphasizes the importance of personal relationships and shared beliefs between venture capitalists and the founders of the companies they invest in. This interpersonal aspect is considered a crucial competitive advantage.
"But I think that you have some confidence around the core of your business, and that's generally what defines a series a that you've been testing and trialing and understand now the real underlying mechanics, and you have a model which just about works, and that you now have a vision to place it."
This quote defines the essence of what makes a successful Series A round: a business with a tested and proven core, understanding of its mechanics, and a nearly functional business model that is ready for expansion with a clear vision.
"But the great thing about minibons is it attracts into the market people who have a different type. They want a different type of asset, and they want a different type of risk, and it allows them to be involved in businesses which they really, really care about and they have a passion for, but also not completely put money in a way which won't see a return for a very long period of time because they immediately get money back in terms of interest on that bond."
The quote explains the appeal of minibonds in the crowdfunding space, highlighting that they offer a different risk profile and immediate returns, appealing to investors who want to support businesses they are passionate about while still receiving some form of immediate financial benefit.
So it's a nice combination of having a brand, utilizing a brand that people are passionate about to raise capital, reward those people financially, but also reward them with inclusion within your business, and focusing.
The quote emphasizes the strategy of using a well-loved brand to secure funding while also ensuring that investors are rewarded both financially and through active participation in the business.
So there's lots of sectors. One area I spend quite a lot of time looking at, and I'm imagining you'll get this response. At the moment, quite a lot, is health tech.
James Wise conveys his enthusiasm for the health tech sector, highlighting its variety and the current trend of increased attention towards it.
For me, there's two areas that sort of fascinate me. One is around patient care and getting them the marketplace for services around people who are ill, and improving the efficiencies around delivering services to people, empowering them with data.
James Wise is fascinated by the potential of health tech to revolutionize patient care by enhancing service delivery and empowering patients with their health data.
I'm really interested in this combination of behavioral economics and how we incentivize people, not just financially, but through the use of the broad term gamification as well to change their habits.
James Wise discusses his interest in how behavioral economics and gamification can be used to help individuals manage their habits more effectively.
The one thing I've learned working in this industry is the real importance of the team and delivering everything.
James Wise emphasizes the critical role of teamwork in the success of any venture, suggesting that the collective contribution of many is more significant than individual accolades.
Most recent investment was in a company called my tomorrows. They are targeting the delivery of drugs for early access programs. So completely changing the way that drug distribution has done for people who are very, very ill. And we said yes because we thought the founding team had the right abilities to execute and their vision was entirely disruptive to a trillion dollar industry which affects all of us.
James Wise explains the rationale behind his most recent investment, highlighting the potential impact and the strengths of the founding team.
My favorite book is probably one more about people than about businesses though. So an intimate history of humanity by Theodore Zeldin.
James Wise shares his favorite book, which aligns with his belief in the importance of understanding individuals as part of a larger societal fabric.
For all the items and resources mentioned in today's show, do head on over to Ww dot the 20 minutevc.com and please do email us with your suggestions for questions that you'd like to be asked in the future.
Harry Stebbings closes the episode by providing information on where listeners can find additional resources and encourages them to contribute to the future content of the podcast.