Harry Stebbings hosts Michael Tress Cisco from Axel Partners on the 20 minutes VC podcast, delving into the venture capital landscape. Michael shares his journey from investment banking to VC, highlighting his work at Warburg Pincus and Morgan Stanley, and his role in Axel's investments in companies like Space Ape and GoCardless. The conversation explores the similarities between the entrepreneurial environments in London and San Francisco, the non-essential nature of VC's having entrepreneurial experience, and the importance of market size and team capability in investment decisions. They discuss the consumerization of enterprise software, with Michael emphasizing the potential for innovation outside the Silicon Valley. Additionally, Michael touches on the significance of being a trusted advisor with strategic insights, the value of personal networks, and Axel's approach to stage-agnostic investing. The episode concludes with a quickfire round, where Michael reveals his go-to productivity tool, Wonderlist, and his latest investment in CartoDB.
It is, of course, Axel Partners, who have invested in the likes of Facebook, Dropbox, Spotify, Etsy and many more. And joining us from Axel is Michael Tress Cisco.
This quote introduces Axel Partners as a successful venture fund and Michael Treskow as a representative who has been involved in significant investments.
Michael was also instrumental in Axel's investments and ongoing work with funding circle, Paclink, Qubit, truffer and world remit.
The quote highlights Michael Treskow's key role in Axel's investments and his instrumental work with several companies.
They are the cornerstone of all startups' financial success and I cannot reiterate how important it is to have them created, monitored and revised by experts in the legal startup industry.
This quote emphasizes the significance of properly managed business agreements for startup success.
So I out of college, worked in investment banking, doing technology, M a. And then from that went to the buy side to a growth stage investing firm, Warbrook Pinkis, where I did technology investing as well.
Michael Treskow describes his professional journey from investment banking to growth stage investing, leading to his entry into the venture capital industry.
It's surprisingly similar in the sense that there is a ton of ambitious entrepreneurs who are trying to change the world, or a subset thereof, and there is venture capital investors trying to partner with these people.
Michael Treskow compares the entrepreneurial and investment landscapes of London and San Francisco, finding them fundamentally similar despite differences in scale.
The way I think about this is all else being equal, all incremental experience helps. And so if you can have somebody who has had prior entrepreneurial experience, all else being equal, you'd like that, right?
Michael Treskow discusses the value of entrepreneurial experience for VCs but clarifies that it is not essential for success in venture capital.
Yeah, it's interesting, I do. But I'm also constantly reminded just how difficult it is and how impressed I am with entrepreneurs that I work with.
Michael Treskow expresses his occasional entrepreneurial aspirations while acknowledging the difficulties faced by entrepreneurs.
Know, I think in general, having spent time in the valley, there is no secret sauce a
This incomplete quote suggests that Michael Treskow's biggest takeaway from Warburg Pincus is the realization that success in the valley doesn't come from a secret formula but likely from other factors such as hard work and smart investing, although the quote is cut off before completion.
It's not that the water is different or there's something in the air, it's just people trying to be innovative and then having access to capital.
This quote emphasizes that innovation does not depend on a specific location but rather on the presence of innovative people and their ability to access capital.
I think one of my beliefs, and one of the reasons that I made the move to Europe is that innovation certainly is not limited to the west coast of the U.S.
Michael Treskow highlights his belief in the global nature of innovation, which motivated his move to Europe to seek entrepreneurial talent.
If anything, I would say my takeaway is that the next big entrepreneurs can be anywhere and I'm excited to be looking for them in Europe.
Michael Treskow expresses enthusiasm about finding the next wave of entrepreneurs in Europe, reinforcing the idea that innovation can come from any region.
Firstly, yeah, I think philosophically the belief is that we are in the business of trying to identify and partner with the greatest entrepreneurs with the most exciting ideas.
Michael Treskow explains Axel's core investment philosophy, which is centered around finding and supporting outstanding entrepreneurs and their ideas.
It's much easier to say we are flexible and we want to try to help you regardless of the stage that you're in on your journey.
This quote conveys Axel's flexible approach to investment, showing a willingness to support entrepreneurs at any stage of their business journey.
So it's more of a necessary condition. And then the real question becomes around how big is your addressable market?
Michael Treskow discusses the importance of the addressable market size, which is a key factor in determining the potential for a company to grow within its target market.
...we want to just be able when I speak to companies to just say, okay, that market feels large enough to build a large company where I don't think that's going to be an issue...
This quote reflects the firm's desire to invest in markets that appear sufficiently large to support the growth of a substantial company, ensuring that market size will not be a limiting factor.
So I think that's a very important point, especially with innovative ideas. The market may not be present yet.
Michael Treskow acknowledges the need to consider future market size, as innovative companies may create or define new markets that do not currently exist.
Yeah, look, there is the easy things. Like all else being equal, it helps to have a relevant background in the space that you're going after.
Michael Treskow notes that founders with experience in their industry may have an advantage, especially in complex sectors.
How can you tell whether the founders have the ability to exploit that market? Are there any tells within the founders characteristics which kind of reveal them?
This question from the interviewer addresses how investors like Axel assess a founder's potential to capitalize on market opportunities, suggesting that certain founder characteristics may be revealing.
"If you want to start an insurance company or sell something to the insurance space, it has enough complexity and regulation in it where it might be helpful for the entrepreneur to be familiar with that space."
This quote emphasizes the necessity for entrepreneurs to have a deep understanding of complex industries, such as insurance, due to their regulatory nature.
"I think really a passion or obsession for the topic is important as well, that you have a reason to really go after it and you're excited about it."
Passion is highlighted as a driving force for entrepreneurs, which is essential for pursuing and succeeding in their ventures.
"What is it that they have understood about the market that is going to enable them to do well and to create a new company where there's probably plenty of existing companies going after the opportunity."
The quote points out the importance of having a unique and insightful understanding of the market to differentiate and succeed amidst existing competition.
"We do not look, for example, at clean tech or biotech because I know nothing about that space."
Michael Treskow indicates the importance of investing in sectors where the investor has expertise.
"One of them is to be a trusted advisor to the entrepreneur or entrepreneurs, to really have the trust and be able to brainstorm ideas with them and propose strategies and give them feedback."
Being a trusted advisor is crucial for investors to effectively support and guide entrepreneurs.
"Pattern recognition and strategic insight. And that's clearly something that improves over time."
Michael Treskow discusses how experience enhances an investor's ability to provide strategic insights based on observed patterns.
"Introductions, of course, right? So partners, customers, useful people to talk to. And that is, again, it's a personal network that is increasing its size as I have more experience in the industry."
The value of an investor's network in providing introductions to partners and customers is highlighted.
"Hiring help with hiring is another important one. And last but least, it's exposure to the global excel network."
Investors can significantly aid in the hiring process and provide access to a wider network, which is beneficial for startups.
"What I do like is founders who can quickly and succinctly articulate their vision, right."
The ability to clearly communicate a startup's vision is emphasized as important for founders.
"I think you just have to be wary of making the wrong comparison."
Michael Treskow warns against the oversimplification of business models through potentially misleading comparisons.
"But ultimately, as you think about your vision and what it is that you want to build or what problem you're solving, I think that typically is a good point to get across."
The quote suggests that the core of a startup's vision should revolve around the problem it aims to solve.
"And before we dive into the quickfire round, you've mentioned before that at excel you do deep dives into particular sectors and industries to kind of hone in on the trends that are arising."
Michael Treskow outlines Excel's approach to understanding industry trends through in-depth research.
"And one of them which you have discussed recently is the consumerization of enterprise software."
The consumerization of enterprise software is identified as a significant trend in the tech market.
"Do you think there is room for improvement further on this? We've seen unicorns produced with the likes of Slack."
The question posed by the host suggests that there is potential for further innovation and success in the consumerization of enterprise software.
"And I think the trend has been to really look at the employees and their individual wishes and what it is they are looking for and to enable them to be more productive."
This quote highlights the shift in enterprise focus towards individual employee needs and productivity.
"It's probably fair to assume that that desire doesn't change significantly when I enter the office."
Michael Treskow emphasizes that the way people interact with technology doesn't change much between their personal and professional lives.
"Yeah, I think that from what I saw, is that they are embracing the role of mobile and distributed workforces in the enterprise, which to me is actually supporting what I was just talking about."
Michael Treskow discusses how Emergence's pivot aligns with the trend of integrating consumer-like features into enterprise tools.
"Wonderlist is a big one that I use every day."
This quote reveals Michael Treskow's personal preference for Wonderlist as a productivity tool.
"I'm not sure there's necessarily for one to emerge."
Michael Treskow suggests that the existence of multiple tech hubs is beneficial and there's no need for a single dominant hub.
"One? I read Den Primek's term sheet."
This quote indicates that Dan Primack's term sheet is a regular read for Michael Treskow, suggesting its value as a VC resource.
"I think Christensen's the narrator's dilemma is great. I think crossing the chasm is super helpful and even Porter's five forces is a good one."
Michael Treskow shares his favorite business books, which offer foundational knowledge in innovation, market strategy, and competition analysis.
"We just announced an investment in CartoDB, which is a spanish mapping, data processing and visualization engine that we're super excited about."
This quote explains the recent investment in CartoDB and highlights the company's potential in the eyes of Michael Treskow.
"But before we leave, don't forget to check out Vidar law to make sure all your current and future business agreements are watertight."
Harry Stebbings endorses Vidar Law for secure and predictable legal services, emphasizing the importance of having reliable legal support for businesses.