20 VC 084 Meet Felix Capital A Venture Firm For The Creative Class with Antoine Nussenbaum

In this episode of "20 minutes VC," host Harry Stebings interviews Antoine Nussenbaum, a principal and founding member of Felix Capital. Nussenbaum shares his journey from starting a software business and working in M&A to venturing into the investment world, where he now focuses on early-stage digital startups. He discusses Felix Capital's approach to investing in the intersection of creativity and technology, emphasizing their passion for brands and enabling technologies, with a preference for Series A and B funding rounds. Nussenbaum highlights the importance of backing entrepreneurs with a mission and global vision, who can scale efficiently and leverage technology. He also touches on the European tech scene's strengths, especially in fashion, luxury, and consumer sectors, and the rise of digital brands. Additionally, Nussenbaum shares insights on productivity tools, the impact of brand loyalty among millennials, and his personal practices like yoga and meditation. Felix Capital stands out for its thematic focus and entrepreneur-friendly ethos, encapsulated by their motto, "work hard and be nice to people."

• Antoine Nussenbaum is a principal and founding member of Felix Capital.
• Prior to Felix, he was a partner at Atlas Global, part of GLG Partners.
• Antoine has experience with early-stage digital startups, including Jelly Note Miracle, Reed Z, and 31 Dover.
• He also co-founded Huckletree, a coworking space in the UK, with his wife Gabriella.
• Felix Capital is described as a VC firm for the creative class, combining technology and creativity.
• They are known for being founder-friendly and have the ethos "work hard and be nice to people."

Now I'm super excited today as I am delighted to welcome Antoine Nussenborm at Felix Capital.

This quote introduces Antoine Nussenbaum as the guest on the podcast, highlighting his role at Felix Capital.

And over the past five years he's worked closely with various early stage digital startups, including Jelly Note Miracle, which Antoine helped to Bootstrap, and only recently in July raised a fantastic 20 million in series B, funding Reed Z and 31 Dover, and actively helped them launch their businesses.

This quote summarizes Antoine's experience with early-stage startups and his success in helping them secure funding and launch their businesses.

• Antoine was raised in Paris in an international environment.
• He was educated in a bilingual school and attended university in Paris and the UK.
• He co-founded a software on-demand business, which was eventually bought by a major player in France.
• Antoine moved to the UK and worked in mergers and acquisitions before transitioning to investment and tech startups.
• He helped bootstrap companies and made angel investments, leading to his involvement with Felix Capital.

Sure. So in a way, I guess I have a kind of traditional path.

Antoine describes his path to the VC industry as somewhat traditional, implying a progression through relevant educational and professional experiences.

And it's by doing these kind of angel deals that I end up doing a seed deal called Jelly Note with Frederick, which was a managing partner of FedEx, and that was three years ago.

This quote explains how Antoine's angel investment activities led to his partnership with Frederick and the formation of Felix Capital.

• As a VC with Felix Capital, Antoine handles more money and has to be accountable to investors.
• The risk assessment and due diligence processes are more intense at Felix compared to angel investing.
• Angel investments are typically at an earlier stage with less data, relying more on belief in the entrepreneur's potential.

One of the big difference is, with Felix, there's much more money to deploy, and ourselves, like entrepreneurs with us, have to report to someone.

Antoine discusses the increased responsibility and the need for thorough risk assessment when investing larger sums of money for Felix Capital.

So you're more backing someone that you believe has a capacity to go all the way through rather than specific metrics.

This quote contrasts angel investing with VC, emphasizing the importance of the entrepreneur's potential in the absence of extensive data in early-stage investments.

• Felix Capital aimed to raise $80 million but ended up with $120 million.
• The fundraising success indicates confidence from investors and the potential for growth.

And a huge congratulations to you on raising the fund with Felix. 120,000,000, was it?

Harry Stebbings congratulates Antoine on the successful fundraising efforts for Felix Capital, highlighting the impressive amount raised.

• Felix Capital successfully closed their fund at the hard cap set by their cornerstone investor, totaling under $20 million.
• Investors from the US and Europe showed trust in Felix Capital during the fundraising process.

"We were very lucky that the fundraising went well. We had investors from us and Europe trusting us, and we end up closing the fund at our hard cap, set up by our cornerstone investor, and it's indeed under $20 million."

The quote highlights the successful completion of Felix Capital's fundraising round and establishes the final size of the fund which is under $20 million, indicating a strong level of trust from investors across the US and Europe.

• Felix Capital is a venture firm that invests in digital lifestyle, at the intersection of creativity and technology.
• They have a passion for brands, especially in ecommerce and media, and invest in both B2C and B2B elements.
• Their investments range from $200,000 to $6 million, with a preference for Series A and Series B stages.
• The firm prioritizes backing the right individuals over specific stages or geographic locations.
• Notable investments include Farfetch and a mobile payment solution called Zong.

"The snapshot is that we are a venture firm investing in digital lifestyle. So the way we define it is we tend to invest at the intersection of creativity and technology."

This quote summarizes Felix Capital's investment thesis, which centers around digital lifestyle businesses that blend creativity with technology.

• Series A funding rounds have grown in size from the traditional $3-5 million to $8-15 million.
• Increased competition and the need for startups to scale quickly have driven up valuations and funding amounts.
• Felix Capital maintains discipline in its investment approach due to its fund size and team structure.

"There is an element of what you say that we've seen, and I think one of the big reason for this is that a lot of segments are becoming more and more competitive with lot of great guys, great entrepreneurs and great startups competing against each other."

The quote explains the observed trend of increasing Series A round sizes, attributing it to heightened competition and the pursuit of rapid scaling among startups.

• Felix Capital differentiates itself by focusing on the creative aspects of digital brands.
• They emphasize the importance of brand environment and design, with technology as an enabler.
• The firm aims to be entrepreneur-friendly and a great partner, as outlined in their manifesto.
• Felix Capital has a thematic approach with long-term, flexible capital.
• Their venture advisory team consists of entrepreneurs they've backed and long-time acquaintances, providing operational expertise across geographies.

"One of our big differentiator might stand on the fact that we have, again, a real focus on the creative side of what people entrepreneurs build."

The quote describes Felix Capital's unique value proposition, which lies in their emphasis on the creative and brand-building aspects of the businesses they invest in.

• Felix Capital's venture advisory team includes 11 members with operational expertise.
• The advisory team is involved in sourcing, due diligence, and investing alongside the firm.
• They have completed eight deals, including five core deals and three seed investments.
• The structure is inspired by US funds but is not exclusive to Felix Capital.

"One other element, which I mentioned earlier, is, again, that our thematic approach, our long term and flexible capital, and finally, and it's quite important element, is our venture advisory team."

This quote emphasizes the strategic role of Felix Capital's venture advisory team and their thematic, long-term approach to investment, which is a significant part of their operational model.

• Europe has a strong heritage in sectors like fashion, luxury, retail, consumer, and media.
• Flagship companies with worldwide reputation have existed for a long time, e.g., LVMH, Axel Springer, L'Oreal.
• In the past decade, new digital businesses have emerged globally in these sectors, such as Farfetch, Net-a-Porter, Spotify, Supercell, and Just Eat.

"There's different elements to this. I don't know if it's properly edge, but definitely Europe has a very strong heritage in specific sectors that are a big focus for us and specifically around fashion and luxury, retail and consumer, or even on the media side on these specific spaces, specific sector."

This quote highlights the strong heritage and focus of Europe in certain sectors, which has contributed to its edge in the tech community.

• The funding environment has improved, with a rise in European entrepreneurship and successful ventures.
• There's an influx of new VCs in the UK market, such as RCEF and Mosaic.
• Launching a business is less costly, entrepreneurs are younger, more tech-savvy, and familiar with the playbook.
• The challenge remains in backing the right person.

"It's definitely a better cycle to raise money than it used to be a few years ago."

Antoine Nussenbaum indicates that the current funding cycle is more favorable than in the past, reflecting a positive shift in the funding environment.

• Felix Capital invests early and looks for entrepreneurs on a mission with a global vision.
• Preference for business models that can scale worldwide and are capital efficient.
• Entrepreneurs who have achieved a lot with limited resources are highly valued.

"We invest very early and one of the biggest thing we try to do is back entrepreneurs that we think are truly on a mission, that have a capacity to go from a to z, that have a global vision."

Antoine Nussenbaum emphasizes the importance of backing entrepreneurs with a clear mission and the ability to execute a global vision.

• There's a shift from traditional to digital brands among millennials, with digital brands being more agile and tech-savvy.
• Successful digital brands know how to leverage new channels like Facebook, Instagram, and Snapchat.
• Brands need to create a sticky environment or universe that resonates with consumers.
• Triangle, a bathing suit brand, is an example of successful growth through Instagram.

"I'm not sure that the millennial as per se less loyal. I think the focus have shift from traditional brands to digital brands and typically digital brands that end up being much more agile, much more tech savvy."

Antoine Nussenbaum discusses the shift in millennial brand loyalty towards digital brands that are agile and understand how to use technology effectively.

• The transition to a new VC allows for a fresh approach to productivity tools.
• Initially used RelateIQ for CRM, but moved to Stride after RelateIQ was discontinued for European clients.
• Slack is used extensively, along with the development of Slack bots.
• Evernote and Pocket are used for note-taking and content management.

"That was a great thing of starting a new vc. We could spend quite some time thinking about that."

Antoine Nussenbaum reflects on the benefit of being able to carefully consider and choose productivity tools when starting a new venture capital firm.

• Antoine Nussenbaum is a dedicated reader of Fred Wilson's blog and appreciates the consistency and straightforward nature of the content.
• He also enjoys Product Hunt's newsletter, which provides a daily distraction and has thematic collections, such as one on VC tools.

I'm a huge Fred Wilson fan, I have to say. And obviously the ABC, which is kind of a classic and I just love the consistency. There's obviously the typical usual blogs, but I really like what Product Hunt has been doing and it's very same thing. This newsletter every day end up being 15 minutes of distraction at least. I love a thematic approach. Yesterday, actually, I think it was about the VC tools.

Antoine finds the daily consistency of Fred Wilson's blog and Product Hunt's newsletter to be valuable for staying informed and engaged with current trends and tools in the venture capital space.

• Antoine expresses excitement for marketplaces, with a particular focus on food, mindfulness, and activewear sectors.
• These sectors align with lifestyle trends and the desire for better living, which are areas of close following for Antoine and his team.

We love marketplace. I perspire myself specifically too. But now, right now, the themes where I'm spending most of our time are around, well, being around food and also the mindfulness sector and the activewear.

Antoine's enthusiasm for marketplaces reflects a broader interest in lifestyle-oriented sectors that are experiencing strong trends, such as food and wellness.

• Antoine practices yoga, meditates, and uses Headspace among other tools for benchmarking purposes.

Yes, I do. I don't communicate so much about it, but yes, I do. I'm a big yoga and practicer and I do meditate also. I benchmark headspace, so I use it. But not only headspace.

Antoine's personal practices include yoga and meditation, which align with his professional interest in the mindfulness sector. He also uses Headspace, indicating an engagement with digital tools for wellness.

• Antoine recently read "The Hard Thing About Hard Things" by Ben Horowitz, finding it inspirational for understanding the challenges of scaling a business.
• He is also reading "Capital in the Twenty-First Century" by Thomas Piketty, which discusses the relationship between capital and economic growth.

It's the hard thing about the hard things on Ben Horowitz. There's a book called the Capital in the 21st century from Thomas PKT.

Antoine recommends Ben Horowitz's book for insights into the entrepreneurial journey and Piketty's work for its analysis of economic growth and wealth distribution, both providing valuable perspectives relevant to the venture capital industry.

• Antoine's most recent investment is in Larouche Kidiwi (Food Assembly in the UK), a food marketplace that connects producers with consumers and emphasizes community interaction.
• He appreciates the business's alignment with Felix Capital's focus on marketplaces and lifestyle, as well as the mission-driven approach of the entrepreneurs.

It's going to be, again, Larouche Kidiwi. It's called the food assembly in the UK. We really like this business because it's a good illustration of our positioning with Felix.

The investment in Larouche Kidiwi represents Antoine's strategic focus on marketplaces that contribute to better living and have a strong community element, resonating with Felix Capital's investment philosophy.

• Felix Capital is hiring for an associate and a principal position.
• Interested candidates can find the job description on Felix Capital's Medium page or email their interest.

So amazing to hear the origins of Felix and the incredibly exciting future that lies ahead. And very excitingly, you could be a part of that future as Felix are hiring an associate and a principal.

The announcement about Felix Capital's hiring plans suggests growth and opportunity within the firm, inviting applicants to become part of Felix's future.

• Harry Stebbings thanks Antoine for participating in the podcast and discusses the resources available for listeners.
• He also promotes Huckletree for office space in London and encourages listeners to support the podcast.

Well, Antoine, thank you so much for coming on the show. I've hugely enjoyed chatting with you. And as always, all the resources and items mentioned in today's show can be found on the blog at www. Dot the twentyminutevc.com.

Harry's closing remarks serve as a gesture of appreciation towards Antoine and provide listeners with information on how to access further resources and support the podcast.