20 VC FF 029 VC vs Angel Funding & The Future of ECommerce with Ivan Mazour, Founder @ Ometria

In this episode of the 20 minutes VC, host Harry Stebbings interviews Ivan Mazur, the accomplished founder of Ametria, a cutting-edge ecommerce intelligence solution for online retailers. Mazur, a serial entrepreneur with a background in various sectors, delves into his journey from a data-focused mathematician to a property developer, and eventually, a technology investor with over 30 investments. His strategic approach to learning and investing as a precursor to founding Ametria is highlighted, alongside a discussion on the evolving funding landscape, particularly the trend of second seed rounds. Mazur emphasizes the importance of reaching the right metrics before seeking VC funding and shares insights into the future of ecommerce, predicting the rise of a personalized ecommerce platform. The interview also touches on Mazur's personal growth, the significance of his mentorship network, and his balance between professional ambitions and personal life, including starting a family.

• "Founders Friday" is a segment on the 20 minutes VC podcast hosted by Harry Stebings.
• Ametria is highlighted as one of London's and Europe's most promising startups.
• Ivan Mazur is the founder of Ametria, which is an ecommerce intelligence solution for online retailers.
• Ametria has raised over £5 million in funding.
• Ivan Mazur is a serial entrepreneur with a diverse background, including property, education, and venture capital.
• Mattermark provided data for the show, and Harry Stebings encourages listeners to read Mattermark Daily.

"Welcome to the first Founders Friday of 2016. You're listening to the 20 minutes VC with your host Harry Stebings." This quote introduces the podcast segment and the host, setting the stage for the discussion.

"Ametria has raised over £5 million in funding, and as for Ivan himself, I mean, where do I start? He's a serial entrepreneur, with Ametria being his 7th company in a career spanning all manner of sectors, from property to education to venture capital." This quote provides background information on Ivan Mazur and his company Ametria, emphasizing his experience and the company's successful funding.

• Ivan Mazur is Russian by birth, born in Moscow, and was brought to the UK to study mathematics at Cambridge.
• From a young age, Mazur was interested in computers and technology, even being banned from using computers at school for hacking attempts.
• Mazur started his first company in the property sector, which was a dominant industry in the UK at the time.
• At around 26-27 years old, Mazur shifted from property to technology, leveraging his mathematics background.
• Mazur and his co-founder Jalal made angel investments in technology to learn about the industry.
• After making 30 investments and furthering his education in mathematics, Mazur founded Ametria.

"I was banned from using computers at two of my schools for trying to sort of hack the network and all sorts of things." This quote reveals Mazur's early interest and aptitude for technology, which foreshadows his eventual career in the tech industry.

"And then I ended up starting my first company in a very non geeky industry, in property." This quote illustrates the contrast between Mazur's technical interests and his initial entrepreneurial endeavors in the property sector.

"And here I am today as the CEO of Ametria." This quote summarizes Mazur's journey from his diverse entrepreneurial background to his current role as CEO of a technology company.

• Ivan Mazur had a structured approach to becoming a tech founder, which began with making strategic investments.
• Mazur wrote a blog post detailing his investment approach, emphasizing the goal of building a world-leading technology company.
• He recognized his lack of experience and the competitiveness of the tech industry.
• Mazur viewed investments as a way to learn from experienced founders and successful companies.
• He determined the amount of capital to invest to be taken seriously and to gain valuable insights from the investments.
• Over four years, Mazur transitioned from a novice to a value-add investor, using these experiences to become a tech founder.

"So I took a very structured approach to it, and I wrote a blog post many, many years ago, which is still up on my blog, as my approach to investment, which quite literally talks about the fact that my dream for all of this is to build a truly world leading technology company..." This quote outlines Mazur's strategic and methodical approach to entering the tech industry, starting with investments as a learning tool.

"And then I actually stopped and thought about, well, how much capital am I going to be able to allocate to this, and how much do I need to invest in each company to be taken seriously as an investor?" This quote highlights the calculated decision-making process Mazur used to determine his investment strategy and his commitment to being a significant player in the tech investment space.

• Ametria completed a second seed round, which is part of a trend where companies hold multiple seed rounds before a Series A.
• The recent round was a bridge to a Series A, with the goal of expanding the team, improving the product, and enhancing sales and marketing.
• The funding environment has seen Series A rounds grow in size, necessitating more traction and possibly multiple seed rounds for startups.

"So it's actually a second seed. We can talk about that as well. There's a bit of a trend right now for doing a second seed, a seed plus a seed extension round." This quote discusses the current trend of startups undergoing multiple seed rounds, which reflects changes in the funding landscape.

"It's two and a half million dollars. So that would have certainly been a series A a few years ago." This quote provides context on how the definitions and expectations of funding rounds have evolved over time, with larger amounts becoming the norm for earlier stages.

"And that does mean that, of course, you have to have very significant traction, and getting that traction is surely possible." This quote emphasizes the importance of startups achieving significant traction to qualify for larger Series A rounds in the current funding environment.

• Startups often cannot scale to multi-million ARR solely from seed funding.
• Series A expectations have risen, with VCs now looking for $2-3 million ARR instead of $1 million.
• This shift has led to the necessity of seed extensions.
• Startups must approach VCs that focus on earlier stages but have significant capital.
• There is a new gap in funding between seed and Series A, filled by specific investors.

"And so what you're finding is that that sort of seed extension becomes more and more necessary purely because series A rounds are being done now at two $3 million annual recurring revenue rather than one."

This quote highlights the increasing financial benchmarks for Series A funding, necessitating seed extensions for startups to reach these new targets.

• The funding landscape has evolved significantly over the past 2.5 to 3 years.
• Startups now require different strategies and must target VCs specializing in earlier stages with adequate funds.
• The traditional seed VCs are not sufficient for larger seed extensions due to their smaller individual investments.

"But the environment has changed so much during those two and a half, three years that you've had to approach slightly different vcs, vcs that focus on a slightly earlier stage but still have significant capital."

This quote explains the change in the funding environment, where startups need to adapt by seeking out VCs that cater to the early stages with enough financial power to support their growth.

• There is a large amount of funding available at the very early and late stages of startup growth.
• The middle stages (B and C rounds) see more concentrated funds.
• The barbell analogy suggests a heavy concentration of funds at the seed and Series A stages, and again at larger growth rounds.

"And do you see a large cluster of funding at both the seed and Series A, and then the larger growth rounds, and then much more concentrated funds in the b and C? Do you see that happening or is that not so prominent?"

This question introduces the barbell analogy, inquiring about the distribution of funding across different stages of a startup's growth.

• Early-stage funding is abundant, with SCIS rounds being accessible to many.
• The challenge at the early stage is standing out among numerous startups.
• Strong teams and market understanding are crucial but may not guarantee attention from investors.

"Absolutely anyone can raise an SCIS round today. It is a case of working really hard at it. It's a case of reaching out to potentially 1000 people."

The quote emphasizes the accessibility of early-stage funding, but also the effort required to secure it, highlighting the competitive nature of this funding stage.

• Late-stage funding is highly dependent on a company's metrics.
• Fast growth and solid revenue figures are key to attracting funding.
• Companies with exceptional growth may attract top-tier VCs, while others will find interest from a variety of funds.

"Certainly at the late stage, if you have your metrics, you will just have your funding."

This quote underscores the importance of strong financial metrics for securing late-stage funding, where performance numbers are the primary focus for investors.

• Being part of a hot sector like SaaS can be a double-edged sword.
• VCs may have higher expectations for ARR and MRR in popular sectors.
• Ametria shifted from ecommerce analytics to marketing automation to better meet market needs.
• Subsectors within SaaS can experience rapid changes in investor interest.

"So I think SaaS in itself will probably stay hot for a long time, purely because it is a great business model."

This quote suggests confidence in the SaaS business model's longevity due to its recurring revenue structure, despite the fluctuating interest in specific subsectors.

• Founders must tailor their pitches according to the type of investor (angel vs. VC).
• Angel investors may have different expectations and desires compared to VCs.
• Building confidence and validation among investors is crucial in early rounds.

"So my experience had been as angel, so I was very comfortable putting together the first angel round."

The quote reflects the speaker's comfort with raising an angel round due to prior experience, highlighting the necessity of understanding investor perspectives.

• Harry Stebings acknowledges the impact of Andy and Phil in his career.
• Andy is recognized as a founder of a leading SaaS company and a remarkable investor.
• Phil is considered an e-commerce expert and has a strong entrepreneurial background with multiple exits.
• Harry tried to sell Ametria to Phil before they met through Andy.
• The connection with Phil led to a strong bond and friendship.
• Harry also mentions Alex from Sarchi Invest, who is esteemed in London and is now on his board.

"Andy and Phil are awesome. I met them both actually at exactly the same time, funnily enough." This quote introduces Andy and Phil, emphasizing their importance in Harry's professional life and the serendipitous nature of their meeting.

"Phil's the e-commerce expert and he'll speak to you." Phil is highlighted as an e-commerce authority, indicating his expertise in the field.

"Alex is actually on my board now. After the latest round, they are the second biggest institutional investor in Alexander." This quote indicates Alex's significant role as a board member and investor, reflecting his influence and the trust placed in him.

• Harry Stebings describes how he pitched to angels and VCs differently.
• With angels, the focus was on the team and engagement metrics due to the absence of revenue.
• The team's background and the platform's user engagement were key in securing angel investment.
• For VCs, the pitch centered on the monthly recurring revenue and its rapid growth, demonstrating market validation.
• The idea that initially attracted angel investors was validated by the time of VC pitching.

"So with the angels it was all about, here is the team." This quote highlights the importance of the team when pitching to angel investors, suggesting that personal credentials and potential are crucial at this stage.

"With the VCs, it was actually really a chart of recurring monthly recurring revenue that was just going up and to the right." This quote emphasizes the significance of financial metrics, specifically recurring revenue, when pitching to venture capitalists.

• Harry Stebings reflects on his approach to fundraising and how it influenced his investing style.
• He suggests waiting until a startup meets all necessary metrics before approaching VCs.
• Harry's experience with premature VC discussions taught him the importance of timing and readiness in fundraising.
• He notes that being approached by VCs can be exciting, but it's essential to be prepared with relevant metrics.

"I guess I would have probably waited a little bit longer to go out and speak to the VCs." This quote conveys the lesson Harry learned about the importance of proper timing in seeking VC investment.

"Wait until you absolutely know you've hit all the numbers that are necessary to raise whatever round you're raising." Harry advises waiting until a startup has achieved the necessary metrics to ensure a quick and successful fundraising round.

• Harry Stebings believes physical retail stores will continue to exist despite technological advancements.
• He acknowledges that people value the experience of physical shopping and that not everyone prefers virtual shopping environments.
• Harry predicts a shift in retail strategy, where stores encourage in-store discovery but facilitate transactions like e-commerce.
• He anticipates the development of a new e-commerce platform focusing on personalization, predicting it will be highly successful.

"I think bricks and mortar stores will definitely always remain." This quote reflects Harry's belief in the enduring nature of physical retail stores.

"There will be a new e-commerce platform developed within the coming years that is based entirely around personalization." Harry predicts a significant innovation in e-commerce, emphasizing the future importance of personalization in the industry.

• Harry Stebings shares his most-read blog, Sasta by Jason Lemkin, and other influential content like Thomas Tungus's work.
• He values the insights from these sources, which guide his approach to running a SaaS company.
• Harry recalls a memorable moment in his career, involving a board meeting with notable advisors and investors, highlighting the significance of assembling a strong board.

"Sasta.com, especially now they've done this thing that picks up quora through scraping and there's always new content on there every day." Harry praises Sasta for its consistent and valuable content, which he considers a guidebook for SaaS companies.

"Our first investor director, Elizabeth Ling, was at eBay, at PayPal, at TalkTalk." This quote showcases the caliber of individuals on Harry's board, indicating the level of expertise and experience they bring.

• Ivan Mazur reflects on the significant progress made from starting as an investor to founding and leading a tech company.
• He expresses awe at being surrounded by a board of highly experienced and intelligent individuals discussing the future of his company, Ametria.
• This moment is highlighted as a pinnacle experience in his life.

"And it dawned on me quite how far I'd managed to get within just a few years of making a few investments and thinking I want to start a tech company."

The quote signifies Ivan's realization of his entrepreneurial achievements, from initial investments to leading a successful tech company.

• Ivan Mazur identifies Elon Musk as a source of inspiration, acknowledging it may be a common answer.
• He cites Musk's biography as influential, highlighting the sacrifices made by Musk for entrepreneurial success.
• Ivan's respect for Musk is rooted in the dedication to achieving "entrepreneurial perfection."

"It's not just him chilling there with his billions and his rockets. It really is a life that has been totally dedicated to achieving entrepreneurial perfection, and I think that is very much a reason to admire someone."

The quote encapsulates Ivan's admiration for Musk's dedication and sacrifices in pursuit of his entrepreneurial vision, beyond the superficial perception of wealth and success.

• Ivan Mazur discusses his reliance on productivity tools such as Todoist, Google Keep, and Google Hangouts.
• He emphasizes a strict communication protocol, avoiding phone calls and texts to focus on emails and scheduled interactions.
• Productivity for Ivan is about minimizing interruptions and managing communications effectively.

"I absolutely cannot live without Google Hangouts... I use that as a productivity tool because it means that I don't get interrupted by phone calls or text messages or anything else."

The quote explains Ivan's preference for Google Hangouts as a means to control and streamline his communication, enhancing his productivity by reducing interruptions.

• Ivan Mazur shares two books that have significantly impacted his life: "Rich Dad Poor Dad" by Robert Kiyosaki and "How to Win Friends and Influence People" by Dale Carnegie.
• "Rich Dad Poor Dad" influenced his entrepreneurial mindset, steering him away from a banking career.
• "How to Win Friends and Influence People" helped shape his interpersonal skills from a young age.

"I read that when I was 18 and it changed my life... It formulates a way of thinking that almost makes you entrepreneurial by nature."

The quote highlights the profound effect "Rich Dad Poor Dad" had on Ivan's life, instilling an entrepreneurial mindset that diverged from a traditional career path.

• Ivan Mazur outlines a five-year plan for Ametria, including the recent launch of a marketing automation platform and plans for international expansion.
• He aims to build a strong team of VPs to elevate the company further.
• On a personal note, Ivan looks forward to starting a family while balancing his professional life.
• He humorously discusses work-life balance with a colleague who prioritizes family time on weekends.

"We're sort of three years into probably a ten year journey, but if we can do it in eight, that works as well."

The quote outlines Ivan's long-term vision for Ametria, indicating flexibility in the timeline while maintaining a clear direction for growth.