Magnus Grimeland – Day Zero Investing at Antler (EP.369)

24:56We want to see something in the founders that are better than most other people. We're looking for drive, which is a combination of ambition and having shown ability to execute. and we're looking for grit, meaning there are people for whom failure is not an option. A little bit like I was speaking about in Special Forces selection earlier that just will power through to make their ambition work. So you mentioned spike. What is a spike? So a spike is something about an individual that they're better at than most other people. If you look at most very successful founders in the world, they're quite spike individuals.

25:32They're really good at something. better than most other people on something. They might have other areas where they're not that strong. So we just want to identify an area where they're much stronger than other people. It could be that they're very deep in a specific algorithm, specific computer language, they're very good product developers. It could be that they are a friend of yours who walks into an elevator with 12 strangers and when the elevator hits the bottom floor, they're a friend with everyone. So they're just good with people. But we want to see something they're truly exceptional at.

26:00Most founders tend to be really great at one or two things. and they leverage that strength and they know that strength and they build a team of people around them who have different strengths that ultimately creates a much higher performing team that a team set of people are just average and everything. So at that stage of the game, are you concerned at all with the business they're talking about? Yeah, so at that point in time, it's just about the person. People write about their idea and what they're thinking about doing and their ambition and so on, but we don't really evaluate that so much.

26:30And so you bring them in for this 200-day program What is the program? People come in. What they're focused on at that point in time is iterating their business models. Some people have multiple ideas. Some people have one idea they thought about for a long time. Some people just started thinking about what to build. Some people are looking for co-founders. First, really very much on the team. Then after a while, then moving and iterating business models forward. What's your decision process after that period of time about getting involved with capital? So after the three months, you have a very good understanding of the teams.

27:03their momentum and what they're working on. Just imagine working with one of your investment prospects for three months or sitting in the leadership team meeting of a company you're considering investing into for three months in a row. The level of depth and the insight you have into the quality of the team and the business model they're working on is pretty exceptional. And then we codify all of that. So we built an internal tool called Antifusion. We brought on board an amazing person who joined us in the early days from BlackRock. Everything we do all across the world is done on one technology system.

27:36And there people are being assessed really amongst three dimensions. One is the quality of the team, which we spoke a lot about already. But on top of being an individual, it's the quality of the team and the team working together. The second thing is we look at the quality of the product they're trying to build and literally the product market fit. So it's product and market. Still, the team is much more important. If you have an exceptional team where the ID still needs work and the product still needs work, you can still back them. If you have an exceptional ID, but we figure out the team is not AAA, top-notch, you tend not to back them.

28:14Because so early on, IDs still really iterate a lot. So those are the things that we look at. And then based off of that, we make a decision on whether we want to invest or not. How do you decide how much capital to put in at that stage? The capital is predetermined. So that's quite important. So once we select founders to join the program, we already sign an option agreement with them that we can invest a certain amount of capital at a certain valuation. Now, that is important because very often after a while they've been in the program and they're moving forward very fast, there's a lot of other VCs coming and knocking on the door.

28:46So we have already secured our investment rights. So for example, in the US, we invest then$250K in cash for about 9 % equity. and then we put in another 250K commitment for their follow-on round. In total, a 500K commitment, but 250K coming in up front. And it's only us doing that round. This is the one thing that we're focusing on being the best at, is finding really exceptional founders and being a great partner with them in the early days. And we obviously follow on as well, but the core to our returns is that process. So that team that gets that initial 250K in the US, they're then leaving your offices.

29:24How do you go about supporting them once you've made that first investment? Once we made the first investment, they can actually still stay in our office for another two to three months. But they typically end up growing quite quickly. So they outgrow and get their own offices. They're still assigned the coach. So we check in with them more or less weekly. Typically what they need support with is in the early days, it's getting the product in the market, getting the first customer, sometimes hiring. We have a strong network of customers. We have a strong network of advisors who can support on the product.

29:56And then within a few months, they typically will raise their next round if they have a lot of momentum. Then we have this network of more than 3 ,000 VCs and 2 ,600 angel investors where we can make very relevant introductions. We also have many LPs who are interested in co-investing and we can make those introductions. So a lot of portfolio companies look at us as almost like a third or fourth co-founder because we can support with a system and a community on a lot of those things that are very important in the early days. There's a lot going on here, 27 regions. You just crossed a thousand companies you've invested in.

30:32You're talking about multiple thousands of potential partners with a venture capitalist down the road. How do you keep track of everything so you can continue to make good decisions about funding in later stages? Technology is critical. We built a technology platform, which means that we get stronger the more nodes we have. We built a partnership structure where we get stronger the more great people we have in the organization. So scale for us becomes a strength instead of creating complexity. Now, how do we do that? A is data, right? So we're very data-driven. So we track founders even before they applied.

31:07They visit our website. They do this. They write a newsletter, wherever it is. Then we track them through the application funnel. Then we work with them in person. Then they're part of the portfolio. So we gather data in an entire way when you use that data to optimize decision-making, optimize the funnel. The other is, in lack of a better word, you call them kind of productivity tools, which is ensuring that the scouting process, the programs, the ICs, everything is run on the technology platform. So if I go and do a coaching meeting where I take my coaching notes, it's on Antifusion. If I do an IC, it's in Antifusion.

31:40So in that way, things are done in the same way everywhere. and then scale becomes an opportunity for you to learn. So when we run 27 locations in parallel, that's 27 years worth of learning in one year compared to just running one location. If you capture that learning and if you use it to improve your processes, we can test out things in that way quite rapidly. So we could test something in three locations, see if it leads to better outcomes or worse outcomes. If it's better outcomes, it goes into the new best practice bucket. If it's worse outcomes, it goes into, okay, we're not going to do this again anywhere.

32:16If it doesn't lead to anything, it's still in the unknown bucket. That's the second thing is learning. And then the third is it creates tremendous network effects. We work with VCs. Sequoia is a good example. We say now Sequoia split in three. We work for them in China. We work for them in Southeast Asia. We work for them in India. We work for them in Europe. We work for them in the US. And we still work with all of those parts currently across the globe. We work with Andreas and Horowitz across the globe. we work with Y Combinator everywhere and we can make great introductions and it's the same with advisors it's the same with access to customers with talent we have a talent platform now the very best founders we didn't end up backing with more than 6 ,000 people on the platform so people can hire people and that means that we provide not only kind of value to the founders but also to the ecosystem so they want to be part of the network so I think for example Andreas and Horowitz's first investment in Norway was an antler company and Y Combinator's first investment in Vietnam was an Android company, because we build trust with these larger allocators across very many different nodes.

33:19And that network effect is incredibly important. We created a technology platform where data learning and network effects means that scale becomes an advantage instead of creating additional complexities. And we give leverage to really great people. So instead of being just a collection of great individuals, the sum of the parts is much bigger and much stronger than the parts themselves. I'd love to hear an example or two of this idea that you have 27 years at once, some lessons that you learned that you could then apply as best practices, or maybe a lesson that you learned that you decided you weren't going to do again.

33:55One great example of something we're not going to do again, our most of our end is we do two cohorts per year in each location. So let's say you want to join as a founder in New York. If the cohort starts today, the next time for you to join is six months from now. Now, most founders is in a bit of a hurry and they don't want to wait six months until the next course starts. So they're just going to start building a business. So that's a lost opportunity for us. So we thought, okay, let's not do cohorts, but let's try out this thing called the rolling program, where we bring on board 10 new founders every month.

34:28And then every month we'll do an investment committee and either 10 founders would leave or we'll invest into them. So you'd always have 100 founders in the office, but 10 of them will get replaced every month, which logically makes sense because that means we're always open for business. We tried that out in Australia and Africa, a few other places. While it logically makes sense, it led to worse outcomes. And I think the reason why it led to worse outcomes is when you have a hundred people coming in together, creates a certain type of pressure. It creates opportunity for people to meet more co-founders, creates opportunity for people to push forward amongst the same agenda.

35:03It creates a little bit of competition. It creates deadlines. So there's all this human psychology into how a cohort works, which you can't replicate through a rolling program. So even if it logically makes sense, the outcomes ended up being worse. We tried it, I think, six times in total. So that's equivalent to three years worth of learning. We're never going to do it again because it just doesn't work. That's a good example of what we tried and didn't work. So how did you solve for that missed opportunities of founders that maybe just missed one of your cohorts and would otherwise have to wait six months?

35:35So the way we do it now is 20 % we do direct investments. So if it's really exceptional people, you need to have a very high level of conviction because when we look at a deal where they haven't been in our office for three months, we need to feel the same level of confidence as we would having worked with someone for three months, right? So the bar is incredibly high, but we can invest in them just directly without doing the program. And then we remain in contact. It's two to three weeks after the program started, they might drop into the current one. Otherwise, we just try to stay close to them.

36:06And very often, they will actually end up joining anyways, the next one, unless they're really far ahead. So the loss is not that high. But at the same time, I think if you think about the space of what we're doing, it's a tremendous amount of really exceptional founders out there. We need it to be in a position where we could come in and invest into them. But we know as a fact that just last year, we said no to more than 130 ,000 people. Amongst that group of people, there are going to be some really exceptional people, but at least we've been in the position to potentially make an investment.

36:37I think it was Marc Andreessen who said, LeBron James scored more points than anyone else in the NBA, but he also missed more shots than most other players. But he was in a position still to win. And I think you got to learn from missed opportunities, but you can't fret too much about it. Scoring back, what's an example of something that you learned that became part of your best practices that might not have been obvious otherwise? One big thing that we introduced is a pre-IC. So let's say 100 people come in to the program here in New York, and three months later, you're doing an investment committee.

37:09You might actually want to, after a month, do a pre-IC to just weed out a few of the people who came on board who are not serious enough. One bad apple in a great team. It could create much more trouble. So we've actually seen that the quality of the work we do and the quality of the rest of the program becomes much higher when we create a one-month gateway. If we brought them people who don't have the right level of ambition, we asked them to go and build their business elsewhere. It's always hard to push people out, but it creates so much more quality after. So that's something we tried out in a bunch of locations.

37:45It led to really good outcomes and we replicated it. So that's a big thing. But there's also small things. is in Norway, they started testing this specific way to use LinkedIn, which led to that specific channel as a sourcing algorithm. We replicated everywhere. And I think it led to an uptick in itself of 5 % on application numbers. There are small things like this, and there's really big things. How do you think about, in the case of these lessons, measuring outcomes? Because you're investing at the early stage. It's a long time before you'll ultimately know if there's success not yet you're drawing lessons to say how we had better outcomes or worse outcomes based on a sample of a month or three months we looked at around 36 000 startups and then leading indicators for how they ended up succeeding this is all public data and then we looked at our own data where we had around 400 000 applicants so far more than a thousand portfolio companies and we looked at what are leading indicators that leads to specific outcomes and obviously it's something we get smarter on every day and we'll get smarter and smarter as our data set increases.

38:53I think we add now millions and millions of data points every year. A current hypothesis, the 10 most important things broadly split in three categories are one, the quality of the scouting funnel, two, the quality of the portfolio, which is more lagging indicators, and then three, operational indicators. If you look at the quality of the scouting platform, there are four things that really matters, A, application volume, which is more actually to do with the momentum. So if in New York, you get 5 ,000 applicants for one cohort, the next cohort, you get 4 ,000 applicants. That's an indicator of the whole system possibly being less popular.

39:31So you want to see a growth in the number of applicants, at least up to a certain peak. You want to see a share of experienced founders being high. For us, experienced founders are founders who made it to series A or series B or made it to a certain amount of revenue. They don't necessarily have a massive IPO or sold their company for a billion dollars, but they accomplished something, a big milestone. Or they are serial founders who did exit the last business, now they're building the next one. The third thing on the qualitative scouting funnel is founder acceptance rate. So if we give an offer to a founder, what percentage of them accepted?

40:04It's a very negative signal if they don't accept it or if they take money from someone else than you. And then lastly is selectivity. The quality of accord is typically much higher if we admit 2 % of the founder applicants instead of 10 % of the founder applicants. So that's the leading indicators. Then the lagging indicators are more straightforward. It's 12 months NYC growth, 24 months NYC growth, fund through rate, what percentage of our portfolio raised subsequent capital, how many are in subsequent capital over a certain amount of dollars. So they give you a fairly good idea, 12 to 18 to 24 months on the momentum of the core.

40:42And we see quite interesting linear trajectory on MIC growth in our portfolio. After four years, it's about 5.3x, and it's increasing quite linear towards that. But there's differences between cohorts in each location. And then there are operational KPIs, which is founder MPS score, how happy are the founders about us and us as supporters. And then we do a team MPS core, which is how happy is our team. And we can literally stack rank every single core, every single location. You can also link the decision making to each individual partner. So people have a very clear idea in terms of how well they are doing.

41:20Now, on occasion, there will be a good core and a bad core. There will be some chance to this. Sometimes there are also macroeconomic things that leads to a specific type of situation in a specific market, right? If you look at Israeli founders right now, we have several Israeli founders who temporarily had to go back to Israel given the current crisis. So you need to obviously look at these type of black swan events and random things that happen. But in general, you can form a pretty good view on quality. And you can also benchmark things up against each other. And there we have a major advantage.

41:53We can benchmark 60 to 100 courts per year. and we can tie every single of them on a decision-making basis back to individuals and thereby consistently improve our organization and create systematic advantages. I'd love to hear some about your organization in that this is a very difficult activity to scale in terms of the amount of capital you're putting to work, yet you're doing this in great scale. How many people are involved on the Antler team? Yes, we're 256 full-time people across Antler. We also have about 10 venture partners by location. So these are part-time people. For example, Andreas Ayan, who was the CTO of Spotify, will dedicate a few hours to support founders out of Singapore.

42:38And we have people like that who've dedicated some of their time to support the founders. And then we have a thousand advisors. When you look at the full-time employees, the vast majority of the partners who join Antler are very care incentivized. So there are people who've been founders before. So when you build a company, you typically don't come into that journey for an immediate payday. You come there for equity upside. And in our sense, that's carry upside. We've created a partnership where carry is very fairly distributed across organizations. If you run, for example, India, or if you run the Nordics, if you run the US now, 75 % of the carry goes to the partners who run it.

43:17And then we put 25 % of the carry into a global pool, which is shared with everyone. If you deliver on our target return of 6x, that's carry upside where you get 75 % of it. So it's a big upside. And then we try to keep salaries at the level where it covers basic living costs. And you see the same actually with most early stage funds. Same with Y Combinator. Partners don't take a very big salary, but they have significant carry upside in the funds. That's very much how we're structured. This works incredibly well. As you have all these teams in the different locations doing the investing, What's the centralized activity that's building all the technology, sharing these best practices, and how does all that work?

43:56We have a global support team, which I lead, which is fully focused on creating leverage for the partnership. The most important thing they do is building technology. So we have a tech team of about 15 people who build out Antifusion, which includes the productivity tools I spoke about earlier, the data platform, but also crude tools for the founders, right? So we have their access to our investor database with all of the VC relationships and the angel relationships. So let's say I'm a health tech company in Africa that needs to raise my Series A. You can go in there and put in that criteria and out pops, okay, here are 40 relationships that Antler have.

44:32Who would make the introduction? Or do we have a portfolio company that have backed them? Can we make an introduction to them so we can create a competitive advantage in terms of funding rounds for our portfolio? There's the talent network I spoke about. It's the advisory network. It's the founder community. There's a Perks platform. So we negotiated free credits with Microsoft, the Store, AWS, Stripe, any type of platform or API an early-stage startup needs to use. We can offer for most of them, it's like almost a million dollars worth of free services. So all this is technology enabled. It's also what makes the data and the learning and the network effects work.

45:07So that's one part of the global support team. Then we have legal, compliance, and finance. So that's fully centralized. It's obviously incredibly important that the people we bring on board take responsibility for this, but we also need checks and balances, water regulation, investor reporting, all this stuff. So that's a centralized function. Then we have marketing and brand. A lot of founders won't know anyone in Sequoia, but they just know that Sequoia is a name they want on their cap table. And building and maintaining that gravitas is insanely important. So we have a common brand across all of our locations.

45:42And then we have a capital team there. So about 40 % of the capital we raise globally is raised through a global capital team. And the rest we raise locally. So there's a number of these functions where it just makes sense that you do the same everywhere, combined with there being strong synergies of centralizing it. And it's all about creating leverage for the partners. The decision-making on investing is done on the region level. I don't see how I could fly into Bangalore or into Tokyo or into Oslo or into New York and make a better investment decision than the partners we brought on board to be on the ground.

46:17But we can build systems that gives them a systematic advantage and we can measure data to optimize and improve on the decision-making process and ensure that we have the right people everywhere. With all of this data of all these companies, I'd love to ask you about a couple of lessons you've learned along the way. Maybe the first one is, what have you found are the success factors of entrepreneurs in working their way through your pipeline? The characteristics of a successful founder we went through quickly earlier, having a spike, having drive, and having a tremendous amount of grit. Now, once you have that, you need to ensure that you bring on board one or two or three other people who is similarly as strong and share a common set of values.

46:59And we have a pretty detailed questionnaire and view on what makes an exceptional founder team. There's this myth that you're better off building a company with someone you've known for a long period of time. Yes, sometimes that's the case. But sometimes also building something with your brother or sister or your colleague or somebody went to college with is very different from being in that scenario with them. So there's actually very many founder teams who've selected someone who they happen to know for a long time, which actually would be way better off meeting 50 to 100 exceptional people and picking the best of those.

47:34If you go into that through having met each other under the presumption that you're trying to find a co-founder, you ask the questions first and then you fall in love later. But if you meet someone organically, you fall in love first and then you ask the questions. So we ask our co-founders to spend real time meeting a tremendous amount of really interesting, smart people before they make the choice in who they want to build with. And then once you've done that, there are a few learnings I made on the way. One of them is as a founder, you need to front low. When you're building a business, let's say kind of Antler in the really early days, when it was only me, if I binge watched Netflix or chose to take a week vacation to go surfing, nothing happened with Antler.

48:13It was a standstill. And it's really like that for a while when you build a business. You might have a co-founder, but the effective hours you can put into every week is insanely important to create momentum. And momentum creates momentum in the startup world. If you raise a bit of capital and you can't make anything happen, it's very hard to raise next rounds. It's very hard to hire people. It's very hard to get customers. If you create early momentum, all that gets easier. And the only one that can create it in the early days is a founder. So therefore, you need to exchange time in the future for time right now and double down the first two to three, four years, you have no choice.

48:44You got to put in as much effective time as you can. When I speak to founders, I would like to say that call your family, call your friends and tell them you're incredibly busy over the next few years. If they want to spend time with you, they should come and help you build your business. I think if you ask many very successful founders build something truly incredible, they will talk about the first three, four years being like this. Then after that, you actually have some choice because you put together a great team. You have customers, you have momentum. You can choose to work a little bit less, or you can choose to work more.

49:12Unfortunately, most founders tend to be quite obsessed. So they end up working incredibly hard until they exit, and then they might start another business. But at least you have the choice. So number one, front-loading. Second is learning how to hustle. So I come from Norway, where they have Jantloven, which basically says that you shouldn't think that you're better than anyone else. You shouldn't think that you can accomplish more than your neighbor. If somebody says no, you should never ask them again. And it's similar for a lot of founders. Also, it's hard to go out there and leaving your pride behind and hustling, right?

49:47Asking people for help, asking people to be a customer, asking people to work with you when you can't really pay them, you can only sell a vision, asking people to be your first investor. And there are so many examples of people getting no's and then giving up on the way. And there are other examples where people never gave up. Spotify, I think, is a great example. I think for years, they tried to raise capital. They spoke to all the VCs in Europe at the time. I think they got 23 no's before they get the first yes. If you're a great founder, you must believe in your product and your team. So the investors you're trying to convince, you're doing them a favor by investing into you.

50:20The customers you're trying to bring on board, you're doing them a favor for them being your customer. You got to believe in your product so much. you got to hustle. You can't take no as an answer. If you get a no, you got to meet 10 more people and get 10 more no's. And for a lot of founders, that is actually a hard thing to learn. Some people are born that way. I was not born that way. I had to learn that. And it's insanely important to succeed. And lastly, the one thing we spoke about earlier is grit, right? That you can't go into building a business with a mindset that failure is potentially an option.

50:49You can't go in and say, hey, let me try this. I might learn a lot. And if I don't succeed, I can just go back to my day job. You got to go in there and put everything in there. Very often it's actually not necessarily the best team that wins, but it's a team that never gave up. And then they become the best on the way. What have you seen in geographies other than the common hubs of entrepreneurship and startups? I think the US, a little bit of China, parts of Europe, and all the other geographies. There's always a set of global themes that you see everywhere. that cadence is increasing. So there used to be a time where you'd see something happening in China, let's say.

51:28And then a few years later, you'd see it in Southeast Asia or you'd see something happen in the US. And then a couple of years later, you see it in Europe. The cadence behind that has gone down drastically. If there are exciting ideas being built one place in the world, very quickly it's being built everywhere in the world. And being global in that sense is quite fascinating because we have founders who came in in Asia who want to build a specific thing. and we could already show them here's 124 other teams across the globe looking at doing the exact same thing that you are doing and that can be quite informative in terms of setting out what id to build now obviously there are very different opportunities in africa for example than you'd see in london in london there's a lot of very successful fintech companies if you go to helsinki where we just set up an office there has been a tremendous amount of really successful cyber security companies hardware companies gaming companies if you go to the u.s you can build anything here.

52:20You can do proven models. You can do really deep tech stuff. If you go to Nairobi, where I am enough, there's a lot of proven models still, right? So it's actually local innovations. You'll take a model, which was very successful, let's say, in Asia or in the US, and innovate locally on those models. So there's a tremendous amount of more traditional business models where you can still build billion-dollar businesses. The other thing in some markets is major infrastructure change. So in India, there's this tremendous opportunity that has arisen over the last few years, where first they introduced digital ID.

52:50So you can identify now 1.4 billion people. Then they built the payment system, which is linked to that ID. So now you can pay for almost anything online. It's a common infrastructure. So the friction of payment has gone down drastically. So for example, one of the issues with building businesses in India prior is the basket size is much lower. So for example, if you're building an e-commerce in India, your basket size might be $5. But in the US, it might be$70. And obviously, on a 70 basket size versus$5 basket, you can allow much higher transaction costs. So for example, if you buy a bus ticket in India for $0.03, previously, you wouldn't be able to earn money on that because the payment price would just be too high.

53:30But now you can due to one common digital infrastructure for payments. So this is a major specific platform shift for India that you won't see in the US or in Europe. The other stuff, you have a common banking infrastructure, which has been rolled out in the US. In Europe now, they're also rolling out the digital currency infrastructure right now. So it's quite interesting to follow this more regulatory governmental infrastructure setup that will really affect innovation. Those are the three takeaways. So one is, hey, the cadence of innovation is moving much more rapidly on the global pace. Two, there are still differences in terms of opportunities based on where the ecosystem is.

54:05And then three, there are these very specific regional opportunities that are very exciting for founders that unless you're there on the ground and you have teams on the ground, you won't be able to capture. And the earlier you go, the more important that is. Later stage, you actually can make investments from other locations because you're much more looking at the business as a business as you would a public market business. You've scaled this quite a bit in just the last six or seven years. And you're talking about growing the applicants in your cohorts. I'm curious, what are your objectives and where do you want to take this over time?

54:34We want to be singularly focused on one thing, which is being the best partner to great founders all across the globe as they're just getting started. And that means finding the best people and have access to the best people through being their best partner, which is then what we do in terms of supporting our portfolio. So we're constantly working on optimizing on that, learning that, and we'll scale that a little bit, right? We can make a few more investments per year in New York. We can make a few more investments per year in Bangalore. There's a few more cities we might launch, like Tel Aviv, West Coast of Africa, a few more cities in the US and so on, but it's not that many more locations, right?

55:09So very much now it's focused on the core, making that better and better, increasing selectivity. I ultimately believe that if you're very focused on doing one thing really great, that's how you can deliver systematically better returns. And the other thing we're doing from a capital perspective is becoming more of a full stack investor. So I mentioned earlier, we have a separate strategy where we now invest up to Series C. And the way we structure that up is also very much to create system values. So one is for the founders. So if I come to you as a founder and I say, hey, I can put up to a million dollars into your business over two rounds, that's obviously attractive.

55:46But if I come to you and say I can put up to 30, 40 million into your business over five rounds, you become a longer partner. So you get access to even better founders. At the same time, when you look at us doing a Series A deal into our own portfolio, we decided to put a few principles in place to avoid any conflict of interest. So first of all, we don't lead rounds into our own portfolio. So there are many multi-stage funds that could lead a Series A and they can also lead a Series B. We don't do that because we don't want to mark our own homework. So the valuation of the subsequent round is set by another tier one VC or investors.

56:20We only co-invest with other tier one investors and they set the price. Now, that point of time, we obviously also have more data and insights on that company than anyone else, right? Because we've selected the founder. We worked with them in person for three to six months. We backed them typically in the seed round as well. We have all their data and KPIs from day zero. So we can combine the market interest with our own data view and put more capital to work in the very best of our underlying portfolio companies. And if there's one thing early stage investing shows, it's if you can concentrate capital in the winners, the absolute returns that you can deliver back to LPs and the DPI you can deliver increases quite considerably.

56:59So that's the second part we're focusing on. So A is continuing to build a better and better platform to be the best partner, the best founders and being for them. And then two, continuing to improve and build out our multi-stage strategy so that we can deliver great returns back to our LPs. So at the onset, you talked about the importance of finding something that you have a passion for, that's what got you through to succeed in special forces. What is that today as you're growing Antler? We have this tremendous opportunity to support the next generation great founders all across the globe to solve important problems.

57:35And if there's one thing that I believe is that the future will not have less problems than the past. And if you just look at some of the problems that we're always facing today, from climate chains to health tech to access to finance to the uninsured, whatever it might be. These problems are not going to be solved by governments. They're going to be solved by great people innovating. We want to create a platform where we enable as many of the world's best people to do that. I think the more people who choose to spend their time innovating and driving the economy forward, the better the world will be, not only by solving these problems, but also leading to economic growth and productivity increases.

58:12So that's one big thing. The other thing that we're quite passionate about is creating a quality of opportunity. One of the reasons why I loved studying in the US, I always loved coming here, is I think the US is built on this dream that anyone can succeed. And obviously, it's not always the case yet, but very much there's a mantra here of creating an opportunity for everyone to move through the stratospheres of society. And there are so many self-made, incredibly successful entrepreneurs here. And we want to do the same at a global level, right? ensure that the very best founders in the world who want to innovate have access to a platform and a network where we can support them to use that skill set in solving really important problems.

58:54And that's quite exciting because I think traditionally to build a business, you've been quite dependent on networks. You need people to support you in the early days. You need access to co-founders, you need access to capital. Obviously in Silicon Valley now, we have the best networks in place for this in the world. But if you go to some other cities in the world, those networks doesn't exist unless you happen to be the more privileged part of the society. Now, we actually level the playing field because we provide access to those networks globally, which is why we also see a very diverse set of founders that we back all across the globe.

59:24And I think those things in parallel, creating more opportunities for the world's most talented individuals, combined with the importance of innovation to drive the world forward, and then the importance of putting some capital to work into driving that innovation, is I think what drives most of Antler and is why our mission statement is make progress inevitable. In interacting with all of these founders and all the people on your team, I'd love to hear if there's two or three lessons that you've learned from other people over the course of your career that really influence how you think about investing.

59:58One tremendous learning from Warren Buffett, which I always enjoyed was invest in yourself. So I think that if you're managing your own money and if you're managing other people's money, you have an obligation to be your best self. So I always thought about how can I become more and more effective every day, every month, every year. So I like to set myself pretty ambitious 10-year goals and then break that down into a one-year goal and break that down into a one-month goal across personal sphere, across work, and across health. And the monthly goal changes every month, but it's related to where I want to be a year from now, which only changes once a year or so, who's related to where I want to be 10 years from now.

1:00:43So I think investing in yourself is incredibly important and then that will lead you also be able to invest in your team. Well, Max, I want to make sure I get a chance to ask you a couple of closing questions. What is your favorite hobby or activity outside of work and family? I love sports. Any type of long distance, the longer it gets really, the more excited I get. There is very long hikes, mountain airing. I took a week off in between my last business and building Antler and I just went hiking alone for a week. Once a year, I tried to do an Ironman. I'm doing 100k race now in April. Football, HIIT workouts, cycling, swimming, water sports.

1:01:19That's where you'll find me. What's one fact that most people don't know about you? In the military and special forces and Navy SEALs, one of the insertion methods is sometimes you can jump out of a small plane with a parachute and you have a diving equipment. and then you will dive into a submarine or you'll dive into a target. It's a way to get unseen into targets. And we did that one time up north in Norway where we were jumping out of the plane. We had a bunch of diving equipment and we landed in a whole group of orcas or killer whales. And I just watched the latest was this Frozen Planet 2 or so where they show the hunting technique of the killer whales.

1:01:53We had a safety boat there at the time. But instead of coming to help us out, they actually pulled up a video camera and started filming them and you can hear them laughing like crazy. It's a fun story. What's your biggest pet peeve? When people say they're going to do something and they don't do it, we meet all these incredible founders who walk to talk every day. And then I have a number of friends and they're still very good friends of mine, but I find it so irritating when somebody talks about doing something for 20 years and they never end up doing it. So walk to talk. Which two people have had the biggest impact on your professional life?

1:02:24There's many. Lately, Larry Summers on our board has been very impactful, particularly since obviously we've built this thing through a very interesting time right we launched in 2018 then we had covid then we had 2021 peak then we had hyperinflation there's been wars he's consistently been there very meaningful advice particularly also when it comes to the macroeconomic environment and asked him this other day what do you think should be the main focus of the platform going forward and he said hey sometimes you should just think about what is required for you to be there in 20 years if you're there 20 years from now compounding adding to your platform, adding the learnings that you're doing today.

1:03:01It's going to be incredible business. And it's great to think of that long-term view. So it's been very impactful lately. My time in McKinsey was very impactful. Working with Dominic Barton, who was also on our board in the early days, used to run McKinsey for eight years. And our chairman, Tori Muralt, used to be the leader of the senior partner election committee and used to run Europe. Just in terms of set one clear focus for the organization, for McKinsey, that was clients first. For us, it's founders first. We always think about having a founder in the room. If we make a decision, will it make it better for the founders or worse for the founders?

1:03:33If we have great founders coming into Antler, what we do matters. If we don't have great founders coming in, if we don't have access to the best founders in the world, it doesn't really matter how good of a decision maker we are, how good our tech is, what access to AEM we have, and so on. Clear focus on one thing and driving excellence and distinctiveness within that one thing. You learn a lot about through that school, and I had great mentors there in Tor and Dominic. And I also want to mention, at my time going to Harvard, I had these tremendous classes with Andrei Schleifer, who's a behavioral economist there and political economist.

1:04:10I also met his wife, Nancy Zimmerman, who's also now on our advisory board. We talked a lot about when you came in from high school, there's this view on economics being math and theory, and they're starting to learn about behavioral economics and the psychology of business. And already in the freshman years, starting to think about how human decision-making and human biases drives a lot of decision-making when it comes to investments. I think it was very helpful very early on in my career. And how you take human relationships and the strengths of people. And now, obviously, our core business is assessing great founders.

1:04:44Getting exposed to that so early, very quickly after I came down to the military, was very meaningful. These people have been very impactful in my career. What's the best advice you've ever received? My grandmother probably gave me more great advice than anyone that I ever had. She grew up in Bolivia and Argentina. Her father was building railways in South America. She was growing up in the bush. So it was a big difference between growing up on the farm in Norway. And she always had these tremendous perspectives on the world and would send me books to read, fiction, nonfiction, philosophers. And she always told me, as long as you know that there are so many things out there you don't know and you're eager to learn them, that would be very good for you.

1:05:23I want to mention one other one is Pelham Lindenfield Roberts, who was my house father in high school. He was a former SAS agent. He worked for Special Air Services in the UK for many years. Then he went into teaching in politics. And he was quite relevant for me because I went into the Special Forces myself after. And it's a hard choice to make to leave the Special Forces. And I was thinking a lot about what to do. He put it quite simply for me. You can stay in the Special Forces, or I was also thinking about becoming a doctor. And that's very meaningful because you have direct impact on things.

1:05:53So if you're a doctor or a surgeon, you go in and do a heart transplant, you can save a patient or two every day and you directly know that you saved that person's life. Or in the military, you go in and you do a hostage rescue operation or whatever it might be and you have a direct impact on these people's life and safety. If you choose to go the way I've gone now, you have indirect positive impact on a lot of people. If we back a founder who invents a new cancer drug medicine and helps sell millions of lives, that's obviously very impactful for the world. But it's very indirect that we found him, we backed him, and then we backed him with capital.

1:06:29That, for me, was a very interesting way of framing the world. Do you want to have that direct impact, which is tremendously important? And people doing this work are insanely important for the world. Or do you want to have that indirect impact? And I think both of them are important, but comes with different levels of satisfaction and value. All right, Magnus, last one. What life lesson have you learned that you wish you knew a lot earlier in life? Partnering with really great individuals and really putting force behind it. The opportunity to do things is way above ever imagined when you're young, particularly building very strong teams.

1:07:05And they're insanely lucky and privileged to work with so many great people in Antler and also so many people supporting us through our network, you can really make great things happen. And it's not only down to you. Magnus, thanks so much for sharing this incredible story of backing founders all over the world. Excellent. Thanks a lot for having me and a big fan of your podcast. Thanks for listening to this Sponsored Insight. Sponsored episodes are paid opportunities for another 12 managers a year to appear on the podcast. If you're interested in telling your story, in front of the largest audience of investors in the industry, please email us at team at capital allocators.com to apply for one of the slots.