E354 | Will Prendergast, Frontline Ventures: Founders chasing unicorn status and patterns in entrepreneurs from U.S. vs EU

34:34And I guess the content that we released like the playbook should be a magnet for those people and a filter for people who aren't interested in going to the US. And a lot have produced that type of content. I think yours is one of the better pieces out there. So definitely go check it out. So now let's go into why founders changing unicorn status need to be successful both in the European and US markets. So that's actually very close to what we just described or talked about, that if you want to be a VC, you've got to be good in both places. But why is this so true for founders building unicorn companies?

35:10You know, we think a little bit more about companies that can go public than unicorn companies. So if I'm referring to that, that's maybe why. But, you know, at the end of the day, if you boil it down, you think I want to take my company public eventually, you know, what do you need? You need customers, a lot of them. you need capital and you need talent and if we do it in reverse order i think the talent in europe there's an amazing talent in europe particularly in engineering talent possibly better than they have in in the u.s market so it's very deep pool we have some pretty decent uh commercial talent as well and that's growing pretty fast so i think you can you can solve a lot of your talent talent needs in Europe.

35:53Increasingly, you can serve your capital needs or at least your early stage capital needs in Europe. But actually, for later stages, if you think about series B, C, D, crossover funds into public markets, that's going to come from the US. But if you think about your customer base, between Europe and the US, it represents 70 % plus of software sales, probably closer to 80 percent us alone is 51 percent of global software sales so you are not going to become a public company unless you crack the us and you're also not going to become a public company unless you get there pretty quickly you know we see some european companies have an ambition to go to the us but they go there a little bit too late and kind of events overtake take you you There's always somebody on the other side of the Atlantic working on the same idea.

36:45And if they're working at a greater pace, you've missed out on your opportunity. So you can't ignore the market that's 51 % of global software sales. So just from a customer perspective alone, you need to go there. And then, as I said, we're orientated around public markets. But if you look at acquisition, the acquirers are in the US market in the main. They also pay more than the European acquirers in the main. So for your exit, whatever that is through public or private, you need to be there for acquirers. And it's difficult to know when to move. When we think about the U.S. companies coming to Europe, they typically come, we call it series EMEA, but that's typically series B, C or D, most commonly C.

37:31I think for the European companies who are going to end up winning, we see them going typically around Series A. So often we're working with them at the seed stage and then working with them to get into the U.S. market for the Series A. So we work a lot on our conversion ratio of how likely is it once you raise seed from us to raise a Series A. Ours is about 70 % conversion from one to the other. And then where there is a conversion to Series A, we're working a lot to make sure that you can at least engage with the U.S. firms in a meaningful way to have them lease some of your Series A rounds.

38:09How many of the Series A rounds, I don't know if you have this number, but how many of them have U.S. investors in them? Don't have that data off the top of my head, but quite a number. And then by Series B, that number would move up again. because sometimes you're engaging at Series A, maybe you haven't made enough of a commitment. I think the US investors are always concerned, are you really committed to the market? And it's funny, when we talked to, I was talking to the CEO of Pointy recently, it's one of our companies that got acquired by Google, but he was explaining a story of going to meet a US investor for their Series A.

38:49And at the time they had a thousand customers in Europe and they had 20 customers in the US. So he was explaining this to the U.S. investor at Series A and saying, you know, a thousand customers and 20 customers. So like over a thousand customers were in the U.S. And he said that, you know, the USBC's response just was, so you've got 20 customers. And he wasn't he wasn't being kind of rude about it. He just genuinely didn't care about his European customers. I think it's very important to start building that U.S. customer base pretty early because it's hard to raise. if you haven't shown commitment to the market.

39:25I can definitely imagine that. Let's dive a bit deeper on the playbook of the successful founders that launched in the US. I know one thing looking at your playbook, there's something around the pick of city that surprises me, which is that New York City is 45%. So let me hear what that's about. Yeah, if I'm honest, it also surprised me when we did the research. So, you know, I think many people, the Bay Area was dominant for so long that I think most people assume that that's the right answer in terms of where to set yourself up when you're going to the US. And for some categories, it still is.

40:07But we did analysis over a few hundred companies and looking back over the last number of years and where they landed and where they expanded in the US. And actually, 45 % of them, the single biggest location was New York for European companies entering the US market. So New York is 45%, Bay Area is about 19%, and then Boston is after that about 12%. So if you look at some of the other locations, about 70 % of the expansions started on the East Coast. Yeah, I was about to ask you about that, whether it's that East Coast time difference that's a bit easier to make work with European time zones.

40:51I think that's a big part to play. But also, when I talked about those 51 % of customers, there's a lot of those on the East Coast. And New York, as a scene, has kind of ramped up very significantly over the last five or six years have seen it. Boston, maybe less so, but New York, massively. So tons of customers, tons of capital, lots of talent and you know you have to ask yourself about the relative benefits to to the bay area and and again as i said for certain categories your partners might be in in bay area you need to be there but i think new york is a very strong argument to be made for for new york and let me hear a bit about because typically it's obviously the sales team the the um the BizDev team that you're setting up in the US first?

41:47Is that where you see people starting and how do they build out their team? Again, for those interested, there's a lot more detail in the playbook around how different companies, different successful companies did it. Most of the companies, you know, they don't start hiring very aggressively. So, you know, often it'll take them over a year to get to five or 10 employees. So they start relatively slowly, but almost, you know, I think 70 % of the companies had half of their first hires in the go-to-market function. As I said, we've got great engineering talent. You can service a lot of them from here.

42:21But at the end of the day, a lot of it does come back to generating new sales. So that's the dominant one is go-to-market. Again, I think it depends a little bit on whether you're product-led or sales-led motion. I think it depends a little bit on whether you have existing customers in the market before you go there and many companies do that we can talk about that if you'd like if you're already of customers maybe you can put more continue on that motion from europe but more customer success in market and i think one of the other things to think about is seniority certainly our learning and research indicates that when people hire they don't start with the most senior hire at the start so you don't need a senior executive in the first year you can because i think the number you know as i mentioned the numbers are small you're hiring a small group of people in the go-to-market function.

43:10So that doesn't need huge management. It doesn't need close management. But I think you can hire three, four, five people in junior or mid-level roles, manage them either remotely or through some other means, and then add in an executive later on when you've got a bit of momentum. Because at the end of the day, really good executives don't want to start with a really cold pipeline. That's pretty daunting as well. So it does help to show a bit of momentum in market before you go out to work to hire the senior execs. Do you have any, like, these are the errors that we have seen people do in the portfolio or from your study?

43:50Unfortunately, yes. If I was to think of two, probably the biggest two are underestimating the cost and not committing sufficiently to the market. So when I say underestimating the cost, if you're coming from a european reference in terms of salary costs and everything that goes with it i think there's always the inclination to kind of undercook the budget for the u.s i think you need realistically about 18 months budget for the u.s in order to be able to show enough progress in that market to be able to raise off the back of it for the next round and you know i think it's not uncommon for people to probably estimate the cost of doing that you know at 50 of what it actually costs so so i think you know you need some expert advice and you know you can talk to recruiters talent people but don't you know like make sure you have real benchmarks that into your model before you you kind of figure out and make sure you've got 18 months of cash for that market dedicated so that you don't you know it's not being pulled back because i think otherwise you can get halfway into the market you're not getting any results in the first six months, you lose confidence and then you end up pulling back.

45:02So I think that's number one. The second one is just not committing enough to the market. I think if you're serious about it, you don't have to send the CEO, but I think the CEO probably needs to commit to being there probably 50 % of their time over that period, minimum 30 % of their time. and it can be a CEO or a co-founder maybe, but it needs to be somebody senior very frequently. I think the success rate, you know, drop off in time of CEO spent in market correlates highly with failure in US market. So I think you just either have to be up for that or not. And if you're up for it, you really need to invest the time.

45:47Being someone who has been raised in the US, is this similar as a VC, that if you want to be able to run a strategy in the US and secure US LPs, you need to spend how much time in the US? How much should you expect for you to be able to crack open the market? How long do you have to be active there? We didn't mention this earlier, but I would say for our European strategy, we have a mix of European LPs and then some US LPs. And then for the US growth strategy, that's actually at the moment quite a lot of European LPs, because I think even European LPs who have a lot of exposure understand that they can't or find it extremely difficult to access the top 1 % of US deal flow.

46:37So actually our LP base today is, the majority of it is European-based. I think that's changing over time more to the US as we become more established. I think the US LPs that we will be targeting in our future funds, they probably want to see you once every six to nine months. It's a fairly limited and well-defined audience. so I don't think you need to spend a huge amount of time like we don't need to spend a huge amount of time talking to LPs in market but we need to spend that over a long period of time so to get to know your relationship is probably a three year time period but once every six or nine months So funny because I noted while you were talking here that I need to reach out to a group of or sort of VCs and ask them for their core stats on their fundraisers.

47:37And one of the stats and what I would use was Stephen Chandler was very forthcoming when we had from Notion, was very forthcoming when we had him on the back as sharing stats. And that three year average time from first meeting with an LP to actually closing was like that was a number he mentioned. So it's pretty funny that you also say, yeah, probably 30 years is the typical time from that. Yeah. So that's interesting. Okay. So now I want to shift to a completely different topic. And it is a combination of remote work, which is a fireball and a dangerous topic in its own. And then, but let's take the joint or point of departure being that the pandemic had a massive impact on how the physical launches in the U.S.

48:31were delayed for European founders. I'd love to hear you talk a bit about that and then we go into remote work afterwards. Yeah. And sorry, just one clarification point on the three-year thing, because I don't want to mislead any other firms listening to this. I think that applies to institutional investors, but does not apply to family offices or high net worths, which I think is much quicker, it can be a matter of months. So sorry, so back to your question. Yeah, we did a lot of analysis on, you know, in both directions, how many years until US companies come to Europe and vice versa. And I I think pre-COVID, that was typically around four years before European companies went to the US.

49:10That feels about right, based on our experience. And then over the COVID period, that went up pretty significantly up to about five years. I think there's a number of things going on there. So the data is a little bit dirty in the sense that we use the first physical office location as a test for that. And I think many people decided to delay the physical office location, even though they might have put somebody remotely in the market. WorkVivo is a good example. They started their US expansion in the middle of COVID. So they started hiring kind of wherever they could find people because they couldn't bring them together.

49:50But ultimately decided to create a hub where 75, 80 % of the people would be based and then hire kind of around that in different locations. so i think from inception to being in the u.s market you know five years to me feels very long now maybe you've been working on your startup at pre-seed for you know 18 months and then there's another 18 months in the seed stage but it's kind of the sooner the better really um i think is the right answer if you want to go there eventually um i think the sooner you go there the better the it's funny you know there's there's certain things that really stick with you um comments that founders make over time.

50:30And one that really stuck with me is a comment that a CEO of AMCS, it was actually a company that EQT acquired last week, but was probably the first Series A I led in my career a long time ago. The CEO built up a pretty successful business in Europe. And then at one point, which I think was probably six, seven years into it, went to the US on a kind of fact-finding mission, came back, and I still remember his exact words were, I wish I knew there was a different way of doing things. So he had his eyes open to a different way of expanding the business, a different way of rolling out, a different way of going to market.

51:05And honestly, I kind of still feel the guilt over that. I was at the start of my career, so I didn't really have a clue. But I kind of said to myself that day, I was like, I'm never going to have a founder that I work with ever say that. Because I feel like it's incumbent on me, the VC, to open their eyes to the opportunity. I should be in that seat and make sure that they optimize for their potential, their personal potential and the company potential. But I think, yeah, the sooner, the better, you know, fact finding missions are good really early on. You don't need to wait to 36 months and you can start really getting customers earlier as well.

51:41Again, I think the Works Bevo example is a relevant one because of when they started, but they started working through the US subsidiaries. You know, that's one strategy there's lots of ways you can do it but they said you know we definitely want to sell it to the us that's nearly our first market but we're all based in europe so they looked at where the us companies i think vmware and maybe netgear at the start they looked at where their european subsidiaries were they went to talk to people in those subsidiaries in ireland the uk they got champions there the champions put them into the us so they actually locally sold and then crossed over that way internally within the organization.

52:19And that was very effective. That could be one way of doing it. I think industry events in the US is also a great way of doing it. So it can be daunting to think, how am I going to figure out who all these customers are and where they sit and where the partners are? But I think if you go to industry events, a lot of people turn up there. So that can be a great way of kind of establishing an early referenceability in market and research. I spoke to one of the partners at Wilson Sincini some time back and what he said about going to the U.S. They're big on obviously helping European founders go to the U.S.

52:56from the legal perspective. And what he said was and the reason I bring this up is because of what you just said about, you know, fact finding in the U.S. coming back saying, ah, it's a different way of doing business. What he said was what many, many, many European founders and European VCs do not fully grasp before they become very active in the U.S. is how different doing business in the U.S. is actually from doing business in Europe. in that they are much more to the point, much more aggressive, so to say, and you have to move quicker. And you could expect, and he said, well, I think much of this comes from the U.S.

53:45is very used to being in a business context where you have a lot of litigation. So from a law firm perspective, what he sees a lot is that everyone is on their sheet in a different way than we are in Europe. Does that mimic anything that you would say you've experienced or would you say, no, it's actually not as extreme? Yeah, I'm not sure I'd agree with all of that. Like, I think the markets are very different in terms of how you sell and their approach to buying. But I'm not sure it's driven by litigation. I think, you know, that they are more used to buying from earlier stage companies. So I think they're more seeking innovation.

54:26I think they're more willing to pay. They have higher, you know, these are generalizations. So they have higher expectations in terms of customer service in many cases. And there's differences in terms of the go to market around, you know, use of partners versus not partners. There's differences like that. But I think in often cases, they're more easy to access than you would believe, partially because they're more open to innovation. So it's not uncommon for our founders to come back and say, you know, actually, I'm getting a warmer reception from larger customers than I expected. So it's daunting at the front end, but founders tend to feel the rewards relatively quickly.

55:08Yeah, that's very interesting. Okay, so now I just wanted to ask you the controversial question of remote work. And speaking of being plugged into the U.S., this is a much bigger conversation in the U.S. than it is in Europe. So I'd love to ask you, what are your learnings there? And where do you see things maybe being a bit different when you're plugged into the U.S. versus what you hear in the European sphere? I think the biggest learning is being intentional. it's a little bit like running a venture firm you know any strategy you've seen you've had many people on your show who have very different strategies and any of those strategies can work if you put focus on it and do it well and it's intentional and i think the same is a little bit the same for remote work if you set a clear direction and say this is our mo you will get people who will attach to that but you have to be consistent in that approach so i think you can be you know and we've great companies that are fully remote and i'm talking about the us hq companies as well here, fully remote, fully in office and hybrid models.

56:13I think they all work. Where they don't work is where people start bending the rules or they say, well, you know, Andreas, you know, he's a good guy, so he can do whatever he wants. I think things start crumbling pretty quickly in organizations that operate like that. We do see in general, and I'm talking about maybe the U.S. Mark, the U.S. companies here, because people are probably more familiar with Europe. we do see the US companies, let's call it the IPO track series, BC companies starting to pull employees more back into office in general. And a lot of them commenting about how they can see the performance impacts of doing that.

56:50So their assessment, not mine, but it's pretty common to hear sales leaders or CEOs say, we can see correlation between in-office and high performance. Again, taking an aggregate, not on an individual, but in-office leading to higher performance. So I think we can continue to see a trend towards in-office, particularly for commercial functions. Do you think that on the fact that you're seeing it more in the IPO, companies getting ready for a go part of it is that in master sentiment as well that you're seeing that this is something that has ballooned in importance in the master community versus real operations yeah i don't think i'm educated to talk about that one so um you dodged the bullet there smart of you okay well then i want to go to something completely else which is i want to ask you just to tell us a bit about yourself and how you got into venture and who you are, what you cherish, both from a life philosophy perspective, but also in more general terms.

58:05I'm always interested in how people got into venture because, you know, there's no set path. It's kind of a little bit of a college industry. I got into venture because I actually wanted to be an entrepreneur. And I thought, hey, you know, I could go to business school or I could go and join a venture firm and hang out there for a couple of years. And I think I'd see hundreds of businesses and I'd figure out the things to do and not to do. And then so when I got into venture, I thought, actually, you know, maybe this is the industry for me. And I guess frontline became the, well, maybe this is the business startup for me.

58:34So it suited my, you know, my personality profile. So that's how I got into it. A lot of what motivates people is kind of, you know, the scars of the past and what they've seen. I saw a lot of firms be successful, become stale and then fade out. And I guess for the people in those firms who created them individually, that might have seemed like that for them was success. But when we set a frontline, you know, we had this kind of North Star. And the North Star was we want to create a learning organization that exists beyond any of us sitting around the table. So success for us was that. If we should just add to it, with William McQuillan, I think you had the youngest general partner in the industry ever.

59:17so so that puts a 100 year mark or so on the longevity of farmland exactly and he was an entrepreneur that we had actually met in you know the prior two firms that myself and and shay at the time were in so he was a person who had been through the venture journey didn't love the experience and was out to to kind of set that straight so uh carry that entrepreneur mindset into things but but for us you know this north star like creating a learning organization was and is success for us and I think leads to significance. And people talk about firm franchises. I don't actually like the firm franchise, but for me it implies it's kind of something stale, which is the opposite of what we're trying to create.

1:00:00But I really admire the firms that have gone through like generational change. I think that's next level difficulty to do and it kind of requires a lot of thought. But some firms have done it really successfully. And for me, that's a significance adventure beyond just the success of performance of a number of funds. Yeah, so that kind of drives me thinking about that. And I think this is a perfect segue into asking you about your three biggest learnings in venture. Yeah, there's been a lot, and I feel like I'm a slow learner, but probably top of the list. And, you know, we've had some new people join the team recently, so we've ended up going through some of these.

1:00:39probably the number one and it seems obvious is just team is more important than you thought it's so easy you know we meet entrepreneurs they've got a new idea they're so excited about it we're excited about it we can start talking about the idea the product and and you spend so much time thinking about that it's intellectually interesting that you can kind of keep forgetting that it's you know it's pretty much all about the team and i have to force myself whatever it is 15 years into venture, like actively force myself to rewind and say, team, team, team. And I'll give you just a good kind of manifestation of this, like where it turns up.

1:01:18So when COVID hit, in frontline, we immediately started probably like every venture firm categorizing all of our companies by, you know, like how difficult was it going to be for them? And so we categorize them by industry we have one company at the time that sold almost exclusively to airlines on their marketing suite so they were more or less the bottom of the list or the top of the list depending how you look like they were in the most difficulty and over the next kind of six months like different things played out but but that company did a series of things changed around and a company that you would have said in week one of covet would have been dead got acquired for a couple hundred million 12 or 18 months later.

1:02:01The company that got acquired by our investing company, the CEO of that ended up being the CEO of the group company. So now it's a couple of thousand people that he manages, David Flanagan. He was an exceptional CEO and entrepreneur. What we realized in hindsight, when you think about it is industry sector had almost nothing to do with it. It was all about team strength. So we should have been categorizing all of the companies by team strength executive bench in the first week in COVID, not by industry. That's interesting. That's a very interesting insight. And super counterintuitive, right? You almost have to have had an experience like yours to realize it, even on this level, that matters.

1:02:47Because we all know it on the pre-seed stage when you're looking at the idea and the team are like, you know, in the end, you have to, if the team is not there, you have to. But even, but here it's in the face of real, you know, a pandemic. This is what you have to look at. Who has the resilient teams? That's very thought provoking. So I think any mechanisms that force you to focus more on team that you can create within your firm will be beneficial because again you know at that stage i was 10 plus years into venture i should have known to categorize by team and we all should have but we didn't so like it's it's just you kind of it sounds obvious when you say it's like somebody listening to this podcast would go of course about the team but like in the moment you know do you remind yourself of that i don't think many i don't think many evaluated their uh their companies on that parameter uh more than on the industry parameter and what's the initial impact of COVID on their company.

1:03:51So I think you're absolutely right. You have another one, which in the show notes that I love, which is exit slash ambition alignment is the difference between good and great outcomes. I remember William McQuillian actually said this back in the days as well, when we had him on the back as. That's three years ago, but it's still one of your biggest learnings that this is really absolutely integral. And also I remember William saying, this is where Europe can sometimes also have a bit of an issue versus the US, that many in the old days of Europe, at least, we have more founders that were setting out to build a good outcome rather than an explosively large outcome.

1:04:32So the venture outcome from a founder perspective was often actually not what people were looking for. Any founder listening to this, it's very hard to, you know, what's good and great is very different to different people. But just if you think about it structurally, and again, maybe somewhat obvious, but setting the context, individuals are usually invested in one company and venture funds are invested in many companies and that just creates a a different risk tolerance we've designed around the risk in the venture firm and the founder hasn't necessarily done that and that creates just starting massive financial misalignment now sometimes that can be bridged by the motivation of the founder where it's not about the financial aspects or maybe they're wealthy already so it actually there's more alignment than you would think but in it you know for regular humans and a first-time founder if you get offered, you know, 100 million, 200 million for a company that you have a reasonable shareholding in, that's, you know, more than life changing for the individual, but it's not life changing for the fund.

1:05:41And the magic about venture is the upside relative to any other asset class, you know, real estate will change by X up and down, but venture is unlimited on the upside. That's the magic. So as a fund manager, you have to lean into that because that's what makes venture special but you have to lean into it in every operational way and if you don't figure out how to create more alignment between yourself and your founder you won't be able to lean into that because the founder will want to exit at a different point to you so as a firm we're very proactive in trying to make sure that we're closer aligned than you know you start off and you know Sometimes that's through just understanding what motivates them.

1:06:27And maybe you realize, actually, no, we're aligned. Everything's fine. Sometimes it's through secondary with the founders. So we're very proactive about people de-risking as they go along. And so that it's not completely binary. And you don't buy yourself. You facilitate that they can sell to others. But it's not within the frontline strategy to be buying secondaries. We will do both. whatever you know often it's as part of a round so maybe we're bought you know we're investing and buying or somebody else is buying we don't really mind it's more about just helping the founder do do you risk over time and many founders don't even think that it's a possibility so i would say it's pretty common over you know we it's not yesterday we started doing this it's probably you know six or seven years ago so founders are you know most founders are kind of shocked by this like i can do that i can you know i can take some money off the table as i go along and uh and then they realize okay so i can do this if i can do this at this stage i can do it at the next stage on the next stage so actually i can de-risk as i yes that's exactly what you can do and and that creates you know it closes the gap on alignment so significantly that you can have a really good conversation if when an exit offer comes in it's just objective they're thinking can i go bigger is now a good time to sell.

1:07:47And I think that's the difference between good and great outcomes. I mean, from a venture point of view, I think to have a great venture outcome, you need to have a founder that's aligned in terms of exit size with the venture fund. And that's not easy to do, but I think you have to do that to have great outcomes. And now I want to ask you about a strongly held belief that you've recently had to change your mind on. I think there's probably two. One of them we covered off maybe a little bit earlier on about this. When we started off in venture, investing in the US was not part of our strategy.

1:08:24And I used to believe that you could be successful investing just in Europe alone. And I believed that for a long period of time. But probably about five or six years ago, that changed. So I think that was a solidly held belief that I did a 180 on. and now I believe the exact opposite. So that would be one. The other thing that I believed earlier on was as a seed investor, you could invest in companies at seed, you could pick your winners, the ones that were emerging and you could double down in future rounds and that was the way to invest. I think as a firm, we've changed away from that because we've realized that that's very difficult.

1:09:06You're probably overconfident in your ability to assess the company's one stage. Because realistically, you're saying and you're looking at companies over 12 months between rounds, and you're saying, you know, the companies at Series A stage, they're actually not that mature. So we're specialists in Europe at seed, and we do some pre-seed as well. We're not Series A investors, and we're not Series B investors. So why should we, like, as in Europe, why should we consider that we make better investments that are in Series B in our European companies than a great Series B investor? It just kind of doesn't make sense.

1:09:42So I think there's this overconfidence that you get by working with the companies. And as a result, we've dialed down our reserves within our fund strategies as we've moved through the funds. Now we want to create a real tension where, you know, do you really want to make that additional check? Or do you want to make another seed stage investment where we think that we're really good at picking companies at that stage? What is your reserve allocation? Will you share? It used to be about 50 % and now it's down in the 30 to 35 range. Yeah. Closer to 30. Yeah. And would you ever, no, you would not ever, you want the optionality, you'd never go down to having zero reserves.

1:10:24Not with the fund sizes you have to be. I think there's an argument to be made for that. And actually, I think if you looked at the data, there's a very strong argument to be made for that. so I could see that happening not anytime soon but directionally we're reducing over time again I think if you look back five or ten years ago it was kind of a couple of things at play you were saying the European ecosystem wasn't as mature so you have to support your companies longer and I know support seems like a negative thing but it was just the reality the ecosystem now is so much more advanced and healthy that you don't need to do that so you don't need to to kind of keep money for those situations.

1:11:04And then, as I said, I think you can be a very good picker at the stage that you're a specialist in and a very bad picker 12 months later if you try to kind of assess in somebody else's specialism stage. I think that's very true. Okay, finally, we have one minute to go. So I'll let you give your really quick top tips for VC's fundraising. Spend more time on qualification. I think a lot of people talk to people who will never invest in their funds. It's just a bad use of time. Maybe one that's, I think, not as counterintuitive. Try to get in the game in any way possible. If you're, particularly if you're a first-time manager, it's not kind of widely known.

1:11:48But when Frontline started, our first fund was$50 million. But our first close on that fund was$1.5 million. And at the time when we did that, everybody said, that's a terrible idea. Here's the five reasons. but it completely we did it intentionally and it completely changed how the fundraising went after that because it went from a powerpoint into it allowed us to make our first four investments and demonstrate how with the strategy in action it also created the limited partnership agreement so there was a physical document so lps treated us completely differently and in before we had that closed on and afterwards and not in a negative way in a very positive way how do you anything about a super early first close versus SPVs that you that you do and then you roll them into the fund there's something about actually operating in the mode that you wish to to be in that is better so so I think SPVs are good and early close is better and and I think even the fact of having the LPA you know you're saying yeah that's the document do you want to assign it rather than can you give us a commitment to kind of tell you what the terms are when we figure them out with people it also allows you to you know maybe anchor on negotiation around some of the terms so if you can get some early investors to agree with some certain terms okay you're going to have a bigger investor come in later but now you're you've anchored some of the terms the way that you want them and i think having them in a fund is better than an spv but i think even and s you know spvs are good as a way to get into it also but there is a signal about commitment burn the bridges behind you strategy around it and I wouldn't I would force anyone if anyone jumps to well what if X and Y happen play all of those scenarios out because I've played them out with many VC funds and first time managers and frankly they're not as bad as the alternative of not ever properly getting in the game yeah very very true Will thank you so much for joining us for this episode.

1:13:54We ended up going for an hour and 18 minutes. So I think this must be concluded to be a huge success, at least on my end. Apply the editing deliberately, Andreas, and lovely to spend some time with you. Thanks for having me on. Here's a few words from our beloved sponsor. How to Web Conference is the leading startup and technology conference in Eastern Europe. The 2024 edition takes place on October the 2nd to the 3rd in Bucharest. You tell him I'll be there! You can enter the most electric space for doing business and building technology in Eastern Europe. There you'll find 3 ,000-plus international attendees, 500-plus startups, 200-plus investors, 100-plus global speakers, and infinite possibilities to connect and get inspired for your next move.

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