E450 | This Week in European Tech with Dan Bowyer, Lomax Ward, Andrew J. Scott, and Dilek Dayınlarlı.

0:00Welcome to Upside for the real stories behind the headlines affecting European venture. Joining today is Dilek from Scalex, Lomax from Outsized, Andrew from 7 % and myself, I'm Dan from Superseed. At last, not a wall of white dudes, I hear you say. This week we're going to be looking back over the last 12 months of startup activity to then look forwards at trends and themes coming up for Europe in 25. Before digging into the Turkish scene, seeing we have Dilek with us, to view the world through her eyes. Now, Dilek is the founder and managing partner of Scalex Ventures. she's an accomplished founder operator and now vc she's turkish the fund is based in the netherlands and they invest in b2b ai robotics cyber and all that cool stuff scalex has also has a founder profit share scheme so everyone benefits when somebody does well in the portfolio now i've only seen a few vcs do that and i think that's really really cool

1:09This show is not investment advice and the hosts of this episode may be invested in the funds and companies featured. Dilek, thank you so much for joining us. How are you and what has caught your eye in the news this week? Thank you. It's amazing to be here. After listening so many episodes, it feels privileged. There you go. You're the listener. Bless you. So what caught my eye is actually the biggest one was Murati's seed fundraising from$10 billion valuation,$2 billion raising. And she got some of the top talent from OpenAI. Nice. No other day passes that it's heating up at AI. It's getting more heating up.

1:53But also the prime minister of Albania, he wants to call him as the industry round. So that was my biggest news. She's from Albania, right? Is that right, originally? Yes, she's originally from Albania. Cool. Lomax, what's been on your mind? What's caught your eye on the news? Well, a few things caught my eye this week. So firstly, Synthesia, which is one of the companies we talked about before, which is a uk ai video generation platform hit 100 million arr they announced in conjunction with a partnership with adobe so this is interesting you know this company was last valued at 2 billion raised over 335 million is one of the most successful companies that's emerged in the latest they are away from the uk so great to see them hitting this milestone so you know ring the bell awesome news somewhat weirdly and controversially although perhaps not not surprised by this we've been talking a lot about defense spending right in the last you know the last three four episodes, especially given what's going on in Europe and the opening of the taps on European and UK defence budgets.

2:49And then we have the head of the EIF in an article with Sifted saying that they do not plan to be investing in weapons and ammunition. So, you know, one thing we've talked about is the need to invest in new defence tech solutions that Europe needs and the UK needs defence sovereignty on a lot of these technological propositions. And here we have the EIF. and the context here is that European Investment Fund is one of the biggest funders of European Venture Capital so they invest in venture funds which then of course invest in startups roughly 10 % of the money in European Venture funds comes from the EIF so this is a huge impact if we're talking about the taps being turned on for defense now we've also talked here that you know a lot of the defense tech money will go into logistics and infrastructure but a lot of it will go into frontline battlefield tech.

3:39So we're actually saying controversially, we're getting mixed messages from Europe here. We're saying on the one hand, let's increase spending. But on the other hand is that, well, actually, the biggest LP in Europe is not going to be investing in a critical part of European defence infrastructure. So it's probably a classic European story. There's lots more to unpack. Do you know if that's fixed, Lomax? Do you know if that's old, as in old policy to be reviewed? Or do you know if that's fixed? I don't know. I mean, she came out and explicitly said this. So I think you can take that from the horse's mouth.

4:09I mean, one thing I've mentioned here before is that if you look in the LPA, so the limited partnership agreements of funds, so the constitutions of venture funds, a lot of them ban a few things. You know, they ban typical stuff like sex, gambling. One of the things they've historically banned is weapons and ammunitions and guns. That was historically. So you would have thought, though, that going forwards, this might change. but you know you look at the biggest like you know the most well-funded defense you know new prime in europe helsing i mean they're developing drones which i'm sure you know would count as weapons and frontline tech that you know may not be able to to take money from venture funds backed by the eif so this is a bit shocking to me and um a bit worrying i was wondering if it's just kinetics though sorry carry on carry on could just be can i guess some of it will come down to come Some of it will come down to definition, and maybe that's where the detail will be, and maybe it's not so bad as we think.

5:03But I think I'm a bit shocked by it. It's mixed signaling from Europe here. In big tech, or as close as to what we have in big tech in Europe, ASML posted really strong results in Q1. But I think the eye-opening thing was that they have announced that orders, which is a crucial measure and metric for future trading of the business, are down 20 % on expectations. And as a reminder, ASML developing critical equipment and machines for developing chips. And so what does this tell us? I think this is a result of tariffs. And the number of chips being manufactured globally is not going down, but I think it just reflects probably the sitting on hands or indecision that's taking place now while people try and figure out where the cards are going to, no pun intended, where the chips are going to fall in relation to tariffs.

5:53Chips are going to fall. You went there, didn't you? You went there. You did it. Yeah, I saw it and went there. We talked about the Klarna IPO being pulled last week. Well, Figma have confidentially filed for an IPO. So we'll see what their S1, their registration document, says when it's published in due course. But that's interesting to see with, yeah, like we're interested to see with, you know, Klarna pulling their IPO recently and missing the window. So Figma feel, despite all the madness that's going on, they have made the initial registration to take the first steps towards an IPO, which bucks the trend at the moment.

6:27So fair play to them. I saw the 1 ,5 pulled their timing. So the German energy business, they're not going to IPO. They said they're going to shelve their US IPO plans. So interesting that Figma are going to go for it. Well, they obviously, they must feel really robust about the numbers under the hood. I mean, we talked here about before about the 20 billion acquisition from Adobe, which was ultimately kiboshed by the FTC. But that company must have really robust numbers if they feel they can get this away in this environment. So good for them. And then the other thing that's happened a lot last week is the U.S.

6:57dollar has been dropping big time. Right. I guess, you know, Dan, I think you, you know, talked about this last part. I think this is something that we we think probably Trump maybe wanted this. Right. It's better for U.S. exports, makes the dollar cheaper. I'm thinking of the impact on VC land and tech in Europe. It's probably good for European stocks. And so it may mean that there's a bit of a rotation there. Probably bad, though, given that a lot of our markups potentially come from US VCs. And suddenly, you know, our deals have come a bit more expensive, which may mean that, you know, they're willing to offer, you know, slightly lower prices.

7:28I mean, this is all in the kind of 5%, 10%, 15 % range. So it doesn't move the needle massively in the venture world, but it's still important nonetheless. Let's see what happens. I mean, who knows what's going to happen tomorrow, right? It's all just so bloody volatile. Andrew, what's been catching your eyes? What's new with you? Well, I saw that the UK government's been lobbying to get a chunk of the Stargate project, which is the big infrastructure play between OpenAI, Oracle, Japan, SoftBank and MGX. And this is about building huge AI hyperscale data centers. I think France and Germany are sort of in the running for that as well.

8:04But really to reflect Lomax's point, we kind of should be doing this ourselves, right? So it's great, obviously, that inward investment would happen. And I hope the UK gets the deal if it comes this way. But also, we kind of just need to match this stuff ourselves, you know, unless we want to become a back garden subsidiary of the US. By the way, you know, Stargate is a$500 billion project. We talked about it last week on the pod,$40 billion is what goes into European venture every year. Like, so I get it. This is infrastructure. This is not like software and biotech and actual early stage startups.

8:38But it's still, these numbers are absolutely huge, right? But surely, yeah, in the UK. What's going on in data centers in Turkey, by the way, Dilic? Is there a huge investment there at the moment? Yes, it's growing really fast in this volatile environment, but definitely. Especially the government requires you to localize all your servers, which requires a lot of investment. Do they? Interesting. interesting interesting i think the difference is though this is a bit like sort of you know the telephone coming of age whenever it did at the beginning of the 1900s and then going oh we'll just let someone else control our telephone network and you know it's that fundamental so i think yeah um dilek you also had some news on hugging face didn't you yes i do have some big news because hugging face just acquired a french humanoid startup uh it caught my eye because i mean after open source AI models now they want to jump into the physical world and they already had a project with them last year I believe inflection point in humanoids are coming up I mean Elon Musk he wants to sell the Optimus for 20k but we know bill of material is around like 50k now so I'm watching closely all the humanoids or robotics companies now it irons very slowly apparently apparently who I was told all those videos that we see it right ironing and then folding apparently it's very slow but it's a fraction of the video speed and legitimately I don't know whether they've improved that since they came out last year but I was like wow that's amazing if someone said no no it's sped up 10 times it's like you know Andrew did you see the um the the camera they've got a new Boston robotics camera guy and it made me think of you because the actual humanoid was moving really slowly with this kind of I don't know what they're called those those camera bodies that keep the camera steady not steady cam they've got a proper name haven't they but um so he was moving so slowly it just reminded me of you andrew because he was like of course there you go they don't need to be doing backflips or doing really really fast ironing so fair enough um i've got i've got a few things that caught my eye this week you may have seen somebody has hacked the crosswalk buttons in menlo parks over in the bay it's not it's not particularly european but it made me smile and they put mark zuckerberg's voices in the when you push the button if you're blind This voice comes on.

10:50So I will play it now. And so they've got Elon Musk. They've got Mark Zuckerberg. And it's very, very funny. And it's not obviously rude, but it's obviously taking the mick out of all of them. And there's a new Finnish startup hub. It's breaking new ground. It's called Maria01. And it means that by 2028, in Helsinki, they'll have a 70 ,000 square foot startup co-working space. So mainly off the back of Slash or other kind of views now on Finland. I thought it was just a really cool thing. They've already got 200 and odd startups in their 20 ,000 square foot space. So they're adding another 50 ,000 square foot there.

11:33So good for them. It's the French Paris playbook, right? I mean, they're just taking the sort of ticket from Station F. Whatever happened to Silicon Roundabout? Did Cameron kill that when he turned up and did that all just die? because we were going to be doing a UK version of this like 15 years ago. Does anyone remember? I think everyone decided that Soho was a better place to have an office than the stinky old shortage, no? Isn't that what happened? The VCs certainly did, yeah. I think the only people there still are like HSV Innovation Banking over in the Finsbury Square. I don't know. I'm pretty sure.

12:07I remember David Cameron turning up to something and I remember thinking to myself at the time, any time somebody from government turns up at a cool, like underground super duper startup it's going to be absolutely stone dead so maybe every time i go clubbing uh dan you know all those nights out you know those monday nights if i see david keman there i never go to the club again but you're 22 dude you're young and cool um i want to do i want to do a big shout out to northern powerhouse too so another kind of uk tick so they've invested 80 million into more than 200 firms up north obviously london is the epicenter rightly or wrongly happily or unhappily london is very much the epicenter so it's really great to see more regional activity and some money money going out to other business up north and to other regions and we've already talked about this um the ipo shelving so i won't go into that but i think my sense is we are still even regardless of figma gonna see fewer ipos in London and fewer IPOs, obviously in the States, but maybe the LSE will be able to take a bit of an uplift as the Americans are not doing so well.

13:19But we'll see. Maybe we'll get dragged down. It's got a long way to claw its way back from. But yeah, quite possibly. We've got to be optimists though, right, Limex? We've got to be optimists. Of course. Maria's interesting. I mean, look, down the road from where I am is the unicorn factory, right? I think it's a good reminder that proximity is very, very important. And obviously we moved into this world of the COVID world of everything being remote, but we've definitely come back. You know, the zeitgeist is now, you know, in person and, you know, when you're building, yes, obviously we're hiring remote teams, et cetera, et cetera, but proximity can be, is extremely important still, right?

13:51So interesting to see that in Finland. I think we should get, we should get a London hub back in action. You know what Boris Johnson says? Not that I want to quote Boris Johnson on a tech podcast, but you know what he said? It's like nothing, yeah, yeah, yeah. Nothing proprinks like propinquity. It's a very Johnsonian thing to say, but it's very true. You know, it's a sort of capture of serendipity. It's a very Chachulian structure, but a quote. He's stolen the whole, I don't know what they're called, top and tail, the thing with the same thing. He's not known for his originality. I was with a friend who did some speaking engagements with him, and he said basically he puts on, he ruffles the hair and does the whole show before he goes on stage.

14:28Talks really normally, Chachulian, and then becomes a pastiche of himself before he goes on stage. So anyway, I think he's still far away out of politics. Right, I've got a couple of reports that I want to go through. I don't want to focus too much on the detail, although I am going to tee both up. And then I want to talk about some Turkish stuff with you, Delec. But to start with, Dealroom and HSBC, now they've launched their Q1 report titled UK Innovation Update. I've always struggled with the word innovation. It kind of feels like one of those corporate... I was going to swear then, but I won't.

15:03corporate um silly words where there's a room over there where all the innovation happens in that room over there kind of just feels a bit of an odd word or an odd phrase so a bit like terribly 90s isn't it it just doesn't feel like your grandpa or your grandma or something yeah yeah let's go and innovate let's go and innovate you must have very cool grandpa grandpa though max well yeah let's give it i'm going to give you some key stats and then and then i think i'm going to hand over to Andrew but some key stats from the report so 4.2 billion raised by UK startups and it's always odd that we use a dollar size even though it's a UK report we're still talking in 4.2 billion dollars another another weirdness health techs are leading the way but these are super concentrated deals and the other kind of key stat from the report is that since 2000 the UK has been basically the leading European tech hub by any measure so we're still still quite up front there So what stood out to you?

16:00What does this mean for the rest of the year? What trends and themes should we focus on? My key takeaway, it's a sign of a maturing ecosystem when you get the founder flywheel. So the recycling has started. We've got SNCC, Wise, Delivery, Revolut, Mafia. That whole founder mafia piece is starting to happen, which I think is great. The UK has roughly three times more unicorns than Germany and five times as many as France. So the UK is still up front, but they're catching up. And we mustn't dismiss Netherlands, Sweden, Scandi, maybe. Dilek, you can talk a bit maybe about the Netherlandish, the Dutchies.

16:33Europe is waking up. However, we're still five to ten times smaller than the US, depending on which metrics you look at. So we're still a long way behind, even though we're growing faster. IPOs have stalled. We've kind of gone into this for obvious reasons, but we'll see what the LSE does later this year. Andrew, what made you stop and read? Two positive bits I took away was, for those of us raising a fund, Arctic in VC actually funding, so both outflow and inflow is good. But the main thing that I was more sort of excited about because it's been my hobby horse for so long is the beginning of a rise of these breakout rounds.

17:10So these breakout stage rounds, like 15 to$100 million rounds. You know, we have, I think, six mega rounds at quotes of over 100 million each. And this is really the way you make this ecosystem sustainable with this sort of strong middle stage funding signals and conviction in UK ventures. And that flywheel needs to really spin. We still don't have the number of rounds we need. And the capital still isn't available there, but it's starting and that's really good because if we get some conviction there, other people will follow. So, you know, as we know, even in BC, it's hugely a sentiment game.

17:46So that was just, you know, finally, we're getting some bigger tickets, It's like actually, and the companies are not automatically having to jump ship Series A or Series B to the US. A lot of them still will have to, but it's, you know, we just need more of the same. We've got to get this, same as we say every week on this podcast, we have to get these mansion house pension rolls. We're going to wave fists, aren't we? Where's our half-billion-dollar hybrid data center? Maybe it's happening. Maybe it's happening. I'm trying to be positive for a change. I love it. I'm loving your renewed energy.

18:21I'm going with it. Dilek, what caught your eye in the report? I know it's very UK-centric. What caught your eye? So I was checking the UK report. The thing that caught my eye is the number one is healthcare investments or health tech investments. Yeah, big. That was a big thing for me. And really prominent startups are growing and doing really deep stuff. That was really cool to see. Sorry to interrupt you, Dilek, though. that was half one round wasn't it wasn't half of that isomorphic yeah half it was isomorphic and another one is 600 million and and vidiva which is 400 million i mean yeah we can talk about it in a minute but yeah one quarter of the four billion raised in the uk was those two deals basically which is still great i mean i agree with you it's still hugely positive right it's still a huge conviction play for health ai but apologies i interrupted oh yeah i love it and Talent caught my eye too.

19:15Talent is always the biggest differentiator. At the report, I saw Ichazo, who is also our advisor. She was talking about the UK universities being the biggest differentiator at the ecosystem. So those were good highlights. Lomax, what kind of drew you in? Can I be a dick now? Absolutely, go for it. No, no, no. I mean, look, so one quarter of the 4 billion deals were isomorphic and Vidiwa. they're both like relatively atypical it's firstly it reflects what we talked about last week when we look at these reports there's always like the power law applies in these reports there's always one or two deals that win the day it's slightly weird this report in the isomorphic is effectively a subsidiary of alphabet right so while it's highly innovative and it was funded by vcs mostly us vcs it's it's a bit of an atypical venture deal and vidiva is a slightly weird biotech deal i mean it's in in glp1s in a very hot area it's basically an in licensing of chinese assets you know all star biotech cap table of 400 million but it's a little bit atypical fine it does reflect the fact that you know the uk has historically and still is very very strong in biotech and fintech and if you look at this report especially they have a little bit in this report about the slated ipos to to come down the pipe in the uk if you look at that list starling monzo lendable revolute blockchain.com accelerant it's a very very fintech heavy list right so i think if you look backwards over the last 10 years where the uk has really really been strong as fintech and and biotech But we don't need to be backwards looking in a forwards looking industry.

20:44So I think going forwards, we know there's a little bit more kind of broader. You now have the Synthesia's 11 Labs. Quantexa was mentioned in this report raising a big round. So I think we're now kind of getting a broader base of software startups to complement what's happened in those areas. The biggest thing missing in this report, where's the liquidity? I don't even think there's a slide on liquidity in this report, right? It's all money in. What about the money out? And I think that's the biggest crisis really going on in the venture market in the US and globally. Yeah, I think so. Yeah, I mean, the report we talked about last week did talk about the WIZ exit, the$33 billion exit to Google, which really moved the needle at the global level, which is great to see.

21:24But if you look at the numbers, and some of it we'll cover in the PitchBook report that we're going to talk about shortly, it's very anemic at the exit level, which is very important. of course for all of us as people who raise money because there's a relatively fixed set of LPs, limited partners who invest in venture funds. And if they're not receiving distributions from the funds in which they invest generated by exits and IPOs, then the ability for them to reinvest is obviously constrained. So there's definitely a lot of capital built up in our industry at the moment that needs returning and recycling.

22:01So I'll be more excited when these reports have a little bit more a bit a bit more on the exit side yeah i'm also concerned if america if mainly american public markets but if public markets generally are struggling that's going to just compound that whole liquidity challenge exactly we just talked about two european ipos that were slated that have just been that have just been um you know postponed it's like those are big liquidity events and a lot of the lps that are in those in those companies are you know or the gps in those companies you know they are they are european funds and um we need the liquidity yeah yeah helpful process vcs raising money but equally you know some of these other companies raising money you want them to keep going you want them to go all the way you kind of don't want them um selling early that's been that's been europe's problem for far too long that they you know people throw in the towel so i want them to keep going no but but andrew the the big but i've got a big but mechanic life is that you at least that gets recycled right if you've got a little bit of m &a you've got a little bit of liquidity coming on before public at least that's being pushed back through the system yes we want the biggies but we kind of want it all so maybe that's just being too i mean seriously andrew i get your point and you know kind of ride or die you want you want companies to keep building and raising and build you know hundreds of millions billions in revenue etc that that is certainly very very important but you need these kind of you need these liquidity fillers in the middle right so there's a there's a separate pitch book report that that i was looking at recently that showed that in the last four years there's been negative cash flow in venture which means there's been more money coming in and more coming out if you look at the 10 years before that from 2011 to 2021 that's 10 years that was more money coming out than coming in so we had to the positive cash flows and the last four years have been hugely negative and and and you know the exit part you need those kind of interim exits to keep you know you can get the big ones like the whizzies etc which do just deliver a lot of capital back but you need that recycling it also means that you don't have the talent trapped i think when you have these exits happen it can actually unlock talent to then go out and spin out and set up their own companies but of course if they're going to leave anyway they might leave anyway but sometimes it's you know they feel more comfortable with a bit of a bit of liquidity in their pockets you're shaking your head andrew you don't agree i think look i mean liquidity you need a strategy as a fund manager to provide liquidity to your dropies first thing is obviously i think when you get the really big um companies that will that the flagship um winners within this industry take something like anduril take a spacex or take you know you know flexport any of those the the secondary markets are pretty healthy you know you see a lot of trading after the series c the series d the series e um you know we've traded some of the stock we i frequently get offers to buy buy stock so there are at that scale there are there are plenty of buyers for those sort of assets um to help move an equity around for those who need it and and transfer transfer those assets to people who want the latest stage and no stage risk um but i think the problem that without having those companies um then you're always capping the the total size of the market and the money that's willing to come into that market so i you know i don't want these companies that are doing these rounds these you you know, a few hundred million rounds to go in 5X and exit.

25:19I want them to keep going into the multi-double digit billion valuations. If that in itself restrains capital going back into the market, I think that doesn't matter because I think the fact that those companies are demonstrating such success will pull other money away from other asset classes into the market in Europe. And it's not that Europe doesn't have the money. It's like this sort of myth that even in the UK that doesn't have the money, we're still the second biggest financial center in the world. It's just the money goes not into tech. People choose to put, institutions choose to put the money elsewhere and they need to choose to see the dollar signs brighter in tech.

25:58And that requires really big outcomes and really big businesses. But it's all a bit out of sync because last year we raised more into UK VC than ever before. I think it was nearly$13 billion. dollars so yes everything is kind of staging and flowing a slightly out of sync maybe we can pull it i don't just i don't disagree you need big thing but health ecosystem has has exits and liquidity all the way up the chain i i agree with you andrew you need the big behemoth you know lighthouse transactions to create and galvanize excitement and interest in the asset class but i'm afraid you need liquidity on the way up well here you go i'll i'll do the opposite i'll say i I also argue that founders should exit earlier.

26:39There are a bunch of founders. There is a habit in Europe and UK, like a sort of dogged blindness to when you're not on a venture scale trajectory. And instead of recognizing that before the value drops out of your business and you become a sort of slightly dysfunctional lifestyle business, you should actually sell. And founders don't sell. And that's partly because, sure, like trade sale in Europe and the UK is harder, but it's not impossible. and we see a lot of founders keep going you know well past their sell by date in terms of the time for that business and that business will never become a dragon a unicorn whatever within the market because they've missed they've missed the inflection point and they should just accept defeat and flip the company while before they run out of money rather than sort of this slow death and i think that's that's something that you see founders are far more comfortable with because culturally in the u.s people are far more comfortable with failure and that's something that VCs should be more willing to encourage.

27:39And a little bit of a bitch about EIS and VCT. That's why I'm not keen on EIS and VCT funds, because often they're much rather the companies stay alive. You know, they collect fees, they collect directors fees, and, you know, they get past the three-year tax break. And it artificially encourages founders that should after 18 months go, we've not hit it, we're not going to win, so we should split or fold and go again. and that's what I'd like to see more of. So I'll agree with you on both sides. Dilek, I want to bring you in also to give us the kind of, this is very UK-centric, I also want to kind of dip into your knowledge and see what the Turkish equivalents are.

28:16So I'm sure there are some parallels here and not. Definitely depends on the cycle, where we are and how we experience the founders. I'll tell you a real story. I had a really good friend. He was only aiming for a$50 million exit. exit then he saw another founder selling at 600 million then his aim became like billion so i think ecosystem also pulls up it also comes with the learnings from the people around you but i definitely believe it depends on the cycle i love liquidity at this environment as a venture capitalist instead of having write-offs i would love to have like four or five or six x returns at each company, but also look for that 100xs.

29:01Maybe give us some more specifics from the Turkish ecosystem because I know you kind of know this world pretty well. Okay. Actually, it's a really, really nascent market and young market comparing to a lot of European markets, especially UK. Imagine the closest one is Poland. They started 20 years before in Germany 30 years before, but they are just getting to have the first generation of billion dollar exits around 2020. So it's mostly M &As. IPOs are rarer comparing to UK, but definitely good M &A is happening. And the good part is entry valuations are like 60 % lower than US and 25 % lower than UK usually.

29:43And they are really operationally efficient. For who? Yeah, for who is the stage ones. That might not be a good thing, depending on what the count table looks like afterwards, right? yeah the thing is i think there's one thing about this ecosystem i would say one word that would tell it resilience and the operational capital efficiency so just to give you two example peak games they just got 18 million investments and the exit was 1.8 billion and my co-founder belkai founded upstream who just got 10 million and made the exit at 300 million so because they They're capital efficient. They don't get that much money.

30:24I was playing on the numbers. $300 million exit kind of worth almost more than a billion dollar exit in US, depending on the capital they raise. Wow. It's a very important point. Capital efficiency in venture is something people forget and dilution. It's hugely important. We know roughly in mainland Europe, in the UK, what would you have to raise? Roughly$350 million to get to a billion valuation. I bet you in Turkey, it's a lot more efficient. Yeah. Actually, our friends from Ulu Ventures, from Kaufman, he made a research about it. Usually it takes 80 % dilution for a Silicon Valley success story from early stage till the exit.

31:06I need to change my model. Okay. But I do also wonder what is kind of this whole, I understand managing cash and being efficient, but also just bloody going for it and just that energy piece of just like just almost throw it at the wall and i just can't help but think that europe needs a little bit more of that attitude but totally accept capital efficiency okay i don't disagree on that you need that you need that but you also need gps who can manage the middle of their book yeah what i mean by that is is there are you know 10 12 companies in the middle of the portfolio if you've got a portfolio of 25 30 companies that you could just sit there and do nothing about.

31:46Actually, I think often the contacts that we need are the M &A departments in all of these tech companies and some of the innovation departments at the old economy companies. And you ring them up and you help effectively negotiate a soft land, not even a soft landing exit, potentially a decent exit from anywhere from 10 to 150 million. I think that is our job. And so some of the best GPs that I know and we know in the game are really, really good at that. It's something that I'm personally working on. It takes time to build these relationships and have the trust to be able to broker these transactions.

32:18It doesn't really work with bankers in our experience. I'm sure you guys have had the same thing, but I think that's a key skill set. And especially in times, leaner times like this, you can have the kind of longer term, you know, shoot for the moon, moonshot in your portfolio, but you need to be able to work the book and also help founders out because it's still a very, very good result for them, right? If they can get the exits like that. you leave the winners alone you ignore the zombie dead wood and you work on the middle bit if we shoot if we're aiming to kind of take the money from lps and anywhere between three to five x right five x would give you a kind of top decile fund you can maybe get a half a turn of your of your book of your funds by doing this or maybe even a whole turn potentially so it's very very valuable dan your comment around sort of more throw at the wall um and i agree with you I think a lot of it depends on the company and the type of company and the market that they're operating in.