George Henry, Partner at LocalGlobe

0:00Hello and welcome. I'm here with George, partner at LocalGlobe. We are here for Open Court, an amazing event that you run on the last Thursday of every month. For those who don't know you, could you give a quick intro into yourself and then let's talk about the event a bit. Sure. So yeah, George, as I like to say, I'm a Belgian import, moved to London 12, 13 years ago, always been attracted to the city. I think first for the culture, then I studied economics and finance. So I think that was also a reason why I thought I would end up here. But as it happened, I ended up here doing a startup. I started in Brussels.

0:32Then I joined Index, where I started working with Robin and Saul. I stayed at Index for two years. And then 10 years ago, transitioned out of Index with them to help them institutionalize LocalGlobe. Yeah, it's been 10 years now. So you've seen a lot of the journey, I guess. How's it been? How's it changed over the last 10 years? I think the ecosystem has changed a lot, obviously. I think there were not many seed funds around when we arrived in 2015. and yeah the seed market has changed the whole ecosystem has changed both in the UK and London but also in Europe but it's it's great to see obviously there's more competition but I think you know I always like to refer still competition is nothing like you experience in the US in the Valley so I think competition is very good.

1:17Amazing and can you tell me a bit about OpenCourt the history you've been running for six or seven months but it almost feels like there was a history before that? Yeah, sure. So yeah, we started this year, hosted the first one in Feb. It's the sixth or seventh edition. And I guess the reason we're doing it, it's just a reflection of how we think about our work and kind of our mission is as fairly stage investors, whether today you call it pre-seed or seed, we don't really make a distinction, is we think, you know, it comes from great conversation. You know, founders who have an idea, who start a business, this is usually sparked by a great conversation.

1:49Us investing in those companies usually also triggered by a great conversation. And so the thinking for us, I mean, you look at the office, it's also designed to be very, hopefully very welcoming and people to walk in and have great ideas. And so for us, the idea was like, how can we expose ourselves and maximize this idea of like being confronted to as many great conversations as possible? And of course, it happens during the week when we meet with founders, but we wanted to create an event that feels a bit more, you know, kind of wide ranging, very eclectic. So that's kind of the idea with OpenCourt every month, having people doing demos, tech talk, whether it's like biggest, bigger companies like OpenEye, Anthropic, today Gemini, DeepMind, Meta, or, you know, the next startups like the Robotic Kitchen today, like Kaikaku or, you know, nothing.

2:35So that's kind of the idea. And yeah, it's also a nod to our heritage. You know, people who know well know that we also like to try different things and help build the ecosystem in which we invest because we think it helps us be better investors if we create, if we make the ecosystem around us better. So, you know, Saul was co-founder of Seedcam and even before Seedcam had created the first, I think, pretty much tech meetup in London which was called Open Coffee Club. So the name and the initiative is definitely also a reference to that. Amazing. And can you talk a bit more about the event this evening today, sort of about AI and hardware?

3:07You know, why has that been the theme? And can you talk maybe a bit about who's going to be here today and why they were invited? Yeah, sure. So, like I said, it's wide ranging. From one event to another, it's going to cover a lot of different topics. It's definitely designed because you already have other great events like the AI Tinkers who are very AI focused. So for us, it's kind of part of the fun is every month trying to curate an interesting topic based on people we meet, more recent news, etc. And yeah, we thought seeing a lot of innovation happening with hardware, nothing announced a big round.

3:42And recently, we know Joseph and the team at Kaikaku, and we love not only what they're building, but the way he communicates online with like huge ambition, very polished announcement and video. And then also having a perspective like the big companies like Gemini. And so, you know, coming to talk about all the integration between AI and home. But, you know, we had a Vibe Coding hackathon in July. we had Anthropic and Meta coming to talk more about you know like Meta was you're going to have to cut that because now I don't remember what it was Meta about but anyway we had a lot of different topics I think again for us the focus every month we try to create good content but it's also curating people based on chemistry we and we think it's really the fun like going back to why we're doing this it's also because we think today in the world we live in there's abundance of digital content and also with AI it's never been easier to build to create content to build apps and that's why we think eventually what matters it's again those great ideas those great conversations and human connections and so we think kind of almost you know ironically the in-person connection is going to be more important than ever because you know then people are often can go and build in their corner but what really matters there's people mingling and I think there's a book like this, but you know, ideas having sex.

5:11And that's kind of, I think what we try to make happen here. And who's the event for? Who are you trying to bring in to kind of witness these talks, get involved and see these great companies? So at a high level, it's both for the founders from our portfolio, but also wider network. So you'll find a mix of like founders, either very early stage founders, or sometimes founders of like scale up companies, exited founders, but also operators. And then what I would call thinkers of builders. Like we have quite a few students from like UCL, Imperial, etc. You know, interest coming in. We also have researchers because, you know, we're neighbors to DeepMind and the Creek Institute here.

5:46So we've started to see some people from them coming visit as well. And actually some of them have contributed to the content of the past. And again, it's trying to, the more the audience can reflect the amazing density of talent, but also diversity of talent we have here in Somersetown in London, the better. And but also it's it's we, you know, if I was a founder today, I would want to come to OpenCourt and feel like I have amazing salespeople, amazing product people, amazing engineer people. So it's not just about technical talent, but yeah, probably half of the audience is kind of technique, technically oriented.

6:22I think you said like month six, month seven. It seems like it's been a great success. I've seen things online which say that it's been massively oversubscribed. Are you happy with how it's gone so far? Yeah, we're very happy. I mean, it's actually, you know, event takes quite a lot of effort. I think we take a lot of inspiration. Again, going back to the importance of in-person events, we don't see this just as a meetup or just content. Like there's always, you know, we've all been reading books about hospitality. Like there is definitely a lot of intention of trying to make it very hospitable.

6:51You know, we curate the food. It's always like interesting street food suppliers coming. The, you know, the music, the playlist is curated, et cetera. So we're really trying to make this like a very hospitable experience and, again, quite eclectic. And, yeah, it's been great. I think for us, you know, we track certain metrics like returning guests, people referring to each other, people pinging us. And we don't make it, you know, if we control the number of guests, it's not so much because we're trying to make it just exclusive. Again, it's because we want this kind of trying to curate the chemistry between people as much as possible.

7:31while obviously bringing as much diversity as possible as well. Yeah, absolutely. Super interesting. And have you got a vision to do this? You know, is this going to be something now you're going to do every month from now on? Have you got visions of trying to do more or different events now that this has been a success? Would you like to do bigger events? Have you started to think about how it might evolve? Are you happy with where it's at? No, we're definitely very committed to keep doing it. So the space itself, Phoenix Court, you know, we welcome a lot of other events. It's a great way to just, you know, it's not just us who have to organize the event.

8:05We had an amazing event on AI and bio. We have a creative AI event next week. And for us at that point, it's just making the space available and helping them. But with OpenCourt, yeah, we committed to keep doing it. We also enjoyed partnering with other people. So over in July, we partnered with AI Tinkers, doing a hackathon with them. We've had actually quite a few interesting people in different European cities asking, hey, would you want to do an open court here with us? So I think we'll probably do that at some point as well. Interesting, go across the continent. Yeah, you could imagine maybe having open court chapters where we don't need to be there, like maybe some people.

8:40So I don't know, we've been tinkering different ideas. But yeah, we definitely hope to do more of it. Amazing. I want to also talk about Phoenix Court more broadly, local load more broadly. You know, there was a big deal we were brought at the end of August that kind of put Phoenix Court as the top Amir investor. I guess my main question is, how do you think having spent a decade here, how has Phoenix Court, Local Globe been able to achieve that in such a competitive field when it's been so hard to succeed as a VC? It's such a winner's game. What do you think Phoenix Court has got that other VCs don't?

9:16I don't know. I mean, I don't want to talk too much about this because I think everyone is trying to build their own differentiation, etc. I definitely think, again, this focus on having great conversations with founders and people. We think the human aspect is so important. And it's down to, you know, values, mission of the founders. I think what we do here also, again, as a space, as a community, is really often resonates with people. So I think, you know, founders feel like we really care about them and their own journey, not just the actual company and how much money we can make. and then the focus around trying to meet them as early as possible.

9:55First, it's never too early to invest. And I know obviously it's what most funds do, but if you look at how we set up, it's really how we set up. We have follow-on funds, latitude to invest at Series B, etc., but this is probably designed to double down to the local companies. And so the whole platform is based on local globe success preceding the best companies and founders. yeah those ranking as like you know it's it's it's great but i think we're very forward looking like we try uh uh to think about what's next and keep building stuff and again going back to the event today i think that's very much why we're doing it because we we think the the ecosystem is only getting started in a way like there's more talent than ever there's more ideas than ever there's more possibilities than ever and we want to be in a position when we can capture as many of them.

10:43And are you seeing that at the very early stage level? Are you seeing more higher quality, like technical talent across Europe than has been before? Yeah, for sure. I think the, uh, uh, I think the raw talent in terms of capabilities has always been there. I think what has changed is two things. It's like, there's definitely a cycle of like feedback loop of people who've done it, people who've done in the U S people who've scaled companies in Europe, who like reinvesting back or operators who've been trained at great companies like Monzo or Revolut or Travelperk and now starting their own companies.

11:16And then also culturally, I think we often say as much as we love, for example, you see like EU Inc. trying to change the regulation, but we still believe also like culture is upstream of politics. And if you can change the aspiration of people, change the narrative, change of what is possible, I think that's also how you create massive change and you bring people who before would have gone into a different job. You know, EF, Seedcam, like I think all these initiatives, Project Europe now, like I think all these initiatives like really contribute to this cultural shift. And so, yeah, I think you start to see the results of this.

11:52It's like amazing talent with ideas, with ambition, and then compounded by the fact that there's like technological breakthroughs that just allows you to rethink every single industry. Yeah, amazing. And what are you seeing across the ecosystem at that level at the moment? You know, there's a lot of noise about concentration of capital going to a select few founders. We're seeing the concentration of capital within certain VCs. Yeah. Are you seeing it becoming hyper competitive at that seed or pre-seed level? Or are you still finding deals where you might be, you know, the only one going for it?

12:22Yeah, I think it depends what you look at. There are deals that gets very competitive. And typically, I would say these are the deals that like, you know, operators leaving great companies, you know, Revolut, Palantir, etc. and they have access to network and those deals get competitive very quickly. And then what's exciting, also betting on like unproven people who come from like, you know, unexpected backgrounds and yeah, and focusing on areas which maybe are not obvious, right? Because we know that also the greatest companies are like, they really don't look obvious at the start. So that's why we're journalists as investors, like in a way, we're not really top down.

12:59Of course, as everyone, we try to understand markets, etc. But usually it's really the founders who take us to the most interesting places. And so we've really seen amazing ideas in companies across the board. I think for sure with AI, there's this huge wave of consumer companies, you know, the Lovable, the Eleven Labs, the Granola, which interestingly, you know, are really strong in Europe. And I think you can almost trace back, you know, look at Canva, look at Shopify. there is something around those prosumer companies not being born in SF who address the mass. Those companies attract a lot of interest and obviously can be very competitive.

13:37But then you also have, you know, areas of like the intersection of AI and bio, which, you know, some people still not feel super comfortable venturing there. But I think if you focus on the founders, you kind of almost sometimes make abstraction of this and then I can get great, great, great rewards. And have you seen, I guess, your portfolio shift? Are you now investing in, you know, you're seeing it shift towards more AI verticals or hardware in areas that are more hot at the moment? Have you seen that reflection in your own portfolio? Yeah, I think we don't think about it hot areas. Again, it's quite interesting.

14:12If you focus on the founders, typically the best talents start to gravitate because they have a vision, because they can see something that others don't see. The best talents start to gravitate towards certain areas And so if you invest very early on and focus on the best talent, you naturally start evolving towards this. So, for example, what we see now, of course, you know, AI and the application layer, you see so many companies. But equally, we see a lot of, let's say, science-based or science-focused frontier companies because that's where the best talent goes. And for us, there is definitely a top-down belief around the amazing potential of like, you know, science-focused companies in Europe because there are all the raw ingredients.

14:51but it's also the results of just bottom-up innovation and you know bottom-up movement from the talent going into those areas and when you you know when you invest as early as you invest and you talk about talent you know it is all about the person that you're investing in what are you assessing that person on it's something we've done a lot of work on we've debated a lot etc and we're trying to strike the right balance between codifying how we define great founders while accepting that it's never going to be a science and it's still an art but where we try to be quite prescriptive or deliberate is in the words we use because it's very dangerous.

15:26It doesn't really help as a team. So I've met a great founder. Like what does a great founder mean, right? And so we've definitely done a lot of work in trying to put objective or at least looking at the founders we've worked with and we've been very successful. What are some of the common characteristics? But at the same time, I think that's the challenge of the job. You're always looking for clients. So as soon as you try to generalize too much, you're at the risk of also missing the next outlier. But yeah, there are some characteristics like we like to see in founders. Yeah, I think it's one of the best things about the outlier model.

16:00It doesn't really matter what background you have because you can always disprove the rule and that's exactly what VCs are looking for, right? There's no reason why you can't build a great business. Exactly, and in a way there's always this tension of, you know, people see a great category or like they see vertical SaaS and everyone starts to make all sorts of rules around vertical SaaS. and for sure there are certain things that can repeat itself but at the same time every great company is quite unique in itself and so I think navigating this thing whether it's around companies business model markets or founders is I think that's what makes it fun Amazing, well look I'm super excited for this evening's event Well thank you for sitting down and spending this time with me it's been great Cool