Matt Miller: Founder & Managing Partner, Evantic Capital in his FIRST interview since leaving Sequoia

0:00Hello and welcome back to the Scaling Europe show presented by Deal. I'm Seb Johnson and today we are in the Avantik offices. I'm joined by none other than Matt Miller himself. How are you doing today? I'm doing great. Last year you announced Avantik to a lot of noise, a lot of excitement. How's it been since then? It's really been fantastic. It's been overwhelming to see the support from our community, the support from the ecosystem. we've come out with a new kind of a new business model in venture capital where we've partnered with this community of 150 incredible founders builders and investors that we call the legends and the product market fit on this has been exceptional and they are a huge support to us and our founders seem to love them and be very receptive to us and it's been really really fun to see and fun to build a team of our own and and go out and and uh we try to make our little dent in the world.

0:50Amazing. Let's talk about the legends then. So you've got 150 people from across the US and Europe, top ecosystem players. How does that model actually work and how does it compare to a traditional VC model? Yeah. So basically we have this group of incredible people, most of whom I have worked with somewhere along the course of my career, some of whom are people we've met in the last year. And they are founders of exceptional companies, people who work as CEOs, people who are builders in marketing, engineering, sales, product, legal, finance, business development, people who work in very large corporates, people who are, you know, big, very big tech companies that we would all think of, the mega caps, people who work in companies that have scaled from very small to big, and very senior experienced folks with lots to give.

1:39They are all investors in Avantik and have invested something in our funds. And the total from that group now is about 57 million from this group of legends. And so they are investors and co-investors in every investment we make. And then from the capital we've raised from the traditional LPs, we share up to 50 % of the carried interest with these legends as they help us source investments, as they help us win investments, and they help us build the great companies afterwards. And so when we go out into the market and we're talking to founders, we share with them like you have this, you don't just get the Avantik team and our experiences, you get the experiences of this community of 150 people who are all participating in the investment with you and invest in your company.

2:22And when there's things that they particularly can offer to you, we're going to give them up to 50 % of the carried interest in the investment to help you win. And so there's this incredible alignment that's occurring between the founders of these companies and their new investors in this community of legends to help them really succeed and kind of at a level that's never happened before. And, you know, the results of it so far have been really, really impactful of having really great people placed inside of super or around super interesting companies and helping us unlock doors that we might not have access to otherwise.

2:55And it's been really great to see this group of people come alive and support. And as you shared, like, it's 50 % people who live in the United States and 50 % people who live in EMEA. So predominantly Europe, but we also have Israel in the Middle East and in the EMEA bucket. And in the EMEA bucket in Europe, we have them spread out all over the place. So we have a big contingent in the United Kingdom and in the London ecosystem, but we also have the Stockholm ecosystem, the Dutch ecosystem, the Paris ecosystem, the German ecosystem. We have people from Spain and Italy and Eastern Europe. And so, which is really great to have all of these perspectives and Scandinavia, obviously, It's really great to have all these perspectives and networks kind of all brought together in one.

3:39Yeah, amazing. I was looking at the companies you've invested in already, Syndesia, Lovable, NA10, 11 Labs. These are some of the biggest, most exciting tech companies in Europe at the moment. How instrumental have your legends been in getting access to those deals? I mean, absolutely critical. Like the, you know, Lovable was the first investment that we made. And we co-invested with Excel in that round. and we had nothing to go on other than the legends. We were brand new. We actually hadn't even closed the fund yet. I personally lent the money to the fund to make the first investment. And we had 30 of our legends who reached out to Anton and they were literally hitting Anton at all sides.

4:22And he was going to conferences, hearing about the legends. He was getting emails, hearing about the legends. He was at the Founders Forum event with legends, approaching him, you know, fall a pound and saying, hey, you know, we're in this new thing with Avantik and we're legends and we want to work together. And that got his attention in a way that was different because the whole world was obviously chasing him and has been chasing him and allowed us to create a relationship. And then after we've invested, we've brought a couple of legends around the company. One of our legends, Tom Wilkie, who works at Grafana, spends time coaching the engineering team and giving them advice and feedback.

4:58We have a couple of legends helping them go to market and other things around the company. And it's been a really great unlock. And I think most of our investments have had some angle where the legends have helped us in winning. In many cases, most cases, we knew about these companies and we loved these companies already. But the legends have really helped us open doors that might have been very difficult otherwise for us to get into as a new fund. Yeah. I was speaking to Victor from Stacia, and he said it's a really powerful thing when you get emails or messages from like 25 of the biggest people in the ecosystem saying you should take this person's money yeah and i think that the difference is is you know i obviously when i was working at sequoia i would ask people all the time when i was selling into an opportunity to help me sell and so on so forth and there's just a little bit difference in this model in that we've we've we've elevated them as our business partners we treat them as our business partners we work with them as business partners and so when they're selling, they're sending founders these notes talking about that they would like to be an investor in the company, that they're excited about it because of these reasons, that here's the ways that they could be helpful.

6:05They invested in Avantik because of blah, blah, blah, blah, their own reasons why. And I think it just hits a little differently. And then post, we bring the founders that we invest in into the community, into the WhatsApp feed, into all the events that we do. And so they're really surrounded by this group of experience. and in Europe, I think it's particularly valuable because if you're sitting in Stockholm, there's exceptional companies in Stockholm, but you can count them on your one hand that have gone public and kind of gone the journey, you know, obviously Spotify, Klarna, others, but it's not a lot.

6:40And that compares to Silicon Valley where there are dozens and dozens and dozens. And so it kind of bridges this experience gap in Europe that we've had that sometimes it's wonderful to have the exceptional talent that we have here, but sometimes experience makes a big difference and we're connecting people. So for example, we have amazing talent here, but it's dispersed. We have the president of revenue for MongoDB lives in Italy. We have the CMO of HubSpot lives in Ireland. And they're not as well plugged in with everything across the continent, but through the Legends model, we bring some of these people together and help create these connections so that founders, whether you're in Berlin or in Stockholm or in London, you have access to this experienced talent, and you also have a network of experienced talent that's working and operating in the US who's all invested in you and helping you to succeed.

7:30And talking about bringing people together, you've got the gala. Yes. You're hosting a huge event here in London. Can you talk a bit about what the event is and why it's important? Yeah, the Legends Gala. And this is something that has been a dream of mine to create for a number of years. When I first joined Sequoia back in 2012, we used to do this event called the Sequoia Supper. And we would gather the coolest people in Silicon Valley who cared to come and have dinner with us, whether we were competitors, friends, co-investors, builders in our companies, founders, CEOs, and we would break bread and have dinner together.

8:09and we would celebrate one or two people in the ecosystem who had done incredible things over the course of the last year or over time. And I felt long since moving here that we need this in Europe. We have lots of great events and conferences in different ways and we're kind of have been in this moment over time where people have been, you know, more negative on Europe despite Europe having the best crop of rising AI companies and rising companies that it's probably ever had in the companies that we have today. And there's just so much great things happening here. These stories need to be told, which I super appreciate you doing through your podcast.

8:46And we need to have a chance to bring together the very best people. And I feel, I personally am very bullish on London. I feel like London is this incredible tech center. I believe it's the best place in the world outside of San Francisco to build an AI company. And we have great events, but many of them are in other places around Europe. and we need to shine a light in particular on London and the strength of this ecosystem here in London. So we're creating this event called the Legends Gala. And basically it's an evening where we're inviting in our legends and Avantik and our legends are hosting the European, the best of the European tech community and our friends from the US and Middle East and other places.

9:25And basically it's an effort to bring together the top one, 2 % of the ecosystem, people from the, People who we may compete with for investments, people who we may co-invest with, people who we're invested in, people we're not invested in, but just the best people in one room to have one great night together. The focus is not on content. The focus is on having a good time and building relationships and connectivity and creating better interconnections. And then we're going to have a section where we celebrate a few people. And this year we're celebrating Doug Leone, who was the steward of Sequoia from Italy, was part of building it into a global dominant powerhouse, was pivotal in opening Sequoia Europe and has been a mentor to me there and a mentor to me in the starting of Avantik and just an incredible human being.

10:12We're honoring Mati, who just did this wonderful$11 billion round with 11 labs and has proven that a kid from Poland can go and compete with the very best AI minds of Silicon Valley. And we believe he's building a monster company. And then Laura Modiano from OpenAI, who is just putting together all the patches and all the hackathons every weekend across Europe and always making connections for young founders and really helping them to succeed. So we have three people we're honoring. And the goal is for this to be an annual event that we do every year and we'll make better. And we will honor another couple people next year and do a year after year and make it a marquee signature event in London for the best of the tech world and also the best of the creative world.

10:59So we're also including in people from our other creative industries like fashion and media and sport and entertainment that are sources of strength for us here in Europe. And so trying to like bring a little bit more broad in our tech world to include some of these other cool things we have here in our backyard. You feeling ready for the event? I mean, it's a big undertaking because we're brand new. We're a team of seven people. We don't have any full time events people in the house. So as a Sequoia, there's incredible events team I got to work with. and I have incredible people here we're working with, but we're all doing this for the first time.

11:31So I hope everybody's a little patient with the details, but the community that's come together for this event is spectacular. And we're really grateful for everybody that's coming and we're excited to invest in this event in the years to come. Amazing, it's going to be amazing. I always want to, going back to some of the investments you've made, right? These are some of the hottest, most exciting rounds that we've seen in Europe possibly of all time, like 11 labs. You've invested in twice now, lovable. Have there been any deals that you've been unable to get access to yet? So when we first started, the Anthropic had announced its$80 billion round.

12:07And we did try, but they were kind of like, guys, sorry, you're too small. Yeah, okay. But other than that, every investment that we have gone for, we've been able to get into. And that's the power of this community and the power of the legends. That's not us. Like I want to be very clear, it's not us. It's the legends. and the legends are the ones knocking down these doors and the legends are the ones doing this work and the legends are the ones empowering and opening us up. Like there are lots of situations where I've met the founder and they're like, Matt, you're great and your experience would be amazing, but we're so oversubscribed and we have interest.

12:41And then all of a sudden 20 legends get on the case. And then they're like, you know what? We have to have you in. There's no way we can not have you be part of our story. So we're going to figure this out and we're going to find a way to have you in our round. And so that's been really powerful And we've been very fortunate that this model has had such great product market fit. And are there companies in Europe or industries or categories that maybe you're not in yet that you want to be in? So I guess there's not in yet and what I want to be in are kind of two different things. So when you're starting a new fund and you're just a small team, you can't do everything, obviously.

13:17You have to be incredibly focused. And there's so many things to look at that are great that we're just not able to spend time on. So we've made the decision purposely to focus ourselves on B2B AI. And because we believe we're at the very beginning of this very powerful AI wave, my personal investment background is in B2B technologies. So I feel like I have more depth there as an investor. And my network is also deeper in these areas. It's not a negative commentary on defense or crypto or other areas. We've just chosen not to focus on these categories, at least at this stage yet. It doesn't mean we won't get there eventually over time.

13:54I think from places we would like to do more of is we would love to do more vertical opportunities inside of the AI category. So we've done some many kind of broad platform approach companies, but we have one that's a vertical with Harvey, and that's been a great one. We'd love to do more of those. Another thing is it's been really important for me to build a firm that's competitive US and Europe. We'd also like to do some Israel too, but it's just like we have so much going on between these two places. We haven't been able to make one in Israel yet, but Israel is an incredible ecosystem. It's a very pivotal part of the West and Western ecosystem, and so we'd love to have some investments there as well.

14:35So those are some of the areas where we'd like to do a little bit more, But we're kind of trying to be very focused on the West and B2B AI is kind of the focus as we start. And how are you assessing the opportunities? What are you looking for that marks it out as a great investment opportunity for yourself and Avantik? Yeah, we're trying to be in the biggest, most transformational companies. So, again, it's a forcing function when you're a small team, have limited time. We look at it as what are the companies that we are very confident are going to be the superstar enduring mega cap companies of this AI wave?

15:13And that's the ones we're hunting and chasing. And if it doesn't fit into that characterization, there's a rubric that we look at around this that we want them to have a sustainable competitive advantage. We want to believe that their team is one that we would work for. Another test that we do is always ask, you know, is this a team that I would actually come and work for and be part of? Do we think that the investment has at least a 10x potential from here? For our conviction investments, we've chosen to focus at companies that have revenue and are scaling and kind of in the growth mode. So we, you know, is there signs of product market fit in this business and signs that the business is working and off to the races and it's more about scaling and figuring out the product.

15:58So this is the rubric that we go through as we evaluate them, but really kind of focusing on the things that we think are going to be the very big ones, especially with this first fund. And when you look at the stage or the size that you're investing in, you know, a lot of these have been quite big rounds like, you know, Lovable, NA10, but also like Nexus was quite early. do you have a sort of uh a reason that you will play and won't play so we look at it as i think that the the biggest test is every investment we make we sit down and we have a conversation what is the dream scenario where this is a 10x plus return because if we're not playing in the land where we can dream to these spectacular returns then we should put our time somewhere else, even if it's a great company.

16:44And so that's one. So even for some of these later higher valuation entry price companies where we've gone to, we've invested in, we look at it that way. Do we believe there's a 10X plus potential here? We like to invest in companies that are early in growth and early on that journey, as well as some of the more established ones. And so we've kind of taken this framework of there'll be companies that are kind of one to 50 and Nexus is the earliest that fits in that. and then we have companies that are kind of 50 and beyond and 11 labs and synthesia are the largest in that category or i guess lovable now too and others but um uh so we kind of have a division the portfolio of half of them fit in that later stage bucket half of them fit in that kind of one to 50 bucket and we like both and we want to like play in both and and we look at both as great opportunities provided we think there's a 10x plus and how do you see advantage as a firm changing now you mentioned that you're b2b ai predominantly now you most folk mentioned that you're in those kind of two buckets do you see yourself going even earlier do you see yourself going even later do you see yourself doing different industries and categories or do you think you know this is going to be it so the goal for advantage is to build over time a powerhouse multi-stage international investment venture firm from london that is competitive for the best opportunities around the world from Europe with a team in London that's executing and winning.

18:11And that's a really important thing. And that's kind of the long-term vision of what we would like to create. I started it as a solo GP and, you know, with lots of questions around finding partners. And to be honest, it's been a bit of a gift to start as a solo GP because it's allowed us to move with great velocity and has taken a lot of the figuring out who will be my colleagues and partners just put that to the side for now but i would like to hire more partners and help to grow partners over time who have had more experience in helping me lead the business and um but it has been nice to be a solo gp to begin um but it won't be the forever and we will move into other categories with time but i think it was for the for the for the for the next few years the focus of avantic is on partnering with everybody in the ecosystem co-investing in many of the great rounds trying to be a helpful partner and build great relationships like for me building great relationships and having good rapport and and collaborating is really important and so that's how we will approach the ecosystem and you might see us out another gp in the year or two ahead but we're not under a rush to do these things and we'll slowly build out into the longer term vision of building a multi-stage full platform a global investment uh venture firm from london the name of antic is you know europe via the atlantic yes you're building this global firm that you want to be like you say multi-stage huge firm but you're building here from london which is quite unusual you know most of the big multi you know the global firms are u.s focused or u.s headquartered but then they kind of expand to europe and in europe we have a lot of great firms that are just europe focused what you're doing is quite unusual we've got index which is similar i guess yes but other than that there aren't very many firms that are global in nature but europe headquartered why was that your approach why was it your approach to stay centered in london but have this global outlook well i was here working in the sequoia office so i was one of those great american firms that came over or i guess global firm came over and opened a european office and i just felt like you know and i saw index and index is amazing and their returns are amazing the people are amazing but we need more than one index and like like this is incredible place and like we should have multiple firms.

20:26Index, unfortunately, is going to be conflicted out of a lot of things and not able to do everything. And different firms make different decisions. And as we can see from Silicon Valley, there is room in a thriving tech ecosystem for many funds to succeed. And I want all of the Europe funds to succeed because they are very valuable partners for us, do things to help them succeed. But I want to build something that, like an index, is international in nature, globally focused, and also can win and participate. And so I felt like there was this gap in the market of that we need more people who are competitive in the valley and so my team will attest like i am very religious like we're spending time in the valley we're going there regularly we have lots we can look at and do here at home and that might be an easier path for us but so critical for us in decision making and being global from day one that we'd be winning in the valley and five of our conviction investments are in the united states four of which are in the valley and five of the one is in new york and five of our conviction investments are here in europe and we're going to working to it to keep that balance over time and keep that competitiveness of being able to win in the valley over time and do you so do you see yourself having an office out there you know when you look at expanding the team in a year or two would that be an early high to get a partner out there not sure if it will be a partner it might be a younger investor um somebody to help us with sourcing who's kind of boots on the ground and that I think that it's really critical to have decision-making in one place.

21:54It's difficult when you divide decision-making across multiple offices. And so I'd love to have kind of the decision center be here, but kind of open to all modifications depending on whom is the potential partner. For somebody incredibly spectacular, they can live wherever they want to live. So as long as we're making money and making great investments and doing great for the community. The legends, right? So you've got everybody everywhere. We do. We do have people everywhere. So I think the goal is to have the center and the heart in London, but open to evolution in all possible ways to do the right thing and grow and build Avantik into a great firm.

22:31And how did the thesis go down with LPs? Being Europe headquartered, but globally minded. You know, there were a few spectacular LPs who really got it and lined up and lined up big with us. And there were a lot of people who got kind of confused. So there were people who felt like the legends might be difficult to manage and too much work. And, you know, are you really going to get anything from these people? And people passed because they thought that the legends was going to be too much. And the legends has ended up being so empowering to all of us, enabling us to do so much more. And then we had people who passed because we kind of sit in the middle between U.S.

23:10and Europe. There's people who want to just invest in Europe. There's people who just want to invest in the U.S. And I'm like, I'm sorry, guys, we're going to do both. like our job is to build a firm that delivers spectacular returns. And for us to do that, we want to be investors in both and be competitive in both. And we think if we're competitive on both sides, we will be better and be able to deliver you better returns. And so, you know, there were people that passed because we didn't fit cleanly in Europe or didn't fit cleanly in the U S and how we, how we decided. And, you know, now a lot of those people have come along and seen the success that we've had and they're, Hey, let's check back in and when's the next one.

23:45So it's been very, very nice to see that happen. But it was incredible how many people were very skeptical of this model as we were first pitching. But we're grateful for the great limited partners we do have and for the great commitments that they made to help get us launched. It's amazing. People always talk about looking for contrarian natures within VC. And then often you come along and you are contrarian. You built a new model. It's so funny. Yeah, I feel from the, if I was just to take like the group of limited partner conversations I had, they really kind of all want you to fit into the boxes that they know and the checkboxes that they have.

24:22While being contrarian is how you generate great returns, they kind of want you as a firm to look like and feel like all the others. And so until it proves itself out a little bit. And so now I think we're in the prove itself out a little bit mode. And I definitely have noticed a tone change from many of the people that we spoke to in the fundraise as they've seen the model work in action. And what's that like on a personal level? It's quite quick validation, I imagine. Is that kind of gratifying for you to see people? It's so rewarding. I mean, I would say that the thing that you, you know, I was talking to somebody recently and I was comparing it to having kids, that you don't realize how much you love a human being until you have a child.

25:05When you have a child, you experience this different level of love that you haven't felt for any other human because they are part of you. When you create something and you build something, there is this feeling of passion and excitement and your skin is super sensitive and exposed to when it goes well and when it doesn't go well. And every time somebody says no, even though you know there's lots of other reasons they say no, it hurts and stings. And every time somebody says yes and you win, you feel these highs. And you feel them at such a greater level when you create something. And that's been the case for me at Advantic.

25:43I had done small things earlier in my life before, earlier in my youth doing startups. but never nothing ever at this scale and like coming from an investor to being a founder and investor has been a huge change in evolution like that and so for sure it feels very gratifying and i take i take every pass personally i'm like i'm like dang i'm super upset every time somebody passes on us uh as an lp uh and then and then every time somebody says yes i just i fly to the ceiling with a high and i'm excited and so it's an incredible journey and uh yeah it feels i'm feel very happy with how things have gone, and it's been incredible.

26:23I've seen you talk about type one versus type two decisions, you know, type one being irreversible type decisions. Yes. This is a very much irreversible decision. You're leaving Sequoia to set up your own fund and to embark off on your own. I know nobody will ever hire me again. There's no turning back. What's the money? There's no turning back now. What gave you the conviction? You know, you had this amazing job, an amazing brand. You had spearheaded the European expansion. You had great investments under your belt. But what made you think, okay, now is the time to go off on my own? I grew up doing startups and being entrepreneurial and all the way through when I was in university.

26:58And then the last startup I did, I felt like I wanted to compete at the very best levels and I needed to go validate myself. I went to Brigham Young University. It was a great university, but it's not known as one of the top five or 10 in the world. And so I had this chip on my shoulder, like I want to go compete at the highest levels. And so I got in my head, like, let's go do investment banking. Let's learn finance, business, and focus on the tech world at the highest of levels. And so I cold called my way into a job at Goldman. And I worked there and I said, okay, I'm going to go be an entrepreneur after Goldman.

27:30I'm going to go work in a startup and then maybe I'll start my own. And then Sequoia came along a couple of years into Goldman and reached out. And it was like lightning striking in my life. Like that was never going to happen again, this chance to go work at Sequoia. And so I did everything I could to go get the job at Sequoia. And then it was incredible. And as I got older and I realized that if I don't start something now, you know, I'm going to lose my window. And so I wanted to start something now. And it was like, and I wanted to take that leap. And I'm going to have had a good set of investments.

28:00And so I just wanted to go from the past and a good set of experiences to learn from. I grew up as an investor in what I feel is the best firm investment firm in the world. And so I learned the investment business for the best people and best partners in the world. And if I was going to do it, now was the time. And so that was what led me to go do this now versus waiting for another point in time. And boy, am I glad I did. Like, it's like you jump off a building and you're falling for a little bit. But then when a little bit of air comes underneath your wings, you're just like, you're so thankful that you're flying to some degree and you haven't hit the ground splat yet.

28:35So anyways, it's been good. Looking back at your time at Sequoia, as you mentioned, the greatest VC firm of all time. Yes. What are you bringing with you from that firm? What have you learned that you are now bringing with you to Avantik? Yeah, it's an incredible firm filled with incredible people who I really love. And I love the culture of Sequoia. And so as much of the culture of Sequoia that I can bring with me, I want to bring. And I'm trying to instill in Avantik. And the whole way that we approached investing, decision-making, company building, our spirit around helping and partnering with founders, trying to become one of their most reliable contacts for first phone call.

29:16All of these things are the same thing that we're trying to do inside of Vantage. Where I'm changing is I'm building something from Europe for the world, which is a different orientation. And I'm creating a different go-to-market model with this incredible community of business partners and legends. But I don't need to go reinvent investing. I feel like I had an incredible education in investing from my time there. Yes, it was like an evolution in terms of the model with GTM and different focus. And, you know, throughout your history, you've been at the kind of the forefront of pushing forward European tech.