Taos Edmondson: Partner at dmg ventures, Founder at Onstage

0:00Hello and welcome back. We are here with Taos who is a partner at DMG Ventures and also one of the co-founders of OnStage. OnStage has got a whole lot going on right now. Can you talk about what's going on this week, next week?

0:11Taos Edmondson:Yeah, so firstly thank you for having me on the show and thank you for all the hype that you've been giving us for OnStage. Very much appreciate it over the past few weeks. there's a lot going on I can maybe talk about what we actually do later for anyone who's not come across us before but we essentially run Europe's largest startup demo day our next demo day is next Thursday we've never done it in person before, it's always been virtual so there's some nerves to see if we can pull it all off but that's the kind of big headline event and then in the run up to that tomorrow we're running a hack night in partnership with a bunch of notable startups like lovable granola um and 11 labs plus a bunch of top bc funds like atomico boulder turn episode one chapter one antler um and it's all being supported by um hsbc and hubspot as well so hopefully i've remembered all those names but um yeah there's a lot going on the next week or so no it's crazy busy and like can we go back in time so i think say just like five years old now yeah you and Hector set it up what was it like in its infancy versus where it's at today a lot's changed so the first three and a half years it was just myself and Hector so Hector's a GP at episode one I'm a partner at a consumer fund called DMG Ventures and we really set it up as a side hustle never intended it to be a business that monetized but gradually found or not even gradually we quickly found product market fit and then we started to get approaches from companies like HSBC, Innovation Banking, Google Cloud, and Cooley about accessing the startups and investors that we work with.

1:53Taos Edmondson:So our first event was actually a month before the first COVID lockdown. And it was an in-person event, it was just in a very different format. So we ran a multi-fund office hours with six funds. So some of the funds that took part were funds like Playfair and Jamjar so some of the top funds in the UK but that model just wasn't particularly scalable so it was essentially one-to-one conversations it wasn't one-to-many pitches that we have today and we quickly realized that for for event two we had to switch to a demo day format where we thought it would be more scalable so the first demo day was during COVID lockdown.

2:35Taos Edmondson:And we had in our first event about 300 applicants and that pretty quickly scaled to, I guess, 500 or so at the second event. And we're now at 1 ,500 applicants across Europe per demo day. And prior to this demo day, we were open to companies globally. But from this demo day, we're just focusing on European founders. So a lot's changed. I mean, the volume has just exploded. 1 ,500 is crazy. Yeah, I mean, I guess that now that you've built this brand, has it got easier to find those companies and have them apply? Or is that still a bit of a, is it still hard work? It's an interesting one. I think we have a, our proposition is a bit of a no brainer.

3:20Taos Edmondson:So a key part of our model is that there's no cost and really no time commitment for the founders and investors that take part. so I think when we do reach founders it's an easy sell frankly the challenge that we have which is inherent to all companies that are targeting pre-seed to seed startups is that it's a completely new cohort of founders every 12 months so you need to be able to kind of access all the different corners of the startup landscape to make sure that you're you're reaching all those founders so I think our it really comes down to a brand awareness point I think our brand awareness is growing and we do have very good brand awareness in Europe.

4:01Taos Edmondson:Part of the reason or a big driver as to how we've achieved that is partnering with VC funds. So we partner with about 350 VC funds which is essentially nearly all the top funds across Europe. Those funds promote Demo Day for us in exchange for access to all the applicants that we get. So yeah that enables us to reach lots of corners we've still got a long way to go um about 60 of our applicants for this demo day came from the uk so we i'd say we have 99.9 penetration in the uk um but there's still other areas of the eu and the rest of europe that we can reach as well super interesting and and how are you i want to go to um i just want to go to to to the hack night tomorrow night so this is the first that you've done this yep what was the rationale what's it been like getting that all kind of up and running and ready um so we only decided to do it about a week and a half ago it's been interesting um we we're really happy with how it's going so far though so we had um just under 200 applicants a real range of people as well some senior engineers from some top tech companies and startups, university students, serial founders, etc.

5:20Taos Edmondson:We decided to do it for a couple of reasons. One, I think as a pre-seed to seed platform, it's super important for us to build a funnel of those next-gen founders. I talked a minute ago about the fact that you're selling to a completely new cohort every 12 months or so. We really need to start building relationships with that top talent early on. Two, as you talk about a lot in your content, velocity is becoming more important than ever. To be able to compete, you have to move at warp speed in terms of building the product and commercializing. And we really wanted to take that to the extreme with this hack night.

6:02Taos Edmondson:So the concept is, can you build something worth more than a million pounds in a couple of hours? So the idea is that people will build from scratch, probably people who have an idea but are ready to start a company. And then the winner will, one, pitch at Demo Day a week later for funding. And two, they'll be accepted onto the Antler accelerator program as well. So yeah, I think they're the two key reasons why we're doing it. And I'm really interested to see how it ends up turning out tomorrow night. And I thought that those prizes were really interesting. It's not just cash, but this is like a pathway to entrepreneurship.

6:39getting onto the anti-residency program and having the opportunity to pitch in front of VCs so if you are a top engineer at a company you know this is like okay you could be a founder in three weeks uh which I think is just an amazing like almost like twist on a classic hackathon um what kind of like what kind of ideas are you looking or you hoping to see or have you seen some things already that maybe you can share about what what could people build that could be worth over a

7:05Taos Edmondson:million pounds in three hours it's a good question so i i'm a consumer investor in my day job so i'm not the most technical person um but in a way i'm probably the perfect audience for this i think it it can be quite easy to um to go too deep into the tech that you're building and forget about the user experience at the end of it but ultimately these startups are going to be selling to probably or possibly non-technical people at the end they really need a hook that will land with a massive range of people whether it's a b2b company or a b2c company um so i'm looking for one things that have that clear hook and if you look at all the big um all the startups that have gone on to be unicorns they will they will start with a clear hook and then they will build that suite of products out and a platform in the long run but they start with a with very clear roi that's easy to articulate in a minute.

8:06Taos Edmondson:But then secondly, I'm just looking for something which I've never really thought of before. I think VCs sometimes can try to build their own VCs in different sectors. But if I'm the one building a thesis in a sector and I have a clear idea of what should be built, it's probably not the most exciting idea. And that's the reason that I'm not a serial founder. so I'm looking for something one which I can immediately see the value from and two something that I've probably never even thought of before and three not just a copycat of something that's already out there as you know 99 % of the value tends to accrue to the winner in a different vertical so we're not just looking for the next lovable or the next 11 labs it needs to be either focused on a clear niche or it needs to be a unique product super interesting and so you think if this goes well you're going to be doing more of these that's the plan um so we we think we we want to build a program of events around demo day that really build up to demo day and augment demo day itself and if if this goes well which i'm confident it will the plan would be to do it ahead of the next demo day and as you said it's quite a unique take on a hack night where we're looking to to take someone from idea to funding within a week um so yeah i think tying it into demoday makes a lot of sense because it gives us a clear angle because there are a lot of other hackathons out there um but this is really our differentiator yeah 100 i mean i think generally as cash prizes is something is always what people get uh but this is like so much more valuable the opportunity to pitch in front of 300 vcs is there's nothing there's no other way that you do that without yeah i don't know yeah i i agree i think i think it is a unique opportunity for people and maybe just to talk about what you touched on there in terms of the format of demo day itself so um we will have yeah about 250 vcs and angels in the room um that demo day doing it in london next week and then we have 20 to 25 finalists pitching from the 1500 applicants it will be quick fire pitches we're planning to have minimal distractions so usually at a demo day you'll have a big presentation behind you whereas at our demo day we're really going to focus on the founder and maybe have a couple of points on what they're building in the background but I think it will be quite uh I think it will be like a visceral pitching environment which I'm looking forward to um so yeah whoever wins tomorrow night will get their two minutes in front of these 250 bcs and i think what's interesting about the the the live demo day is that previously it was kind of like when i watched it before it was all pre-recorded you know pre-recorded versus live it's so different i know from doing my own content pre-recorded is safe you get it all done you can edit it you can adjust it you can fix it and then push it out and you can just stream it live whereas going live live is you know a whole a whole other complexity um how are you feeling about managing you know the complexity of having all these people in the room the founders doing back-to-back pitches and making it go smoothly um i so i'm lucky that i have a great colleague who you've um interviewed on on the show called izzy who um is kind of heading up most of the organization so I'm very grateful that we have her on the team um there are pros and cons to doing it live this is async so you touched on on some of them there it certainly takes a lot of stress out of Demo Day when it's all pre-recorded but it's a bit of a weird emotion when we've done it pre-recorded in the past because there's a massive build-up to Demo Day but then on Demo Day itself as a team we just sat there for a couple of hours and watched Demo Day and didn't really do anything so there was yeah it was a really weird emotional come down I suppose on Demo Day itself and then we had the after party which was great but everything over the past few weeks has really built to Demo Day and I think it will be like a bit of a crescendo in terms of the stuff we're doing but also how we're feeling about it emotionally so yeah relatively confident that we'll pull it off logistically and excited but yeah i'm sure something will will go wrong on demo day but that's just something that we'll have to be comfortable with yeah you just deal with it i guess um and going back to on stage you know you've been doing this for like you know five five years has it come up to six years yeah five years five and a half yeah five and a half years looking back on the journey what has been the biggest mistake that you think you've made yeah so probably about a year ago um i think we were at a point where where demo day was running well and um we had like proper processes in place internally and we had a team that were up to speed and i think we just took our focus away from demo day slightly and we thought we could do all these other things um all these other events have like a full calendar throughout the year and we did a lot of planning for some of these other events and realized that one we were just stretching ourselves a bit too thin but two these other events were to the detriment of Demo Day itself so we probably spent a couple of months going in the wrong direction there but yeah towards the start of this year decided to refocus on Demo Day cut away all the extra stuff and really focus on on building value for the investors and founders that we work with so our our ultimate metric, our KPI with Demo Day is the number of introductions that we make between VCs and founders.

13:53Taos Edmondson:And this is a key part of our model. So even though we have 20 to 25 companies that pitch at Demo Day, about 400 companies that apply end up getting an introduction to an investor. And in total, we deliver about 2000 introductions between VCs and founders per Demo day so really we we just realigned on on that being our number one goal and growing that as much as possible um and and yeah stepped back from trying to run all these other events and and just focus focusing on like monetizing them and adding value in different ways i think we we are now sticking to our lane and we know what we need to do and there's so much more that we can do with demo day itself and the program just quickly the program of um events that i talked about they're all going to be supporting demo day so they're not just random other events throughout the year they're all part of this program which will which will strengthen the proposition of demo day itself yeah that makes sense that's super interesting that i didn't i didn't realize so many of the companies that apply end up getting those introductions which i guess is like a huge value and it's not just like oh the top one percent will get to pitch and therefore you know it's like anybody who applies and who kind of yeah gets that visibility that opportunity to to be in that to to being introduced to investors um i wanted to touch on the onstage fund you know this is being talked about like i spoke to izzy about when she came on what was the thesis behind raising the onstage fund yeah so there's only so much i can say from a regulatory point of view um but i can i can touch on our thesis for building out an investment arm if you like um which which my colleague Joel is leading so really through Demo Day we capture two things ultimately one we capture a lot of goodwill from founders and investors for investors we're we're delivering 3 ,000 plus companies per annum to them for very little effort frankly and then for founders we're delivering all those intros that I talked about before so we we generate a lot of goodwill there even if it's not a company that's made it to Demo Day.

15:59Taos Edmondson:And then secondly, we generate a lot of data. So we know what sectors they're interested in investing in. We've also started to track the performance of founders after Demo Day. So we have an early view of the breakout companies. Like when they applied to Demo Day, for example, they might have been at idea stage, but if they're starting to generate some serious traction six months later, we can pick up on that really quickly. um so those two things mean that we're pretty uniquely placed to build um some people don't like this term but like an index model where we can essentially make lots of investments into companies across europe where we're we're partnering with the top tier funds that we work with through demoday um and we're really leveraging the the data and the goodwill that we generate and I think the goodwill is probably more valuable in in the short term in that it helps us get into competitive rounds and founders and investors want to bring us into these rounds and then the data over time will compound and we'll have more insights on what traits we should be looking for in investors and as I talked about before identifying breakout companies early so the demo day really gives us a unique platform a unique platform which we can leverage to build this index fund model for europe so that's so interesting you're i guess you've built such an amazing funnel of deal flow and you've now built amazing relationships with the top two vcs you're starting to get enough data from previous demo days that you can now look at you know that that you you're definitely getting high quality enough companies that you could generate some amazing returns here have you seen anything that kind of connects or any key themes among some of those breakout companies are you starting to learn okay so from the previous batches or cohorts the the you know is these typical founders or these industries or something like that is there any themes but kind of like behind the you know behind it all that that kind of helps you to pick one of the things that comes up again and again which is maybe an obvious point but companies which monetize early and just put a product into market tend to do very well because they get quicker feedback cycles whereas some founders can agonize over products and wait 12 to 24 months before putting it into market I think so yeah early revenue generation is one in terms of founders and this is something we really index towards DMG as well founders you have magnetism it might sound quite a superficial thing to say but founders you have magnetism make a massive difference because those founders can one fundraise um two they can attract the best talent and three they tend to be able to articulate their product better to customers as well whether that be businesses or consumers um so yeah that that magnetism is a core trait that we see in in lots of founders that go on to be successful and how when it comes to the fund it is you know how is that going to tie in with demo day is this going to be something that you you run behind closed doors and it's sort of more secretive?

19:12Or is it going to be like, well, you're pitching at the demo day, but you're also pitching to on stage itself? How is that going to work?

19:19Taos Edmondson:Yeah. So it's a slightly looser or it will be a looser relationship than a YC where you kind of get funding as part of the program. So we'll be investing in lots of companies that come through demo day, but also some that we source outside of demo day itself. um but in all cases as i mentioned before we'll be partnering with the tier one vcs that we work with through demo day so we will definitely augment our proposition and and say we have 20 companies i would hope we'd be backing five to ten of them through the fund um some of them might just be outside of our our remit or we might not do it for a different reason maybe they're too late stage or whatever it is um so yeah it will definitely be part of the demo day proposition but not a prerequisite of taking part, if that makes sense.

20:11Got it. So that's quite a high number of tickets you'll be writing. That's really interesting. That really is like, yeah, OK. So if you're doing, you know, maybe five, maybe 10 a demo day, you do two demo days a year plus investments in between each demo. That's probably quite a large number of investments you're going to be making. And so from the onstage team, is that just going to be Joel, who's kind of primarily leading that, or how involved will yourself and Hector be in making those decisions? Yeah.

20:38Taos Edmondson:So Hector and I will sit on the IC. As I mentioned before, we both have day jobs at funds and us being at funds has lent a lot of authenticity to one stage over the years as well. So there's a real strategic benefit, I think, to one stage of that. so Joel will be leading it initially and then we'll have an IC so we have a couple of other members of the IC as well as me, Hector, Joel but we'll build out the team over the long run as well super exciting well look, I'm excited for tomorrow night I'm excited for next week I'm obviously going to be there so yeah, well thank you for joining me it's super exciting, I love what you've built great, thanks very much Seb

21:26Thank you.