Farewell Balderton
Six years ago I was sitting reading the papers in the May sunshine in Buckinghamshire. I’d just left my startup, Firefly Tonics, and was taking the summer off to think, dream, travel, figure out what next.
My phone rings.
A head-hunter.
“Have you heard of Balderton Capital?”
What was I thinking?
As VCs, first impressions are a big part of our job.
But we’re notorious for revising them, deliberately or subconsciously, with the benefit of hindsight.
Our egos stop us from learning.
So I’m going to try and be truthful about my journey, by going back to a primary source: my journal.
(Yup, I write a journal. Longhand. No editing. Keeps me sane.)
Here’s what I was thinking back then, the night before I started at Balderton:
20th September 2009
“I really want to do this:
Work with first class people
Learn about the latest technology, evaluate heaps of businesses
Get to know lots of smart, ambitious entrepreneurs
Be well-placed to start another business in a couple of years.”
I was anxious about joining a “9 to 5”
“I mustn’t let them tumble-dry the life-force out of me.”
So I promised myself I’d:
“Spend time with the dreamers, the can-do’s, the people who want to change the world — rather than the cynics. Ask the real questions that get inside people, not the smartass questions that make me sound clever.
Be modest. Be me, not my job.”
Hmmm…
Which bits came true?
1. “Work with First Class People”
27th September 2009: [one week into the job]
“Wow, these guys are smart. It’s thrilling being the dumbest guy in the room.”
One thing that’s never been in question is the calibre of the Balderton team. In most jobs you’d be lucky to cross paths with one mind as brilliant as, say, Mark Evans, Tim Bunting, Bernard Liautaud, Jerome Misso, Rob Moffat, James Wise, Suranga Chandratillake or Daniel Waterhouse.
Here we have them all in one room.
This is good and bad. Good because you never stop learning, hoovering up their experience and wisdom, observing them in board meetings, studying how they come at businesses from five different angles, living up to their deeply-held values, trying to keep up with the banter.
Bad because, initially anyway, you’re terrified of saying something dumb — everyone’s at least two steps ahead of you. Like Alice Through the Looking Glass, you’re running as fast as you can, and still going backwards.
December 2009 [three months in]:
“Oh dear, I’m not sleeping well this week. Feeling swamped and behind at work — constantly letting down Bernard, Roberto or Dharmash — and I can’t help feeling half the partners are regretting hiring me. I still don’t feel myself:- it’s partly the need to conform; and the need to appear less stupid, because it’s Balderton’s reputation at stake. Trouble is, this self-monitoring actually makes me more stupid: I’m constantly replaying things in my head.”
Two months later, things are even worse:
I woke up at 3.30am, running through all the work things that needed doing, and became convinced I was going to get fired: [nameless colleague] had been so unimpressed with my trawl through eCommerce retailers that I had to wonder what I was any good for.
But then, randomly, you stumble across an outstanding entrepreneur. And that’s when the job becomes magical…
2. “Get to know smart, ambitious entrepreneurs”
February 2010: [five months in]…
“Matt Moulding, founder of the Hut Group. I saw him speak at a dinner in November and loved him. He’s a no-nonsense self-proclaimed “Northern oik”, incredibly motivated, who’s built a culture a bit like his previous employer the Caudwell Group: big bonuses, work hard, seal the deal. All the staff wear The Hut T-shirts and hoodies… It’s an odd business for us — no huge innovation except a low-cost culture, a modular tech platform and a well-motivated workforce. How do you invest in that? But he’s such a great entrepreneur, I’d bet on him.”
Matt Moulding effectively saved my Venture career. I went from the throes of despair to the thrill of closing my first investment:
“I worked most of the weekend — till midnight Friday, then most of Saturday on a marathon call with the Hut, listening to Mark [Evans] preparing Matt for today’s partner meeting. Then writing the investment memo (heavily prep’d by Mark) most of Sunday. It was exciting.
Matt’s a rare human being: a driving passion to build a huge business — to ‘win’ — but more importantly a laser eye for talent, and how to get people to work together and make incredible things happen. I think the Hut will be a huge business.”
We made the investment. The Hut has done exceptionally well.
And from that moment on, I started, at last, to find my feet…
31st March 2010:
“Venture is a people business. Before, I was trying to find companies through research, data, analysis; but business is about people — so I’ll get much further by finding great people, getting introduced to great people they know, and being a helpful, wise, empathetic ear — with bags of cash to invest”
It was also my first time working closely with Mark Evans — who became an inspirational mentor to me. Mark has a razor-sharp mind and near-photographic memory; he reads voraciously, works relentlessly, never stops learning. He has this knack of making people around him feel valued— by listening intently, and giving others the credit even where little / none is due. “Harry found it — Harry finds all the good ones.”
We’ve found many more great entrepreneurs over the years.
Most don’t get a mention in the journals, sadly (the journal’s mostly relationships / adolescent drivel)— but I did dig up a few “first encounters”:
Oct 2011:
I met Ross Bailey — an entrepreneur I’d met briefly at the Take Heart Ball and instantly liked. He has a nice idea — an AirBnB for vacant shops — and he’s enlisted so many impressive people to help. All this at 19. I found myself marvelling at him as he talked: […] so much passion, self-awareness, self-belief.
We invested in Ross’ company Appear Here two years later.
Nov. 2011
Then there was Carl Waldekranz at Tictail — a new way to run eCommerce, making it staggeringly simple for the retailer; and social (following, like Tumblr) for the customer. Carl is a natural — smart, great web designer, ambitious. We must do this.
We flew straight to Stockholm, loved the rest of the team, and signed a termsheet within the week.
May 2011: email to Eileen Burbidge (Passion Capital):
I just had a good meeting with the team behind GrouPAY — really impressive guys, just got accepted onto Y-Combinator. Thought it might be up your street…
Groupay became GoCardless, and Eileen wisely invested a few months later. We eventually invested in 2013, and one of the co-founders, Tom Blomfield, went on to found Mondo [later Monzo].
March 2013:
We’re getting in Touch Surgery to present on Monday: stellar progress since last Summer, getting commercial traction with medical device companies, and I think could transform the pace of innovation in surgery: because now there’s an efficient way to disseminate best practice.
I couldn’t convince Mark [Evans] last Summer, but he agreed this time. Jean is very smart, very charismatic, a little vain (says being a plastic surgeon is a hit with the ladies…). But both he and André are smart, passionate about changing surgical education, and incredibly hard-working. They’re people I aspire to be like.
Backing three full-time surgeons who’d, in their “spare” time, learnt to code and built a working app to transform surgery, is one of my proudest moments.
October 2013:
I love my job: this week I met Roland Lamb, inventor of the ROLI Seaboard, a remarkable new kind of keyboard, with a very brilliant team. They have an electric atmosphere in their cool Dalston/Haggerston warehouse, with long tables built by Jim the boat-builder, and a lady who comes and makes veggie lunch for the whole team every day… It’s such a privilege to spend time with entrepreneurs like this.
We invested in ROLI the following month.
But one of the best companies of all was right under our nose all along:
October 2009:
“I had lunch with Chris Morton [then a Balderton associate], sitting in the sun in Grosvenor Square, discussing his business plan — a directory of every fashion item, as a resource to shop, search and share. If he can get all that data easy to search, de-duped, up-to-date and engaging to use, this could really work.”
He did. We finally invested in Chris’ startup, Lyst, in 2013.
Of course there were disasters too. Dumb decisions. And the investment is only the start of the journey.
But I’ve met more amazing entrepreneurs than I could possibly have hoped.
Several have become close friends.
I can’t mention you all, but I do hope I get to work with many of you again.
3.“Be well-placed to start another business in a couple of years”
Entrepreneurs never lose the entrepreneurial itch.
In theory, Venture positions you well to start a business: you’re in the flow of the latest ideas; you’re bumping into smart people who might be good co-founders; you know how to raise capital... And many Balderton people have gone on to run their own businesses — including former colleagues Andrew Nutter, Charlotte-Anne Swerling, and Chris Morton, above.
But the danger is that the longer you stay in Venture, the more you set the bar for your own startup impossibly high. You know there are 10 other teams working on every decent idea. You become deeply aware of your own flaws and limitations. You ask, how can I even begin to compete with the execution of Matt Moulding, the product flair of Carl Waldekranz, or the determination of Ross Bailey?
So what happened to that 2-year plan?
December 2010: [15 months in]
“Cheering news from Jerome & Dharmash (though Mark had tipped us off in advance so I wasn’t trembling like last year): Rob & I are “the best associates we’ve had” and “we’d like to keep you here as long as possible”.
So, from Jan 1st, I’ll be a Principal. They’d like me to stay 4 years rather than 2, with the possibility of partner thereafter. So I can spend another year focusing on becoming a good investor.
[…]
But I really mustn’t allow myself to get bored or comfortable: when I stop learning, I must move on.”
I haven’t stopped learning.
4. Ask the real questions. Be me, not my job
VCs need to be optimistic, authentic and empathetic — yet also, somehow, ruthlessly efficient, or we get “swamped”.
We meet new people every day, asking them the most intimate questions about their dreams and ambitions — but the vast majority we have to reject.
This is the hardest part of being a VC: finding the emotional resources to say no with humility, compassion, and honesty, every day. Say no too warmly, and you give false hope and waste time in follow-up discussions. Say no too harshly, and you shatter dreams and spoil relationships. Our volume of work pushes us to be ruthless — just move on — but our human compassion and uncertainty compels us to be sincere and supportive. Yet if we invest too much emotional energy in every rejection, we’ll be too exhausted to jump up and down when we next meet a great entrepreneur.
How do we square this?
VC is a people business. Our decisions are more emotional than rational. So it helps if we’re in a good place emotionally. We have to be grounded enough to connect at a deep level.
I found that tough when I started:
27th September 2009 [one week in]
“More pitches — all male — and we’re an all-male investment team too. Over the week, I met 40, 50 people in meetings maybe, and not a single woman. The banter is all Premier League, Man U this, Drogba that. I started to fret about how I ever fit into this alpha-male world”
And there was something else I was struggling with:
“There’s the gay question. I haven’t told the partners yet because I don’t want to make them feel they have to keep their banter in check; and I feel this overwhelming need to ‘fit in’ — be one of them. But clearly, if I can only fit in by being straight, then I’m either going to have to live a lie, or never fit in.”
I think the great entrepreneurs are those who are most authentic, honest, true to their values and purpose. We’re drawn to those people — they’re the people we want to be led by — they have integrity, resilience; they treat people right by instinct; they’re open about their shortcomings; they make quick, instinctive decisions; they’re on a mission.
As VCs, winning the trust of these great entrepreneurs, we have to find our own authenticity. Machismo is, by definition, not authentic, and I’m pleased there’s less of it around than there was. But I also needed to get more comfortable with who I am. The more we can do to build our own integrity and character, the more we can trust our instincts. Boy, I’ve got a long way to go.
How has Balderton changed?
Balderton’s come a long way in 6 years.
In 2009, we were in a faceless office in Mayfair.
I was issued with a Blackberry and a recycled Lenovo laptop.
Our “CRM” was an on-premise Access database.
Our email was Outlook Exchange, with a tiresome archiving system that couldn’t be searched.
The average age of our CEOs was probably 40+.
Most of the partners barely set foot in East London.
Our logo and website were fuddy-duddy, our brand nebulous.
We had first-rate partners who’d made great investments like MySQL, Betfair, Yoox, Bebo — but we’d just turned down both Spotify and Twitter...
As of 2015, I think we’re a far more open, friendly, approachable fund.
We have a clear focus: early-stage European startups.
We’re becoming a brand.
Our CEO events buzz with 20-somethings and 30-somethings (I feel old).
The team is stronger, more collaborative, more focused, than it’s ever been. We’re liked, as well as respected.
We’ve moved into the most amazing space in King’s Cross, with an open café area for meetings, a startup space, and entrepreneur events every week. Of course we’ve migrated to Mac/Gmail/cloud stack a while back.
And as for the next Twitter? Well we have a few candidates…
There’s plenty we can still do better — decision processes, career paths, gender balance…
But I’m truly proud of the Balderton I leave behind in 2015. And to have played a modest part in the transition.
How has the ecosystem changed?
Meanwhile, of course, the tech ecosystem has gone bananas.
In 2009, “Silicon Roundabout” had just been coined. Wired had just launched its UK edition. You could meet half of London’s tech entrepreneurs in a small pub at Andy McLoughlin’s monthly ‘DrinkTank’. SeedCamp was the only accelerator. I could visit Stockholm or Helsinki for 48 hours and feel pretty confident I’d met most of the startups that mattered. And European VC funds were a dying breed — returns had been poor since the crash, and “zombie” funds were the norm.
Today, a new VC fund is launching every week. Tech companies sprawl from Bermondsey to Bethnal Green, Canary Wharf to Camden. There are so many accelerators there are sites to help you choose the right one. Stockholm’s monthly Tech Meetup sells out 600 seats in hours. Dublin Web Summit is as big as Glastonbury. David Cameron is papped in Second Home or ROLI every other week. And you could probably charter several jumbos from Shoreditch to Burning Man.
Tech has gone ubiquitous.
It’s been an incredible time to be part of it.
So what next?
Sorry, I can’t spill the beans quite yet.
But I’m staying in Venture. A new fund. Already raised. Launching in September. We’ll announce more soon.
I hope we can push the model forward, enhance the tech ecosystem, and work with more outstanding entrepreneurs.
I hope I can live by that paragraph I wrote back in 2009. Perhaps I’ll stick it above my desk.
I hope building the new fund will scratch my entrepreneurial itch a bit too.
But one thing’s for sure.
Balderton will be an unbelievably hard act to follow.
Thank you.
I leave you with this paragraph from Anthony Seldon…
We all have our individual “song”, our unique mission or opportunity in life, whether or not we accept it. As we travel on our journey, that inner song is either released, progressively, or it is further imprisoned. When it is fully expressed, we at last know ourselves, and our purpose. It is joyful. Travelling in the other direction is a journey to obscurity, alienation and misery.
