Exploring Founder Liquidity — In conversation with Thanos Papangelis

Margarida Garcia
9 min readSep 6, 2022

In 2007, in the middle of his Ph.D. in Computer Science, Thanos Papangelis left it all behind to focus on Epignosis. Being the founder of a tech startup was not only uncool in Greece back then, but also almost unheard of.

At a time when learning management systems (LMS) were clunky and took months to roll out across organisations, Epignosis was building a product that focused on delighting the end user — with one click setup and at a fraction of the cost. Frustrated business unit managers, tired of waiting for the corporate-wide LMS rollouts, could now just simply expense it on their business credit card. And so their flagship SaaS LMS product, TalentLMS, was born.

Beacon’s founder, Maria, was approached by Thanos and his co-founder, Dimitris Tsingos in 2015 to invest, join their board, and help them scale. It was the beginning of a relationship that would shape both the company and Maria’s views on how investors needed to support talented founders, especially when they were coming from Europe’s peripheral economies. Today, despite Maria having exited her investment to Insight Partners, she remains on the board in an advisory capacity, and Thanos has since become an advisor and investor in Beacon.

While the Epignosis’ corporate story is well known within the investment community, Thanos’ personal story remains a secret and deserves to be shared. It was his story that helped inspire Beacon’s founder liquidity strategy, and one of several examples that showed us the importance of offering financial freedom to founders early on to give them the mind space to think big.

How did you come up with the idea for Epignosis?

My partner Dimitris Tsingos and I, both had entrepreneurial backgrounds, and he was actually the one who had the idea to start an EdTech business in Greece.

Out thinking wasn’t all that linear — our first idea was a disaster and the second one never found a strong PMF in Greece. We then decided to try and expand the business by selling it internationally, and it worked! We managed to succeed through our failure. As a result of this, I have learned something that most entrepreneurs learn: to find what works, you need first to find what does not.

Dimitris Tsingos and Thanos Papangelis celebrating Epignosis’ 5th anniversary.

How did your journey as a leader unfold?

In the early days, all that mattered was to break even without raising external capital. At that time, I was involved in running sales and marketing as well as product and customer success. We were a small team of 10 at the time, and roles and responsibilities were really fluid. Most of the time, I was overstretched, possibly a bottleneck, and certainly had little time for creative thinking.

With profitability and strong growth, confidence increased, and a shift in focus occurred: we needed to improve our operational efficiency and build a strong middle management team.

I endorsed our new, structured organisation wholeheartedly, but even as we were growing up, I kept making mistakes: I spent a lot of time trying to head up both our tech team, as the CTO, as well as being a co-CEO alongside Dimitris. It was as if the geek DNA in me was refusing to let go. I would find a million reasons to argue why what I was doing “may be unorthodox, but it would work because we are different.” I came to realise however, we were not.

On reflection, as an introvert, part of my CEO role never came naturally to me. Because of the support I received from our investors and the board, as well as my co-founder, I eventually decided to keep the CEO role. I had to learn to let other super talented people take over the technical leadership of our product and tech.

How did you meet Maria?

I met Maria for the first time face to face in the crowded conference room of a hotel in the northern suburbs of Athens, after Dimitris had invited her to speak about her experiences in investing in various startups.

Dimitris had tracked her down: Maria was one of the few Greeks of the diaspora who was an active investor and mentor to tech startups in Europe. She talked the same language — not only literally, but also metaphorically as she also was an engineer. She understood both the business as well as the culture of our then-nascent company.

At the time, Epignosis was a ten person company sharing office space in a somewhat rundown part of downtown Athens. The business was approaching $80k MRR but in the absence of equity funding, we were an atypical profitable startup!

We were anything but an obvious bet: lots of other investors saw us as an “oddball” — few could believe a startup could grow fast and be profitable at the same time. Even fewer could believe that we could become a global leader based in Athens, a peripheral European economy which at the time was going through the particularly challenging time called “Grexit”. Even though “Grexit” referred to exiting the Euro only, and emphatically not the EU, it was seen by some as threatening to destabilise the institution that was the European Union.

Maria’s input was instrumental in helping us focus on operational efficiency. She provided us advice and guidance on the metrics that we should focus on to harness our full potential but also on how we could expand the team to support our ambitions. The reason we were able to work so well with her was her intellectual honesty aligned to her obsession to understand data to surface where the problem, or the opportunity, might be. You never got the sense that she had a hidden agenda: the company and the founders always came first.

And then others joined the game! Tell us more about how you met PeakSpan and Insight?

Indeed, I still wonder how they found us from the other side of the world! I believe it was because of our digital footprint: Epignosis’s growth was turbocharged by our SaaS product, a competitively priced, super UX-friendly LMS which was designed to be frictionless on its adoption and was available as a freemium model. I think if you are based in a peripheral economy, it helps to build a product-led, low ACV, high-velocity business with solid unit economics and digital trace. Ultimately, investors can more efficiently perform DD, which made us a safer bet for international funds.

And each of our investors led us to the next stage — Maria played a critical role in those relationships as a Board member who was based in the UK. Maria brought early discipline into the organisation and the Anglo-Saxon POV, which played very well with PeakSpan and helped us in the translation and understanding of cultural differences.

As Maria helped us operationalise our early success, PeakSpan’s investment legitimised us in the eyes of mega US funds like Insight Partners. It’s interesting because when PeakSpan reached out, we weren’t chasing funding. Epignosis was profitable and growing at 100% YoY at >50% net profit. Although we believed the extra capital would help us further accelerate the business , what we really wanted most was to “grow up” as a business.

PeakSpan’s DD further accelerated what we had already started with Maria and forced us to clean up the house regarding governance and reporting. After that, we were no longer just hard-working, promising, and spotty teenagers!

Having PeakSpan, and then Insight join us as investors was not only a great validation of what we were building but also of how we were actually doing it. For anyone who’s worked with either of the two, you’ll know the importance and attention they give to metrics and overall operational efficiency.

I didn’t realise then how crucial liquidity would eventually become — but it actually allowed us to take much bolder decisions when it came to building the company over the upcoming years.

At Series A when you were many years into the journey, and I reckon with lower than market rate salaries, PeakSpan came in offering you some liquidity. What did that give you?

For many years we were underpaid, and so the liquidity, however small when compared to our entire stake as founders, made a tremendous difference on a personal level. More importantly, it reduced the risk for the founders.

At this point, we weren’t chasing liquidity, nor funding as mentioned: just strong international market validation, expertise around the table, and hedging against a potential downturn. When PeakSpan offered us tiny liquidity, it was just a positive “cherry on top of the cake” situation for us. I didn’t realise then how crucial liquidity would eventually become — but it actually allowed us to take much bolder decisions when it came to building the company over the upcoming years.

The second time liquidity happened for us was with Insight, we had a high-performing business, one of the best in the category; we were paying ourselves well and had little risk. However, we saw it as an opportunity to give Insight a strong position in the cap table and get more skin in the game. We knew from working with them for a few years that with their support we would go harder, better, faster, stronger.

Over the years, I have started giving back to the ecosystem — I became an angel investor in a few early-stage companies around Europe and am an active mentor to them as well as an LP working with some exceptional managers.

Looking back, do you wish you would have done something differently?

One can optimise in hindsight but, overall, I believe we made the right decisions at the right time. Could we have been less risk averse? Could we have grown even faster? Probably yes. But one needs to be true to one’s risk tolerance: contrary to popular belief, entrepreneurs are not high-risk takers; they are actually more risk averse than the average person. They just have a higher conviction than the average person in their own abilities.

I often ask myself if we would be where we are without investors and external capital, given that we were already on track to become a substantial company. But I remind myself that a lot of the confidence to invest in our growth was a result of having partners like Maria, PeakSpan and Insight around the table. Their plurality of views, the global perspective they brought (and still bring!), and their know-how have helped me better develop as a leader.

Epignosis HQ in Athens today.

And what advice would you give to founders today? Especially founders based in peripheral economies in Europe or elsewhere in the world?

Talent is what can make or break your company, and being based outside of the main hubs can help you in many ways. Capital, although scarcer, will be needed in fewer amounts which, if optimised, can lead to very different outcomes for the founding and managing team. At a time when talent competition is intense, and remote work has intensified that trend, raising less and keeping valuations lower until later can have a significant impact on attracting the right team early on.

When going out to raise, always consider (and re-consider) your governance. International investors are accustomed to reporting standards that are not necessarily adopted by embryonic ecosystems. Although there are many advantages if things go well, the risk is higher (perceived and real) because of your geography, and harmonising local legislation, employee contracts, etc. to international standards can be a great advantage.

Finally, language and culture also play a significant role in your success — no matter how articulate one is, running 20 calls a day in a foreign language will likely hinder your eloquence if you don’t practice extensively.

You dedicated your life to EdTech. What are the prospects in the sector?

EdTech is an ever-evolving sector that has yet to reach its peak. I see education in the public sector as an attractive future growth area. Enterprises are becoming increasingly responsible for helping employees play catch up with the ever-changing nature of the tech and other landscapes. Technology-wise, the current solutions need to evolve significantly to make training more adaptable to user needs and to turn it into a faster, more satisfying, and cheaper alternative to traditional training. We are certainly not there yet.

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This is the first of a series of founder liquidity stories, stay tuned for the next ones.

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