VC Q&A Session: MassChallenge & Balderton Capital

We asked entrepreneurs from our UK 2015 cohort what their number one questions were for Suranga Chandratillake, General Partner at Balderton Capital. He covers everything from a 24-hour funding deal to the appeal of IPOs.

Suranga founded blinkx, the intelligent search engine for video and audio content in Cambridge in 2004. He then lead the company for eight years as CEO through its journey of moving to San Francisco, building a profitable business and going public in London where it achieved a peak market capitalisation in excess of $1Bn. Before founding blinkx, Suranga was an early employee at Autonomy Corporation — joining as an engineer in the Cambridge R&D team and ultimately serving as the company’s US CTO in San Francisco.

Suranga has a MA in Computer Science from the University of Cambridge. He holds patents in the area of video discovery and online video advertising, was elected a Fellow of the Royal Academy of Engineering in 2012 and was chosen as one of the World Economic Forum’s Young Global Leaders in 2009.

Six of our entrepreneurs had their chance to ask him their burning questions below:

Romanna Bint-Abubakr, Founder and CEO of Haute Elan: “​What’s the quickest turnaround you’ve seen​ from meeting an entrepreneur to receipt of funding?”

The quickest turnaround I’ve known from initial meeting to term sheet is around 24 hours. Even in these (very rare!) circumstances, it takes a bit longer for the money itself to hit the company’s bank account. Often this part takes 2–3 weeks at least but in particularly crazy circumstances (such as a system scaling so fast they need cash RIGHT NOW for new server instances) we can make exceptions.

Thanos Kosmidis​, Founder and CEO, CareAcross: “While most VC-backed companies have global aspirations, there is a growing trend towards hyper-local startups (e.g. for deliveries). When is this a viable strategy for a startup?” ​

Hyper-local is a bit of a buzzword, I probably describe these companies as those that deliver a product or a service in a very local way, but at global scale. These companies can be hard to build, as users can be initially hard to sell to — this is because people are very sensitive about the choices they make from local suppliers and partners (which restaurant they go to, which real estate agent they use, which accountant does their books if they’re a small business, and so on).

The flip-side of this is that once you are sold in, you tend to get to build a very close relationship with the customer, which means you are unlikely to get dislodged easily. Investors love these sorts of companies but, as an entrepreneur, it’s important to be able to demonstrate that you can cost-effectively deal with the sales challenge, and also that you are ‘local’ in lots of markets, over a much larger (ideally global) landscape.

Christopher Platts, TalentRocket: ​”​What are Balderton’s biggest strengths when it comes to helping their portfolio companies? What differentiates their approach vs other VCs?”​

I think there are two things that matter and both boil down to people. The firm is centered on eight partners and a strong team of around 25 other professionals who provide every service you can imagine — from finance and legal, to human resource and data science. The partners are bound together by an equal partnership — a fairly rare construct in venture — whereby we are all equally invested in the success of each and every company we invest in.

The reason that the equal partnership is important is because we have built a partnership that is comprised of people with very different life experiences. For example, myself and Bernard were both founders who built $1Bn+ companies that we took public, Lars has led mobile strategy for both Dropbox and Uber, and Tim took public or acquired hundreds of billion dollar companies in his time at Goldman Sachs. Having varied experience within the equal partnership framework means that the entrepreneurs we invest in can work with different people at different points over the lifetime of their company. We can, in turn, provide a lot support in a variety of areas, and always with a very personal touch.

​Tamarah Rajah, Founder, Live Better With Cancer: “What kind of traction do you look for at series A and what are the most important metrics for you?”​

This depends entirely on the type of company. An enterprise SaaS company has a very particular set of metrics, and a social media messaging company would have their own, very different set.

At a high level, when we are analysing a potential investment, we ask a different question: have the team found a market that genuinely wants what this company offers? If they have, then we can start thinking about traction.

Olivier Stapylton-Smith​, Co-Founder, Moteefe: “What makes a founding team great in your experience?​”

​Every team is different, but we like:

• More than one founder, as being a solo entrepreneur can be a lonely and difficult place.
• Highly technical founders. At Balderton, we back technology-driven businesses, therefore we find it hard to back founding teams that do not viscerally understand the technology that underpins their opportunity.
• People who are driven by something more than just a financial result. Building a company is a very long term thing and, in our experience, money alone is not usually a big enough incentive during the rougher patches of this journey.

​Gerard Keely, Co-Founder, Vidsy: “There seems to be a trend towards companies staying private rather than IPOing or selling at sub-unicorn status to larger companies. Do you see ‘being a privately-held unicorn’ as an attractive aspiration for a potential investment or should the goal be an IPO/exit?”

We look for people who want to build valuable, important companies that use technology to change the world. If you can do that, good things will happen, and there’s no need to obsess over the detail or nature of a potential future exit.