Carmen Pumariño, the Director of EAE Invest and entrepreneurship enthusiast, talked to Anindya Saha, the General Partner at Nero Ventures in the fifth EAE Entrepreneur Experience, entitled “How does a Venture Capitalist choose which startup to invest in?” In the session, they discussed aspects related to investment, entrepreneurship and the importance of teams.
Anindya Saha is a naval engineer and works with the coaching team at EAE Lab, as well as getting personally involved in their projects. “The personal side of things is important because, when you lead a team, the person matters more than their qualifications”. The investor has lived in the United States and Korea and, now here in Spain, he has found certain similarities between Spanish culture and India, his home country. In Spain, the entrepreneurial ecosystem is at a very early stage, far behind the USA, China or the United Kingdom. “We have to work and grow together because there is still a long way to go”.
Financing is always available because projects are improving and the standard just keeps on rising year after year. Although he believes that there is a lot of noise made about the entrepreneurship sector, in which there are lots of guru and a great deal of speculation, the important thing is that entrepreneurs and investors help each other to enable the sector to grow within the country. Boosting the sector in Spain is somewhat tricky “because of the bureaucracy, the level of taxes, the liability of an administrator in a startup”. In Saha’s opinion, liability should adapt to the laws and not the other way around. Moreover, he also advocates increasing private capital investment in the country.
Financing for entrepreneurs
Carmen Pumariño would change the 3 Fs for fans and discussed aspects such as investment in time and money in early-stage entrepreneurship ventures. In addition, she spoke about public investment such as the grace-period loans offered by Enisa or the Institut Catalá de Finances. The Founder of Nero Ventures then widened the scope to Europe, mentioning the European Horizon 2020 group. “At a European level, there is a lot of governmental support”. The aspects that he values most when evaluating is a project is investable are the 3 Ts: Team, Trust and Transparency. The relationship between the entrepreneur and the investor is reciprocal. “There has to be a level of trust and transparency in the relationship. Then comes the business model and scalability”.
At Nero Ventures, they examine whether the business could be scaled even outside the country. “When we invest, we think about the next rounds and scalability. We work well in the niche markets, where there is a need that the business is covering”. Spain is an emerging market and, at Nero Ventures, they do not negotiate the valuation a priori, but rather they look at any competitors and analyse comparable countries, because Spain is not comparable to other European countries.
The relationship between the company and the investor
The relationship between the company and the investor is mutual, as far as Anindya is concerned. “We are the entrepreneur’s partner throughout their journey”. They even share their experience and contacts when necessary. In addition, he advised the entrepreneurs to analyse the investor that they want for their project and focus in the more human side of business because, when times are hard, there is a lot of friction and it is better to invest with somebody that you already know.
The EAE mentor emphasized the need for time for transactions to develop. “Little by little, they get to know each other, seeing the different sides of the person”. He also advocates planning in a scenario as chaotic as a startup. He highlighted three aspects: planning, execution and efficiency, and “starting to look for money, even though we don’t need it yet, just to know what the investors are like”.
Recommendations for entrepreneurs
Launching an entrepreneurial venture is a very difficult challenge, but it is also very enjoyable. The experience is addictive. The investor’s guiding principle is that “you’ve got nothing to lose, even if your project fails. To your family and friends, you are the same person. We shouldn’t place too much importance on success or failure because every entrepreneur gives it their all. Nobody wants their company to fail”. With this in mind, he recommends looking for balance: focus on increasingly enjoying everyday experiences.
In his opinion, being an entrepreneur is a lifestyle. It affects your personal life and it is addictive, It is important to realize that from the start. He believes that anybody is capable of being an entrepreneur, but the problem is wanting to take the risk. “You live on a roller coaster. You have to like living with uncertainty”.
The value of teams
At Nero Ventures, they value the transparency of information, so that entrepreneurs can have a transparent conversation about where they need support. They also have to be permeable people. “We are looking for a young team but there also has to be somebody with relevant experience in the sector”. In this respect, they value the complementary profile of the people in the team, which should contain a range of versatile professional profiles. However, the rules are not set in stone and things can change.
In terms of the dichotomy between the team and people, Anindya Saha values a balanced and complementary team, “but there also has to be a leader”. This leader has to tackle and resolve problems from the front, without conveying them to the company.
Check out the full webinar at the following LINK