Latest / Founders and Funding / Ep 23 - Aleksandrina Ikonomova - Exited Founder & Angel Investor

Transcript

Ep 23 - Aleksandrina Ikonomova - Exited Founder & Angel Investor · Founders and Funding

• 0:01
  Hi, welcome to the Founders and funding podcast.
• 0:03
  I'm your host, Philip Smith. On the podcast, I'll be
• 0:06
  interviewing founders, investors, startup advisors on
• 0:09
  how to fund the journey of your startup and some tips and advice
• 0:13
  they have for you along the way. This podcast is sponsored by
• 0:17
  Perfect Technologies and Laden. Enjoy the episode.
• 0:23
  Hi Alia, welcome to the Founders and Funding podcasts.
• 0:27
  Hi there, thanks for having me. It's my pleasure to have you on,
• 0:32
  Arlie. Just to kick us off, could you
• 0:33
  tell me a bit about your company and your role?
• 0:36
  Yes. So currently I work with Bisana
• 0:40
  Labs, which is an agency operators agency that works with
• 0:44
  VC portfolio companies on their underperformance or to say and
• 0:49
  we go in, help them with operations, improve their
• 0:52
  metrics and either prep them for the next fundraise or we prepare
• 0:58
  them for an acquisition. So my partner has been in M&A
• 1:01
  specifically for SAS Technology over 20 years and I myself am an
• 1:05
  exit founder and this is pretty much what we do at the moment.
• 1:10
  And I also enjoy invest on the side in some of the companies.
• 1:14
  Fantastic. And what does an average day
• 1:17
  look like right now? It's a very interesting
• 1:21
  question. When you work with start-ups,
• 1:24
  there's rarely average anything. But usually because with the
• 1:29
  start-ups, we work on a weekly, monthly and quarterly basis.
• 1:33
  So Mondays and Wednesdays are for strategies.
• 1:37
  So we analyze what we've done during the week and because we
• 1:41
  have big batches of start-ups, so we have to divide it, one at
• 1:44
  the beginning, one in the middle of the week.
• 1:47
  So we sit down, we look at the experiments that we've mapped,
• 1:51
  we look at the results and we decide whether to continue, what
• 1:55
  have we learned? Is there anything to put in our
• 1:57
  playbooks or is it something that we have to adjust to move
• 2:01
  faster, etcetera. Then we look at how the tools
• 2:04
  are performing, is everything working OK, what decisions were
• 2:07
  made during the week, etcetera. Then on the rest of the day, so
• 2:11
  it really depends. It's just putting fires down,
• 2:13
  talking to Obcs, fixing juice and things like that.
• 2:17
  So it really depends on the day. But as a person, on a personal
• 2:22
  note, since I have to be very focused and agile, but I'm the
• 2:26
  network a lot, I wake up on my own very early.
• 2:30
  So six, I'm already up whether I've went to bed in the next the
• 2:36
  previous evening at 2:00 AM. So my my internal watch is
• 2:40
  already waking me up at 6:00. I have a very strict morning
• 2:44
  routine when it comes to just getting in in the right
• 2:47
  headspace. So I usually meditate, breath
• 2:50
  work, writing down thoughts, ideas, anything and then just
• 2:56
  sit down look at the tasks for the day.
• 2:58
  I'm I'm notion obsessed person so I have everything in notion.
• 3:02
  Everything is tracked hour by hour, everything is written
• 3:06
  down. Everything is whatever I can
• 3:08
  have automated with Co work, of course.
• 3:12
  And yeah, just hands down working until I want to say 678
• 3:17
  depending on the day. Because most of the days I also
• 3:20
  have a lot of networking events that I have to go to.
• 3:24
  Not have to, but usually want to because that's where we meet
• 3:27
  with other founders, other Angel investors and other VCs and come
• 3:32
  back home, work a little bit more and go to bed and repeat.
• 3:39
  Well, it sounds like a really good routine for success and
• 3:44
  certainly working for you and and you're certainly working a
• 3:47
  lot of different, different areas.
• 3:50
  And so I suppose talking about some of these startups that
• 3:53
  you've invested in and why were they the right choice to invest
• 3:57
  in? Umm.
• 3:58
  So I, I've just just to give you a little bit of context.
• 4:02
  So I have been an entrepreneur for seven years now.
• 4:05
  I've done multiple companies in different industries.
• 4:07
  Some were very successful, some not so much.
• 4:10
  And I exited last year. My biggest exit was last year.
• 4:15
  And that's when I decided to give back to the community by
• 4:18
  investing a little bit. I do smaller checks up to 10K
• 4:23
  and I do early stage, so there needs to be some kind of
• 4:26
  attraction or at least very clear signal why the founder
• 4:32
  thinks it's worth pursuing that problem or solution and why they
• 4:40
  want to dedicate the next 20 years of their life in that
• 4:42
  specific area. Because it's becoming very
• 4:45
  popular and modern to become an entrepreneur, to fundraise, get
• 4:49
  in that. I would say a rat race.
• 4:51
  It could be sometimes without giving, like having a clear
• 4:55
  thought process. Why would I do that?
• 4:58
  So for me, it's quite important to of course, to see that the
• 5:01
  founder really has, I wouldn't say passion is the right word,
• 5:07
  but is really irritated with the problem.
• 5:09
  Like they really are pissed off. Excuse my language with the
• 5:15
  problem or with how things are, and usually it's tied to a
• 5:20
  personal story. No, I, I was a bad founder
• 5:23
  because I was easily distracted by by the next interesting idea,
• 5:27
  next interesting problem, etcetera.
• 5:29
  I'm just very good at operations and say, oh, so that's that's
• 5:32
  why I managed to sell a company. But the best founders I see,
• 5:37
  regardless if I invest in them or not, are people who could
• 5:41
  very clearly describe me, the relationship they have with that
• 5:44
  problem, if I could say so. And then it's of course an
• 5:49
  operational level. So seeing if the founder can
• 5:53
  manage their own gals, can they properly manage themselves,
• 5:59
  their emotions? Because it's a very emotional
• 6:01
  ride. And it's very difficult to
• 6:04
  predict whether they will be able to do that when times get
• 6:08
  calmer because a lot of founders naturally thrive in gals.
• 6:13
  But when things get calmer, they tend to create that kills
• 6:17
  themselves. So it's an interesting aspect of
• 6:19
  it, but that's usually the job of the later stage investors to
• 6:22
  figure out how to navigate that situation.
• 6:25
  So yeah, that would be that way. Pretty much it.
• 6:27
  How they execute, how they learn, how quickly they fail,
• 6:32
  test, experiment, do things and what is their relationship with
• 6:38
  the problem? Yeah, I know.
• 6:40
  Certainly I think from the sit ups I've worked with, I've
• 6:43
  always seen the ones that have a bigger problem to solve and ones
• 6:46
  that have really experienced the problem or obsessive or fixing
• 6:49
  this and they're the ones that are going to be successful and
• 6:53
  small problems don't result in in companies wanting to to pay
• 6:56
  to solve them. In terms of those those
• 6:59
  companies, the startups you've invested in early, do you have
• 7:01
  any examples? Is there a company or two you
• 7:04
  could talk about that you've invested in as examples?
• 7:07
  Yes. Umm, well, I haven't asked for
• 7:10
  permission to specifically speak about them publicly, but I can
• 7:14
  give an example of a company that for me executed very well.
• 7:18
  So one of the they have they had to change their ICP dramatically
• 7:26
  because they like they had like very long sales cycles.
• 7:30
  It was B to BAI software that replaced a certain workflow, but
• 7:40
  it didn't. So it did solve the problem for
• 7:44
  the I, the first ICP that they went after.
• 7:47
  But the problem was that there were so much, so many COM
• 7:51
  competitors there. It was so difficult to the
• 7:54
  decision maker. The decision maker is very
• 7:56
  different from the user, so 3-4 steps ahead.
• 7:59
  So usually they weren't as embedded in the industry as they
• 8:04
  would have have to in order to succeed.
• 8:06
  They did have a one or two big clients, which was a great
• 8:09
  success, but that wasn't enough for them to be able to move as
• 8:15
  quickly as it's needed at this stage.
• 8:17
  So we sat down. It's a company that I've also
• 8:21
  worked with. We sat down and we assessed that
• 8:24
  and we had to dramatically change the ICP and the
• 8:31
  propositioning and the way they marketed themselves, the way
• 8:35
  they approached their ICP, etcetera, which could be very
• 8:39
  uncomfortable when you're like the early stages and they did.
• 8:45
  And at the beginning the results.
• 8:47
  So it was easier to get to the ICP.
• 8:49
  The calls were much more frequent.
• 8:52
  They received feedback much quicker, which was very
• 8:55
  important in terms of product building because with the big
• 8:57
  companies that wasn't the case, but the revenue was slower
• 9:01
  because they had to change their pricing as well, much slower.
• 9:06
  But in the long run, that was the right decision.
• 9:08
  And doing something like that requires a lot of self trust and
• 9:12
  a lot of like willingness to solve the problem regardless by
• 9:16
  anything. So that's for me is a brilliant
• 9:19
  example of someone who looked at the long term game instead of
• 9:22
  just, you know, because a lot of founders just go for a certain
• 9:26
  market because they think that would sound more interesting to
• 9:29
  an investor instead of thinking, OK, how can I improve my
• 9:32
  metrics? How can I improve my nostal
• 9:35
  metric? How can I improve cash flow
• 9:38
  instead of just thinking, OK, what would sound great to an
• 9:41
  investor so they can invest in me?
• 9:43
  So that's that's a great example for me for a brilliant founder.
• 9:48
  It certainly is. And what is the best way to fund
• 9:51
  a startup's journey? So in terms of do you think it's
• 9:54
  better to start bootstrapping or to start trying to get into
• 9:59
  investment? Or is there a preferred path you
• 10:01
  think that that works for startups?
• 10:03
  I don't think there's a straightforward way for every
• 10:06
  startup. So it really depends on the
• 10:08
  industry, on the capabilities, on the level of experience of
• 10:12
  the founder. Now it's becoming more more
• 10:15
  easier to build things and test things.
• 10:18
  So what what was used to consider pre seed is no longer
• 10:22
  valid. So you cannot just go with an
• 10:24
  idea unless you're like for Timex the founder, that's that's
• 10:28
  different ball game. But you have to have like a very
• 10:32
  solid proof that you know what you're doing, or at least you
• 10:38
  have some kind of a very strong signal that it makes sense to,
• 10:43
  to, to build this. And again, it really depends on
• 10:47
  the, on the, on the industry and it really depends on the country
• 10:49
  as well. So for me, when I moved to the
• 10:51
  UK, I've, I realized like how easy it is to get UK grants,
• 10:55
  which was shocking to me. I'm coming from Eastern Europe,
• 10:57
  I'm Bulgarian. So the government doesn't take
• 10:59
  care of you as much. It's all grind, make money and
• 11:03
  then figure it out and then even try to fundraise because the VCs
• 11:06
  there are not as risk takers as they are in the UK.
• 11:10
  In Europe general, we have a problem with that anyways.
• 11:15
  So it really depends where you are, what you're building, how
• 11:18
  quickly can you prove that the problem is relevant to a bigger
• 11:22
  market, how how quickly you can embed yourself in the market.
• 11:27
  All these factors come into play.
• 11:29
  And I don't think every startup should fundraise.
• 11:32
  I don't think everyone is solving such a big core,
• 11:37
  significant problem for the world that it requires A
• 11:39
  fundraising, I think. And not every nervous system is
• 11:43
  built for fundraising as well, because when you fundraise, this
• 11:48
  means that you have to put up with investors who are not
• 11:53
  always the easiest people to put up with.
• 11:55
  They're very demanding. They require very high level of
• 12:00
  agency, very high level of execution, very high level of
• 12:04
  sometimes investors don't know that what they're saying, what
• 12:06
  they're doing either. So you have to be like very sure
• 12:09
  of yourself that you are the best person to make a final
• 12:13
  call. So it really have to has to do
• 12:17
  also with are you capable of, of dealing with all that?
• 12:21
  Because it's very, very difficult journey.
• 12:25
  Yeah. And that leads me to the next
• 12:27
  question of do you think who the founders are, what, what skills
• 12:31
  they possess that impacts if you should invest or what the kind
• 12:36
  of investment they should get. So if you find that there were
• 12:39
  technical founders, if they don't have those kind of
• 12:41
  technical skills, maybe the more sales focused because that
• 12:44
  impacts if they should fundraise or not.
• 12:48
  That again, depends on the business.
• 12:50
  So whether or not you should fundraise depends on is your
• 12:54
  business investable? Do you really want to go that
• 12:58
  route? And it doesn't matter if you're
• 13:02
  technical or not, if you have been 20 years incorporate or
• 13:07
  not, it really doesn't matter as long as you understand the game
• 13:10
  that you're playing. And the game is much bigger than
• 13:12
  just fundraising for your startups because I'd, I, I don't
• 13:17
  see enough entrepreneurs understanding that it's a, just
• 13:21
  a huge vehicle. What I mean by that is that you
• 13:24
  fundraise from your VCs, but your VCs fundraise from LP.
• 13:28
  So those returns are expected for too many, from too many
• 13:32
  people. So you really have to understand
• 13:36
  that you're getting yourself into a system that requires a
• 13:39
  certain level of execution speed and people will push you and
• 13:46
  pull you in different directions.
• 13:47
  And you have to be very stable and sure of yourself in order
• 13:51
  to, to be able to, to play that game while building a company.
• 13:55
  Because at some point even on, especially on the later stages
• 13:58
  becomes a lot about politics, especially in Europe.
• 14:02
  So you see like the best founders that have fundraise
• 14:06
  that are coming from Europe, they're a little bit I would say
• 14:11
  they, they know how to set boundaries very clearly.
• 14:14
  So I have, for example, I don't like the term coachable founder.
• 14:17
  For me, that's a really bad thing because that means that
• 14:23
  he'll listen to everything everyone has to say.
• 14:26
  And this is not a good thing for someone who is leading Unicorn,
• 14:31
  let's say. So for me, the founder has to
• 14:34
  be, to some extent, I would say agreeable.
• 14:38
  Easy to work with, yes, but not coachable because I like
• 14:43
  founders who tell me you're not right because this, this and
• 14:46
  that. And they know that like that
• 14:48
  chosen, they know what they're doing and they have trust in
• 14:50
  their own discernment. Although you never know what
• 14:54
  you're doing actually with the startup, do you?
• 14:57
  That's a good point. And how can companies attract
• 15:00
  investors effectively? By building a successful
• 15:03
  business. So if you, so if you have
• 15:07
  traction, that could be revenue or not, depending again on the
• 15:10
  business and the business model. If you're building something
• 15:13
  meaningful, people would like to invest in you.
• 15:17
  If you're if you're sure about what you're doing, if you're
• 15:20
  confident about what you're doing, even if you don't know
• 15:23
  what you're doing, people will want to invest in you.
• 15:27
  So of course there are strategies of to prepare a good
• 15:29
  data room, to clean it properly, to organize everything, have an
• 15:33
  eye to the detail, be a great leader, create the formal
• 15:37
  effect. So fundraising should happen for
• 15:39
  me in 2 to 3-4 months maximum. If you've done the work and you
• 15:45
  should prepare like it's a marathon and you should have
• 15:48
  someone that would be like your Co founder essentially would be
• 15:51
  running the business while you go out and fundraise because
• 15:55
  it's a full time job. But attracting the right
• 15:58
  investors is it starts with like, talk to them before even
• 16:05
  opening the round. First of all, they can give you
• 16:09
  some good advice on how to improve your metrics or what
• 16:11
  they would like to see. Because after all, they've seen
• 16:14
  a lot and they know how the industry is changing, what's
• 16:17
  moving, what's not. Talk to as many people as
• 16:20
  possible. Spread the word that you're soon
• 16:22
  to be opening a fundraiser. Make sure your business is
• 16:25
  having the traction that it requires to to have attraction
• 16:29
  in order to be fundable and investable.
• 16:32
  Build everything systematically. Build like a good data room.
• 16:36
  Show that you're someone who understands all the aspects
• 16:40
  because as soon as you fundraise, your business goes to
• 16:43
  the next level. It cannot be as scrappy as it
• 16:45
  was in your, you know, 2 bedroom apartment where you have 6
• 16:50
  people together. In order to build the company,
• 16:53
  it just requires a different type of decision making process.
• 16:57
  It has to be like a little bit more sophisticated than that.
• 17:01
  So make sure you have all those points together and then create
• 17:05
  the formal, so-called formal which usually happens when you
• 17:08
  close like your lead and after that go after the the smaller
• 17:13
  funds or the angels etcetera. I see that Angel investments are
• 17:19
  also changing. So less and less angels are
• 17:22
  willing to put the first check before you have even built
• 17:25
  anything. So idea based checks are more
• 17:28
  rare. They kind of come in with with
• 17:33
  the seed receipt funds together. So have at least one fund and
• 17:38
  build a relationship beforehand. And that's really great advice.
• 17:44
  I'd finish up if you'd one key piece of advice to share and
• 17:46
  fund in a startup, what would it be?
• 17:51
  One key piece of advice. That's a very difficult question
• 17:58
  for your data. Make sure you know what is
• 18:04
  working, what you're working on, why is it working or why it's
• 18:07
  not working, and be ruthless in executing based on the
• 18:13
  information that you're gathering.
• 18:15
  And that that's how you build intuition because there are a
• 18:19
  lot of people are saying that founders know best date because
• 18:22
  they have intuition, but intuition is also memory.
• 18:25
  So you expression gets better with more with the more
• 18:27
  information that you get. So try to follow key, all the
• 18:32
  key metrics. Why something is working when it
• 18:35
  why not be very, very, very honest with yourself.
• 18:38
  So a good example I can give is like founders love talking to
• 18:42
  people and that that that doesn't mean that those people
• 18:46
  are your ICP. So be very ruthless and saying
• 18:49
  like, is this person actually a buyer or a good partner for my
• 18:53
  business or am I just spending time talking to them because it
• 18:57
  feels productive when in fact I'm just being busy.
• 19:01
  So be absolutely ruthless in being clear on the metrics that
• 19:06
  matter. Follow them relentlessly.
• 19:09
  Have a system based on which you assess.
• 19:12
  What have I done? Is it working?
• 19:15
  Is it not? If it's not, why is it not
• 19:17
  working or why is it working? And what's the next step to
• 19:21
  build upon on that and keep track of all that?
• 19:24
  Because this is this compound effect at the end of the day
• 19:27
  will help you not repeat and go in circles with the same
• 19:30
  decisions and same same mistakes.
• 19:36
  That's really great advice to finish on.
• 19:38
  Alia, thanks so much for coming on the podcast.
• 19:40
  I think you shared a lot of really great advice, some of
• 19:42
  which a lot of which I haven't heard before.
• 19:44
  So I think there'll be a lot for for founders and investors to
• 19:47
  take away from the conversation. Maurice, thanks for having me
• 19:50
  and happy to help. Thanks, Alia.
• 19:55
  Hi, Thanks for listening to this week's episode of the Founders
• 19:58
  and Funding podcast. If you'd like to be a guest or
• 20:01
  have a guest suggestion, please get in touch.
• 20:03
  Thank you.