Latest / Founders and Funding / Ep 14 - Alan Costello - Partner at Resolve Ventures

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Ep 14 - Alan Costello - Partner at Resolve Ventures · Founders and Funding

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Hi, welcome to the Founders and Funding podcast.
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I'm your host, Philip Smith. On the podcast, I'll be
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interviewing founders, investors, startup advisors on
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how to fund the journey of your startup and some tips and advice
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they have for you along the way. This podcast is sponsored by
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Perfectly Technologies and Laden.
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Enjoy the episode. Hi all, and welcome to the
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Founders and Funding podcast. Thank you very much for having
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me. Pleasure to be here.
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I well, I really appreciate you taking the time and to start us
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off, could you tell me a bit about yourself and what you do?
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Sure. So I'm part of a team that's
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called Resolve Partners. We've been in various guises.
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We've been operating with early stage start-ups in Ireland, in
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Europe, in the Middle East for nearly the last 20 years,
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primarily helping them to grow their part of market fit and
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grow into international markets, often with corporate
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partnerships. That's the work that we do and
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very often alongside were involved in helping them to
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raise funding be that precede or up to A and we've also been
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involved in some transactions at the far side of that story as
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well. So essentially we're we're here
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helping founders to interact with their market opportunities
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and maybe some of their partnerships and platforms in
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between there. Fantastic.
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And tell me about your role there.
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So the Resolve has three core partners.
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Our team actually came together almost 10 years ago when we were
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the investment team of the NDRC and we, so we've been working
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together that long. We're not exactly finishing each
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other sentences, but not far off.
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And the role there is sometimes you're working with startups and
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vendors, sometimes you're working with partnerships.
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For instance, one of our big programs is called Accelerate
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Green that we run in partnership with with board and Mona around
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scaling climate companies and scaling climate founders.
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We do a lot of work with efforts on the universities as you'd
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expect. But primarily our work is, is
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with the founders at varying stages, helping them to, I
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suppose, position their value propositions, their growth
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strategies, their investment strategies, maybe acting as a
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sounding board or as a a white board that they can reflect
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ideas and strategies off. And we'll give push back and
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challenge. And sometimes we're right,
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sometimes we're wrong. But a lot of what we do, the way
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I see it is a little bit of knowledge transfer.
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We've worked with hundreds and thousands of founders.
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We've seen lots of things that work and lots of things that
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don't work. And it's part of our role to try
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and translate all of those war stories into the most
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appropriate kind of learning mechanism for founders to be
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able to link into their problems, challenges and
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opportunities that they have today.
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Fantastic. But I think that's a really
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great addition to add, you know, forced out of fun is because I
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think it is hard trying to get that real market feedback and
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really try to refine that a proposition and and what does an
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average day look like right now for you?
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It's kind of busy, but good busy.
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So it, it feels a bit portfolio ish, our portfolio risk.
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So today I was working with the founder to help them with their
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growth strategy and they're looking to acquire a company in
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the states. Then I was doing some planning
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for some events that were going to be running that's kind of
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putting out a little bit of learning and collaboration into
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the ecosystem, particularly around the climate and
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sustainability space. Then I'll be going on to a
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mentoring session with a company that's on the Accelerate Green
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program with us. So we're going to be chatting to
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them about, I suppose maybe not forensically, but pulling apart
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their existing business model and understanding it and seeing
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where there might be either growth opportunities, problems
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or maybe strategic shifts and pivots that we might explore.
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This afternoon I'm going to be doing a mentoring session with
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the company that we work with on another program.
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And then I'll be going back to that founder and seeing where
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their financial advisors and legal advisors have got to on
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the transaction that I was talking about this morning.
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So it's, it's varied, it's very founder centric and it's, yeah,
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it's, it's being able to try and hold lots of different projects
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at once or during the, during the course of one day.
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But fantastically interesting for that.
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Like you're learning the whole time you're, you're going deep
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and experiencing business models and opportunities and the whole
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time really thinking about problem solution and problems
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being fixed and being opportuned or being opportunities out of a
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problem. So it's it's fascinating and
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very stimulating, but busy. Yeah, certainly sounds like it.
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That's fantastic. But it certainly gives you a
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great opportunity to help those steps because you're speaking to
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so many founders and seen so many of the the challenges and
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put together the solutions for them.
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Talking about some of the startups you've seen in Ireland
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lately that have been particularly interesting.
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Yeah. And sort of at a high level, we,
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we, we would probably work with hundreds of founders at the
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ideation stage every year and through thing into contacts that
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we would have with say New Frontiers or Enterprise Ireland.
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We would work with dozens of founders every year that we work
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with more intensively through either our private engagements
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or investment engagements or the programs that we run through.
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And so there's quite a wide breadth, but some of the
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companies that I'm really interested in and have been for
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the last number of years around the climate sustainability
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space. So there's a company out of
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Kildare called EV Acts who have some really interesting patent
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technology on combining HVAC systems with EV charging.
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So we're looking at a couple of big mega trends coming together
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and it's not, it's some of that is combining the physical
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hardware, but a lot of that is also about understanding the
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control systems around that and how power management happens
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either at the home or in the premises or in the industrial
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facilities. Or another company out of Galway
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called Connery looking at supporting fish farming by
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aiding the productive and sustainable and healthy growth
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of fish farming. So you think about that as being
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growing a new protein source and it's a high impact business, but
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affected by environmental concerns.
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And what the guys in Connery are doing are finding novel
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technologies around helping the fish, but that scales up and to
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think about providing protein sources for emerging markets
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provide alternating between high climate impact protein sources
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like like beef and aiding at quite a significant commercial
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scale. And the large, very large
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commercial fish farms might have 1/4 of a million salmon swimming
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around in in a fish farm in a single cage.
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These type of solutions to help their health and well-being
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become really, really impactful both for for planet and for
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profit. And that's always, that's a
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useful bifocal that you can, you can take on a business having
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good positive impact, but that also makes good commercial
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sense. Another business again in the
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climate space that we've we've worked to, there's a company
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that's spinning out of TUW at the moment called Pyram.
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And they're looking at all of the waste energy and the waste
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heat that's in very hard, difficult to climate impact
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businesses like cement and glass.
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And they've got hardware and software technologies that's
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going to make use of the waste heat and the waste energy that's
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been used in those processes and be able to turn those back into
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productive energies in the system.
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So a lot of the work we do and we can, we do go quite deep on
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the technologies at the right time.
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But on the on the 1st instance, you're just trying to think
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about that value proposition that is impactful, important and
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commercial and it just gives you great, great share of companies
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to work with. Absolutely, and those are some
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really fantastic Son of Irish companies.
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It is absolutely correct. I think even from a public
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standpoint, people love to see companies that are both
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commercial, but they're trying to do good, you know, they're
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trying to make their lives better and to to look at the
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funding aspect of a startup's journey.
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What do you think is the best way to fund a startup's journey
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in your opinion, Ellen? So there are some biases here, I
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guess, sure in the world of, of, of this founders and funding
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podcast and the, the 2 or 3% of companies that ever raised
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private investment were kind of biased towards angels and VCs
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and that that's relevant and, but different.
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So yes, but the other 97% exists and they're also brilliant
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businesses and, and all businesses and all founders and
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all commercially successful businesses weren't that type of
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support and weren't that type of feel that so like for trying to
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bridge those kind of two stories.
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And like we're always going to start with customer revenue.
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And I understand that, you know, if you're building a deeper tech
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or you may, your first customer revenues might be €20 a month
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subscription and that doesn't exactly pay for everything that
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a startup has to do. So there's this delta between
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customer revenue, cash flow and margin and cash flow positive
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capital efficiency versus then also needing to raise some
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private investment of whatever type.
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But the reason I'll always start with revenue is because I'm
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looking for that validation traction demonstration that
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there's something around problem solution fish or the beginnings
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of product market fish. Whether that's going to stand on
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it, whether the business is going to stand on its own
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revenue generating fees or whether that business is going
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to use a little bit of that revenue generation and customer
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impact in order to build a, a high quality investment
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narrative in order to raise investment from from private
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investors. So I'll start with revenue and
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then I'll look at some of the programs and support structures
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that are around here, things like the PSSF and it's
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predecessor Competitive start fund, They were, they are some
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of the best funding programs, opportunities that are available
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anywhere around. So these type of mechanisms
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where there's an open call, demonstrate your traction, show
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your vision, show the management team have had a great story and
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a great potential and there are support structures that are open
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for you. But I'll generally hover back to
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at least show me some type of some version of customer revenue
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to get me on that traction story.
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Yeah, I think it makes absolute sense and and to look at the
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founding team a bit. What skills should founders
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possess? And you know, what is the
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combination of skills do you find?
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Yeah, so this is kind of interesting and I'm, I'm, I'm
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not going to bring something new to the story in this like I'll,
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I'll hone in so much on customer discovery, customer insights,
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spending time with customers. Yeah, I don't want to, this is
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sound disrespectful, but I I don't want to necessarily have
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some Maven hardware code or designer who's building and
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designing things absolutely the best potential product that's
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out there or the best made or the best designed or the most
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efficient code. And then they look up blinking
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for their customers or their market and it's not there.
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So I'm going to hone in on founders that are very, very
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customer centric. That's not to say the customer's
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always right, that's a different thing, but who are customer
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centric about their needs and developing a value proposition
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from that. And then you layer on top of
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that something like insight founders who, who can by the
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know things, work things out or infer deductions from the market
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and from the customers that you know that which can't be found
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on Google. And so people are able to apply
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learning and have insight into. So what, why now?
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What's next? I can do that a little bit
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differently. And those, those kind of when
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you see that coming at you, it's, it's genuinely exciting
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and, and interesting and you're, you know, you're on a fast
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journey. You want to try and push some of
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the, the support structures or the, the, the business tools
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around that person because they're, they're the ones who
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are going to see things a little bit differently.
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Yeah, I think that makes a lot of sense.
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And then to look at this from the founders perspective, how
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can those startup companies and founders attract investors
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effectively? I mean, they're let me think
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there's a high level tools and frameworks are, you know, be be
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talked about, be in the media, be get have some PR that they're
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interesting. I'm not going to, they're
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entirely valid, but I'm kind of old fashioned and I'll, I'll
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talk about going out and maybe doing some of the leg worker
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sells. So identifying what investors
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are going to be most useful, most relevant to you in the
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business and going out and trying to find your way directly
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or introduced to them. And what I'm getting out there.
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Maybe a higher point is I think the first investors can mean the
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business, all investors should be bringing value.
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The first investors should be people who get what you're doing
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to get the business model, get the technologies that you're
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doing. And that's about finding them
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and finding a way to being introduced to them.
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And a, a VCs will have different tools and structures where
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they'll go out and find you, but that that's, you know, they're
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going to see if you're hiring someone on LinkedIn and that's
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going to set off a little signal for them in the, in the CRM.
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And that's, that's valid. Or for early stage founders, I
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think you're going to have to go out and find sectrally or
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service or structurally specific Angel investors were involved in
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your space. Ideally those who have been
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Angel investors a little bit and then maybe not first time Angel
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investors. And they're they're going to be
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gold for an early stage founder because they bring so much
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knowledge capital, yes, knowledge links, credibility for
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the later other and other investors that might be coming
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in behind. So that that's a little bit of
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legwork and a little bit of thinking.
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And I think that's where founders probably have to start
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rather than manufacturing it too much.
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I think it's it's, it's do the hard yards.
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Yeah, yeah. And if you'd won't keep his
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advice to share on phone in a serpent and making it
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successful, what would it be? The one key advice I always come
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back to, and it's going to sound tweet, is go back your insight.
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And so let me give an example. I was working with the founder
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before Christmas and we introduced them to the concept
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of the mom test. This is the book by Rob
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Fitzpatrick. Lots of startups and we will
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know this book and it's kind of it's, it's a foundational stone
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for startup customer discovery. But we introduced it to him.
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He leaned in hard. He introduced his, a couple of
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his team members to it. And between the middle of
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December and the middle of January, they did 80 mom test
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interviews. And they weren't a start up.
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They were probably doing a couple of million in revenue,
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but they probably doubled their revenue target for this year as
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a result of those mom test interviews being customer, being
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close to the customer, getting the insight, listening to the
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customer's voice, understanding what the problem was.
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And then those customer discovery interviews, if you can
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imagine, I'm doing air quotes on a bean market research.
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Of course they were sales pipeline.
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Of course they were developing those customer discoveries as as
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customers full stop. So I'm going to lean hard into
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those vendors that stay, that get involved with their
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customers, understand the problems that understand how to
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develop a value proposition around that.
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That's going to be the so much else can be built and supported
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around you. That's not to diminish tech
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building, that's not to diminish marketing, branding, PR and
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sales support, financial supports.
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That's not to diminish the impact of early stage event
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investment capital, but being that close to your customers
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problems so that you can insight and develop a value proposition.
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Yeah, that's. A really fantastic advice.
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Alan, thanks so much. According to the podcast issued
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a lot of really great advice there from your experience.
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Thank you. Hi, thanks for listening to this
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weeks episode of the Founders and Funding podcast.
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If you'd like to be a guest to have a guest suggestion, please
16:17
get in touch. Thank you.