Three years in and a short reflection :)
It’s been three years already since Pia and I launched New Wave. When we got started, we knew that we had a couple of challenges to work on during this dry run…
A partnership is a relationship, will we make it work ?
The Bushnell’s law: Easy to learn, hard to master. How good can we become ?
We also had a couple of first principles that we didn’t want to settle on…
We aim to 10x in terms of fund return. Call us crazy, we believe it’s realistic and that we shouldn’t be less ambitious!
We aim at investing €100M funds to focus on seed-stage only. No multi-stage or opportunistic fallacy here, we apply the same thing that we tell our founders, which is to remain focused.
On the verge of launching our new fund, I would like to honestly reflect on those things. The road is made of ups and downs that very rarely people dare to share publicly.
A partnership requires a lot of work, more than I anticipated. Since 2015, prior to New Wave, I hadn’t been challenged much in my investment decisions. Kima is a play of optionality, where the conviction of one investor is enough to commit. During the first 12 to 18 months, Pia and I were just taking it naturally, without really addressing our differences and how they could either create frictions or reveal to be superpowers for one another. Fortunately, we came to address them through a very constructive, blunt, forward-looking approach, without hiding any of our flaws or frustrations. It’s a major strength in our partnership, we have the humility to admit and commit not towards a consensus, but clear, challenged, strong decisions. I have progressed more over the past three years than ever before and it also plays a great role in the way I approach things at Kima Ventures as well.
Easy to learn, hard to master. The learnings over the past three years have been incredible but they also contributed to create a higher level of expectations on our side, which increases the level of difficulty in our dealflow selection and decision making. Whether we talk about our ownership, the founders we back or just certain elements like fit and timing, we’re not settling with lower expectations or some orange to red flags that we hope will hopefully clear off.
10 x 100M = 1B. We are not in the business of funding good companies, we’re in the business of believing in extraordinary founders who can create worldwide category leaders. It’s harder at seed stage to see it, no doubt about that. And we need to own a decent 7% to 10% of our portfolio by the time it reaches 10 to 15B in valuation, knowing that it will only come from a handful of the companies that we’ve backed. Our worst case scenario is to have a portfolio that is only worth 3 to 5B in valuation by the time we exit. It means that $500M exit aren’t that interesting and that $1B to $2B exit are decent but not really game changing neither.
But don’t get me wrong. This ambition is not about money or power. I like to say that to start something we need an engine and that to keep going we need fuel. Not very poetic but pretty straightforward. My engine is competition, my fuel is recognition.
That’s why I do what I do.
What’s yours ?