Nick Kingsbury (Amadeus Capital Partners): We are a DeepTech investor, so we do like things with solid IP and outstanding technical teams behind the product.
23 Feb, 2021
Paolo Pio is managing director of Joyance Partners. He has 13 years of experience in the technology industry, with expertise in product development and strategy, international business development, and enterprise sales. He most recently ran Cisco’s Data Center Networking business development team for the region of Asia Pacific. He is an Angel investor and serves in various startup advisory roles, including mentoring at Virgin Startups and TechItalia Lab.
I started my career as a software engineer at Cisco. Then I moved into product management at one of big data centers, so I lived in San Jose, California, for 6 years (2006-2012). Then I moved back to Europe, to Geneva and then Zurich, where I ran product development team for EMEAR (Europe, Middle East, Africa and Russia), later took Asia and Australia regions, built a team in Singapore and Tokyo, managing it remotely. At the meantime I did my MBA in London Business School. That was when I started to think about investments and started to get more familiar with different areas of investments. After MBA, in 2016, I started making angel investments. At 2018 one of the companies I invested in, introduced me to Joyance – american VC firm investing into Health and Happiness startups – those, who can make customers healthier or happier – or both! At the time they wanted to launch in Europe and were looking for a managing director for the region. So, the CEO of a startup I’ve invested introduced me, we met, we liked each other a lot, and month and a half later I joined them. I’ve been with Joyance since April 2019 and it’s being great – a lot of fun, a lot of learning and a very good experience so far.
Ok, first of all, we scout for startups in our investment focus areas, which are Health and Happiness. Those are quite close to Life Science, to that part of startups that operate in the field of Longevity – extending people’s lifespan, especially healthy lifespan; Fertility; Gut Microbiome; BioTech; NeuroTech; FemTech; SexTech for women – these are all areas we’re interested in. Outside the Life Science we invest in Next Generation Food, like lab grown plant-based meat. We’re also interested in Robotics and now making investments in bionic limb startup. It is also AI/AR/VR in Health. So, the very first thing is that we want a startup to match our investment thesis, and we like startups operating in a field of Deep Science, creating something new, solving hard problems and protecting innovations they produce with patents. We believe this builds a feasible competitive advantage with respect to potential competitors, at least, for some time. So, these are our main criteria: sector is #1 and Deep Science is #2. Of course, we look for a number of other things. The most important thing at the early stage is an entrepreneur. We speak with CEO, try to understand him, his story, his motivation, why he is doing that, does he has a background, does he have a charisma, the stamina, the grit. Also we’d like to know has he been able to attract a team as strong as him – or stronger, this is very important. We talk about 5Ts – Team, Temperament (including those of the team and among the founders), Technology (are they creating new tech, is it defensible, is it differentiated), Timing (why it is happening now, what are the breakthroughs in science or technology that make it possible in the specific time, why couldn’t it be done before) and the last one is Traction (have they already launched, are they pre-product or pre-revenue, or how many customers they have, what kind of revenue they’re building, how they acquire customers).
We normally invest in seed and pre-seed stages. Sometimes we can invest in pre-revenue if we like the technology and entrepreneur, sometimes we don’t. Having some revenues already reduces the risk of investment. We can do Series A investments as well, but rather as an exception. When people just start to think about incorporating, when they raise their first 100-200k, up to they raise 500k-1m. This is because we sign small checks – our check ranges from 50k to 300k. To make such an amount count, you should enter at early stage. We have a small fund, it is just 73m, so operating at the early stage is where it works.
The first investment we made as a fund. I’d met this team before I started to work here. The startup name was Caura, it was from UK. I’ve heard their pitch on an event like DemoNight. I really liked what they were doing. It is a hardware, a device that goes under your skin and measures blood glucose and lactic acid levels from intertissue fluid. And it is very innovative. I, myself, have done a lot of sports, I played football. To measure your lactic acid level you need to jump on a bike, start pedalling, then give some blood from an ear for a test, keep pedalling for another half an hour, then another probe from the ear – and that’s for several cycles. It is a painful process, you know. And their device goes under your skin and measures lactic acid level continuously and painlessly. I was immediately stunned with this pitch, went to speak with him right after, and the entrepreneur was really good as well. So, the product was really fascinating with my background and the pitch was really good.
Characters and personalities, definitely, are very important. People need to be hungry, they must want to win. Hard work and exceptional work ethics need to be there. People need to work hard and never stop until they succeed. They need to be resilient when things going bad. All these are essential personality treads. Then, of course, you need to have a good mix of skills, like a technical founder going with a business co-founder. We look for that, we must be sure that when we invest in a startup, the people are there to cover all the areas necessary to make it a successful business.
I’d rather take them both – they were successful together. Yes, at the end, Jobs was more successful. Anyway, if I found any of the two, I will fund them.
Not until now, I believe, but it is not a dealbreaker, it just hasn’t happened yet in our European fund. We started our operations in Europe in April 2019 and so far made 11 investments. I know every startup we invested, we did speak with single founder startups, we liked them a lot, it just not didn’t end as an investment for some other reasons. We are member of Social Starts – a big VC fund operating since 2010 that had invested into more than 400 startups. I’m pretty sure that there are several solo founder startups in that portfolio and I’m pretty sure that we may also invest in such a startups if it fully meets our criteria.
This is what we’re aiming to do in Joyance – we’re connecting our entrepreneurs. For us creating a community of Health and Happiness is very important, and we put a lot of work and efforts there. For example, 3 weeks ago we did a Friend of the Fund event in London. All our entrepreneurs from Europe were invited, majority of them came – people from Stockholm, people from Germany, Switzerland, from everywhere.We hosted 70 people that night. And two of our portfolio companies met and really liked each other. One of them was doing plant-based meat, pea protein based chicken with another company doing cultured fat from cells. The two CEOs met, really liked each other, left to have a beer together and decided to work on a prototype that will include part of plant based chicken and part of lard-grown fat. We think it is amazing, and we couldn’t be happier as when we see interactions among our startups.
A lot. We have very strong tools infrastructure and have algorithms that literally scrap the web monitoring the sources, like social media, etc. for interesting projects. We see around new 200 startups per week. Out of these 200 we spend time on a half. We are a team of 19 people globally, we divide those 100 startups, look deeper into them, speak with entrepreneurs and decide if we want to go to the next stage, if it worth one more talk, or it’s not for us.
Sometimes they come through friends, people we know. Sometimes through LinkedIn, when they call or message me on LinkedIn – if it’s relevant or just plain good, I will always replay.
As I mentioned, there are 19 people in our fund, and each has own specialities. For example, my partner in London, Neha Tanna, is a medical doctor, who worked as a general practitioner for 7 years and then in pharma for about the same period, then did an MBA, worked in med-tech startup, and, eventually, came with us. When we see therapeutic startups, she will chat with them first, and if she likes them, she will bring them to me. If I like them, I will ask them to chat with our managing partner, Mike Edelhart. If he likes them, it, probably, will be one more chat with our founding partner, Bill Lohse. At that point if all four of us think that those guys are good and matching our area of interest, we decide to invest, and we start proper financial and legal due diligence process. Our CFO, Anna King, based in New York, checks their financials, the terms of the round. Eventually, we involve our lawyer, and, if everything is good, we invest. It sounds long, but can be shorten, and the fastest invest so far took us 2½ weeks from the fast chat with CEO till the moment we wired the funds. Usually it takes longer, but once we made up our minds, everything is fast. Sometimes it is a startups that prolongs the round. Usually, we co-invest, and if someone puts 500k, we put 100k, and until they finish their due diligence process, we cannot close. So, it takes from a couple of weeks to a couple of months.
Between 50k and 300k Euros.
If I catch somebody lying, we’re immediately done. You want to invest in somebody who has an integrity. Don’t lie, it’s stupid, it’s silly. This is the biggest red flag. Then I would say it is personality faults, like being dishonest, or not being hard-working, or not being able to attract talents. Everything else is not really red flags. Say, if a startup doesn’t have traction yet, it is not a red flag, we may decide to talk later, e.q., in 6 month, after a launch, when we can see if market actually responded to your product as you think it should.
Not yet! At least for me in Europe, but I’m sure it will happen. We make a lot of mistakes – everybody does. You cannot predict the future, just try to do the best you can. Sometimes you’re wrong.
Also not yet. All 11 startups we invested in Europe are still alive, doing well, and we are very happy about each one of them.
Peace of Meat, I think – that lab-grown meat – is quite unusual. I hadn’t tried it myself yet, because we invested at very early stage. And I’m very curious how this meat – grown in a lab, never being a part of an animal – will taste like. This guy is going to lab-grow fuagra. They found the way to grow cell in the lab and overfeed those cells, instead of overfeeding the duck to get that fatty duck liver.
I personally like automotive and self-driving as well, but it is not in a focus of our fund. So…
Also I really like Crypto, it is quite close to what I did in Cisco and very technology packed, yet it is not in a focus of our fund as well.
I’ll probably name book you’re already know. Zero to One by Peter Thiel is an amazing book. Book by Ben Horowitz The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers. These two books are fantastic. Than you have a classic Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist by Brad Feld and Jason Mendelson – I highly recommend this book. Also I like a lot Zucked: Waking Up to the Facebook Catastrophe by Roger McNamee – this is a very good book about Facebook and how things went sour. I also like meditation, so if they will read Search Inside Yourself: The Unexpected Path to Achieving Success, Happiness (and World Peace) by Chade-Meng Tan – it is a fantastic book on meditation, and he breaks down the art of meditation the way a Westerner can understand and comprehend.
There is a lot of events like Slush, or VivaTech, or NOAH, that are great for startups. I think what matters is that they make things working and off the ground before they go to conferences. They are great, but shouldn’t be #1 priority for startups. Th 3 I mentioned are the best one in Europe.
I played football until, like 23 in a pretty good league in Italy and kept on playing until I was 30-31. Now I run a bootcamp in London, so come join us every Sunday at 11 a.m. at Hyde Park – lots of music, lots of fitness at no cost. But VC is definitely not football. The good thing about this sport is that in the end you know if you won or lost, and at the end of the season you know your final standing. VC lifespan is very long, you have 10-years horizon for the funds, and if you do something here, you do it for 5-6-7 years. It is how long it takes for your investments either exit of fail (but sometimes they fail earlier). It can be also individualistic – some people play for themselves. Sometimes it can be a group effort, which is happening in our firm: we are very close to each other, and when one makes an investment, this investment is made by the firm, and there is no personal name associated with the investment. This is not true for many other firms. So, for us it is some kind of a team sport.
Well, Apple for sure. Cisco, because I used to work there. Cisco build the foundation of internet; one of the founders invented router and switches. And the third one is Google.
I’m very satisfied. It wasn’t easy to make this transition, but it goes well. Since the last year in Europe a lot happened. I’ve started all alone, then I hired 6 people – incredible people I’m working with, really talented. And I’m working on the things I really care about. Fitness was always my passion, I read a lot about nutrition. I meditate for the last 8 years. All these are very close to Health and Happiness we invest in. I know, that the work we’re doing – supporting these startups – is meant to make the world a better place, a happier place. This is our mission – to find entrepreneurs and scientist early at their journey, partner with them and support them in this transformation of our world.
My own hometown. I’m always happy there.