When it comes to Investing, Focus on Human Capital
How do you work with the companies in which you invest? Tell us about your investment style.
We at Propel Venture Partners have seen that there is a lot of investment in venture capital, but we focus on human capital—the people and the talent that we can bring to your business. I always emphasize the fact that if an entrepreneur takes money from us, then he/she is good enough that we can hire them to be part of the group.
How do you differentiate between the opportunities that you see?
We are investors in financial services technologies, and for any investment, the typical trait that I seek is great teams with superior products in large markets. In financial services, compliance piece is what I focus on, and we dig in to ensure whether the companies are running in a manner that is compliant with the regulations in any market that they are operating in.
Venture capital equals human capital
All aspects to consider in the earlier stage investments majorly depend on the team, how CEO, founder and the rest of the group demonstrate their ability to be good recruiters and retainers of talent. It is the creation of culture we look for; people who are aware of their surroundings and who are able to tap in into common themes of society. We want individuals to take up brave actions with their business. Because ultimately, it’s how you behave that indicates how you are going to perform as a founder.
How do you work with clients post investment?
I invest a lot on time and a little bit of money; it is always about putting a lot of time into the project. It also happens that not everyone wants their investors to meet them once a month or week. Some others are more confident to have relationship initially through text messaging or have regular fund calls on demand. I do find though that the best work happens when there is a comfort between the founders and investors to make a call at any time and not to have stand to a standard procedure. This is one thing that I love about my job—I get to speak to a lot of founders that we have invested in. I never know what the reasons are going to be for but my job is to be available, and that’s the one thing that Propel is known for.
How do you think your current portfolio of companies has benefited most from your guidance?
Many VC’s have gone to a business school and have got an MBA degree from a renowned institution before they have made their way into venture funding. But for me, it was a different scenario altogether. I went to law school in South Africa and came to the USA 21 years ago. After passing the ball in the United States went straight into startups.
I am more of an entrepreneur than a traditional venture investor. I think that gives an advantage for the role of CO and of the founding team, at a startup. I recognize that when you are a CO, running your founding team, you’re making the real-time decisions. As a former operator that wasn’t always easy for me in the initial days of transitioning to venture. I think it’s important to draw a line between the law of the board and the operator because nobody steps in their way and that comes down to the confidence and respect into the people that you invest in.
Also, it’s important to note that sometimes the discussions aren’t going to be about the business. They could approach the areas that are more personal. It’s important that these meetings cover both the business and the personal side of things. Because I believe that “Venture capital equals human capital”; people are the essential ingredients in anything we are doing right now.
Has there been any change in the way that companies come to you and pitch in with their ideas?
I believe that Propel Venture Partners over the years has invested a lot on actual presentation and has been diligent to improve the entrepreneur’s presentation skills. As we are the first group of people to see the pitch, after any presentation particularly at an early stage, we give real-time feedback. For instance, if we come across situations wherein the presentation needs clarification or further addition we convey the same to them as it leads to a far stronger presentation and success for them. The other thing is many entrepreneurs who are serious about their progress, bring in advisors early on. These advisors can be mentors or people having experience in the industry, or they could be subject matter experts for the business, and I think those individuals add a lot of value to the process and have proved the quality of the pitch and the companies.