Novice Investor #10 - In-Person vs. Zoom, Waterfall Models and Drake Memes

Happy Halloween everyone!

October and November is always a hectic time for me. Post-summer, the finance world gets busy, gifting seasons begins keeping my weekends busy on my jewellery side project and to top it all off taxes are due October 31st. To help with the busy period this year I very nearly completed a Sober October. Non-alcoholic beers have come a long way. Great to see innovation in the space!

At Kennet, in-person board meetings are back with a bang. I had the pleasure of attending an insightful strategy session in London with Grip and our first face-to-face board meeting in Warsaw with eStoreMedia. I leveraged the trip and managed to meet plenty of impressive Warsaw-based CEOs too. Here is a picture of eStoreMedia’s office in Warsaw.

In-Person vs. Zoom

This month, several experiences sparked some thought towards the future of in-person vs. virtual communication.

3-hour zoom board meetings have been a real struggle for me this year. If I am on a Zoom for more than an hour my engagement levels deteriorate and my energy levels crash for the remainder of the day. As mentioned, I attended my first two in-person board meetings of the year in October. The productivity and creativity levels of the face-to-face discussions were a marked improvement on their virtual counterpart, and I felt energised after each meeting. Last month, I also surveyed our portfolio companies on what type of Kennet events they would prefer to attend. Interestingly, 66% of respondents preferred in-person events. Finally, I spoke to a large event organiser who shared their view that virtual events are great for top of the funnel sales activities e.g., finding leads / educating leads. However, when it comes to the bottom of the funnel, closing deals, in-person events are crucial.

My not-so-unique conclusion from these experiences is that hybrid is the future. Without 20-minute Zoom calls, my current cadence of 10 - 15 intro calls per week would be impossible. However, trying to build genuine relationships and have productive follow-on sessions from my bedroom office simply is not the way forward. I plan to continue broadly engaging CEOs online for hyper-efficient top of the funnel activities and get to know all of you with face-to-face meetings and regular targeted in-person events. Hopefully, this meme can illustrate my thoughts.

Waterfall Model

VC/PE/Growth Equity Analysts and Associates, pay attention. In this video, I run through how to create a fully dynamic waterfall model template. Earlier in my career, I wasted countless hours trying to build complex models from scratch for each financing. In the spirit of efficiency, I took some time to build a one-size-fits-all template. Using a template like this should save you hours but be sure to replicate the model yourself to fully understand the maths.

Next month I will add a layer of complexity with caps, dynamic seniority and warrants. As always, feel free to email me if you want the template.

Productivity Tech

In last month’s newsletter, I highlighted the latest developments of the GPT-3 deep learning model which can create human-like text. As a follow-up, I decided to try out a start-up using the GPT-3 model.

Meet Unbounce. Their Smart Copy product uses GPT-3 to automatically produce sales copy. One of the key elements of running a B2C business is consistently putting out high-quality content on social media channels. For my side project, I can easily get on top of imagery through weekend photoshoots, but I always run into writer’s block when coming up with captions. It makes the process of putting out content painful. This month I used Smart Copy to do it for me. You enter your keywords and Smart Copy churns out numerous captions you can use on posts. If you ever run into trouble coming up with captivating captions for LinkedIn / Instagram posts, their freemium product is a great way to fill in the blanks and get some inspiration.

Books & Podcasts

The Autobiography of Gucci Mane

Last month, I was randomly asked who my role models are. I stumbled on the question and realised I do not have any. I have always been internally motivated. There is no one out there I truly look up to and try to emulate. When answering the question aloud I felt like a passionless corporate drone. In an attempt to find a role model, I switched gears on my reading list and searched for an autobiography to read. Meet Gucci Mane!

The book is a full life story of Radric Davis/Gucci Mane who is an Atlanta-based rapper known for his trap music. Gucci moved out of his hometown in Alabama to Atlanta and quickly became accustomed to all things rap. It is a great book to get an understanding of the early careers of some of the big-name artists like Gucci Mane, Future and Nicki Minaj. In so far as role model qualities, it is hard not to love an underdog story seeing someone go from humble beginnings to a world-renowned star. Gucci’s intense work ethic and ability to forgive/move forward from the past are also qualities to look up to. However, he doesn’t come across as the most trustworthy guy and his run-in with the law will probably keep him off my role model list. In summary, it is an interesting read which gave me more appreciation for Atlanta-based artists’ music.

Kennet Partner’s Investment Target

Kennet Partners is a Growth Equity investor with over 20 years of experience partnering with European and US SaaS companies. If you know any companies which fit our criteria, please reach out.

Investment size: $8m - $30m

Maturity: Over $3m in ARR

Growth: > 30%

Type: Bootstrapped and capital-efficient B2B SaaS businesses

Geography: Europe & US