Insightful interview with David Bowles from Delta Partners VC Venture capital firm with over 110 early stage investments in Ireland and the UK.
Your background, how did you get into what you do now?
I have always been interested in start-ups and entrepreneurship. Although a computer scientist by trade, I found myself working in more commercial roles in firstly large organisations and then start-ups (i.e. IBM, McKinsey, ezetop, etc.). I loved being part of a small team challenging the status quo. When the opportunity arose to join Delta Partners and work with start-ups every day there was no way I was going to let that pass me by.
What tips would you give to companies looking to secure initial and subsequent funding?
It is never too early to meet an investor and form a relationship. And when you meet that investor, even if you aren’t asking them for funding on that day, always be open and honest. Investments are best viewed as entering a partnership, so from the earliest meeting you are looking to build trust and understanding. Don’t be afraid to say ‘I don’t know’ and use that as an opportunity to follow up a meeting with the answer to the question.
— Delta Partners VC (@DeltaVC) November 8, 2015
Is there a certain type of company you prefer to invest in?
My favourite companies are those that have the potential to serve large markets coupled with a strong, ambitious team. At Delta Partners, our experience has shown us time and again that those are the ingredients that can produce a business with tremendous growth. Each element is vital. Being an entrepreneur is hard; very hard. Things will constantly go wrong, technology will be delayed, and customers won’t come through. It is the strongest team who can fight through those challenges and emerge victorious. I really like entrepreneurs with focus and vision, but are robust enough to take the knocks.
What are the things that pitching entrepreneurs do that drive you around the bend?
Telling obvious lies is the most egregious sin of all. It’s not necessary and there’s nothing wrong with “I don’t know, let me get back to you”. But answers obviously concocted on the spot and are then easily verified as false after the meeting do more to harm an investment pitch than anything else. Lies told over tiny, inconsequential little facts forever damage trust and relationships.
— Delta Partners VC (@DeltaVC) October 22, 2015
If you were to ever move to the other side of the table and start your own VC-backed business, what 3 learnings do you think would be most useful when negotiating with VCs.
- By far the most impactful tool in your negotiation arsenal is to secure a VC’s interest in your company. That is the biggest challenge and should be the focus of building relationships. Detailed terms (e.g. valuations, board rights, etc.) are a lot easier to discuss once everyone is committed to the success of the company.
- Finding an investment should be approached exactly like any other large partnership sale. An entrepreneur is selling shares in their company. As such they should have a pipeline of potential buyers (investors) lined up that they then proceed to meet, work to understand product-market fit (their company versus the funding appetite and availability) and determine pricing (how much investment can be raised and at what valuation). Entrepreneurs should chase and follow-up with potential investors as tenaciously as any other customer.
- Investments can last a long time. An investor should be chosen very carefully and not just under the criteria of the funding they bring, but also if they are someone who will be able to continue contributing and being supportive to the business over an extended period. Is this investor a partner to the business and will they be able to provide the entrepreneur with useful advice in the coming years?
This the official 'Delta is at the Summit' pic! Our last Summit? pic.twitter.com/6FGcnr2GjF
— Delta Partners VC (@DeltaVC) November 3, 2015
Personally, not professionally, what tech trends excite you the most?
3D printing and Fintech are the two trends that I find the most exciting personally. We’re less than a decade away from 3D printers being as common place in homes as paper printers were in the 1990s. Unlike 3D printing which is creating an entirely new category of innovation, Fintech is taking technologies and a sector that has seen little change, and innovating through the application of the principles of speed, transparency, interconnectedness and ease-of-use.