Meeting a VC for the first time. We’re five minutes in and this happens:
Me: “So yeah, that’s what I’m trying to achieve with Futuristic etc”.
Other VC: “Aha, that’s really interesting. Now, what companies should we be looking at here in The Nordics?”
Awkward silence..
I’ve always wanted to have meaningful relationships with the people I work with. However, startupland is an industry that tends to view conferencing and quick ‘coffee catchups’ as it’s primary means of building relations. Great if you need to kick-start a network - not the best if you thrive on hourlong conversations and deep relationships. Since I 'm based in Denmark while covering The Nordics, I find that ‘fast interactions’ are often what you’re left with in ecosystems that are not your own. Therefore, I needed a way to spend more time with people I like in other ecosystems - without an indefinite budget for flights and hotels.
As a consequence, I’ve been undertaking a somewhat radical experiment. I decided to physically relocate to all the major ecosystems in The Nordics. Since I would never have the guts to write a post on something so accountable like physically moving, I’ve actually gone ahead and started it already. From May — July this year, I resided permanently in Helsinki to see if I could go deeper in my pursuit of more meaningful relationships with people in Finland. After my time there, I feel like a much more integrated part of the ecosystem with people whom I now consider actual friends.
My current roadmap for relocation will be to live in Stockholm, Oslo and Tallinn before the end of 2019.
This post outlines my thoughts on the experiment and why I decided to conduct it. There are certain benefits to adopting a nomadic lifestyle as a VC covering several geographies for sure. Maybe this experiment will even be valuable for other VCs to replicate. When I’ve completed my circuit, I’ll follow up with some reflections on what I’ve learned from my experiences.
Long-Term Real Relationships
I’m trying to build a firm that’s going to be around for the next fifty years. Therefore, I have no problem investing heavily in my relationships with founders, community builders, and other VCs. Real relationships are built while spending Sundays in a park or over a nice dinner together. And those 20-minute slots you get through a conference matchmaking app just won’t suffice. They require that you show up consistently and prove that you are willing to invest in another person.
One of the things I’m inherently annoyed by in VC is how transactional relationships sometimes turn out to be. It’s about what dinners you’re invited to and what deals you can provide other funds. I’ve even had complete strangers ask me for introductions to companies I’m looking at after five minutes in a meeting room together. All of this just feels really icky.
Real relationships are built on trust and openness. These take a lot of time to build, so I understand why some people prefer to try and skip ahead to the fun part. But unlike your old VHS tapes, this is not how things work around here. Getting deep enough in a geography / vertical to see the best deals is an investment that takes years of commitment unless your fund happens to be named Sequoia Capital.
Deal Flow
Deal flow obviously matters a lot. Being somewhere permanently makes you see better deals than observing from afar. Getting great deals consistently is largely a factor of keeping yourself top of mind with founders and other investors. That’s just a lot easier when people see you every day for lunch. Not to mention being able to find your own deals, rather than relying on others to introduce you to interesting founders.
However, in my case finding new deal flow was secondary. When I talk about my moving experience most people tend to ask me whether I was in Helsinki to find companies. I was not and I didn’t find a single new investment. Nor was this the plan. If you want deal flow from a region, you go for consistency rather than short-term volume. I could have arrived with a mindset of meeting as many fundraising companies as possible. However, I believe in this region over the next ten years and not just the two months I was there. Therefore, my time was better spent optimising for the long term.
Pushing my Advantage
Let’s be upfront about it: I’m not very old (27 as of this writing this). That carries with it significant disadvantages in certain areas such as networks, experience, and decision making. But it has one great advantage that most forty-something GPs at larger firms will never have: mobility.
When I advise our founders, I always tell them to push their advantage. Whatever that means in their given context. In my own situation, it’s becoming increasingly clear to me that I am willing to do a lot of the things other VCs just won’t. Whether it’s travelling extensively or just being out there on the ground. Pushing your advantage is absolutely key when you are trying to establish any firm in any market.
But can’t my associates just do it? Well, they can. But if/once they get hired elsewhere, they take with them all of their relationships and you get to start all over. I hope your firm provides great benefit packages!
Europe has historically had a problem with too much regionality among VCs. Traditionally, we invested close to where we live and can visit our companies. Yet, the problem is that most European markets have nothing on Silicon Valley or China in isolation. So opening up our mindset and becoming one region is absolutely key in the global technology race.
Things are changing for sure. I see large funds from London and Berlin visiting the Nordics monthly and the pace is picking up every year. Getting into an ecosystem requires years of dedication and showing up. No shortcuts or quick fixes will suffice. If you have high conviction in a region, you invest the time and effort it takes to actually build real relationships there — in the long run, it will seem like a bargain!
My methods may be a bit extreme and not super scalable. I’m not expecting all funds to have 15 satellite offices spread around Europe. That being said, all it took me to relocate was a friend’s apartment and an efficiently packed suitcase. The barriers are often larger in our minds than the physical ones actually constraining us.
Even if you don’t want to move anywhere, I think we could all do with a little more niceness and a little less transactional behaviour — after all, we’re gonna be doing this for many years to come, right?
This piece was written by Christian Jantzen, founding partner of Futuristic.vc. If you want to follow my writings, connect with me on Twitter @chrjantzen.
Futuristic.vc is a early-stage VC firm based in Copenhagen, investing all over the Nordics. We invest in beautiful minds building epic companies. You are welcome to reach out with comments or feedback at [email protected].