‘Go work for 20 years prior to entering Venture Capital’ vs. Young Venture Capitalists.

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This blog firstly appeared at VEECEE

A typical Venture Capital fund, with the size of 100-200 million would probably have 2-4 Partners, possibly 1 Principal and 1-2 Associates or Analysts. In a recent blog post, Vincent Jacobs from Kima Ventures took a deep dive at the backgrounds of junior employees at European venture capital funds. In total he identified 175 people working in junior roles at 103 different VC funds in 15 different European cities. It is quite an interesting post. But one of the main takeaways is that Venture Capital is a very small industry, with only 175 – 200 junior positions around Europe.

When I decided that I wanted to become a VC, I started reading every resource I could find at the time. The majority of articles on ‘how to get into venture capital’ pretty much argued that it is impossible to enter the sector without enormous luck and at least 20 years of experience. One of the most famous posts presenting a similar opinion is the ‘ Venture Capital Aptitude Test’ from Guy Kawasaki, where he mentions ‘ Venture Capital is something to do at the end of your career, not at the beginning. It should be your last job, not your first’.

Most of the people who ever tried to get into a junior role in Venture Capital have probably heard the response “You have no experience. Go work for 20 years and then try to enter”. As a VC you need to find the best companies to invest at and then use your experience, advice and network to add value to the company and help them grow. Therefore the logic goes. What value can somebody without a vast experience add?

Whilst I agree with the basis of the argument, and I have great respect towards Guy Kawasaki and all other people that share similar views, I sincerely believe that it is better to enter the Venture Capital industry from a young age and grow your experience in the sector. The three main reasons are:

1. More productive years
Malcolm Gladwell wrote a book called “Outliers” in which he stated (presenting evidence to support the argument) that it takes 10,000 hours of involvement and practice to become an expert at something. When you translate this to working hours, this could mean anything between 4-8 years before someone masters a given subject. By using a simplification and taking the average, I am assuming that an outsider to the Venture Capital industry would need at least 6 years of work experience in the sector in order to become an expert at it.

A senior executive joining the Venture Capital sector at the age of 50, after having gained 20-25 years of experience would start being highly productive at the age if 56. Assuming a typical fund lifetime of 10 years and a new fund raised every 4 years, this partner would be able to be fully active after getting to the ‘expert’ stage (from fundraise to full exit) in maximum 2 funds.

On the other hand, an Analyst / Associate  / Principal, joining a Venture Capital firm at the age of 30 with already 3-5 years of job experience would gain the ‘expert’ stage at around 36 years old. Applying the same assumptions and simple math, this person would be able to be fully active after getting to the ‘expert stage’ (from fundraise to full exit) in around 6-7 funds.

2, Easier to mingle with young aged entrepreneurs
Being at a young age, it becomes easier to source and connect with young aged founders, since you are sharing similar interests, life style and possibly common friends.

3. More receptive to new technologies
Venture Capital is one of these industries that your job never ends. You are constantly working. There is always another article to read, there is always another great event to attend, always another promising entrepreneur to talk to. In this sense, it requires people that still have a young person’s mentality; continuously eager to take the extra step, forget everything they know and learn something from the beginning. Young people, carry less experience and therefore are more receptive on new ways of doing things.

In conclusion, whilst I fully understand the importance of operating experience prior to entering the Venture Capital world, I believe that given the opportunity and assuming somebody really likes the industry, it is better to enter from a young age. Venture Capital is an industry that allows people to get enormous responsibility from a very young age, even in junior roles. Besides being highly intellectually stimulating, I sincerely consider Venture Capital to be the ideal industry for someone to develop leadership skills and grow a great professional network, while at the same time really making an impact.

Cohort analysis for startups 101

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Most of the times a VC fund is considering an investment in a startup it will ask for a cohort analysis. Such an analysis is comparing different groups of users throughout time. As a company is building its product, it is constantly testing new strategies. Customers that start using an application in the first week after its launch will have a completely different experience from users that start using an application later in time. Cohort analysis aims to help entrepreneurs (and potential investors) to understand whether a company really improves throughout time. Lets look at a specific example and assume that we are analysing an e-commerce site. This website has 500 new buyers every month. In the majority of the pitch decks that are shared with VCs you would find a figure like the one below. engpost1 The first impression from the figure above is that this specific e-commerce business is developing very well. The reality is though that these numbers don’t necessarily say a lot. Even looking at the average money spent per customer doesn’t give a clear picture. engpost2 The reason that these figures don’t give a clear understanding of the development of the business is that it is mixing revenues from clients that shopped for the first time in January, with revenues from clients that shopped for the first time in May. Lets look at two different scenarios regarding how the revenues per customer cohort could be in reality. Both scenarios would result in a figure like the one above. But as will be made clear, these represent two totally different scenarios regarding the development of the company.

Scenario 1 engpost3 When rearranging the data, we would end up with a figure like the one below, which is a typical figure used in a cohort analysis. engpost4 From the table above we can observe the following:

  • Clients that bought for the first time in January, spent on average $10 in January, $8 in their second month (February), $3 in their third month etc. Clients that bought for the first time in February, spent $11 in their first month, $8 in their second month, $7 in the third etc.
  • We can observe a trend that clients spend on average more money during their first month throughout time. This would probably mean that either the quality of the products or user experience is improving.
  • Clients that bought for the first time in January are spending only a small amount 5 months later.

Scenario 2 engpost5 When rearranging the data in a similar way as before we end up with the following table. engpost6 This table is showing a different story.

  • Clients who started buying in January are still spending a lot of money.
  • Clients who started buying in February are spending less money than in Scenario 1.
  • Clients of March and February are almost at the same spending levels.
  • There is a trend of clients spending less money on average during their first month throughout time. Revenues remain at high levels because January clients are loyal customers. Still, there is no clear improvement for new clients.

Cohort analysis would give entrepreneurs and potential investors a clear overview of a company’s progress. One could create this type of analysis for revenues, users, average revenue per user, expenses or any other metric. Since it is an analysis that VCs like a lot, entrepreneurs that are fundraising should be aware of it. You can find more information on cohort analyses, the correct way to read and interpret the and some templates in the following links.

Cohort analysis για startups με απλα λογια

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Ένα απο τα πιο σημαντικά εργαλεία ανάλυσης ενός startup, το οποίο έχω την εντύπωση πως δεν χρησιμοποιείται αρκετά είναι το Cohort Analysis.Μια τέτοια ανάλυση συγκρίνει διαφορετικές ομάδες χρηστών στο χρόνο. Τις περισσότερες φορές που ένας VC σκέφτεται να επενδύσει σε μια εταιρία θα ζητήσει να δεί κάποιο cohort analysis. Όμως μια τέτοια ανάλυση μπορεί να δώσει πολύ σημαντικές πληροφορίες και στους founders μιας εταιρίας.

Καθώς μια εταιρία φτιάχνει το προϊόν της, δοκιμάζει συνεχώς νέες στρατηγικές. Οι χρήστες που ξεκινούν να χρησιμοποιούν την εφαρμογή την πρώτη εβδομάδα έχουν μια τελείως διαφορετική εμπειρία απο τους χρήστες που ξεκινούν να χρησιμοποιούν την εφαρμογή αργότερα. Ο σκοπός του cohort analysis είναι να βοηθήσει τον επιχειρηματία (ή τον πιθανό επενδυτή) να κατανοήσει αν βελτιώνεται πραγματικά η εταιρία στο χρόνο.

Ας δούμε ένα παράδειγμα. Ας υποθέσουμε πως αναλύουμε ένα e-commerce site. Αυτή η ιστοσελίδα έχει κάθε μήνα 500 νέους χρήστες, οι οποίοι ξοδεύουν κάποια χρήματα.

Συνήθως στις εταιρικές παρουσιάσεις βρίσκεται μια εικόνα σαν την παρακάτω.


Απο την παραπάνω εικόνα η πρώτη εντύπωση που σχηματίζει κάποιος είναι πως η συγκεκριμένη επιχείρηση έχει μια πολύ καλή πρόοδο. Η πραγματικότητα όμως είναι πως δεν μπορούμε να μάθουμε πολλά απο τα συγκεκριμένα νούμερα. Δεν μπορούμε να έχουμε μια ξεκάθαρη εικόνα ακόμα και αν δούμε το μέσο όρο που ξοδεύει ο κάθε πελάτης.


Ο λόγος που οι συγκεκριμένες εικόνες δεν μας δείχνουν μια ξεκάθαρη εικόνα είναι πως μπλέκουμε τα έσοδα απο πελάτες που ήρθαν πρώτη φορά στο site τον Ιανουάριο με τα έσοδα απο πελάτες που ήρθαν πρώτη φορά το Μάιο.

Ας δούμε τώρα δύο διαφορετικά σενάρια σχετικά με το πως θα μπορούσαν τα έσοδα ανα customer cohort να είναι στην πραγματικότητα. Και τα δύο σενάρια θα μας έδιναν μια εικόνα σαν την παραπάνω. Αλλά όπως θα γίνει ξεκάθαρο, πρόκειται για δύο τελείως διαφορετικά σενάρια. Είναι προφανές πως τα νούμερα που παρουσιάζονται παρακάτω είναι υποθετικά και δεν ανταποκρίνονται σε κάποια πραγματική εταιρία.


Σενάριο 1


Ανακατανέμοντας λίγο τα δεδομένα καταλήγουμε στο παρακάτω γράφημα, που σηνήθως χρησιμοποιείται στο cohort analysis.


Απο αυτόν τον πίνακα μπορούμε να παρατηρήσουμε τα εξής:

  • Οι πελάτες που αγόρασαν πρώτη φορά τον Ιανουάριο, ξόδεψαν κατα μέσο όρο 10 ευρώ τον Ιανουάριο, 8 ευρώ το δεύτερο τους μήνα (Φεβρουάριο), 3 ευρώ τον τρίτο τους μήνα κ.ο.κ. Οι πελάτες που αγόρασαν πρώτη φορά το Φεβρουάριο ξόδεωαν 11 ευρώ τον πρώτο τους μήνα, 8 ευρώ το δεύτερο, 7 τον τρίτο κ.ο.κ.
  • Υπάρχει μια τάση οι πελάτες να ξοδεύουν κατα μέσο όρο περισσότερα χρήματα τον πρώτο τους μήνα όσο περνάει ο χρόνος. Αυτό σημαίνει πως κατα πάσα πιθανότητα η ποιότητα των προϊόντων, ή το User Experience βελτιώνονται.
  • Οι πελάτες που αγόρασαν πρώτη φορά τον Ιανουάριο, 5 μήνες μετά ξοδεύουν ελάχιστα χρήματα κατα μέσο όρο.


Σενάριο 2


Κάνοντας την ίδια ανακατανομή καταλήγουμε στον αντίστοιχο πίνακα.


Στο συγκεκριμένο πίνακα βλέπουμε μια διαφορετική ιστορία.

  • Οι πελάτες που ξεκίνησαν να αγοράζουν τον Ιανουάριο ξοδεύουν ακόμα αρκετά χρήματα.
  • Οι πελάτες που ξεκίνησαν να αγοράζουν το Φεβρουάριο ξοδεύουν λιγότερα χρήματα απο το σενάριο 1.
  • Οι πελάτες του Μαρτίου και του Φεβρουαρίου βρίσκονται πλεον σχεδόν στα ίδια επίπεδα.
  • Υπάρχει μια τάση οι πελάτες να ξοδεύουν κατα μέσο όρο λιγότερα χρήματα τον πρώτο τους μήνα όσο περνάει ο χρόνος. Τα έσοδα παραμένουν υψηλά επειδή οι πελάτες που ξεκίνησαν να αγοράζουν τον Ιανουάριο είναι πιστοί πελάτες της εταιρίας, αλλά δεν υπάρχει κάποια εμφανής βελτίωση στους νέους πελάτες.

Το Cohort analysis δίνει στους επιχειρηματίες και στους πιθανούς επενδυτές μια πολύ καλή εικόνα της προόδου μιας εταιρίας. Cohort analysis μπορεί να γίνει για τα έσοδα, τον αριθμό των χρηστών, το μέσο όρο των εσόδων, τα έξοδα ή για οποιαδήποτε άλλο metric. Είναι μια ανάλυση που οι περισσότεροι VC αγαπάνε, οπότε είναι καλό να είναι προετοιμασμένοι όσοι επιχειρηματίες αναζητούν VC funding.

Μπορείτε να βρείτε περισσότερες πληροφορίες για τα cohort analyses, πως να τα διαβάζετε αλλά και κάποια templates στα παρακάτω links.


200 milliseconds – The lifetime of a programmatic ad

Lately I have been looking into the AdTech space. One of the biggest innovations of the latest years in the space is Programmatic Advertising and Real Time Bidding (RTB). Real Time Bidding in essence means that advertisers have the opportunity to bid for an ad impression (to show one of their ads in an internet user) in real time.

A whole fairly complex ecosystem exists with numerous players. I plan to write about this ecosystem in a future post. But anyone interested could find more info here.

My point for this post is what happens behind the scenes in the 200 milliseconds that it takes to load a page in your browsers. In this extremely short time period a website that you are visiting sends a signal, multiple advertisers place a bid in an ad exchange (like a virtual stock exchange but for ads), the highest bidder is chosen and places their ad in your browser by the time the webpage has loaded. It is fairly impressing.

You can see a very nice video of this process below.


Joining Prime Ventures

PV logo

I realized that I wanted to become a VC during my first year in The Netherlands. I wanted it even before that. I wanted it since I was in engineering school. But I just hadn’t heard the term “Venture Capital” back then.

The moment I realized that I wanted to become a VC, I realized that there was one single company that I wanted to join. Prime Ventures. The leading Dutch Venture Capital firm, that has backed companies like ebuddy, takeaway.com, layar, liquavista etc. Over the past years I have been visiting very often the Prime website. Reading about updates in the portfolio, looking for new openings.

Since the beginning of May, I took the next step in my career and joined the Prime Ventures team, as an Associate. Prime is currently investing its 4th fund, which closed recently at €170 million. With almost €500 million under management, Prime is one of the largest Pan European Growth and Venture Capital investors. We invest in high growth, promising European technology companies.

The first days have been very exciting! I love the team, the company and the job. We have an amazing office in the centre of Amsterdam, next to Museumplein. From there we are looking to back the best entrepreneurs across Europe.

Please feel free to send over your ideas. I’d be more than keen to receive your suggestions on interesting companies we should look at.

Freelancer marketplaces are here to stay

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Online marketplaces are redefining the business models of the web. There is a big discussion in the tech ecosystem on the unbundling of Craigslist, after a 2010 post from Andrew Parker, a Boston based VC with Spark Capital. The post featured a chart highlighting the different startups attacking various parts of Craigslist. The chart was updated in 2012 by former Spark analyst David Haber expanding the list of companies to more than 80. Furthermore, CBInsights updated again the chart in January 2015, coming up with some very interesting insights that you can find here.

The main conclusions were: “Flash forward to 2015 and the verticalization of web marketplaces has accelerated substantially. Funding activity to Haber’s original list of companies has skyrocketed. Collectively, the 82 companies on Haber’s list have raised $8.87B in funding and have notched 13 exits to date as well as the merger of Elance and ODesk. Four of the companies have gone public including Lending Club, Care.com, Chegg and Castlight Health for aggregate exit value of $8.4B.  “

Freelancer marketplaces compose a significant part of these companies. The joint company Elance-oDesk is arguably the leader in the space with approx. $750M in gross revenues. Its highly anticipated IPO is expected to make it the next unicorn.

But Elance-oDesk is not the only participant in the space. Here is why I believe that Freelancer marketplaces are a very interesting market that is here to stay.

  • This is a big market that is experiencing rapid growth. A study estimates that approximately 25% of the US workforce today is freelancers and this number is expected to reach 50% of the workforce by 2020. That would be more than 80 million people by 2020. In terms of value, online  freelancer marketplaces are forecasted to reach $20 – 40B.
  • The global economy in general is moving to a contractor or freelancer workforce.
  • Both employees and employers are looking for the flexibility that such a platform is bringing. The ability to find exactly the talent you need for exactly the job you need them, being completely specialized without having to pay a premium long term for a full time employee.
  • Underlying drivers behind this expected growth are: demand by smaller enterprises, demand outside the US, demand by larger enterprises, cost savings by cross border labor arbitrage.
  • The biggest driver in the following years, I expect to be the demand of larger enterprises. We know that large enterprises are shifting their budget.
  • On the other side there are also conditions that could slow this growth, like regulation and compliance requirements. But the traditional staffing industry has proven that there are multiple ways to address and co-exist with these requirements.

Some companies operating in the space are:

Disclaimer: I am currently working at Randstad Innovation Fund, which has invested in twago, the leading European Freelancer marketplace.

Setting The Deal – Athens 2015

A few days ago I traveled to Athens to moderate the Setting The Deal event during Panorama Epixeirimatikotitas, one of the  biggest events on entrepreneurship in Athens. It was a great event with a very interesting discussion and interaction.

Below you can see a description as well as some pictures from the event.


With over 250 attendees the first Setting the Deal Athens took place on March 21, 2015 during Panorama of Entrepreneurship and Career Development, the city’s biggest annual event that brings together the world of Students, Universities, Entrepreneurship, Corporates and Startups.

Setting the Deal is a unique format created by Startupbootcamp HighTechXL, that educates entrepreneurs on Venture Capital and term sheets.

The first Setting the Deal Athens was organised by Startupper.gr, the leading source of original information about tech entrepreneurship in Greece, Startupbootcamp HighTechXL and Panorama and featured Spyros Trachanis, partner at Odyssey JEREMIE Partners, John Papadakis, co-founder and CEO at Pollfish, Nayia Antoniou, founder and managing partner at Nayia Antoniou & Associates, Nick Kalliagkopoulos, Analyst at Randstad Innovation Fund and Demetrios Pogkas, Startups & Entrepreneurship Editor at Startupper.gr.

First Nick Kalliagkopoulos explained how a Venture Capital term sheet is structured and explained 4 different terms on which our guests negotiated: valuation, liquidation preferences, managers’ stock vesting and protective provision.

Investor Spyros Trachanis, entrepreneur John Papadakis and legal advisor Nayia Antoniou were given a virtual company scenario and a virtual term sheet based on NVCA standards and for an hour negotiated on the 4 terms, some times reaching a mutual agreement and other times leaving the agreement for a follow-up talk.

Eventually the audience after learning how a Venture Capital deal works had the chance to ask questions and get more insights from our invited guests.

You can find the first Setting the Deal Athens document (Term Sheet Booklet, the Imaginary Company Presentation and the Basic Terms Explanation Presentation) on our SlideShare page (http://www.slideshare.net/SettingtheDealAthens) and follow us on our social media pages:https://www.facebook.com/SettingTheDealAthens, https://twitter.com/hashtag/SetTheDealAth.



5 trends on VC activity in 2014

CB Insights recently published its free 2014 US VC year in review. I suggest that everybody subscribes and gets the report, as it contains some very interesting insights. Furthermore, at the same time various organizations are publishing some interesting reports. One that caught my attention is EY’s Adapting and evolving, Global venture capital insights and trends 2014.

Below you can see 5 trends on VC activity that were of particular interest.

  • 2014 saw the highest funding since the internet bubble in 2001. $47.3 billion were invested across 3.617 deals. This is up 62% compared to 2013 where $29.2 billion were invested across 3.354 deals.


  • 2014 saw the highest number of seed VC deals since 2009, totaling 976. In terms of dollars invested, these reached $1.33 billion. The average seed round size reached the highest levels in the past four years, at $1.9 million.
  •  Overall VC funding to the mobile sector was up 109% vs. 2013, reaching $7.8 billion. This number was mainly driven by the mega deals of Uber, Snapchat, Instacart and square.
  • Most VCs prefer to make investments at the second/later stage, when companies are partially de-risked.
  • Investments in US present a 50% – 90% higher median round size compared to Europe. The median amount raised prior to IPO by US businesses in 2013 was $100.9 M, while the same number for European companies was $26.4 M. The median time to IPO by US businesses has been 5 years, while the time to IPO for European businesses reached 6.3 years. Therefore we see that US companies receive higher investments, at higher valuations but exit earlier than their European counterparts.


Eindhoven continues to be the dream location for high tech companies.. HighTechXL 2014 was just amazing..

I might have left from HighTechXL, but I am still closely following the developments, since I truly believe in the team, the program and the ecosystem.

As I wrote last year in a post that got featured in VentureBeat, there are many reasons that Eindhoven is THE place for a High Tech company. You can find the original post named ‘8+1 reasons Eindhoven is a dream location for a High Tech company’ here. But if I wrote this post again I would put much more emphasis on HighTechXL and the success of the companies that have participated there.

This year already 4 companies received funding; the most impressive is that 2 of them received investments on stage during demo day. In front of more than 1.000 people, these 2 companies signed an agreement with a Chinese investor on stage during the demo day. More on the investments, as well as on demo day here. Unfortunately I was not able to be there, since I was travelling at the same time as the demo day. Still, I can’t but feel extremely proud that I was part of this fantastic team!  

Thoughts on the way back from NY

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I wrote a post when I was going to NY and I am writing another one as I am flying back. After spending 4 days in NY these are my main thoughts .
  • Next time I go to NY I should also spend the weekend there
  • Next time I go to NY I should make sure the weather is better.


And now focusing on the most important staff
  • Although it is not San Fransisco, New York has a booming Tech Scene. Some of the world’s best investors are located there (like USV) and some of the world’s best accelerators and incubators (like TechStars).
  • Especially on the HRTech side, New York has a lot of startups and Talent Tech Labs, an incubator / accelerator focusing entirely on this segment.
  • How will the future of work look like? Are the online freelancer marketplaces going to prevail in any type of business? Do you see in 5 or 10 years also the high profile white collar jobs contracted via these marketplaces? How far is the day where one would hire investment bankers from a marketplace like Elance-oDesk, twago etc?
  • Is Uber’s model going to work in every industry? With our mobile phones we all are a node in the network. But which are the industries that this model can really disrupt and where does it make no sense?
  • Everybody is talking about the trends of today in the industry. But what are the trends of the next 10 years?
  • Too many people talk about the employeefication for software. This practically means that if you have an enterprise software, you can offer it to employees for free, try to establish an engaged user base and then charge the company to use it. Can this model work?
At some point in the future I might try to tackle some of these aspects one by one. Depending on time and appetite. Please keep sending me emails on topics you would like to see in this blog.
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