🚨After a stint in consulting at McKinsey & Company, Davor Hebel got into startups and venture capital. Today he's a managing partner at Eight Roads. He talks to Sam Shead for VC Wednesdays, a weekly series featuring a Q&A interview with a venture capitalist.
🖊️ What’s one interesting trend you’re seeing in the VC industry at the moment?
It’s certainly the impact of artificial intelligence on the entrepreneurial ecosystem: AI is the new innovation S-curve [a graph that helps describe, visualise and predict a business' performance progressively over time] and we are likely overvaluing its effect in the short term and undervaluing it in the long term.
Figuring out its potential impacts and winners and losers – for example incumbents or new entrants – is fascinating and exciting. I’m convinced that the best opportunities to invest are when there is no consensus view and today is such a time, so I couldn’t be more excited as an investor today about the opportunities we see in European tech.
🖊️ I suspect you get a lot of startup pitches. What’s your strategy for dealing with them?
After a couple of decades of experience I learned to rely more on my instincts and look for something that is truly unique and differentiated. Looking at a pitch, I like to analyse the following dimensions: market size, product quality, team strength, and company momentum. If three out of four are outstanding, that’s really compelling.
🖊️ How do you get to know founders before you invest in them?
Backing the right founders makes all the difference. So really getting to know them and tracking them over time can help ascertain how fast they are executing and evolving, how they deal with setbacks, and to evaluate working style and relationship.
Backing a company and founding team is like getting married – you will go through good times and bad so it is good for both sides to enter committed and with the right expectations.
And it’s a two-way street: it’s important for our founders to get to know us as investors to understand what the joint journey could look like. And I’m convinced that being there for the founders through thick and thin, being empathetic is really our job as investors. In the end, the journey of building something large out of nothing is challenging, arduous and often lonely. We need to rally around our founders and protect them the best we can, not add our own fears to their list of issues.
🖊️ What’s your favourite app right now and why?
I really like the WHOOP companion app – it keeps getting better and more accurate, automated and helpful. It’s still early days on their path to a real quantified self companion but making good progress (note: we are not investors in the company.)
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