Angel Investing at Scale with Fabrice Grinda

Foreign.

Welcome everyone. We've got another investor live today, a very special one with Fabrice Grinda. Fabrice is the founder of or was the co founder of olx, now is the founder of FJ Labs. Fabrice, thank you so much for joining us today.

Thank you for having me, Fabrice.

You know we're going to be talking about scaling as an angel investor, but you know, I'd love to get a little bit of your background, you know, how you became an entrepreneur and how that led you into angel investing. Just to set some context for our viewers today.

Sure. I think the entrepreneurship thing evolved from my hobbies. When I was 10 in 1984 I got my first PC and I started immediately programming and I built a BBS in the 1980s way before it was cool. It was really love at first click. I never imagined for a second that what was a hobby would turn into a multi billion dollar business. But sometimes things evolve the right way. And all of a sudden one when I went to Princeton, they installed in my second year essentially a T1 line in my room. So while the rest of the world is connecting the Internet at very slow 19.2 kilobytes per second modems, I had 10 megabits of room and then saw the birth of the Internet as we know it today. So Gopher to Mosaic to Netscape and immediately it was clear to me that this is where I belonged. I mean all of a sudden that the stars that aligned the right time at the right place with the right skills, that said, graduated person, top of my class, but I didn't really know anything about business and I'm like, if I build a business, probably going to fail. If I join a business, no one's going to take me seriously. I'm 21, so let's go to McKinsey and companies like management consulting. It's basically business school except they pay you. And I'm going to learn the basics of business and improve on fundamental development needs like interpersonal communication skills, oral written communication skills. I did that for two years actually thinking I would miss the bubble. But lo and behold, I didn't. I felt I'd learned what I needed to learn. And so at the age of 23, left to build my first startup which is an ebay type company for the rest of the world. I was already in love with the concept of marketplaces. I love the idea of creating liquidity and transparency and otherwise opaque and fragmented markets. When I discovered ebay was like love at first click as well. And I was like, okay, this is what I need to be doing. And also it's an idea that's appropriate for a 23 year old. The problem with the Amazons of the world, where you need inventory, supply chain management or an E trade, where you needed a banking license and a lot of capital that were not available people of my age. And so I built the company in France, so launched what became one of the largest auction sites in Europe. And I think by virtue of being a consumer facing Internet entrepreneur, and at that time the story was like this young, fresh faced Frenchman coming back from the US to bring the Internet to France with a reasonable pedigree. The story hit on the PR level as well. And so I was visible. And by virtue of being visible, a lot of other entrepreneurs started asking for money and advice towards the first sight, no money. So I just gave advice and led to my first angel investment essentially when I became entrepreneurs. In both cases, I started 22 years ago and I became an intrapreneur and an angel investor more or less at the same time. Wow.

So it definitely wasn't called angel investing at that time. And you know, it wasn't a popular thing in the us. How was it in France? I mean, were there, was there a burgeoning ecosystem of startups that, you know, might have looked to you as kind of the, the poster child for the French Internet revolution? And you know, were they all kind of looking at you as kind of the, the model for where they wanted to take their businesses and was that kind of why they came to you? Or was it like they were looking at doing other things that were completely unrelated to auctions and marketplaces but they still came to you for advice? So, you know.

Yeah, no, it was exactly, essentially exactly what you described. Like, because I was so visible, I was like the COVID of like the French Forbes magazine on the 8 o' clock news, talking about the Internet. So at first it was really, people started asking me questions about online auctions. But very rapidly I kind of became the person you would talk to if you wanted to talk about what was happening the Internet in general and what was happening with the Internet. Francis. So I became the, as you said, the poster child of the Internet revolution, the French Internet revolution. People wanted to be like me and so started getting a lot of deal flow in ideas that were absolutely not related to auctions. In fact, I wouldn't do anything competitive. And for a long time it was like I wasn't sure if I should even be engaging in this. It felt like I was working already 7 days a week 20 hour days, over 100 hours a week for years on end. Like dude, the last thing I felt I needed was like more commitment. And so I thought long and hard whether this made sense. But I realized I loved actually giving advice. I love helping other people. I liked sharing and understanding the latest trends made me a better entrepreneur. And so actually I thought it was actually symbiotic with my core business, maybe better entrepreneur to be helping them. And then in general I liked helping them and being part of of their stories and push and helping amazing entrepreneurs fulfill their destinies and vision.

So where was the first company that you invested? Where were they based? Were they based in France or was it in the us?

No, the first ones were all in France. Because my first tech startup from 98 to 2000 was basically, I mean it was pan European. We were one of the largest auction sites in Europe. And out of that I also helped build an ebay of Latin America called providing them with the business plan and technology and own a fairly large chunk of the company. Another team of people from McKinsey, BCG, Stanford, Harvard, et cetera. And frankly out of that ended up meeting in India, Avi and Severe who built Bazi. And we also provided them technology which they didn't use to go and build Bazi, which ultimately became ebay India. So even though I had a global footprint in a way from it operating through perspective, the deal flow and the visibility was really in France. And so all my first investments were in France. And it was a little, I invested a little bit of a city search equivalent for France. There was a company that became an on it was an online recommendation engine that became an online marketing agency. There was a half dot com. I don't know if you remember that. Yeah, yeah. For price transactions live for France and a number of these. And what's interesting is so I made these first seven investments between 98 and 2000. In 2001 after the bubble burst or I think I made eight investments. One of them immediately failed was pets.com of France. It had the exact same destiny as pets.com so immediate failure and the failures come before the successes of angel investing because it's way faster and easier to fail than it is to succeed. And so the company failed pretty rapidly. And if you'd asked me how much the seven remaining were worth in 2001, I would have told you like ah, they're worth zero. I didn't even pay any attention to them whatsoever until like years later I think in 2004, 2005 at which point I was ready well on the way of running my second company. And the second company was a huge success. I mean it was like 200 million revenues and annual revenues, massively profitable. And I got a call from investment bankers saying, hey, this company is going public next week. We'd like your war information. Like what, what company? Like they're still alive, what's going on? And frankly more through sheer luck and or at least good selection of entrepreneurs. Because in my early angel investing, kind of invest in everything and anything and it was really more did I like the team and then did I like the. Conceptually the idea made sense that light of what was happening in the U.S. seven out of the eight ended up making succeeding. So other than the first one that failed, I made money on all others, which was like including like an incubator. I mean all of them. I mean some I made very little but got my money back and some, some I made a lot like the online ad agency that went public. But I was like, wow, this turned out to be more successful and more profitable than I expected it to be. Frankly, I didn't expect it to make real. I didn't want to lose money, but I didn't expect to make real money from this. I, I thought, ah, this is a great way to be helpful and friendly to the ecosystem and quasi consider it to be charity. It's like, oh, I'm giving back to the community and I'm helping other entrepreneurs with the experiences I've had. In terms of how do you raise capital if you're in a marketplace, how do you deal with the marketplace dynamics of matching, supply and demand, who are the best VCs, how to manage your board? I mean, all things I'd learned, which at that time were not necessarily common knowledge, I figured I would show you them. I had no idea that this would actually ever make money. But the reality is I also had no money from 2001 to 2005. I mean when my last company, when I sold the first company, the company's stock of the company that bought US promptly fell 99.98% from I think 10 billion to 30 million. During the period of my lockup, everything went down to zero. Now the funny story is tied to held like 10 years later. The company was actually ultimately bought for 1.8 billion. So they actually made it. They went 10 billion to 30 million and 1.8 billion. And they were actually bought by the same company that ended up buying my two companies later. OLX Naspers, which is a small world story. But I needed the cash to go and build the next company. So I made like 700k out of the first startup, which, given that I invested 300k of my personal money, was not a huge return. And I invested every last bitty of that in the next company. Because no venture capital was available in 2001. It was like the nuclear winter. I mean, I'd gone from a period in 99, 2000 where VCs I not talked to would fax me committed binding term sheets, which is completely mind boggling and crazy when you think about it. And that's a bubble to a world where despite the fact that I had an idea that I think made a lot of sense, I knew how to execute it. I invested essentially every last penny in my personal money. I borrowed $100 on my credit cards. I couldn't raise a dollar for the life of me from 2001 to 2003 and had to make it the hard way. I mean, ultimately missing payroll 27 times, living in New York City, sleeping in the couch in the office, couldn't even afford coffee. I basically lived off ramen noodles for two and a half years. So during the time period I did not actually make a single angel investment, but then managed to grab victory from the jaws of defeat by finally becoming profitable. That was on August 16, 2003, on my second company, Zingy. And then it became a rocket ship. We went from a million in revenues in 02 to 5 in 03 to 50 and 4 to 205. Given there was a business I didn't particularly love and I thought the margins would be compressed, I sold it a bit early, but as I've learned in the last crises, better too soon than too late and better for cash than for stock. So I sold for 80 million in cash in June of 04, but didn't really start angel investing again because I was so busy. I was at that time the company was on a straight tear all the way to the moon. And so we went from 20 people to 50 people to 100 people to 150 people. All that in the pace of nine months or so, was working day and night to make it happen. I started having a bit more time when the company got big enough that I had a great cfo, a coo, we were structured properly when I realized this is not where I want to be and I'd rather be building marketplaces and started thinking about doing Olux. And so I left in November 2005 to basically go start Olux. And at that point in Time I started becoming more open again to angel lessing, especially since I made like $27 million after tax. I own 53% of the last company, so it's like 43 million of the 80 million. But then you pay taxes to Uncle Sam. He needs his planet flesh. And so. And I think with that money, I bought two tennis rackets and an Xbox and a tv. And that was it. I still lived in my studio, tiny studio apartment in New York. Nothing had changed. So I was like, okay, should there be opportunities to angel about some things that are interesting? Why not? And because I started being a little bit visible. I mean, it's interesting. Like I built a much larger company in the US that I ever built in France. But the, you know, big fish in a small pond, you get. I was way more visible in France than I was in the US and so even though I built a company in 045, well, 02 to 05, that did hundreds of millions of revenues, was profitable and sold it really well, I had no real visibility. So it didn't really have deal flow. Especially being based in New York, where the ecosystem kind of cratered after the Silicon Alley hype had died, after companies like TheGlobe.com, et cetera, had all gone under. And so it took frankly, the DoubleClick acquisition by Google and Kevin Ryan and a few of the early pioneers in New York scene to have that recover and to start getting a bit more deal flow and seeing companies that I thought would be interesting. Yeah.

So you started investing or started looking at investing in again around 2005, 2007, that area. Did you actually sit down and think about putting together a thesis around what you want to invest in, how you want to invest? You know, what's the approach that you're going to take to investing? Or was it more kind of ad hoc deal flow comes. I'll look at it. If it looks interesting, I'll do it. If not, I'll move on.

Well, I mean, you need to remember I was really busy building Olx olux even in the early days was we launched, we went in 100 countries just to see what would happen, and we spent 50k per country. So it's $5 million. And it just so happened it really worked in four, which are India, Pakistan, Portugal and Brazil. So we went down to four, then really nailed it there, and then re expanded to another 30 countries. And so now, of course, it's 5,000 employees in 30 countries. It's 350 million uniques. But even then it was Getting it was hundreds of employees in many geographies. I was traveling the world as extraordinarily busy and so I spent really no time, to be honest, even looking for angel investments. But once again being a visible consumer Internet CEO, operating frankly in non traditional geographies, even though we're a U.S. company and we raised from American VCs and our headquarters were in the U.S. most of our revenues and well, most of the revenues are coming from Brazil, but most of the traffic and the user base was coming from India, Pakistan, Brazil, Portugal and we were very visible in the rest of Latin America and Eastern Europe. Started getting a lot of deals in these geographies by virtue of being visible. There were not many examples at that time, especially a very large, from a traffic perspective, consumer facing Internet companies and especially less by I suppose non local, non native people. And I was spending a lot of time there. I mean I was spending two months a year in Buenos Aires, a month a year in Delhi, a month a year in, in Sao Paulo. I was traveling all around Africa and became very visible there. So started getting deal flow and basically it was just reviewing bad deal flow. If I like something I invest, if I don't like something, I don't invest. Now pretty quickly in that process, within a year or two started getting overwhelmed by the amount of deal flow and getting overwhelmed by the amount of work that it was taking away from the core businesses. And at that point in time, as a recovering workaholic, I was like okay, maybe let's not, let's try not to be working 100 hours a week anymore. Maybe let's try to limit myself to 70, 80 hours a week. And so I created, I kind of split the time, 60 hours on Orlocks and like 10, 15 hours in the angel busing. But as the deal flow started blowing up on the inbound side, I didn't have time to take one hour calls with all the different founders. I mean if I four 40 inbound deals, that's 40 hours. It just didn't work. And so pretty quickly I'm like I need to limit my scope. And the easiest way to limit my scope and by the way to be more helpful to the entrepreneurs, to be more thoughtful about what invest in is to focus on things I understand and things I like. And so very rapidly in that journey and I don't know when it was maybe 2006, 2007, I'm like, I'm only going to look at online marketplaces so, so you can send me anything you want, but I'm Only going to really engage if you're building a multi sided marketplace. And it's in that context that we invested or I invested in TKBeast, which is like the sub hub for Europe. And a lot of those companies. The only exception to that role is if you were someone I knew really well or an intrapreneur that I backed in the past that had been successful and was doing a second startup. If that's the case, whatever you do, I will back you, no questions asked. And it started taking on a life of its own. So very quickly started investing in 20, 30 companies a year. In a way, not too bad. It was like 0.5, 0.6 companies a week and did that for a number of years. And it kept going on its merry path between 2006 and 2012 until basically I sold OLX.

So during that time you were doing 2330 companies a year. How many deals were you looking at?

Well, depends on the definition you use. I was getting probably 40, 50 deals inbound a week. But many of them were out of scope. So many of them were sending me interesting things but like nanotech, hardware, robotics, space tech. And I just wouldn't even evaluate it. So how many I would actually evaluate probably 15, which is already a lot of time relative to. Yeah, 10, 15 a week. And that's why I was 60 hours in a. Relax, 15 hours a week on, on, on, on evaluating deals and making an investment decision. And, and, and there's no. And by the way, my process for following up is like the, the most. Well, I hate anything administrative and I hate reading legal documents to the point that if I read three words I fall asleep. It's also the way my companies have always been built. I've always had a cfo, coo because I don't want to deal with anything administrative whatsoever. I would be on a call on the intrapreneur. On the call I would tell them I'm in. I'm not. Yes. No. Why? So in a one hour call I already had created in my mind a set of heuristics for evaluating companies and for evaluating founders, whether I thought their ideas made sense. And so after one one hour call, I would tell them I'm in, I'm not. And of course we'd have agreed to the amount of evaluation. The after that point, anything they would ever send me, I would auto. Auto. I would have my assistant, my virtual assistant in the Philippines, auto sign the document. I would never read them. So I actually. So my management process was easy. Any document they ever Sent, required a signature would be auto signed without being ready, including the stock purchase agreement, exit agreements, anything like. I just didn't have any time to allocate admin stuff. And frankly, it goes to show that most people in the world and most people I interacted with at least, maybe I'm a good judge or character, but I actually think most people are honest and most people have good intentions. And there was never a case where I said that we would agree, oh, the valuation is 5, and then the documents would say 10, or the fully diluted percent of ownership I should have had, should have been different than what it was. And there was never a case where I got screwed in an exit or whatever. And so to me, it goes to show that a, if you treat people right and you're friendly, people do right by you. But I think also, frankly, most people are fundamentally good. Now I don't do that anymore. I wish I could do that, by the way. But when you are a custodian of other people's money, you can't just auto sign documents. Which is why in a way there's FJ Labs and a real team, a real structure. Not to mention that there's a lot more deal flow, a lot more work. And so I'm very happy to now be surrounded by an amazing team of collaborators.

Yeah, during that time when you were doing 20, 30 investments a year, how much time were you spending engaging with the entrepreneurs that you had invested in? You know, where were you doing like quarterly calls with them, trying to help them? Were they, was it more ad hoc? They would reach out to you when they needed something and just managing completely ad hoc.

I basically told them, look, I'm super busy and, and I'm highly scheduled. You know, I like my, my day is broken up in 30 minute increments though. Some meetings go 45 or an hour and you need to schedule time way ahead of time with my virtual assistant to get in my calendar, it's completely inbound. If you want my help, ask for it. I have no time to go and chase you down. If you want to send me a weekly update, send me a weekly update. If you want to send me a monthly update, you send me a monthly update. If you want to send me a quarterly update, you send me a quarterly update. You want to send no updates, you send no updates. The amount of help I will provide you will be directly related to the amount of time time you put into getting my help. So if you actually really need and or seek my help, I will give it to You I am available and I'm super responsive. But you need to ask for it. It's not my job to go and chase you down. And that approach still works to this day.

So what are some examples of the type of help that some of the angel investments that you made, the entrepreneurs.

Came to you for a business model wasn't working and they were wondering what, what to pivot to or if they were really early in their. They're very early in the marketplace dynamic. They're trying to figure out should they take a percentage commission on the buyer. The seller should be 1%, 5%, 15%, 20%. And because I've done this and seen this so many times, you know, I could show them how to do the an analysis of the elasticity of demand, elasticity of supply. And you want to take your commission on the more elastic part of this, of, of the curve and you want to take it on, but you have to see how elastic it is and how elastic it is. Of course, the more elastic it is, the higher the rake you could take. And so a lot of, I suppose from this perspective, like institutional knowledge of how you build design marketplaces is one thing they wanted especially they needed a pivot. The other thing that I really helped is fundraising because I've raised a lot of venture capital from a lot of VCs over the years and I've done right by most of them. They, I have these good relationships. And so they, when they were looking to raise the next round, it was rather easy and frankly from a value add for them, time cost. For me it was a massive win win because it would literally take one minute to draft email saying, hey, whatever, XVC at this vc. You know, I'm an investor of this firm. They're amazing. They're going after the next round. Would you want an intro? And here's enough information about them for you to make a decision. Would you want an intro? And obviously double opt in, never a direct intro. And the conversion rate of those types of emails, if you're well thought through as introducing the right company, the right investor at the right stage at the right time, it's like 95%. And so the intrapreneurs would love it because they'd get intros to VCs that were highly qualified and there were the best VCs and the most of us and the VCs would love it because they'd get differentiated filtered deal flow and that would take very little time for me. So it's like win, win, win. And so that's one of the things I used to allocate a lot of my time doing. And frankly, it's one of the main value propositions today. Today at FJ Labs, think of the other traditional venture capitalists these days. They have billions under management. When you have billions under management in your fee structure allows you to have a platform team where you have like, headhunters, recruiters, psychologists, coaches, etc. If you're essentially managing, you know, your capital, plus some capital from a future user, family offices, and you're small at seed, we can't, we can't afford that. I mean, currently we're not even profitable in our fee structure. Like the. I'm not paying myself, my partner's not paying himself, we're not reimbursing our expenses, and we're barely breaking even on our underlying cost structure, so we can't do all these. So we're like, okay, what is it that should be our main value proposition beyond thinking through marketplace dynamics and frankly, fundraising, especially given that we're not leading, so we're unbiased. We just want you to have the best investor possible to get you to the next stage at the best price possible. We don't have any inherent bad view or perspective where the price should be, and we don't. We're not trying to write a big check to get more ownership, etc. So as a result, helping people fundraise is one of our fundamental value proposition, which frankly came out of what I was doing as an angel, which is true of everything that FGA Labs is today. It's an outward growth of what my angel invest activities were back then.

Yeah. So let's fast forward to, let's say, 2014, 2015. You've got over 100 companies that you've invested in at this point. Some of them have done quite well, Some of them probably have shut down. Have you gone back and kind of reevaluated your initial apprehension of administrative duties and said, well, you know what, this is a lot of stuff. There's a lot of legal paperwork around here. I need to pay a little bit more attention to this, so. So that I can continue scaling this and keep doing more. Or was it like, hey, it's working fine as it is. And a lot of the deal flow that's coming to you presumably was also filtered through references that people that you knew very well, so you didn't have to worry about it as much.

So it happened a little bit differently. So, first of all, one of the partners or co founders of the eBay of lat America that I helped found back in the 90s was also an active and successful angel investor. And my co CEO at Olux who had been the CEO of that site reintroduced me to him in the late 2000s and we decided to pool our angel investing together in terms of reviewing deal flow. And we also had somewhat slightly different expertise and he was way more into reviewing legal docs, et cetera. Starting in, I don't know, 2009, 2010, we started doing 100% of our angel investment together and the next big decision point became in 2000, the end of 2012. So I sold Olux in 2010 and I stayed for three years and in late 2012 I left Olux and I started thinking through our student Max and I and I laid out and I actually published the blog post on all the decision framework of what I could be doing then. And I had a lot of ideas. I tried to buy Craigslist or offer to run them. I could, I thought of launching different types of companies and one of the ideas was just was raising a venture fund. In fact, at that point in time we went out and failed to raise a venture fund despite our extraordinary success. So historically we've made money at 50% of the companies we've invested in that exited and we've lost like 50% with an average of 62% IR and about a 4x on a net realized basis. So we thought, oh these numbers are fantastic, people were going to throw money at us. And it wasn't the case. Partly because I'd already codified or the approach we were taking to angel investing was very different from the way most VCs operate. I mean first of all we're seeing a lot of deal flow, we're investing in a lot of companies and so much more diversified portfolio or fund that most people would pursue though I think it is the right strategy. Talk about why. In a minute I've been approached by a young entrepreneur. I was thinking through building a company. I don't remember exactly when, but I think like 2010 or 2011. He was at Harvard. He had built a company. He had essentially stalked me and got it stocked himself into a meeting with me during which I told him like, I mean literally he was like emailing me like I need to meet you. And I'm like no. And one day he's like, I'm at the door of your office, why don't we grab coffee? And I thought if I meet him, maybe he'll leave me alone afterwards. Which of course never happens. That way. But this is a good stalking experience. He gave me his pitch. I told him it was horrible. You should just return the 500k raise to his investors and be done with it. I got an email from him the next day saying, hey, you're the only person who's been actually honest with me about the validity of my idea. It was like a horrible Chadwick type clone. And. But I talked to my investors, they said I could keep the money, and now I just need to find the idea to go build with it. So why don't we go and build this company together? We're thinking through ideas together, and I'm like, no, I don't have time. So I kept pushing him away, and he finally sent me a check for $5,000. He's like, I'll pay you 5,000amonth to work for you. And that's why I was running olx. I was super busy. And I'm like, look, okay, keep your money. Just follow me around if you want and follow me on my investment calls and let's see if you can help me filter a lot of the inbound deal flow. Because at that point, I was really being overwhelmed by the fire hose of 40, 50 deals a week, and I just didn't have time to go through them. And so it forced me to codify my Euro 6. So at that point, I actually did come up for the first time with how do I evaluate a company? And the four.

Your.

The four evaluation criteria, which are a perspective of the team and we can go in them later. But then what is a good team? A perspective of the business, a perspective in the deal terms and whether or not it fits my thesis of where the world is and where the world is heading. So these four criteria, I could have. And I had him apply them, and I realized that actually, frankly, really smart people can actually apply the. The thesis and heuristics if you give them enough at bats and the. And you. After each call, we would review what we thought and why. And very quickly I basically let it filter all the inbound deal flow. And I would only take the calls that he deemed were interesting at first. Of course, he would rather filter less because he was. He didn't want to pass the next Uber Airbnb, but pretty quickly narrated then, and I'm like, wow, this is actually super helpful now. In the process of doing that, he started getting a lot of ideas and seeing what the trends were, and it led him to go and build his own company, which we, I guess we incubated and became the first startup studio company we built together. And so in 2012 or when I left or likes or early 2013, I'm like, you know, I like building companies, I like investing in companies and I have an idea or company I want to run right now. Why don't we create a structure with my partner Joseph where every year we keep investing and we build one or two companies that we like building on a startup studio model and we were off to the races. And the last thing that kid did who today is of course CEO of Adore Me it's over 100 million revenues profitable lingerie e commerce company was recruit a successor and so he went to another first year business school student. At that time it was only Harvard, but obviously now we recruited a number of universities to replace them to help us filter the inbound deal flow. And we first tried to raise a fund failed because the idea that you could evaluate companies on a one hour conversation and invest with I guess what most people would say no due diligence. I would argue that it is due diligence to be evaluating the unit, economics to be valuing the founder, etc. And the presentation that they give us. But let's say limited due diligence is not something that resonated with institutional investors. So I actually thought for a long time we're not going to build a VC fund. But in 2014, 15 strategic marketplace companies that I'd competed with when I was at OLX started approaching us saying hey, we'd like a window into the future, we'd like to understand what's going on in the U.S. we'd love to invest with you. And of course they being publicly traded companies are very large, needed things more legal, more of a legal framework and due diligence and structure than I would have done on my own. And that's where frankly my, my partner came to play. And if it wasn't for him, we wouldn't have fund because I wouldn't be doing, I wouldn't, we wouldn't have, you know, be issuing K1s and like whatever. I don't even know if we're a CC registered or all the stuff you need to do to run a fund, I would never have done. And that led to the real creation of FJ Labs at Fund 1 with external capital in January 2016.

Interesting. Sorry about that. So as you started scaling out these investments, I mean now you're probably at like what, 200 investments or more, right?

At that point in time or you mean now, today?

No, no, at that Point in time.

Yeah. Several hundred investments. Yes.

Yeah. And what were you seeing in terms of exits? And you know, how do you manage that number of personal investments?

Right.

Like, you know, I think a lot of angel investors get into the game. They start investing in a few companies and you know, for various reasons, personality differences or, you know, I'm not getting any updates, I don't know what's going on, or I want to get a lot more involved people, stop investing over time.

Right. And.

You know, you've done this consistently for a long period of time with a very large portfolio with very little, very little outside resources other than yourself and somebody who's stalking you so well.

And a partner who became more and more incremental and useful in doing this.

Yeah, right. Which eventually led to FJ Labs.

Correct.

But you know, at 200 companies, I'm sure you're getting requests from founders to sign paperwork on a fairly regular basis.

Oh yeah. Until I had a fund all auto sign. Yeah, that was easy. I'd assigned all the docs for the longest time or had my partner. And then in 2014, 2015, my partner started reviewing all the docs and he was in charge of getting all that done. So anything legal that need to happen to him and he would take care of it and so that they had that. But in terms of managing, like what are we invested in, how much investment, how much money capital do we have deployed from myself or my partner or our friends, frankly, we would do trustless shares with other friends in different companies, created a massive spreadsheet full of matrices, et cetera, that would calculate in real time, implied IRR, actually net realized, IR, etc. It was a monster that I built over many years. But at some point it became untenable. If I do a refresh on calculating the irr, my computer would freeze for five minutes while it was encoded very beautifully, let's say, say. And I try to hire, I guess a young intern from France, reach out to me and I don't remember when exactly, but like 2014, 2015, and asked if he could work, follow me around and work with Ruby for like nine months during some sort of like internship program that his school had, it was an Internet school in France. And he was really bright and sharp and so I'm like, sure, why not? So he followed me around and we tried to, to work out what would be the best role for him. And I was hoping he could be chief of staff, but frankly his English was not sufficient to help me deal with name band, deal flow. But he was an amazing product visionary. And so I told him, okay, why don't you build a team and you productize my basically the tools we built internally for evaluating startup, managing startups and managing deal flow and you put it in the cloud and he built it. And when we were done and we thought it was just going to be a tool for us, he's like, hey, do you mind if I built a business out of that? I'm like, not sure that's a big business, but if you want to, why not? You can own all the ip, et cetera, and go for it. And that became a product called Kushim K U S H I M VC which allows you to both manage your deal flow and your portfolio in terms of everything from cap table in the deal flows, like top of funnel. Okay, just came in. Has it been reviewed? Has it been assigned? Is it reviewed? If it's reviewed, what do we do with it? Do we decide to reconnect in six months? Do we pass forever? Do we invest now? If we invest, then it goes in the portfolio management part where you have everything from the cap table to your ownership to news on the company, etc. And all kind of automated and it's very inexpensive, very easy to use. And so started using that and it made our lives a lot easier. Now of course, as we started raising external capital, we started building a back office operation. So now we have a cfo, we have a head of a director of operations, we're, I don't know, maybe it's VP of operations. Not sure what the title is. He has an analyst and so there's an entire back office team that does that. Though to be honest, they reported my partner not to me. And I don't really know exactly what they do on a day to day basis. I think they give me the time to go and talk to CoR entrepreneurs, evaluate ideas and, and invest money. And.

That'S great. So you know, at this point you are what, 2015, 2017, you have a vast portfolio. You have put a little bit more structure around how you're evaluating companies, how you're managing deal flow, how you're managing the companies that you know, say, invested in. What about verticals? Right? Have you now started going outside of your core marketplace vertical and start investing in some other things that you know, like crypto?

Right.

Or, or crypto oriented startups that weren't really in your wheelhouse but friends that you had invested with in the past or people that you knew were getting excited about some of these industries and Were saying, hey Fabrice, you got to put some money into this.

So. So first of all, marketplaces is still the core focus today. You did 22 years later, we're still at the very beginning of the marketplace revolution. Now what's happened is the theses or the thesis I invested in marketplaces keeps evolving. There is a trend towards, and I guess a continuing trend towards vertical marketplaces. So you take the ebays and the Craigslist, but frankly the seamless grubhubs, upwork, thumbtacks of the world and you create beautiful, extraordinary vertical experiences there. There's another trend happening right now where you're reinventing these old school marketplaces where you go to upwork and you say, I need a developer and like 200 people apply and you need to pick one. This marketplace design philosophy is called double commit. The new model is you say what you need and the marketplace fix the supplier for you. So I did a plumber, they picked the supplier for you. I need an electrician, a programmer, whatever. And so this new model of marketplace pick is another one of the big pieces we're investing in right now. And thirdly, B2B marketplaces and B2B, we're still the very beginning in the consumer world. We've seen these extraordinary user experiences from Uber to Airbnb and to Instacart, Instagram, you name it. In the business world, a lot of transactions happening through Rolodex, through email, through Excel, and there's very little online marketplaces, price transparency discovery. And so we're focusing on bringing that to every vertical possible. And this is leading us right now to invest in things that you wouldn't think of, like dump truck driver marketplace. I mean that's a $37 billion market. A marketplace to find welders on oil platform. So marketplace and again, much larger market than you would think. And so we're doing petrochemicals, et cetera. So we're doing a lot of these B2B marketplaces. Now if you look at overall our portfolio, 30% of the portfolio is non marketplace. A combination of former founders. We back to do really cool, innovative stuff. So for instance, we were investors, a company called Vettery, which is a labor marketplace. And the founders obviously decided that as a next step, after selling via Deco and beer successfully, they were going to build an electric vertical takeoff vehicle, aircraft. So they're building a flying car. Flying electric flying plane. That's going to be a taxi that you can order, like an Uber. It's a company called Archer. And so obviously we had to invest in that, despite having zero expertise in the category. We also back companies of close friends or ideas that we love or frankly, infrastructure for marketplaces. Now, in crypto, it's a little bit different. I dabbled in crypto very early, though at this point, I'd have to read my old blog posts to know how early. But let's say the early 2010s, just because I was a gamer, and I guess I'm still a gamer, and I. CPUs, GPUs, sorry. And I was using these GPUs to mine some BTC. And so I ended up having bitcoins that I'd mined. And as Bitcoin became the rage, became really aware and frankly, thoughtful about it. And Bitcoin itself, as I was operating in many of these emerging markets, really had a use case in being not really a currency, but really a store of value, a deflationary store of value. Because many countries, if you look at Argentina over the last 22 years, we had in the early 2000, a full, I guess, transformation of the dollars to pesos at an arbitrary rate where you lost 3/4 of your assets or 80% of your assets. They nationalized your retirement system, they imposed crazy capital controls. And so multiple times there was arbitrary confiscation of your assets. And the only way around it was having things like gold or diamonds, which are also variable in value and easy to steal and hard to store. And so it's not a surprise to me that a lot of the bitcoin innovators come from markets where there's been high inflation, arbitrary confiscation of assets like Argentina and other emerging markets, and there's a real use case. And to me, that always made sense to me. And when I saw other crypto projects emerging, we ended up investing in a number of of them, realizing that we were still early in the game. And at this point, we're still at the application layer, we're still building the bricks or the picks and shovels to build the infrastructure, and we're still pretty far from a useful application layer. I was pitched, obviously, many, many crypto applications, especially marketplaces, but none of them made sense. They were way too complicated to use. And there was no if you're going to build something in crypto, you need to make a compelling argument as to why there's. There's value in decentralization in marketplaces. Often there's a real value in centralization. If you think of an Airbnb, the fact that Airbnb, the central authority, is There, they provide the insurance, they make sure that they prevent fraud, they solve issues between the hosts and the guests. Yes, they take commission, but they also provide liquidity. They make sure that they have enough listings in every region. If you have a completely decentralized platform, these incentive systems are not there and don't work. And so there probably are use cases of marketplaces where there's value in decentralization, but so far I haven't seen any. And so we scaled back. It's not scaled back. We just invested in crypto projects of friends. You know, we're in Lolly, which is like an ebates for crypto created by a friend of mine and it's amazing. That made sense. But as I said, we're still early in the development there, but. And there are no applications that we'd like to invest. And not in technology, but the application of technology. So we wouldn't invest in an AI company. But if you're using AI to do something interesting that's compelling, you know, so the old school marketplace, you have to go like ebay. You write a, you want to sell something, you take, you, you write a description, you write a title, you pick a category, you pick a price, you take a photo. The new model is you should just take a photo and the AI based on that photo should tell you everything. Like they should pick everything for you, including the price, and, and just place it on sale and like really simplify your life. Like, I wouldn't invest in a drone hardware company because that's going to be commoditized and the margins are going to go to zero. But if you're using drones as part of your product in order to, I don't know, fly over buildings and identify leaks to sell them to general contractors who are going to solve or fix them, that could be interesting. I mean, just made that up, but why not?

Yeah, yeah. So you know, you, you've continued investing as an angel till 2018. 17. 18, 2016, 16. Which is when you started FJ Labs.

Right.

And through FJ Labs, you've invested in how many additional companies? A couple hundred.

Probably been averaging 120 a year or so. Yeah, we did 124 last year, 128 the year before. But that includes the follow ons. And so it's like 86, 80, 90 new investments a year and like 2030 follow ons, but also 2030 exits every year. And what's interesting is how stable all those proportions have remained. Like, we're still at 50%, we make money at 50% of the deals we invest in when they exit or IRR remains realized. IR is 62,2% to date over the last 22 years, which is like top 1% despite having increased or invested more and more now, of course, I suspect ultimately it'll go down as we're deploying more capital and we're following and we're writing bigger checks and sometimes in the follow ons at later stages. So expect that, that it'll probably go down, I don't know, 30 or 40, but it'll still be pretty amazing. But yeah, it changed. But in a way not too much has changed because we're still operating the same philosophy I did as an angel. Right. Like we're not leading, we're not pricing, we're not taking board seats. We still decided over the course of two one hour meetings so that deal would come in. Now we get about 100 deals a week. It's randomly assigned to a team member. And now we have a pretty big team because if you include both the studio and the ambassador side, there's about 32 of us. A team member reviews it. About 60 of the deals, 60% and 60 per week, are not on scope. So we don't even take a call. The remaining 40, and I've already passed on like probably dozens of others that go to my email or LinkedIn that are really of zero value, that are like, I have an amazing company, do you want to invest? Like not enough information to decide. I don't even reply. So it's really more than 100, but let's say 100. We review 40. We take calls with, it's a one hour call. On that one hour call, that team member evaluates. What do we think of the founder, what do we think of the business, what do we think of the deal terms and does it meet our current thesis of where the world is and where the world's heading? They write a summary, a one page memo and they make a recommendation. We review that over the course of a two hour meeting every week where we focus the companies that are at the high priority, not necessarily the ones we're going to invest in, but the ones that are interesting, even if it's a pass because of valuation or whatever. And then my partner and I take a few calls a week, I don't know, 10 total. And we invest these days on average in two calls per week. So over the course of two one hour calls over one or two week period, we decide whether we invest or not. And again, no board seats, no minimum ownership requirements so we still really much act like angels and so it's really the extension of what was originally our angel investing activities that has just scaled up and these days we're deploying like 53 million a year. So it's about 400k invested 128 companies but it's really a range. So our typical pre seed check size is 220k or typical seed check size is 390k or typical a I don't remember but like 500. I posted what they are. We ref set sizes per round or per stage but we're also not like vc. I don't have any minimum ownership requirement and frankly if the Rand is full and I usually would invest 390 but you only have 100. I'll take the hundred. It's fun to be part of the adventure.

You'd rather be in a good company than not be in it?

Yeah. And yeah does it probably make sense from a time allocation capital like if you're deploying that little capital at the end of the day will it move the needle? Probably not. But if you meet amazing people and amazing companies and you want to be part of their stories and so so you go for it and the rest is not really that important.

I want to shift gears real quick and ask you what your thoughts are about the whole Angellist syndicate model and Angellist funds model for angels. People that are starting to invest, people that are or have been investing for some time and thinking about starting up their own syndicates. What are your thoughts?

The well what I like about it is it democratizes access to angel investing. But you need to be very thoughtful because venture investing, angel investing doesn't follow normal Gaussian distribution curves. If you're investing in the stock market the return distribution looks like this where the big fat middle and you're probably better off just investing in the s and P500 and you're going to get whatever the average of the market gives you. The issue is if you look at venture returns, they're not distributed in a normal way. They're distributed in a power law. So if you look over a decade the top two companies of the decade become super unicorns. They represent 40% of the returns of the decade. The decade. The next 20 companies are worth more than 10 billion represent 60% of the sorry 40 notes another 40% of the value. The next 100 companies are worth over a billion, represent 15% of the value and everything else is like 5%. And so you need to be in the top 50 companies to really make it. And the probability that you're going to be in one of these by default is very, very low. And so I would recommend that the highly diversified portfolio, if you look at the studies, most angels, if they invest in fewer than 50 companies, don't make any money. And if they invest in more than 50 companies and end up being successful. But I would also recommend having a decent thesis, being thoughtful about what you invested. And so I wouldn't invest in like random companies on Angelist. I, I, I think that's really a terrible idea. I would invest in the funds though, but I wouldn't follow A, some people have syndicates where, oh, I'm doing this deal, invest in this deal. I'm doing this deal, invest in this deal. I don't like that because then you're A picking and choosing and B, then they make money and on. If they lose money, if they, you don't, you lose everything. But they don't lose anything. And if they make money another deal, they get their profit in another deal. Right. So the deal they, they get paid per deal. So even if they, let's say they, let's say they do 100 deals, they make money in one deal, they lose on 99 the pro, they will take the profit on the, on, on the hun, on the one, but they were not going to deduct it from the losses on the, on the 99 because they're done individually. Well, if you go to funds, they've.

Lost their money on those other 99 also.

Yeah, but they don't put that much money to play, to be honest. Like, it's not like us. I mean, so Today we've deployed 262 million and 100 million of that is our money. I mean we put our, it's basically everything I have is invested in tech startups. This is not the typical fund manager where it's like 2% or whatever of the fund is represented by their capital. And so I would recommend a highly diversified portfolio in angels. And in fact we have our own fund on Angelus which is a friends and family entrepreneurs fund. This way the entrepreneurs in our portfolio who are by definition highly concentrated in one startup can get exposure to the tech ecosystem at large and get some diversification. And we do one of these funds every year just for that reason. And that's the type of fund I think people should invest in because then they get exposure to hundreds of companies or at least dozens of companies. It's more diversified and yes, you're not going to get the 200x ER because it will be blended with the losses, et cetera. But you need to remember the five year survival rate of a startup is 7%. When you're investing there's already a 93% probability that that company is dead within five years. And I'm sure if you look at the 10 year, it's obviously less than that by definition. And so diversification is key and I guess general advice only invest money you can afford to lose. So I quite like going to Vegas. The way I see it is more and it's the way I've always seen it because in the early days when I was investing I had no money. So it was really like this is, I'm backing a friend. It's going to be an amazing adventure that we're all not together. It'll be amazing stories and we're trying to make a difference. Most likely it won't work, but it'll be a fun adventure and that's I think the correct mindset to start angel investing in. Don't expect that you're going to make lots of money this way because frankly it's not the best way to make money and it's really hard. Most likely you're going to be losing money. So think of it as a trip to Vegas.

You kind of answered this question. We had a question from Vikram, basically said what should be the mindset of a early stage VC or an angel while they're working. While the startups potential for an exit could kind of be nothing or more likely that they're going to shut down in less than five years.

Right. So the average duration today between a seed investment by an angel and an exit is 10 years.

Through an exit is 10, 10 years. Wow.

Yes. And it's. And it's kept increasing. So in 2001 the Series 8 IPO or exit was like four years and now that's seven and a half years. And the seed of course is happening before them. If you're investing pre seed at the angel rounds, that's even before then. That's why it's really 10 plus years on average for most exits. Now there is liquidity. There are these days liquidity opportunities along the way for companies that are doing well. You have platforms like Forge where you can sell your interests but you can only do that and the companies are doing the best. That would also go and defy Silicon Valley orthodoxy which says you should double down on your winners and not be selling them. Now we actually do sell them because I need cash in order to pay for the operations of the fund and to keep investing. Every year we do recycle capital and on average our exits are have been coming four years down the line. But that's because we're doing, we're selling in secondaries in the upper ends of the most successful companies. But for most people the the real exit is when there's an M and A event or an IPO 10 years down the line. So you need to be very patient.

Gotcha. Another question came in from Arnaud. How are you getting access to the most competitive deals? By being under the radar and being over subscribed.

So when the deals. So because I'm not a traditional vc, I, I'm not imagine there's a series A happening or series B. Whatever Sequoia and Andreesen are fighting, they want to be writing a $10 million check in the company and the company doesn't want. But the pre money is whatever 30 million pre money founders don't want a huge amount of delusion that they don't want to be raising 20. They're only going to take one of those because these funds have minimum ownership requirements. They don't want to own less than 15% or whatever their internal rules dictate. The thing is, I don't have a minimum ownership requirement. I don't want to be writing a big check. And these VCs actually typically love me because if it's a marketplace, they want my perspective. Do I think this is a great idea? How can I be helpful to them? And I'm only writing a 500k check. And so next to their 10 million allocations, nothing. So I see myself as a helpful friend to the VCs, not as a competitor. A third of our deal flow actually comes from other VCs sending us deals saying hey, we're thinking of doing this. What are stage everything from pre C to series B or C. What do you think? Would you like to participate and do this with us? And in fact 50% of the deals we invest come in from other VCs and in return, of course we send them deals. In fact we send them a lot more deals than they send us because a traditional series VBC is going to do two deals a year and we're going to do 100 deals a year. And all of our mostly seed and pre seed and A, all of these deals are going to need to go. All the seed need an A, all the A need to B. So I'm going to send them a lot more deals than they're going to send me. And it's win, win, win. The interpreters love it because they get funded and they get introduced by two great VCs. We love it because the companies get funded and we get deals from VCs. And the VCs love it because they get differentiated deal flow. And so we're in a position to get in, frankly, almost any marketplace deal we want to get into, and it's a very privileged position, but it also comes from the fact that we chose to be specific. We're not trying to compete in everything. We know our knitting by sticking to our knitting, by doing marketplaces, by being very thoughtful and helpful there and building this brand. Marketplace founders want us in the cap table. Other VCs in the deal want us to be part of the deal because we could be helpful and they want to understand what we think of the deal. And the fact that we've seen so many at bats is refining our craft. We're refining our thesis, we're refining our heuristics all the time. And so if you were to start aid, or at least a VC fund or I would actually highly recommend, be specific, focus on something that you are truly differentiated, that you really have very clear understanding of that you can be extremely helpful in, and then people want you to be part of this. And. And I think limiting our scope to marketplaces, which by the way, in a way is not that limiting, where in every geography, at every stage, in every industry just happens that we have one business model has been, I think, probably the best decision we ever made. You're muted.

Fabrice.

Sorry.

I want to be cognizant of your time. We're at time and if you have a minute or two for a question, great. If not, yeah. All right, so we got one question from Siddharth. As a novice early stage investor, how much do you feel companies seek out strategic value that an investor provides versus just capital, and how much does this have an effect on deal flow?

The answer, of course, is it depends. Some companies need, if you're in the B2B space, you need access to the people that are going to be signing the deals. And so if you can introduce them to strategic partners, extremely valuable at the middle stage or the larger at the series A and B, the big VCs that have amazing platform teams like think of First Mark or Andreessen, they can help you recruit, they have amazing talent on board and so they can provide a lot of value. But I think that's probably the wrong dichotomy, is like how I would Pick my VC is neither how much capital they're providing or what valuation were they investing in or what is the theoretical help they can bring me or an investor is do I get along with them? It's kind of like a wedding. You're in it for the next five years and probably the next 10 years together and you need to know that they have your back. So you need to get along with them. And that's true of any investor you work with. You need to like them and want to work with them. And it goes in both directions. And that would probably be the first decision criteria. I would also recommend not raising too much money at too high a price because then your price or perfection and that's a very high killer of companies when you don't grow into that perfection for the next round. And Dan Rounds can, can essentially people don't want them to happen and so they don't happen. So the company doesn't get capital and the cap and the companies just die. Yeah.

One last question. Can you share a little bit about your venture building practice?

So I've always loved running and building companies and so the startup studio side is a means of scratching that edge. The way we work, and I'm going to write a blog post on this is every year we go to five business schools at the first year students and we go to Stanford, Wharton, MIT, Columbia and Harvard. And on average we interview 200, 250 students. So we say, okay, we're gonna, you can join us full time during your summer. During your first second year, we're gonna teach you half the summer venture capital. And the other half of the summer we're gonna put you in one of the companies that we're building right now. So you know what it's like to be an early stage intrapreneur. In your second year, you're going to work with us part time, 15, 20 hours a week. You're going to review all the inbound deal flow. At that point, you've already been trained. You can help us filter all that fire hose of deals we get every week and you can help us recruit the next batch. And when you graduate, you become intrepidors in residence where you're paid full time at a full salary to look for ideas for us to build together. And usually we do two brainstorm sessions every week. In fact, we're doing one every year, sorry, one in August, one February, usually my place in Turks and Caicos. So the entire team comes in and we come up with 100 ideas every time that don't exist that we think should exist in the world. Then we stack, we order them in terms of which ones we think are the most compelling. Then the founders who are a good match of these ideas go and do deep dives on them like hundreds of interviews, landing page analysis unit, economic testing to competitive analysis to decide whether or not there's an idea we like. And usually somewhere between graduation and two years later we find an idea that we want to build together and there we have a very standard deal where the founding team and their employees get 65% of the company, we get 35% in exchange for 750k and the fact that we're on the board chairman and helping build the company and build whatever they need and we do one or two of these a year. We also commit the next 2 million at either a 10 million post money valuation or at market if you can get better deals and deal terms if you want for the first 2.75 million, which frankly the first few years of funding you don't need to go raise any extra capital and you can get going at frankly, what are the most generous terms out there in the studio model. Now of course we only do marketplaces in the US so it's one of the limiting factors. And the reason why business goal for evaluation is frankly it's just an easier. People have been pre filtered, so it's an easier way to get candidates that have been pre filtered. And there we mostly focus not on people that come from, from I guess, private equity or McKinsey et cetera. It's really people that may have had that background, but also where city managers or Uber or Instacart or Airbnb or product managers and have operating experience typically in larger scale startups, but now want to go and build it on their own.

Gotcha. I have one last question for you and then I'm going to let you go.

No worries.

For Grace, you've invested in tons of companies across the globe, all different types of verticals. What are some of the geographies that you're most interested in today?

So first and foremost I'm most interested in the us. There are two ecosystems that are highly developed in the world today. It's US and China. But in China it's not a level playing field. And I don't think as a foreign, an investor, an entrepreneur, I could operate successfully there. And so it's the U.S. so the U.S. remains the bedrock of core innovation and we like to invest in innovation in disrupting old school incumbents with better user Experiences and interfaces and better business models and harnessing the deflationary power of technology to make the world a better place. And so at the end of the day, 70% of what we do is in the US now, because OLX is so global and because my partner is based in Europe, we also get a lot of deal flow. So the second big geography we focus on these days is Western Europe and the Nordics. And the Nordics, especially like Sweden, as a very diverse ecosystem. But there's been fundamental democratization of Internet entrepreneurship. It used to be in 98 you really need to be in Silicon Valley because just to get the lights on, you needed your own data center and your own servers and Oracle database and Microsoft web servers. It cost millions of dollars and there was expertise that was required that was only available there. Today with the no code revolution, everything in open source is so much easier and cheaper to build a startup than ever before. We're seeing innovation even in the us. It used to be Silicon Valley and then Silicon Valley, New York, Silicon Valley, New York, Louisiana, Chicago, but now it's happening everywhere and we're investing across the US and we have many successful investments in completely non core geographies. And I don't mean like Austin, I actually mean like Syracuse, New York or Raleigh, North Carolina. And so that's already a big trend in terms of outside of the U.S. the main places we've been focusing on are Brazil and India. Both are large countries and as a result of being large, have large domestic markets and pretty robust capital markets. The thing is, for venture capital, for angel investing work and frankly for startups who work, you need seed money which is available in every country in the world. Whether you're large or small, there are always rich people willing to fund startups. The good news is seed capital is available everywhere. The the issue is series A and B is not really available in the small markets. And as a result it's hard to get funded to the point where you get to 100 million evaluation or 100 million revenues, at which point the later stage global guys like Tiger Global will find you. Now if you do make it there, then the American investors will find you. But the problem is that there's that valley of death series A and B where you can't get funded if you're in Chile. And also you don't typically, even if you're successful, you don't get acquired. And you don't get acquired because on the MA list of Google, Chile is going to be very low down the list. And the thing is that's true. And I don't mean to pick up Chile, but that's true of like all the mid sized companies from Uruguay to like Peru to whatever in Latin America specifically. And now we are also doing, it's changing a little bit now in countries where the were there already a few successful examples that the ecosystems are burgeoning. So right now in Colombia there's Rappi, which is like this Uber eats instacart of Latin America that is doing really well. And, and, and as a result of that the Colombian ecosystem started virgin. We've made a few investments there. Mexico with its 100 million people has finally started to become more robust. And we're making that we're building a company partly there as we speak. And in Africa right now we're looking at Nigeria, Kenya and South Africa. I probably wouldn't do the other markets yet just because it's too frontier, it's too hard to get capital, it's too hard to get exits. But the larger markets are definitely where I would start. I also avoid places for now like Indonesia, even though they're a large population doing rather well just because the people who win these countries are dominated by very few families that are highly connected and they can. And so the winners need not be the very best teams, which I think I know I'd evaluate, but the people that are the best connected. And because I'm not on the ground, I don't understand the local political ramifications of like who's well connected, who's not well connected. And we saw it play out in a few of the companies, like in the online travel agency space you needed to have an online travel agent license in order to operate and they only gave it to people that were connected. So it wasn't the best team that won, it was the best connected team. And those are the types of dynamics that I don't like. That's part of the reason I don't invest in China. And so I'd say US, Western Europe, Nordics, Brazil, India would be core focus for us. And then right now also Colombia and Mexico and we're also looking at like yeah, larger African markets and we'll see where it goes. I suspect that as no code revolution takes hold, we're going to see more and more innovation everywhere. And as capital become democratizes a bit more, it'll be easier for people to launch successful companies from everywhere. And so I suspect that that spread is going to increase because if you actually look at our geographic spread, I think we're already invested in like 30 countries and that they're always counterexamples as we speak. We're trying to invest in a company in Egypt, but again if you look at the 120 we do every year, it'll be like five and like non traditional GEOs and you know, 115 in traditional GEOs.

Yeah, I know I said one more question. But if, if, if, if I could ask you one last one and I promise this is the last one. Investing in Alibaba. What was that like? And when did you invest the.

So, so my first auction site in 98. I wanted to call it Alibaba and that was the name of my business plan. The entire site was designed Alibaba and there was this tiny Chinese company that had bought the domain and just so happened. I also speak Mandarin. I studied at Beijing normal university in 94 for one of my semesters while I was at Princeton, actually a summer semester, I reached out to Jacques Ma and Talk Time, who's completely unknown, and I asked the viewers who would be willing to sell me Alibaba.com for 10k which he declined to do. Probably a very wise move at his end though I would have not done anything near what he's ended up doing with it. But as a result I became aware of Alibaba very early on in its existence and of Jackman. I kept following it. And it's actually funny because in the consumer space what really made them was their auction site called Taobao, which had not. Which. Which had lost the market. So originally, and goes to show ebay's incompetence, originally ebay bought the leading player in, in. In. In China. The name escapes me but that they had a 99% market share and, and they, they were like, okay, we want China, everything's great, let's start charging. And. And they've over monetized the Chinese side and they really didn't understand what they were doing and they didn't understand that only 4% of people in China were online at that point in time. And so even though you were the dominant player today, you had to capture the hearts and minds of the next 90% of people coming online in the next decade. And so Giacomo launched Taobao, went free, was doing very aggressive online advertising, took the market away from ebay in a few years and ebay was completely incompetent. They had won the market and they mismatched it. By the way, they did the same thing in Korea. They bought internetauction kr. They had 99% market share there was another startup that launched called gmarket that went from nothing and kept investing and growing while ebay kept monetizing and making sure they had good returns. And within a decade they'd lost the market and they had to buy gmarket for like billions, a billion dollar or more after they'd already won.

Well, same thing in India, right?

Same thing in India. So. Well, in India they didn't buy. Yeah, slightly different, but it was way worse, I think there because they had 99 market share in China and in Korea and lost the markets by sheer incompetence. And, and, and I mean, not paying much attention to it. And so in 2011, the. There were early investors in Alibaba. I think it was IDC or no, I think it was actually, it was a tiger global fund that had created an SPV to invest Alibaba in 99. And these funds, most funds have a 10 year life, and after 10 year life you can extend it one year, then you said another year. And at that point, the investors, they were tired. The company was valued at like 15 billion, more or less, which is a $4, 11 a share or something like that. And so they decided to create an opportunity where they would sell their stake to other people. So I was able to invest in Baba at that point at $4 a share, and I put like a million dollars. And it's been great. Now it turned into like $20 million over the course of the next decade. So it was fantastic.

Fantastic. Fabrice, thank you so much for making the time and going over. This is a great chat. I learned a ton talking to you and I'm sure a lot of other people have more questions. So hopefully we can get you on the show again sometime in the future.

I'd be delighted to. Thank you for having me.

Thank you very much. Thank you everyone for joining us. We'll see you again next time.