👋🏾 Hi friends!

It’s good to get a win now and then in life and, after much lobbying from various groups, some of which I have been part of and inputted into, it looks like the government is going to reverse the pretty myopic decision to increase the thresholds to angel investing in the UK.

I certainly got on my platform, such that it is, and hopefully made my voice heard, if you missed the article I wrote for the Standard, you can find it here.

But obviously the news isn’t about any one person, it’s a win for the tech ecosystem and especially for female and minority investors as well as the companies they back. It’s great to see that reason won the day here.

You can read about the reversal here:

I’m well underway writing about all the things I’ve learned from the last couple of decades as founder, CFO and CEO, so sign up for early access to Off Balance – The Book and feel free to share with anyone else you think might enjoy it 😄.

Now let’s get down to business…

In this weeks Off Balance, I’ll be chatting about:

🎙️ Massimiliano Magrini – Founding Partner of United Ventures on Nothing Ventured.
⏰ Vesting and Reverse Vesting Explained

From launching Google Italy to launching his own fund…

I sat down with Massimiliano Magrini, Founder and Managing Partner of United Ventures, a multi stage fund based in Milan and Rome, investing in founders and startups from base camp to summit. He is the author of Fuori dal Gregge (Away from the Herd) where he explores the nature of startups and their relationship with large companies, the digital revolution and its consequences alongside the role of Venture Capital and inclusive and meritocratic organisations and systems. Prior to founding United, Massimiliano was Country Manager for Italy for first AltaVista and then Google.

In this wide ranging conversation, we talked about:

➡️ Launching Google in Italy just 4 years after the company was founded.

➡️ How search engines proved the value of putting tech into the hands of consumers but were never intended for the end user.

➡️ Why all markets outside of the US are exporters of technology.

➡️ How the changing attitudes to globalisation are impacting the venture ecosystems.

➡️ Why you cannot be an island, all ecosystems need to be connected.

➡️ How serendipity leads to innnovation.

➡️ Founder DNA and how Massimiliano captures this in his book, Fuori dal Gregge (Away from the Herd).

Check out the episode on YouTube, Spotify, Apple or wherever you get your podcasts and don’t forget to rate, subscribe and like 💪🏾

Check it out and let me know what you think!

Also, if you have any feedback, or if there’s something you’re desperate to see me include, just reply to this mail or ping me online – I’m very open to conversations.

If you like what I’m putting out, do give me a follow on LinkedIn, Twitter and Instagram.

(If you are trying to connect with me on LinkedIn, maybe read this post I wrote and make sure to start your request with “Off Balance” and, more importantly, tell me why you’d like to connect 💪🏾)

Don’t forget to like, rate and subscribe to Nothing Ventured on Apple, Spotify or YouTube, it really helps more people see what we’re doing – you can find links to these (and more including my Office Hours) right here!

Now let’s get into it.

Off Balance

I struggle with people who suffer from the Dunning-Kruger effect…

There’s a conversation going on in one of my whatsapp chats where someone has received a message from an individual who is convinced of his knowledge even though it’s demonstrably (and googlably) disprovable.

So let’s talk about vesting.

When you Vest, is that always Best?

Most people are aware of standard vesting which is where your shares (or more likely options) vest (become acquirable) on the completion of some milestone.

Typically this milestone is time based as follows:

➡ You are issued say 1,000 options day 1.

➡ 25% vest on a one year cliff.

➡ The balance vest equally on a monthly basis over 3 years.

This means that of the 1,000 options, you can’t exercise (acquire) any of them for 1 year.

At the end of the first year, you have the option (the clue is in the name) to acquire 250 of them, but the balance 750 remain untouchable.

Instead, from the end of the first year, approximately 21 shares vest every month and become available for acquisition.

What this means is that your options to acquire equity in the business you’re working with is tied to the amount of time you work in that business.

Often, there will be an accelerated vesting clause if the company exits before the vesting period has ended allowing you to exercise all your options on an exit and hence participate in the success of the business.

Occasionally you might see milestone based vesting, often the case with sales people, where options vest based on a particular event (achieving x sales in a quarter for example).

Most companies stick with the relatively simple time based vesting.

The one that most people aren’t aware of is Reverse Vesting which can have considerable impact, especially to founders.

When an institutional investor comes into the business (for example a VC), they may include a reverse vesting clause as part of their terms and is predominantly time based.

This means that a founder who starts with 10,000 shares and a 4 year reverse vesting clause can only keep those shares if they stick around for 4 years.

If they decide to leave the business after, say, 2 years, then 50% of their shares would be clawed back.

This is to protect investors from co-founder relationships going sour, or founders leaving the business early and carrying a large percentage of ownership and voting rights.

On their departure, if they retained this ownership, the cap table would have a lot of ‘dead’ equity on it, i.e. shares issued to someone who has not fulfilled sufficient enough an obligation to the company to warrant having them.

It seems unfair and a lot of founders resist, especially if they have already spent several years building their business. But it makes sense from the investor perspective to ensure they don’t have a key man risk that causes them problems in the future.

Hope that clears that up 🙂

As always, my office hours are open, if you’d like to chat about this or anything else, just grab some time 😊.

I hope you found Off Balance #29 useful. As always, I’d love to get your feedback and understand the sort of topics you would love to hear about.

Just hit reply to this mail or drop me a line at [email protected] and let me know 😊

🚀And that’s a wrap for this edition of Off Balance – I’d appreciate your feedback so just reply to this email if you’ve got something you’d like to say.

📨 And if you think someone else might love this, please forward it on to them,

🎧 Finally, if you’re a fan of the Nothing Ventured podcast, please don’t forget to like, rate and subscribe wherever you get your pods – it really helps us spread the word.

That’s it from me so until next time…

Stay liquid 🙂

Aarish

👋🏾 Hi friends!

Crazy how quickly a couple of weeks can go by when you’re knee deep in the thick of things.

I’ve been busy writing, prepping for some fundraises, speaking with clients and generally trying to grow – despite some of the headwinds we’re seeing with startups at the moment – more on that below.

Oh, and on top of everything else, I’ve had my second story published in The Standard – check out the story here.

I’m knee deep in writing about all the things I’ve learned from the last couple of decades as founder, CFO and CEO, so sign up for early access to Off Balance – The Book and feel free to share with anyone else you think might enjoy it 😄.

I’m a few chapters in and exploring all 100 of the lessons I posted that got 1m views, thousands of likes and hundreds of comments and shares online – and that was just a list!

Now let’s get down to business…

In this weeks Off Balance, I’ll be chatting about:

🎙️ Harry Slagel and Lucy Adams, Founders of Martee’s on Nothing Ventured.
📉 What you might want to do if things are getting tough in your startup.

Trying to build an impactful venture?

Watch this podcast 👌🏾

In this episode of Nothing Ventured, I sat down with Harry Slagel and Lucy Adams – Co Founders of Martee’s – who are building the tool to predict and manage demand to get fresher, healthier food to consumers.

In this wide ranging episode they talked about:

➡️ Harry building his first business in lockdown, scaling to 1m revenue and ultimately exiting.

➡️ How Lucy and he met – turns out LinkedIn has value beyond posting clickbait.

➡️ Building an impact driven business in the food sector backed by Founders Factory and Nesta, making an acquisition and pivoting from stores to demand forecasting.

➡️ What are accelerators good for and why they love the ones they are working with.

Check it out and let me know what you think!

Also, if you have any feedback, or if there’s something you’re desperate to see me include, just reply to this mail or ping me online – I’m very open to conversations.

If you like what I’m putting out, do give me a follow on LinkedIn, Twitter and Instagram.

(If you are trying to connect with me on LinkedIn, maybe read this post I wrote and make sure to start your request with “Off Balance” and, more importantly, tell me why you’d like to connect 💪🏾)

Don’t forget to like, rate and subscribe to Nothing Ventured on Apple, Spotify or YouTube, it really helps more people see what we’re doing – you can find links to these (and more including my Office Hours) right here!

Now let’s get into it.

Off Balance

I’m having more and more conversations with startup founders that are struggling to see any kind of light at the end of the tunnel. The days when they could raise funding at the drop of a hat are long gone and when you’re coming to the squeaky end of their runway and all attempts to grow enough to unlock their next milestone have come up short, it may feel like there’s no hope left.

And whilst there is no shortcut to survival, here are some of the things I would do to give the business the best chance of surviving to fight another day.

What do you do when your running out of cash – and time…

There are no magic bullets…

I’m often asked how to turn things around in a struggling startup and there is, sadly, no easy answer.

Even harder to answer this question when the business has a few months of cash left, has been overvalued in previous rounds and is struggling to raise additional finance and may have more staff than it can support.

Here are some of the top of mind things I would do if I were brought in as a hail mary…

🔪 Cut costs deeply – this means working out what is the absolute minimum cost base you can work with to keep the business going, service existing contracts and at least maintain, if not grow.

✂ Fire underperforming clients – we all know there are clients out there that are not profitable. We may have brought them on to juice top line growth but who take a massive amount of time from an account servicing perspective. They likely came in at low prices and are sweating the business for whatever it can. Get rid of them. Nicely, but quickly. Focus on the clients that are adding value, not destroying it.

🔻 Shrink the product line – analyse your products at an individual level, see which ones are generating value at low or marginal acquisition costs, shed the products that are low value, even if they are features you think need to exist – you can always reinstate when things are on a surer footing. Not only will this allow you to work on the valuable products, but it will refocus the team on one, not multiple things.

📈 Increase prices – seems obvious but many founders and sales teams are reluctant to do this as they feel it will increase churn. But if a client doesn’t see the value in paying a legitimate price for your product or service, then the likelihood is that they weren’t a client you wanted to keep.

🤝 Restructure your debt – not just pure debt, renegotiate contracts with suppliers, ask for discounts or defer payments onto a plan so that you can better manage your cash flow. I’ve had to do this with banks as well as with vendors in various businesses. They won’t want to have to write off your debt altogether.

🌁 Find a bridge – go to your existing shareholders (and others) and see if they will bridge you, maybe not with an investment but with a repayable working capital loan. Secure it by writing it as a convertible or payable on some milestone.

📊 Micro manage your cash flow – you need to be monitoring cash on a weekly basis as a minimum and more likely daily. Every debtor needs to be accounted for, every payable understood. You don’t want surprises, do a daily standup and check in on where things are. Painful, I know, but this is business, the hard things are what make the differences.

But as I said right at the top… There is no magic bullet. All you can do is fight for survival get to a place where things are stable, generating surplus cash flow and you aren’t hemorrhaging cash.

As always, my office hours are open, if you’d like to chat about this or anything else, just grab some time 😊.

I hope you found Off Balance #28 useful. As always, I’d love to get your feedback and understand the sort of topics you would love to hear about.

Just hit reply to this mail or drop me a line at [email protected] and let me know 😊

🚀And that’s a wrap for this edition of Off Balance – I’d appreciate your feedback so just reply to this email if you’ve got something you’d like to say.

📨 And if you think someone else might love this, please forward it on to them,

🎧 Finally, if you’re a fan of the Nothing Ventured podcast, please don’t forget to like, rate and subscribe wherever you get your pods – it really helps us spread the word.

That’s it from me so until next time…

Stay liquid 🙂

Aarish

👋🏾 Hi friends!

I’ve just come out of a few days of intense meetings and whilst the work was interesting, I couldn’t believe I was in a place in 2024 that had the following restrictions:

Collared shirts.
Tie preffered.
Jacket preffered.
No trainers.
No denim.
Socks above ankle.

I literally had to dumpster dive my wardrobe to comply!

The plus side was I got to wake up every morning and enoy this view!

Oh, and on top of everything else, I’ve also been published in a pretty well recognised paper – check out the story below.

I’m knee deep in writing about all the things I’ve learned from the last couple of decades as founder, CFO and CEO, so sign up for early access to Off Balance – The Book and feel free to share with anyone else you think might enjoy it 😄.

I’m a few chapters in and exploring all 100 of the lessons I posted that got 1m views, thousands of likes and hundreds of comments and shares online – and that was just a list!

Now let’s get down to business…

In this weeks Off Balance, I’ll be chatting about:

🎙️ Nader Sabbaghian on Nothing Ventured
🗞️ Aarish on the Evening Standard

What do you do when enterprise deals are just taking too long to convert? Invent a new business model 🤯

I sat down with Nader Sabbaghian, Partner at 360 Capital a fund with 500m under management investing across Europe.

Nader took us through his journey into VC from founding and operating in the noughties where, in one of his ventures, they had to invent SaaS essentially as a survival strategy hosting product on off prem servers and charging clients monthly so as to sit in budget and avoid the daisy chain of procurement that goes hand in hand with enterprise customers.

In the episode we talked about:

➡ How mad you have to be to leave McKinsey & Company and join a startup in the early 2000s.

➡ Why as a VC, it’s better to hunt in your own backyard.

➡ Why it’s the right time to start a business and the right time to invest because there is a lot less nonsense out there.

Check it out and let me know what you think!

Also, if you have any feedback, or if there’s something you’re desperate to see me include, just reply to this mail or ping me online – I’m very open to conversations.

If you like what I’m putting out, do give me a follow on LinkedIn, Twitter and Instagram.

(If you are trying to connect with me on LinkedIn, maybe read this post I wrote and make sure to start your request with “Off Balance” and, more importantly, tell me why you’d like to connect 💪🏾)

Don’t forget to like, rate and subscribe to Nothing Ventured on Apple, Spotify or YouTube, it really helps more people see what we’re doing – you can find links to these (and more including my Office Hours) right here!

Now let’s get into it.

Off Balance

Growing up in London, I would often head to my dad’s office in Warren Street. I always recall (other than writing stories on the office telex – if you’re old enough to remember what one of those was!) coming home on the tube and my dad picking up a copy of the Evening Standard as we walked into the station to read on his way home.

Now whilst print media is certainly in decline, there are a few names that are very much part of an area’s identity and, in London, I think the Standard is very much one of those.

As someone that loves writing, it’s always been a dream of mine to get published in an ‘actual’ paper, and a week or so ago, that dream came true 🤯 

Times are tough for startups. CFOs must adapt to survive

There is no doubt that times are tough out there fore startups, markets are turbulent, VCs have pulled back on investing, the wider economy is still facing some headwinds and, for CFOs working with startups, it’s not a simple period to be navigating.

I identified 5 areas where CFOs need to help move the needle:

Do more with less.

Revenue is the cheapest source of finance.

Get the deal done.

Communication is key.

Throw out the playbook.

In doing more than less, CFOs need to be managing the finances tightly and advising founders on where they may need to tighten spend, reduce headcount and do the tough job of rationalising the business. It is time to tighten belts and ensure businesses are as capital efficient as possible.

Revenue is obviously the best way to finance your business – and the cheapest. Startups need to prioritise finding and growing their revenue base as reliance on investors to fund their business has become less viable.

CFOs also need to be advising founders on their options when it does come to fundraising, you can’t expect every deal to be on the best terms and, sadly, you may have to accept less than ideal ones to move forward. CFOs need to walk the balance between ensuring those terms aren’t going to kill the business and making sure the business can move forward.

As anyone that has followed me for a while, you’ll know that I believe that Narrative > Numbers. In periods like this, it is critical that CFOs and founders are communicating regularly with investors and potential investors to make sure that there are no surprises so that when there is a need to call on the support of current investors they’re already dialled in.

Finally, what may have worked over the last several years may not work anymore. So it’s time to throw out the play book and work creatively to ensure the business survives and thrives – don’t get me wrong, by creative, I don’t mean in the Enron sense of the word, CFOs are, afterall fiduciaries of the business – but they may need to advise on switching up business models, pricing, hiring and finding alternative avenues to raise capital as they continue to build.

You can check out the full article here and I would love to hear your thoughts!

As always, my office hours are open, if you’d like to chat about this or anything else, just grab some time 😊.

I hope you found Off Balance #27 useful. As always, I’d love to get your feedback and understand the sort of topics you would love to hear about.

Just hit reply to this mail or drop me a line at [email protected] and let me know 😊

🚀And that’s a wrap for this edition of Off Balance – I’d appreciate your feedback so just reply to this email if you’ve got something you’d like to say.

📨 And if you think someone else might love this, please forward it on to them,

🎧 Finally, if you’re a fan of the Nothing Ventured podcast, please don’t forget to like, rate and subscribe wherever you get your pods – it really helps us spread the word.

That’s it from me so until next time…

Stay liquid 🙂

Aarish

👋🏾 Hi friends!

I thought taking a break from writing would be a bit of a relief.

How wrong I was 😂 

Instead, I’ve just had a lot of thoughts squirrelling away at the back of my mind as to what to write about, and a slightly neurodiverse tendency to keep adding to that list and setting myself ever more grandiose projects to pursue.

Of course, some of this happened whilst I was in the midst of some form of fever dream over the last couple of weeks when I got hit with a particularly nasty virus so maybe those thoughts will pass – though so far they haven’t quite made it out of my cerebellum.

It’s been an interesting couple of weeks in startup land – firstly I managed to coral a few of the EmergeOne CFOs out for a fun night of bowling, booze and banter – though all my beers were 0%.

The evening started with one of the team ordering an IPO instead of an IPA and you can imagine where it went from there.

Whilst I am a massive advocate for people working wherever they are most able to get their energy from, I do believe that there is a real need for human connection to elevate our thinking and explore new ideas.

So this evening was great to just exchange thoughts and think about what more we could all do. Check out our smiling faces below!

I’m knee deep in writing about all the things I’ve learned from the last couple of decades as founder, CFO and CEO, so sign up for early access to Off Balance – The Book and feel free to share with anyone else you think might enjoy it 😄.

I’m a few chapters in and exploring all 100 of the lessons I posted that got 1m views, thousands of likes and hundreds of comments and shares online – and that was just a list!

Now let’s get down to business…

In this weeks Off Balance, I’ll be chatting about:

🎙️ Duncan Clark on Nothing Ventured
👼 Financial Promotions Act – changes incoming, what it means for UK angels

In last week’s Nothing Ventured, I spoke to Duncan Clark, founder of Flourish.

Flourish is a data visualisation platform used by companies and journalists alike which he took through to exit to Canva where Duncan leads the European team.

Check out the episode and let me know what you think!

Also, if you have any feedback, or if there’s something you’re desperate to see me include, just reply to this mail or ping me online – I’m very open to conversations.

If you like what I’m putting out, do give me a follow on LinkedIn, Twitter and Instagram.

(If you are trying to connect with me on LinkedIn, maybe read this post I wrote and make sure to start your request with “Off Balance” and, more importantly, tell me why you’d like to connect 💪🏾)

Don’t forget to like, rate and subscribe to Nothing Ventured on Apple, Spotify or YouTube, it really helps more people see what we’re doing – you can find links to these (and more including my Office Hours) right here!

Now let’s get into it.

Off Balance

This quote by Amit Kalantri really rang true this week as the UK government sets out to make some changes to the regulations around who can invest in high risk, private companies (aka startups) from the 31st of January.

The tl;dr is that it’s anticipated that these changes will disproportionately impact the ability of women and minorities to participate in the ecosystem.

If you feel strongly that this should not be the case, please join the other 1,700+ people who have signed this open letter to the chancellor.

Protection Should Not Lead to Exclusion

The Financial Promotions act, which is the piece of legislation we’re talking about, was last reviewed in 2005 and exists primarily to ensure that retail investors (but more generally all investors) are covered by regulations “which seek to ensure consumers are provided with clear and accurate information that enables them to make informed and appropriate decisions.”

But the changes, due to come into place on 31st January 2024, are aimed at changing the exemptions around who can invest in early stage, risky assets like startups.

Here’s the breakdown:

Certified High Net Worth Individuals Before Amendments:

Income of £100,000 in the last financial year and net assets of £250,000 throughout the last financial year.

Certified High Net Worth Individuals After Amendments:

Income of £170,000 in the last financial year and net assets of £430,000 throughout the last financial year.

Self-Certified Sophisticated Investors Before Amendments:

Worked in private equity or in the provision of finance for small or medium sized companies in the previous two years.

Served as the director of a company that has an annual turnover of at least £1m in the previous two years.

Made more than one investment in an unlisted company in the previous two years.

Self-Certified Sophisticated Investors After Amendments:

The criteria of having made more than one investment in an unlisted company in the previous two years has been removed and to satisfy the the criteria as a director, the company must have an annual turnover of at least £1.6m in the previous two years.

On top of this, there is an increased compliance requirement by way of investors having to sign a compliance statement in a prescribed format to confirm their eligibility.

So what, you may say?

After all, the rules seem to be working to protect individuals from making investments in companies where they may lose some or all of their money given the risky nature of startups – and that’s a fair point.

But the bit that isn’t fair is that this will ultimatley unduly impact women, minorities, and those living outside of London.

These tables make it clear – at least as far as the male / female divide is concerned, link to the original article here:

The stats around investment into women and minorities are quite clear, less than 2% of capital finds its way into businesses founded by women or minorities and, overwhelmingly, the people that fund these sorts of businesses tend to come from similar backgrounds.

So, if you’re someone who this impacts or who feels this is unjust, I’d again urge you to sign the open letter and I would love to hear from you and understand your own experience as an investor and how this might impact you.

As always, my office hours are open, if you’d like to chat about this or anything else, just grab some time 😊.

I hope you found Off Balance #26 useful. As always, I’d love to get your feedback and understand the sort of topics you would love to hear about.

Just hit reply to this mail or drop me a line at [email protected] and let me know 😊

🚀And that’s a wrap for this edition of Off Balance – I’d appreciate your feedback so just reply to this email if you’ve got something you’d like to say.

📨 And if you think someone else might love this, please forward it on to them,

🎧 Finally, if you’re a fan of the Nothing Ventured podcast, please don’t forget to like, rate and subscribe wherever you get your pods – it really helps us spread the word.

That’s it from me so until next time…

Stay liquid 🙂

Aarish