Cem Sertoglu: Lessons from the Greatest Venture Investment in European History | E1228

1. 0:00 – 0:48

   Intro

   1. CSCem Sertoglu0:00

      ... the best single venture investments. We have 16 and a half million investments that has brought us back 2.1 billion dollars in proceeds. So Fund 1 is 20-time multiple on invested capital. 2.7 of that is non-UiPath, so about 85% of the proceeds of Fund 1 have been UiPath. I believe UiPath went from a million to 100 million ARR in 21 months. At the time, that was, I think, the fastest ever.

   2. NANarrator0:25

      Ready to go? (instrumental music plays) Cem, I'm excited for this. So we first did a walk around the park and I was like, "God, I wish this was recorded." So first, thank you so much for joining me.

   3. CSCem Sertoglu0:45

      Thank you, Harry. It's great to be here.

   4. NANarrator0:47

      Now, I would love to

2. 0:48 – 5:43

   Entry Into Venture World

   1. NANarrator0:48

      start, how did you make your way into the world of venture first and come to where you are today? Let's just start there.

   2. CSCem Sertoglu0:54

      I'm a founder-turned-investor. Uh, I started my first company in 1999 in New York. Horribly timed, arguably the worst time in history to start a tech company. Um, it was a company called SelectMinds. Uh, we were building in social networking software, uh, one of the earliest, uh, participants in that space, but hit the crash pretty hard. We survived, ultimately did okay, uh, had a nice exit, and, uh, decided to move to Istanbul, which is where I grew up on Turkish, born and raised in Istanbul, and, uh, initially thinking that was going to be for two years. Uh, when I moved back, I started meeting young Turkish tech companies, mostly consumer internet businesses, and got excited because I, at the time, I think I saw two things that not a lot of people agreed with me on. Um, one is the fact that people behave similarly everywhere, uh, especially in their interaction with technology, with consumer technology. So, uh, at that time, for example, people were telling me, "Oh, you know, uh, people in France will never buy shoes online." And I'm thinking, I look at the US, I look at the UK, and I'm like, "Uh, that's not right. People are people, they're gonna buy shoes online." So, uh, I saw the playing out of consumer internet, uh, in the West and looked for opportunities to, uh, partner with companies that were trying to do the same thing in the rest of the world, uh-

   3. NANarrator2:20

      And so you're an angel in these early companies?

   4. CSCem Sertoglu2:22

      I was an angel in these early companies. I got very lucky. I, uh, a few of my early investments turned out to be the biggest exits, uh, at the time in, in the Turkish market. A e-commerce company got sold to eBay, a food delivery company, the leader in Turkey, got sold to Delivery Hero. These were big outcomes, largest exits. So it started to build a

3. 5:43 – 13:41

   How Venture Capital Evolved into a Low-Margin Business

   1. CSCem Sertoglu6:07

      ... if it were a commodity, it would be the same thing to raise from a Sequoia, or from us, or from 20VC, or, uh, or from your, uh, you know, dentist who's angel investing. And we all know that that's not the same thing for a founder to be ... It's, you know, it's not cash is green and all equal. So I don't think it is getting commoditized because it's limited. It's, uh, you cannot scale it by just pouring money on it. I think that's what commoditation- commodization implies.

   2. HSHarry Stebbings6:34

      Does the volume and multitude of multi-stage funds having very deliberate seed strategies not mean it is a commodity? The fact that literally every multi-stage firm is seed investing, you will come out of a great peak games, top-tier school, here's five million bucks on 25 million. It's, it's kind of like if you tick these boxes, here's your application signed. Commoditization could be argued.

   3. CSCem Sertoglu7:00

      I think if you look at those firms as kind of a one strategy, one investment portfolio, uh, I think you could come to that conclusion. But what I see it is at the core of their portfolios, if they are early-stage investors, so I don't mean the later stage or crossover type investors, but if they're really early-stage rooted, the way, uh, you know, Index Sequoia, uh, Benchmark are, then, uh, I mean, actually that's a great point, where Benchmark has stuck to their seed strategy. So they keep playing the game that they know they have an edge in, which is, uh, keeping fund size constant and just deploying, you know, concentrated portfolio after concentrated portfolio. The other firms decide to build essentially a, an asset management business-

   4. HSHarry Stebbings7:45

      Mm-hmm.

   5. CSCem Sertoglu7:45

      ... adjacent to their early-stage strategy, and I think that's where they start to look like commoditized products, but I don't think they are.

   6. HSHarry Stebbings7:53

      Cem, I'm gonna be honest with you. I sit in the early-stage bracket with you, uh, (laughs) and in that kind of hopefully artisan boutique business. Honestly, founders want quick cash at a good price and generally don't want someone to be involved too much, is what I see. And the multi-stage funds are producing harder and harder competition for me and for other seed players because they say, "We'll give you a higher price than Cem or Harry will. We'll give you more money and we'll leave you alone."

   7. CSCem Sertoglu8:22

      I think it looks at the, it, it depends on the contract that the founder is looking for. If they're wanting cash and they wanna turn around and run their business, I think what you're saying might be right. Most of the best founders we partner with are looking for a contract where they try to align with co-founder-like partners to be on the journey with them. And in that case, I think they start asking themselves the right questions. And that's why for, uh, some of the top founders, you'll see out there that their market, th- their cap tables are not filled with only the sort of very large multi-stage, uh, firms. They pick their investors as, as people. They almost pick them as if they found, they pick, uh, co-founders.

   8. HSHarry Stebbings9:08

      Will you play the game? And what I mean by that is, it's a five on 25 with a great operator coming out of a great, uh, p- p games or you name your kind of great outcome. Will you say, "Hey, we're gonna go head-to-head with Index and try and win that round," or, "That's not a round for us"?

   9. CSCem Sertoglu9:21

      Uh, no. We'll, we'll, if, if we think this is a founder that we can align with and if we feel that chemistry with the founder, uh, if we see that the founder also understands us and can understand what we bring to the table, absolutely. And we've, we've gone into situations like that where the founder ended up choosing us over some of the brand names you're bringing up.

   10. HSHarry Stebbings9:43

       How do you feel about price?

   11. CSCem Sertoglu9:45

       (laughs) I think it's, is it Scott Fitzgerald who said that, like, a, a sign of a great intellect is the ability to hold contradictory, uh, beliefs at the same time?

   12. HSHarry Stebbings9:56

       Yeah.

   13. CSCem Sertoglu9:56

       Um, on the one hand, we look at our bi- biggest outcomes and we do an analysis of what would have happened, what the return would look like if we'd paid twice as much at the first check. And the answer is that it doesn't really matter that much. For UiPath, if we'd done the seed round at, at twice the valuation, it wouldn't have really, you know, made a, made a, any difference. It would have still been a fantastic outcome.

   14. HSHarry Stebbings10:18

       It would, but it would have halved your multiples.

   15. CSCem Sertoglu10:21

       Yes, but in that case, I mean, you know, when you're, uh, at the type of multiples we're at, uh, I mean that's a, you know, 16 and a half million investments that has, uh, brought us back $2.1 billion in proceeds. So, uh, yes, I'll take half of that any day. Um-

   16. HSHarry Stebbings10:36

       16 and a half for about 2.1?

   17. CSCem Sertoglu10:38

       Yes. And that's after the, that's after the selloff. So it wasn't even the high-water mark.

   18. HSHarry Stebbings10:43

       Wow.

   19. CSCem Sertoglu10:43

       It is, it's one of, it's, it's power law in action and it's, uh, it's actually a very humbling, uh, experience to, to see because it, it shows you, you know, where you have to play a very disciplined game, but you also need to get lucky. (laughs)

   20. HSHarry Stebbings10:56

       Can I be unfair and ask how much have all your other gains been if that's 2.1 billion?

   21. CSCem Sertoglu11:01

       So fund one, uh, is, uh, a 20-time, uh, multiple on invested capital. Uh, 2.7 of that is non-UiPath. So about 85% of, uh, the proceeds of fund one have been UiPath.

   22. HSHarry Stebbings11:17

       Wow.

   23. CSCem Sertoglu11:17

       But if you take it out, it's still a 2.7 times fund in front of us.

   24. HSHarry Stebbings11:20

       Which is a very good fund.

   25. CSCem Sertoglu11:21

       Yes.

   26. HSHarry Stebbings11:22

       Yeah.

   27. CSCem Sertoglu11:22

       It's, uh, I think it would make it a top quartile.

   28. HSHarry Stebbings11:23

       Wow. That's amazing. Okay, so, like, two opposing thoughts at the same time.

   29. CSCem Sertoglu11:28

       Yes, so on the one hand, we know that valuation doesn't matter. On the other hand, we cannot operate like that. So we also, as a, as a firm, we are ultimately tethered to some idea of value, uh, and- and, you know, what are we paying for and does this, the, the, does the company we're looking at warrant that? So, uh, I think, you know, we, we try to not lose on price, but constantly question us about the, you know, is this entry price a fair price that we're coming in? Or are we now at a point in the cycle or is this firm just getting, you know, this, is this round getting so competitive that the, the, the term sheet is getting, um, getting bid up? And we've, uh, we've passed on price.... uh, in the past. And, uh, I think we have a, a mixed track record on, you know, whether that was the right decision or not.

   30. HSHarry Stebbings12:21

       What did you not do, with the benefit of hindsight, you wish you had done? And what did that teach you?
4. 13:41 – 18:11

   How Cem Prioritizes Founder, Market, and Traction

   1. CSCem Sertoglu13:41

   2. HSHarry Stebbings13:41

      So, I mean, I can, I can trump you. Every day there was one of the biggest losses.

   3. CSCem Sertoglu13:44

      (laughs)

   4. HSHarry Stebbings13:44

      I turned down Deal and Vanta at pre-seed. And I did both the times because I knew the founders were amazing, but I just didn't like the business, I didn't like the category. Something else other than the founder. And so now I have this, and I'm kind of intrigued to hear your thoughts 'cause, you know, you're much wiser than me. I just have this obsession on founder. Um, I don't care what they do. If they're an amazing founder, they get a check from me. How do you prioritize the stack between founder, market, and traction?

   5. CSCem Sertoglu14:13

      Um, in that order. Uh, founder number one, uh, because ultimately at our stage, I think it's the only thing that matters. We've seen, uh, great starts get bungled badly because of, uh, founder problems, character problems, ethical, uh, problems, values. Uh, so the founder trumps all. We've passed on a few very interesting promising companies because we just could not see ourselves partner, uh, with the founder across the table. Um, secondly would be market because everything we do ultimately needs to be able to return our fund, if all goes well. Uh, we're in a sort of a high return, uh, business by taking high risk. So the high return should be there. So if it's a small market, if it's a crowded market, we'll pass. Uh, the traction at our stages tells us something in some cases, but it's, uh, it's, it's, it's a, it's a distant third.

   6. HSHarry Stebbings15:04

      Can I ask, on the it needs to return the fund, I agree and I take the same approach. Do you scenario plan on outcome sizing and where you think that will go?

   7. CSCem Sertoglu15:12

      (laughs) We do. But then in hindsight, sometimes we do the, you know, post-exit, we look at our early memos and we laugh about it. Um, again, you know, for example, in, in the case of, uh, UiPath, I mean, we thought it could return the fund. Uh, I mean, it has, it has returned 12 and a half times the fund already.

   8. HSHarry Stebbings15:30

      (laughs)

   9. CSCem Sertoglu15:30

      So, uh, that's, that's been, you know, very miscalculated analysis.

   10. HSHarry Stebbings15:34

       (laughs)

   11. CSCem Sertoglu15:34

       But we, we, we do do it. It's a part of the, I think the-

   12. HSHarry Stebbings15:36

       (laughs)

   13. CSCem Sertoglu15:36

       ... discipline of just making sure that the, the market's there.

   14. HSHarry Stebbings15:40

       So when we go back to the kind of cottage industry-like vibe that we both sit in and then also the multi-stage asset class vibe that is also there, founders have a choice. What do you advise founders who are sitting looking at these two very different products contemplating raising a seed round?

   15. CSCem Sertoglu15:56

       I think the word we end up coming to is care. When you are a small partnership, I mean, in our firm, uh, for every fund, each partner writes about four or five checks per fund.

   16. HSHarry Stebbings16:07

       Mm-hmm.

   17. CSCem Sertoglu16:08

       Uh, so in kind of each vintage, we're talking each year, we're talking about one or two investments at most. So, uh, in terms of the capacity, attention, and care that that founder stands to receive from that founder, um, I'm sorry, from that partner, is, uh, probably very distinct from what you would see at a firm with a much broader portfolio, um, and a, you know, turnover, uh, of personnel. Uh, we've had very, very low turnover, uh, in our firm.

   18. HSHarry Stebbings16:35

       Do you need a board seat with every check?

   19. CSCem Sertoglu16:37

       Um, if it's warranted. If our, if our check is big enough, if our space in the, uh, cap table warrants it, uh, yes, we usually like to get a board seat, but not every time.

   20. HSHarry Stebbings16:46

       Will you do single-digit ownership deal?

   21. CSCem Sertoglu16:48

       We will. We, we try not to be dogmatic. Uh, if it makes sense, if the math works. Uh, I mean, our typical first check ownership is between 10 and 20%, but we've gone on either side of that.

   22. HSHarry Stebbings17:00

       Yeah. That's, it's always a hard one. My biggest mistakes most recently, ElevenLabs in particular, is where I was like, "You got like 2%" and I was like, "It's just not enough." And actually, 2% would have been great in hindsight. (laughs)

   23. CSCem Sertoglu17:13

       Yes, but then, you know, I think, I think you should stick to principles. And, and we do that as well. We've passed on, uh, in some cases because of, uh, the ownership, just because it's, we have really a certain number of bullets we can, uh, we, we have only s- you know, four or five investments per partner per fund that we're making.

   24. HSHarry Stebbings17:32

       How many, how many companies per fund?

   25. CSCem Sertoglu17:33

       Um, we, fund one had only 15, but I'd say that's probably extraordinarily narrow.

   26. HSHarry Stebbings17:38

       And that is super concentrated.

   27. CSCem Sertoglu17:38

       Yes, yes. Uh, fund two had 18.

   28. HSHarry Stebbings17:41

       And this is seed?

   29. CSCem Sertoglu17:43

       Uh, seed and A.

   30. HSHarry Stebbings17:44

       Okay.
5. 18:11 – 20:24

   Signalling Does Exist?

   1. CSCem Sertoglu18:11

      its weight.

   2. HSHarry Stebbings18:11

      A lot of founders hear from us that signaling is very real and the dangers of it. Do you think signaling does exist or do you think it doesn't?

   3. CSCem Sertoglu18:19

      I think signaling does exist very strongly, uh, and we try to, e- in every investment we make, we tr- really try to analyze the signals we're getting from the cap table, uh, from really everyone and how they're behaving, how they're voting with their sh- shares. Uh, you know, uh, not literally but like, you know, uh, their follow-on decisions, lack thereof, uh, I think they, they provide lots of interesting insight.

   4. HSHarry Stebbings18:43

      What are the biggest reasons for you, from your experience, companies don't scale efficiently from zero to one, from seed to A, raise a grade A round, what are the biggest commonalities in why they don't?

   5. CSCem Sertoglu18:55

      I think the biggest impediment to that scale, uh, for some companies is assuming product-market fit prematurely-

   6. HSHarry Stebbings19:03

      Mm-hmm.

   7. CSCem Sertoglu19:04

      ... and being tempted into going into hyper-scale mode prematurely.

   8. HSHarry Stebbings19:11

      Why do they assume it prematurely? Do they have the wrong data? Do they have the wrong objective? Do they just believe the hype? What is it?

   9. CSCem Sertoglu19:18

      I think it's a combination of all, all three you mentioned. Uh, first of all, ours is a, is an industry that fetishizes growth.

   10. HSHarry Stebbings19:26

       Mm-hmm.

   11. CSCem Sertoglu19:27

       And, and as you know, the easiest metric to grow for a founder is headcount. And, uh, it, it creates this sort of, uh, perverse validation sense, uh, they've just raised a large round very successfully, they have the budget, they put out the ads, they hire the recruiters, and off to the races they go. And of course, uh, when you're especially on the go-to-market side, if you're scaling your go-to-market team, then you give them script and they start working off that script. If that script is not a perfect fit for where that company is at the moment, then the sideways trailing, uh, starts to, starts to happen. And, uh, yeah, uh, losing the ability to adapt and iterate, especially on the go-to-market side, is, uh, is what we've seen as the, as the biggest cause of that, kind of, sideway- sideways

6. 20:24 – 25:32

   When & How to Address Concerns with a Founder

   1. CSCem Sertoglu20:24

      trailing off.

   2. HSHarry Stebbings20:24

      When that sideways trailing off happens, do you communicate that super clearly to the founder, and how do you think about when enough time is? You don't want to be jumping in too fast, you don't want to be too negative too soon. How do you think about that?

   3. CSCem Sertoglu20:37

      Okay. Uh, first of all, we, we believe in being quiet on the board and, uh, it's, it's, it's a, it's a skill that we have, uh, spent a lot of time thinking about and, and also, uh, through our kind of apprenticeship model internally, we, uh, try to distribute within the firm.

   4. HSHarry Stebbings20:57

      Why?

   5. CSCem Sertoglu20:58

      Because first of all, I mean, we're, you know, we're, we're the only asset class where the asset chooses the investor, right? So, there's this enormous pressure to demonstrate value-add, and what this means, um, is... and, and, and social media unfortunately compounds this, that there's this temptation for VCs to be coming up with, uh, aphorisms around, you know, uh, what a company story should look like, whereas every company is unique, every company has its own pace, its own trajectory, and, uh, we think that, you know, you, of course, learn from your experiences in other journeys, uh, but then synthesize that and distill that to very carefully chosen moments to provide input to the founder. I think your job as a board member is to understand the company, be very well-prepared on any interaction like the board meetings, et cetera. We're obsessive about preparing for, uh, board meetings. But we are very careful in choosing when we share strong opinions.

   6. HSHarry Stebbings22:08

      So, I'd love your advice then. Uh, when I have tough topics that naturally come up in a board meeting, I'm always torn in two ways. One, I should air my thoughts and opinions and concerns because Cem might have something important to add, someone else might have something important to add, and it might be a valuable exchange of perspectives.

   7. CSCem Sertoglu22:27

      Mm-hmm.

   8. HSHarry Stebbings22:27

      But then also, caveat that with it's also a sensitive topic, it's maybe personal towards the founder that it might be a criticism in a bad way, and I want to be just respectful of not throwing them under the bus, so to speak. How do you balance between the two?

   9. CSCem Sertoglu22:43

      Uh, first of all, I think the, the board dynamic should... the healthy board dynamic is one where, with all the board members around the table, but also in one-on-one conversations with the founders as well. So, I think it's very difficult to, uh, have that conversation come up for the first time in a board setting if it's sensitive, uh, like that. I think, you know, the valuable relationship with the founder that the board member or the VC has should allow for, uh, a better introduction, better timing, et cetera, for that, uh, sensitive topic. But, um, you know, I think beyond that, uh, again, uh, as long as you're choosing what's important few topics are carefully, then, uh, bringing them up should not, should not be a problem.

   10. HSHarry Stebbings23:28

       You said most investors have lost the skill of being quiet. My pushback on that is, we sell the most obvious commodity of all, which is cash. Yours is the same as mine, and mine needs to be greener than yours. And so, we are marketing and we are a marketing machine as an asset class. Do... is that not understandable?

   11. CSCem Sertoglu23:49

       I disagree with that. I think our, what we sell is not our cash. The cash is available, it's, uh, I mean, the seeds and A, uh, rounds are flush with new capital coming in all the time. So, I, I think what we sell is our time and attention and capacity, and we're selling one of those 20 slots in that fund's portfolio that I'm going to be devoting my entire set of resources for the next 10 years. That's what I'm selling.

   12. HSHarry Stebbings24:18

       Do you think the best founders really need their investor?

   13. CSCem Sertoglu24:20

       The best founders need...... a group of smart, aligned individuals that they know are on their side and, and pushing in the same direction, rowing in the sh- same direction as they are when they're trying to create this miracle called a successful startup. Because ev- I think every successful startup is a miracle. They shouldn't happen.

   14. HSHarry Stebbings24:40

       Do you think the boards that you're on are valuable to the founder?

   15. CSCem Sertoglu24:44

       I hope so.

   16. HSHarry Stebbings24:45

       Not you, but the boards.

   17. CSCem Sertoglu24:47

       I hope so. I mean, we've seen, we've seen board dynamics where, uh, alluding to what I was saying a minute ago, um, the, there's just so, so much pressure to demonstrate value add that we find some board members just get overly eager to, to contribute, to add, to maybe even, uh, iterate over and over, uh, topics, uh, that maybe don't warrant it. But, uh, I think it's important to understand that first of all, the founder always knows their business better than us. Uh, a lot of times they're smarter than us, they're certainly harder working than us, they have more skin in the game with us, so our job is to just support them when we can, um, and

7. 25:32 – 27:01

   Advising Founders on Early-Stage Valuations

   1. CSCem Sertoglu25:32

      when they need us.

   2. HSHarry Stebbings25:33

      How do you advise founders on the valuation they raise that early? I'm sorry for this being an off-field question. I was literally just going through it-

   3. CSCem Sertoglu25:39

      Sure.

   4. HSHarry Stebbings25:39

      ... and I said to the founder, "Raise at a valuation you feel incredibly confident you can raise at 3X the price of on the next round." What's a good heuristic?

   5. CSCem Sertoglu25:48

      I think for practical reasons, that's a, that's a good benchmark, whether it's two, two and a half, or three, that could be discussed based on the stage. But more or less, I think that's a good heuristic, a good rule of thumb. What we try to align with our founders is the early rounds are not real rounds. They are contracts where you're demonstrating alignment around, around a, a target that is very far out ahead. I mean, every early stage check, you're buying a very out-of-the-money call option on these businesses. So it's, it's not a trade. I think a lot of people get that wrong. It's not a trade. It's, uh, it's really a construct for an alignment for a partnership where the founder is saying, "You know what? I'm gonna have a few people around this table on this journey with me." And, uh, what I'm saying in return is, you know, "This company and your team, the founder team, is going to be one of my four, five slots for this fund. So for the next five years, I'm all in with you on this." I think the early stage, the seed round, A round is really a contract that establishes this alignment. It's not a real investment. It's not a, it's not same as buying Apple shares

8. 27:01 – 28:52

   Where Founders and VCs Often Diverge

   1. CSCem Sertoglu27:01

      in the market.

   2. HSHarry Stebbings27:01

      What are the biggest ways that founders and VCs become misaligned?

   3. CSCem Sertoglu27:05

      Uh, I think, you know, (laughs) we usually try to, uh, sort of disagree with the f- with the founders, uh, in the term sheet process at least once so that we kind of see the dynamics of what, uh, what happens, uh, around then. But, uh, so usually what, uh, what we see companies sort of go in a wrong direction and board dynamics go in a wrong direction is if there was a lot of tension in the, in the early round discussions, if this was a very contentious negotiation around specific, uh, governance terms, et cetera, uh, sometimes that leaves a bad taste in the mouth on both sides. And there's this, uh, lack of trust that is in place, uh, as soon as the investment is done. We've had very few cases of this, but it's a very, uh, negative environment to operate in.

   4. HSHarry Stebbings27:54

      A lot of founders are told, like, "Run an efficient process." You know, "Make sure that you align meetings, this week's first meetings, this week's second meetings, this week's term sheets." Do you mind feeling part of a very manufactured process?

   5. CSCem Sertoglu28:07

      (laughs) If we feel rushed, we mind. And we will not get rushed into decisions. In 2021 when the market was, uh, in a frenzy, we would never categorically pass on a valuation, so we've written very expensive checks in that period, but we would categorically pass on not having enough time to understand the business and digest the opportunity.

   6. HSHarry Stebbings28:33

      Mm-hmm.

   7. CSCem Sertoglu28:33

      And sometimes the process that gets communicated us will not let us understand and digest the company. In those cases, we'll pass. And it doesn't feel good because, uh, c- categorically passing is not right and, uh, I'm sure there's probably some good companies in there, uh, we may have passed, passed on because

9. 28:52 – 31:32

   Do High Prices Lead to High-Quality Investments?

   1. CSCem Sertoglu28:52

      it felt rushed.

   2. HSHarry Stebbings28:52

      Can I ask, the expensive checks that you wrote, have they matured into great companies? And the real question I'm asking is, do high prices lead to high quality?

   3. CSCem Sertoglu29:04

      The jury is out on, on the entire set. Uh, a few of them, a few very critical ones have matured into, into... and grew, have now grown into the multiples that we ended up, uh, paying for them at the time. Uh, a few others are still on their way there. Um, and it's a young portfolio, so I can't really, you know-

   4. HSHarry Stebbings29:22

      It's interesting, the worst performing segment of our seed portfolio on our firm one was 5 on 25, 'cause they had too much money too soon, there was a lack of focus, a lack of urgency, and actually they struggled to raise their next round because it was already at too high a price for the round that they were gonna go and raise.

   5. CSCem Sertoglu29:37

      Right.

   6. HSHarry Stebbings29:38

      So that was an interesting analysis.

   7. CSCem Sertoglu29:40

      Mm-hmm. Um, I think one difficulty in, uh, sort of analyzing our track record and, and mistakes is the, the round parameters have become quite fungible, you know. What's called a pre-seed, what's called a seed, what's called an A are a bit all over the place.

   8. HSHarry Stebbings29:58

      Sure.

   9. CSCem Sertoglu29:59

      I mean, last week was the announcement of a, a seed round, uh, 100 million dollar seed round at a billion-dollar valuation, so that's not really a seed. That's a unique case. That's something else, but it's not a seed round. So, uh-

   10. HSHarry Stebbings30:09

       Do you agree we've seen the eradication of pre-seed rounds? I never see pre-seeds.

   11. CSCem Sertoglu30:14

       Um, to us pre-seed is that there's nothing to look at. That's what we call a pre-seed.

   12. HSHarry Stebbings30:18

       Okay.

   13. CSCem Sertoglu30:18

       So-

   14. HSHarry Stebbings30:18

       So I'm looking at one now which is five million dollars for the round, are to four million...... but there's nothing. There's two people just with an idea.

   15. CSCem Sertoglu30:27

       So, okay, that sounds like a very big seed round. I'm sorry, a very big pre-seed round if there's nothing to look at.

   16. HSHarry Stebbings30:32

       Would you do that?

   17. CSCem Sertoglu30:33

       If we're sold on the founders and the market. Since there is no traction, we can't look at that.

   18. HSHarry Stebbings30:38

       Do you find it hard to get com- I'm finding it hard to get comfortable in this situation, honestly, Cem, which is like, I get it, they're great, they come from great companies, they're mature product leaders, but it's 4 million on nothing.

   19. CSCem Sertoglu30:50

       It's our job to be uncomfortable because we're writing very high-risk checks that w- that should lead to high return. So, but the high risk always feels uncomfortable, so I think it's normal to f- feel uncomfortable. I think that-

   20. HSHarry Stebbings31:07

       Has it got easier over time for you?

   21. CSCem Sertoglu31:09

       Uh, no, it hasn't. It hasn't. No.

   22. HSHarry Stebbings31:12

       Bugger. (laughs)

   23. CSCem Sertoglu31:13

       Venture investing is never easy. No, it's, uh, I, I think it's a very hard profession.

   24. HSHarry Stebbings31:18

       What's the hardest thing that people don't often see, do you think?

   25. CSCem Sertoglu31:21

       How long things take. And I'm saying this as a very fortunate VC that, you know, the big performer in our first fund pr- you know, matured very, very rapidly. But, uh, things

10. 31:32 – 36:06

    Are Richer Investors More Successful?

    1. CSCem Sertoglu31:32

       take long.

    2. HSHarry Stebbings31:33

       I think one thing that I think about a lot is wealth and how that, uh, impacts on investor mindset. Does the fact that you are now incredibly wealthy make you a better investor? In other words, are richer investors better because they only see upside? You did very well from your angel portfolio and from being an entrepreneur before. Do you think richer investors are more successful?

    3. CSCem Sertoglu31:54

       I think being... So, y- it, it should help with the, with that risk, uh, equation. Um, we think a lot about, uh, GP commitment size. Uh, we have a very high GP commitment in the fund. And, uh, I would-

    4. HSHarry Stebbings32:10

       Guys, what is it?

    5. CSCem Sertoglu32:10

       It's, uh, it's close to 10% of our, our $250 million fund. Um...

    6. HSHarry Stebbings32:15

       Fuck. (laughs)

    7. CSCem Sertoglu32:16

       And, uh, you know, we, we were very proud of this, saying that, "Look, you know, this shows our confidence in, in, in, uh, in what we're doing and, uh, it gets us aligned with our, uh, with our LPs." Uh, a very experienced LP challenged me on that and said, "Uh, wait a minute, I don't like that. I have, you know, what I'm allocating to you, to your fund is the highest return but the highest risk part of my portfolio. So, I don't want your team nervous because you personally have a lot of money in this fund. I want you to take very, very high-risk, uh, investments as long as the return is there." Will this high GP commitment make you nervous, make you more risk-averse?" I thought that was a brilliant challenge, brilliant question. Um, so I think, uh, it, it kind of plays out on, on both sides.

    8. HSHarry Stebbings33:04

       I also think GP commits are actually flawed in many ways because, you know, a lot of people will say, with total respect, "Look at me and look at you." And you know, our GP commit is, is 1%.

    9. CSCem Sertoglu33:13

       Right.

    10. HSHarry Stebbings33:13

        "But it's just me, and it's the start of my career."

    11. CSCem Sertoglu33:16

        Right.

    12. HSHarry Stebbings33:17

        "And I don't have the liquidity that you do."

    13. CSCem Sertoglu33:18

        Right.

    14. HSHarry Stebbings33:18

        "You've done very well with." And they go, "Well, you know, other funds have much larger..." And it's, it's so much about proportionality.

    15. CSCem Sertoglu33:24

        Of course.

    16. HSHarry Stebbings33:25

        And-

    17. CSCem Sertoglu33:25

        No, and, and if an LP can't see that, shame on them. I, I, I think that's inexcusable to, to, uh, hold a, a young emerging manager to, to that, uh, to that hurdle. I mean, without my first fund outcome, I wouldn't be able to put the large GP commitment in fund three.

    18. HSHarry Stebbings33:41

        Totally. Have you seen institutional American LPs come to your region en masse and allocate? Or has it still been a gray area for them?

    19. CSCem Sertoglu33:50

        It's too exotic for most traditional allocators to VC funds. So our LP base is, is very diverse, uh, but it's not concentrated in large, uh, North American institutions.

    20. HSHarry Stebbings34:03

        What should they know that they don't know?

    21. CSCem Sertoglu34:05

        They should know that, I think venture capital has made the mistake of following private equity in terms of LP allocation categorization. And in private equity, regional investment strategy ultimately is exposed to the regional macro dynamics. Whereas in venture capital, because the outcomes are typically global outcomes, your, uh, you may have, you may be hunting in a region with certain macro dynamics, but the outcomes are never impacted by the macro. My, my portfolio is a global portfolio. My outcomes are American outcomes, you know, London Stock Exchange outcomes, you know, acquisitions by global tech companies. They're not, uh, outcomes that are subject to the turbulence of whatever, you know, country that founder team may be coming from.

    22. HSHarry Stebbings34:59

        How do you respond to an LP who goes, says, "Political risk, there's currency risk, ugh." Building a business is hard enough.

    23. CSCem Sertoglu35:06

        Um, we go to our track record and show them that there was not a single case where, uh, any of our portfolio companies were impacted by those risks. When things, but when bad things happen to our portfolio companies, they're the same bad things that can happen to a, a, a Silicon Valley-based company.

    24. HSHarry Stebbings35:21

        When you lose a deal, why do you lose the deal?

    25. CSCem Sertoglu35:24

        Sometimes on price. Um, you know, uh, ultimately we have to underwrite to a certain level of return. I always feel that there are venture investors out there with a very much lower cost of capital than us, so somebody will come and underwrite the same opportunity to a lower, uh, outcome. In those cases, our offer ends up being not high enough. So we, we've lost on price. Sometimes we've, uh, lost on, uh, ownership, des- you know, desired ownership, where, uh, we find the existing investors would not let a new lead investor get to the level of, uh, ownership that they would, they would like to get. Um, those have been

11. 36:06 – 52:39

    Making $2.1BN on UiPath

    1. CSCem Sertoglu36:06

       some cases.

    2. HSHarry Stebbings36:07

       We mentioned turning 16and1/2 into 2.1 billion. I do want to discuss that. I spoke to Daniel before the show. Uh, I think it's probably one of the greatest venture deals in European venture history.

    3. CSCem Sertoglu36:18

       Probably the, the, the best single venture investment.

    4. HSHarry Stebbings36:22

       That's a, that's a pretty good intro to the show, isn't it? I mean, let's be honest. Uh, so I wanted to start on that. How did you meet Daniel for the first time?

    5. CSCem Sertoglu36:30

       So Daniel had been building a company called DeskOver, uh, I think since 2005 or 2006. Uh, it was a more of a consulting, uh, firm, uh, that was doing custom, uh, automation and, uh, different sort of back office, uh, uh, applications for, uh, different workflows for various clients. Um, we met him in Bucharest. I think the company was 12 people, uh, when we met him. And he struck us as having... being at the right place where, you know, here's a founder who was deeply immersed in the problems that his clients were facing on a day-to-day basis. Very technical, so had a very strong vision on the immediate problem he wanted to solve. He didn't start out with painting a ultimate picture of what UiPath would look like 10 years out as a, you know, large global enterprise software company. But he was very keenly focused on what is the next feature he would need to add and how long that would take and what would that solve at what customer or what new customer would that then allow him to sign. So very pragmatic, very iteration-focused, very technical, very hands-on. He also wowed us on how he saw what he was building to be so applicable in so many diverse situations. And, uh, he came and convinced us that at one point every single company in the world could be his customer.

    6. HSHarry Stebbings38:07

       Was he immediately exceptional, being honest?

    7. CSCem Sertoglu38:10

       In, in these regards that I talked about, yes. Now what we were worried about when we first met him, and we spent a lot of time with him. We met him in 2014. We ultimately wrote the first check in 2015. So we had maybe six to nine months that we were able to spend with him and the team. Uh, one concern we had was, is he a go-to-market leader? And because, you know, our Eastern European rooted founders are not polished. You know, his English wasn't fluent. Uh, he was not a great narrative storyteller at the time. You know, can he be the sales leader here? We introduced him to a few either sort of early hires or potential co-founders to, to, to kind of join him, uh, with, with sort of, uh, you know, uh, very senior responsibility in the company. And then but along the way, the way he interacted with them, one, we saw how earnest he was and how much he wanted to make this happen. So he was giving these people the, the time, the effort to try to see if they would work. In the process, we got convinced that, no, Daniel will be able to handle all the responsibilities of a, of a, of a leader and a, and a founder of the company. So we didn't insist on this go-to-market question being fully answered, uh, at the time. Uh, but yeah, he didn't fit the, fit the enterprise software founder mold.

    8. HSHarry Stebbings39:38

       So when you finally build that conviction to go, "You know what? We wanna back Daniel and we wanna do this." What did the deal look like?

    9. CSCem Sertoglu39:45

       Uh, he was raising one and a half million. Uh, initially we thought we should do the full one and a half million. I mean, it's 150 million dollar fund, we would have, uh, been able to, uh, write that check. But then we thought, uh, th- this is a big enough vision, uh, that this company, uh, also, I mean, you know, at the time, he was struggling to raise. We showed the company, at that first seed round, we showed it to 14 funds to co-invest with us. Credo ultimately, uh, came in with a half a million check. We led with a million dollars and then Seed Camp joined us with a hundred thousand dollar check. So it was 1.6 million raised. I believe it was just south of seven million pre. Um, so that was the, that was the initial round.

    10. HSHarry Stebbings40:25

        Seven million pre.

    11. CSCem Sertoglu40:27

        This is a company doing about half, half a million in revenues.

    12. HSHarry Stebbings40:30

        Phew. Amazing thing is we had Daniel on the show and it took nine years to get to that stage.

    13. CSCem Sertoglu40:35

        Yes. Yes. Although, I mean, he, he... it's not the same business. I mean, he, he started out as more of a solutions provider, uh, and then, uh, ended up finding the product idea along the way and building a product.

    14. HSHarry Stebbings40:47

        With respect, it's 150 million dollar fund. Doing a 1.5 million check is a 1% check.

    15. CSCem Sertoglu40:53

        Correct.

    16. HSHarry Stebbings40:54

        Why didn't you?

    17. CSCem Sertoglu40:55

        Um, because, you know, the most you can invest out of 150 million dollar fund is 15, 20 million dollars. And we know that it costs more than that to build a global software company. And again, this looked so off the beaten path, you know, London-based or New York based growth fund to come and, uh, invest into. We thought we may have to support the company. In fact, uh, probably about a year later, year and a half later, we ended up, uh, then showing the company to about 40 firms. Everybody passed. Uh, I think they're, I think they're every single European VC has passed on UiPath at least once. Um, so we had to bridge the company by ourselves. I mean, not by ourselves. Uh, our co-investors came in as well.

    18. HSHarry Stebbings41:42

        Was it doing well?

    19. CSCem Sertoglu41:42

        It was, yes, it was headed in the right direction. The, the numbers were not exceptional, but we could see how the clients were getting value out of the product. It was certainly headed in the right direction. And that's what we, that's what our reserves are for. Our reserves are for those companies that will be misunderstood by the market or overlooked by the market because they don't fit into the mold. And, uh, so we, we were able to write that check with a conviction.

    20. HSHarry Stebbings42:10

        Sorry, that's, that's too good. Okay, so we have this kind of tweener round.

    21. CSCem Sertoglu42:14

        Yes.

    22. HSHarry Stebbings42:14

        And I spoke to Daniel and he said, uh, you proposed to do the deal at 20 and he would have taken 25.

    23. CSCem Sertoglu42:22

        Yes, and we couldn't agree.

    24. HSHarry Stebbings42:23

        He said to, about this three times. (laughs)

    25. CSCem Sertoglu42:27

        (laughs)

    26. HSHarry Stebbings42:27

        It's one that he clearly remembered.

    27. CSCem Sertoglu42:29

        Yes.

    28. HSHarry Stebbings42:29

        You know what I love about Daniel? That even with the success, he still remembers this. (laughs)

    29. CSCem Sertoglu42:33

        Yes. Yes. So, uh, there's a learning from there. Like when the numbers are pointed in the right direction-... double down, you know, go and do the, do the price round. We felt, uh, that the, the feedback from the market was so poor that nobody else was interested.

    30. HSHarry Stebbings42:54

        What was the feedback?
12. 52:39 – 56:41

    Cem’s Biggest Loss

    1. CSCem Sertoglu52:39

    2. HSHarry Stebbings52:39

       16 to 2.1, amazing. Sadly, it's not all that. There is sometimes a loss.

    3. CSCem Sertoglu52:46

       Of course.

    4. HSHarry Stebbings52:46

       Uh, what has been your biggest loss and how did it change you as an investor?

    5. CSCem Sertoglu52:50

       Uh, fortunately, we haven't had big losses. Uh, I don't think we've lost, uh, the number that you mentioned in a, in a single investment. Uh, and we've had relatively low lo- loss ratios, which is maybe even a criticism of our-

    6. HSHarry Stebbings53:01

       What is a low loss ratio?

    7. CSCem Sertoglu53:03

       In fund one, out of 15 investments, only three of them did not return capital for us. Now, six companies are still alive, but we expect to make money from all six of them. So, they will not be loss-making. So we will have made a positive return out of, on 12 out of 15 investments in fund one. Now, when I think about it, uh, some of those returns, um, were capped returns. Uh, they were probably lower-risk investments than we should have made. Even though they returned us, uh, capital, they, uh, probably cost us two higher-risk, higher-return opportunities we should have probably backed. That was a learning for us from fund one.

    8. HSHarry Stebbings53:52

       Do you think about downside protection when investing?

    9. CSCem Sertoglu53:54

       I do because maybe because I was an angel investor before or maybe I'm human, uh, because I, I know I shouldn't be thinking about downside protection. But, uh, it's, it's, it enters the thought process, it enters, enters the equation. I think it's overrated.

    10. HSHarry Stebbings54:13

        Why?

    11. CSCem Sertoglu54:14

        You know, as I mentioned before, our deals, our investments are not real investments the way you go buy Apple shares on the stock market. They are long-term contracts around a vision and ultimately it doesn't really move the needle that much, whether, uh, you have a liquidation preference that can lock in some symmetric returns if things go bad. Many times, we've seen those type of structures get...... renegotiated at the point of liquidity because it just serves one right purpose or another. Um, and, uh, again, you know, they've, we've never really seen downside protection measures make a big difference in any outcome.

    12. HSHarry Stebbings55:03

        What has been your biggest loss?

    13. CSCem Sertoglu55:05

        Realized loss, uh, has been, uh, about six million in a, in a company that, uh, was, uh, faced with some regulatory, uh, it was an HR, uh, business, uh, that faced some regulatory, uh, issues around it. And, uh, laws changed that made their vision very difficult to execute, and they, uh, ended up liquidating.

    14. HSHarry Stebbings55:26

        Did that impact your mindset moving forwards in any way?

    15. CSCem Sertoglu55:29

        In that case, we had written a follow-on check, where I think about that follow-on check, uh, that, uh, we maybe didn't have enough data to evaluate that follow-on check. So, that would, that could've been a smaller loss. Uh, I think there's a bit of, uh, learning there. That was an early investment of ours, uh, in our, in our first fund, so, uh, I think we were still somewhat novice around, uh, fund management and fund investing as opposed to personal investing. Um, so the, the learning is around, uh, maybe-

    16. HSHarry Stebbings56:00

        Do you think-

    17. CSCem Sertoglu56:00

        ... diligencing a follow-on investment more thoroughly.

    18. HSHarry Stebbings56:03

        How do you approach the diligencing and follow-on investments today?

    19. CSCem Sertoglu56:07

        Depends on the follow-on investment. I think it's different when you've written a half a million dollar check and you're writ- writing another half a million dollar check early on in a journey, uh, whereas you're really doubling down with a 10 million, um, UiPath late check, so it's-

    20. HSHarry Stebbings56:20

        But at like Point Nine they have the rule which is like, "You know what, if a great com, if a great fund does your next round, we'll do it too."

    21. CSCem Sertoglu56:27

        Of course, that's a very strong signal. Uh, but we've, we've done, I mean, the bridge round at UiPath, no great fund was touching the, the company and we had to build our conviction internally. I think if we had the ru, luxury to get validated the way, uh, y- you mentioned,

13. 56:41 – 1:00:00

    Concerns Over Current Liquidity Markets

    1. CSCem Sertoglu56:41

       of course. (laughs)

    2. HSHarry Stebbings56:42

       Final one for you. Are you worried by liquidity markets today? You know, we've seen M&A markets close up, a lot of competition, uh, prohibits M&A happening today. We've seen IPO markets, you know, almost shut down entirely. Are you worried about that?

    3. CSCem Sertoglu56:56

       If it's a s- sustaining trend, I am. I suspect it's not. I think markets are cyclical. I think, you know, uh, exuberance will come back, uh, we've started the rates, uh, change direction re- recently. You know, we'll see what the FTC governance will look like post-election. So I think those are cyclical. I think it'll come back. Um, great companies, uh, are defined by sustainability that, that they're, uh, they're not gonna, they're not dependent on the mood of the markets. Again, you know, the, the outcomes are very dependent on the vintage. You know, the, uh, I think a very humbling fact is the biggest predictor of a fund's performance is its vintage. Uh, so, you know, irrespective of how-

    4. HSHarry Stebbings57:41

       Do we all get a pass for last vintage?

    5. CSCem Sertoglu57:44

       Depends on how you played it. I don't think you get a automatic pass. I think, you know, the, the question rightfully that will get asked would be, "What did you say you would do? Did you do what you said? Um, if there is a performance issue, can it be attributed to the markets? Or was it other factors that led to it?" If it's pure vintage-related, I think, I think, uh, again, it's not a, uh, coincidence that funds get benchmark based on vintage.

    6. HSHarry Stebbings58:16

       The majority of funds from '21 will not do 1X. Agree or disagree?

    7. CSCem Sertoglu58:21

       Uh, I haven't seen the underlying data. I would suspect that is probably the case. I, I, I, I'm afraid that is a right prediction.

    8. HSHarry Stebbings58:29

       I'm really worried actually about now. It's, it's a really hard time to be investing, Cem, I feel. Pricing is insane. The AI bubble is just almost more prolific than 2021 from my perspective. Do you agree with me and do you share my concern?

    9. CSCem Sertoglu58:44

       I agree. I agree. Um, is it more difficult than it's ever been? I'm not sure. I think in these, uh, kind of in-between cycles situations, I think things get, things get a bit more murky. That's why it's important to have clear strategy. It's like, what's the game you're playing? What do you think your edge is there? Are you sticking to that game? I think that delivers.

    10. HSHarry Stebbings59:07

        Uh-

    11. CSCem Sertoglu59:07

        That gives me confidence.

    12. HSHarry Stebbings59:09

        I agree. Do you play the game on the field for AI companies or do you just say this is a bubble right now?

    13. CSCem Sertoglu59:13

        Everything that touches software today is AI. There is no software company that doesn't utilize machine learning and artificial intelligence in some way to do their, uh, job better. So, of course, every investment we've made out of Fund Three in the last five investments are all, in one way or another, AI companies. Now, are we investing into, you know, hundreds of millions of dollars rounds of fou-, you know, foundational models? We're not. We're not in that, in that game.

    14. HSHarry Stebbings59:39

        Oh, come on, Cem. Just, it's only 100 billion. (laughs)

    15. CSCem Sertoglu59:45

        (laughs)

    16. HSHarry Stebbings59:45

        Did you see that Larry Ellison on stage? He's like, "It costs $100 billion to enter the race."

    17. CSCem Sertoglu59:49

        Yes.

    18. HSHarry Stebbings59:50

        I saw it at, like, you know, 1:00 AM.

    19. CSCem Sertoglu59:52

        Well, he, he'd like that to be the case 'cause then, you know, there's only four players in that game, right? (laughs)

    20. HSHarry Stebbings59:56

        Yeah, I mean, Christ.

    21. CSCem Sertoglu59:58

        I'm not sure that's the, that's the

14. 1:00:00 – 1:04:50

    Quick-Fire Round

    1. CSCem Sertoglu1:00:00

       game.

    2. HSHarry Stebbings1:00:00

       Listen, I wanna move into a quick fire. So I say a-

    3. CSCem Sertoglu1:00:02

       Sure.

    4. HSHarry Stebbings1:00:02

       ... short statement and you give me your immediate thoughts.

    5. CSCem Sertoglu1:00:04

       Sure.

    6. HSHarry Stebbings1:00:04

       What do you believe that most around you disbelieve?

    7. CSCem Sertoglu1:00:07

       I think I alluded to this, but I believe that most people believe wrongly that an early stage investment is, is a trade. You're, you're buying something for, uh, you know, you're buying a share for, for a price. Uh, I believe it's a contract for long-term alignment to build a great company.

    8. HSHarry Stebbings1:00:29

       Which venture investor do you most respect and learn from outside of your own firm?

    9. CSCem Sertoglu1:00:33

       Fred Wilson was the first person to tell me that I, he thought I might make a good venture investor. This is back in 2005 when I'd just sold my company.

    10. HSHarry Stebbings1:00:42

        Did he say why?

    11. CSCem Sertoglu1:00:43

        He thought I was well-rounded.Um, and he's been an, an inspiration and a source of learning for me, like, through his writing, uh, online, uh, as, as I developed into an investor. I also have a lot of respect for, uh, USV and, uh, and Benchmark in how they've kept their discipline around, you know, what they think they do better than anyone else, and I think the, the results show. So, those are the two firms I would name.

    12. HSHarry Stebbings1:01:09

        Most memorable first founder meeting?

    13. CSCem Sertoglu1:01:11

        One of our fund- two founders, I met when he was six years old and I, uh, I, I picked him for my, uh, soccer team.

    14. HSHarry Stebbings1:01:20

        How old was he when you founded him? 12?

    15. CSCem Sertoglu1:01:21

        He- (laughs)

    16. HSHarry Stebbings1:01:22

        (laughs)

    17. CSCem Sertoglu1:01:23

        No, he's, uh, he's about 42, I think, when we founded him.

    18. HSHarry Stebbings1:01:27

        Wow. That's amazing. Okay, uh, that, I, I did not know that one. Tell me, what's the most contrarian or unorthodox advice for founders listening?

    19. CSCem Sertoglu1:01:35

        Founders usually underestimate the leverage they have on their cap table. Um, they negotiate things for, uh, very obscure situations, et cetera. I think experienced founders know that it's their company and they will have a lot of flexibility around managing things when it happens, uh, when the opportunity comes down the road. So, uh, I, I always find myself smiling when, you know, we're negotiating a very sort of obscure, one-off, uh, you know, far-fetched scenario, uh, where I just know in my actual portfolio, I know how much weight the founder carries (laughs) -

    20. HSHarry Stebbings1:02:18

        (laughs)

    21. CSCem Sertoglu1:02:18

        ... and it's their company. You know, it's, it's kind of funny.

    22. HSHarry Stebbings1:02:21

        What do founders most care about in the term sheet that they shouldn't?

    23. CSCem Sertoglu1:02:25

        I think it goes to my last answer, is, uh, you know, they, for me, the founder, uh, for the founder, I think the most important thing is probability of success. You know, is this round that I'm closing, is this gonna impact my potential of getting what I want to get to? As a percentage, will it make up for the dilution I'm suffering? So, if I'm giving up 20% in this round, after, after this is signed, am I 20% more likely to get to that vision? If the answer is yes, then they should, they should sign.

    24. HSHarry Stebbings1:02:56

        Have we seen predatory terms come back in the departure of tourist capital?

    25. CSCem Sertoglu1:03:02

        Very rarely. We've seen a few, uh, but usually they're in, um, essentially very, very difficult situations. Uh, so I doubt there will be any good outcomes coming from, uh, those dirty terms.

    26. HSHarry Stebbings1:03:16

        What concerns you most in the world today?

    27. CSCem Sertoglu1:03:18

        Technology has been a factor in concentrating resources in the hands of very few, um, and I think that is, uh, causing a lot of problems right now. And it's, I think it's going to get worse before it gets better.

    28. HSHarry Stebbings1:03:32

        Is there any way that can be solving that? Is that not by nature just capitalism and innovation that is-

    29. CSCem Sertoglu1:03:38

        I'm hoping, you know, uh, with the, with the existential threats, uh, that our world and humanity faces, uh, I think, you know, uh, solutions that are compatible with capitalism or how resources get allocated will also, uh, emerge. However, in the short term, technology has been, uh, an, a very strong accelerator of the trend.

    30. HSHarry Stebbings1:03:58

        What do you know now that you wish you had known when you got into venture?

Episode duration: 1:04:50