Bill Liao: Balancing the Roles of Environmentalist and VC

You’ve mentioned that you 'unconventionally' fell into the world of investments and startups, and that a turning point for you was recognising that someone with an engineering/technical background and sales skills is a unique proposition. Can you tell us a bit more about how you came to realise the power of those combined skills and the opportunities it created for you?

Your first couple companies were founded and floated in Australia and Germany. It's always interesting to understand the different investment climates of different countries. Do you see a big difference in terms of investing and entrepreneurship? 

• Due diligence is a very common thing all VC’s look for in a startup.
• Startups need to be very candid and transparent when meeting an investor. More startups in Europe are learning that they shouldn't send an NDA to an investor.
• Coming to investors with ideas carry no value. Adding secrecy to worthless ideas doesn't make it any better and puts investors off taking action.
• There are myths that it's easier to raise money in the US but in my experience if you are an amazing salesperson with great potential this is true- but if you are amazing then it's true globally.
• No matter where you are, visibility is so important. Stealth projects are great but don’t compare to massive engagement. If everyone is seeking that round your valuation will rise and competition will drive up the price. On the other hand, if the price goes too high and you need another round that can cause a problem. If you have a massive valuation in your first round then you will have to deliver 10 times as much in the second round.

• In the UK and Ireland because of the SEIS and EIS you can see a lot of common stock price rounds that are very small, diluted, and very expensive equity wise. However, in San Francisco you can see very high valuations with less transactions per startups. Although there are more investors and actual transactions, the proportion of startups that are successful is quite low. 
• In the US grant money isn't as normalized as it is in Europe.
• There are also differences in how investors view your pitch and team and what they consider traction is depending on the location.
• If you have a B2C business 10 million is the new 10,000 in the US. If you don’t have 10 million engagements in 3 months you will be wasting a US investors time. In Europe, angels and VCs are more lenient. They say “We can nurture you but because of that risk we do want a big chunk of the company”. Whereas valuation in the US can go crazy if enough people sweep in behind it. 

Can you give us an insight into the do’s and don’ts for startups approaching investors?

• Don’t send me a cold email. I am open to speak to anyone during my office hours whether it's 15  seconds or 15 minutes.
• Don’t live by the quote “If you want advice, ask for money and if you want money, ask for advice.”  Investors have become privy to this so we prefer transparency and working with entrepreneurs who know exactly what they want. Don't call up my office hours to ask for advice when you want money or ask for money when you want advice.
• Do your homework! Does your perfect investor even have any cash anymore? Most investors announce when they have a new fund that lasts about 4-6 years. If you research an investor and their last announcement was made about 5 years ago you may need to rethink your strategy. Has this VC invested in your industry before and if so, did they invest in your direct competitors? Usually we don't like NDAs but in this case they're a good idea so that you don’t give all of your proprietary information to people who have invested in your competitors.. too much of a moral hazard
• Do find ways to find startups that recently raised money. A startup that has raised money always has a very good relationship with their VC. So, make sure to help that startup- give out favours so that they owe you one. Make sure to network, do your homework, and be generous! If there's a startup that has a good relationship with their VC it's usually the CFO that is the main point of contact rather than the CEO. A warm introduction to an investor is the best way in. 
• Don’t be reluctant to global accelerators. I see this in Ireland a lot and therefore the Irish are quite under represented in global accelerators. The beauty of an accelerator is that startups get to test their team, especially when travelling. Some complain that they have to get their whole team to move- which is the exact reason I think startups should go for it! This only means that  they have nothing to do but concentrate on the startup and that's a crucial step. 

In 2020, do you think this disruption to the market will allow firms to take a step back and see  how they're investing and look at something more sustainable, and environmentally friendly. Do you think that there's room for positive change?

“The future has already happened; it is just not evenly distributed”

SOSV was the first VC firm to run their own accelerators. What are the challenges and rewards that come with working alongside startups in such an early stage in the life cycle?

In addition to running Accelerator programs, you have recently announced the upcoming SOSV Momentum Pre-Accelerator program. Can you tell us a little more about that?