EUVC #247: Colin Daymond Hanna, Balderton on purpose, empathy and prioritization

Tune in for a journey of self-discovery, global insights, and venture wisdom, covering everything from his unique upbringing across continents to the crucial role of empathy and transparency in VC.

Nov 16, 2023

Transcript

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DALLE watercolor Painting: A juxtaposed scene showcasing the journey of Colin.

Today we have Colin Daymond Hanna with us. Colin is a Partner at Balderton. And I think it goes without saying that I need not introduce this firm; but just in case anyone listening in has just started in venture, I’ll say that in the two decades since Balderton’s founding, they have worked with hundreds of extraordinary European founders, and have raised eight funds totalling more than 3bn Euros. At Balderton, Colin invests in purpose-driven, product-focused founders spanning verticals including Cloud, Consumer, Crypto, and Fintech. Colin has led the investments into Fuse Energy (formerly Tesseract), Ory, Supernormal, AnyType, Clue (note: the links go to Balderton’s annoucements, interesting reading!).

Colin is also part of the team at Balderton responsible for driving the firm's Sustainable Future Goals initiatives. Read much more about that here.

Chapters:

00:00:00 - Introduction to Colin Daymon Hannah
00:02:54 - Growing up in Asia & the US and transitioning to venture
00:07:28 - Taking a Leap of Faith to Berlin
00:09:51 - The Role of Luck in Decision Making
00:12:05 - Prioritization and Communication
00:14:27 - Balderton's Purpose as a Partner for European Entrepreneurs
00:16:38 - Clue: Empowering Women's Health
00:18:56 - The Local First Mentality and Censorship Resistance
00:21:31 - Lack of Empathy in VC and Overstretching
00:23:40 - Importance of Investor Alignment
00:26:03 - On Purpose and Prioritization
00:28:35 - Prioritization & Portfolio Management
00:30:49 - Transparency in Investing
00:32:54 - Building Networks with Investors
00:35:10 - The Importance of Strong Communication and Vulnerability
00:37:17 - Communication and Gratitude
00:39:12 - How Sports Shape Your Path
00:41:31 - The Importance of Trusting the Process
00:44:01 - Transparency in Achieving Global Goals
00:46:07 - Investing in companies aligned with SDGs
00:48:32 - Express Championing of Positive Externalities
00:50:26 - Tips for Emerging VCs in Europe
00:52:46 - Focusing on the Purpose, Not the Valuation

Quote by Daniel Keiper-Knorr from Speedinvest:

Luck has less to do with our work than many people think. One can get unlucky, of course. But if one needs luck be successful, they are doing something wrong.

Colin’s take (paraphrased by yours truly!):

While respecting Daniel's perspective, Colin doesn't necessarily agree with it. He feels that luck has always played a role in outcomes. Colin emphasizes the importance of giving one's best and working hard on aspects within control, drawing insights from his swimming career. However, he also stresses the need to understand that not all factors can be controlled. For Colin, luck represents the outcomes of these uncontrollable elements. He often refers to the game of poker and the book 'Thinking in Bets' by Annie Duke as examples.
The book explores the intricate balance between skill and luck in decision-making. Even with skill, one can lose in poker, reinforcing the idea that things might not always turn out as expected. For Colin, while hard work and perseverance are essential, recognizing the role of luck remains equally significant.

Point Nine Capital, based in Berlin, is highly regarded by many, including Colin. Colin had the privilege of getting to know partners Ricardo and Louis while they lived in Berlin and deeply admires their unwavering focus and expertise. Despite the growing competition, including challenges from large multistage and American firms, Point Nine Capital has maintained its excellence without compromising its core strengths. They consistently secure the kind of deals they are renowned for, emphasizing the importance of staying true to one's specialty. Special recognition goes to Ricardo, Louis, Christoph, and Pavel at Point Nine Capital for their commendable work.

Q: What advice would you give your 10 year younger self?

Colin feels that he wouldn't offer any advice to his younger self. Reflecting on his journey, he's content with both the ups and downs he's experienced. Drawing a parallel to a science fiction scenario, he mentions that if he had a time machine, he might be hesitant to change anything. Altering one event might trigger a cascade of unforeseen consequences, akin to the butterfly effect. A decade ago, Colin made a significant life decision by moving from New York to Berlin. Though he might have had reservations, he took the leap. Given that he made that choice, Colin believes he wouldn't give any advice to his younger self, even if it might be an unconventional stance.

Q: What are your top tips for emerging VCs across Europe who are fundraising ?

Colin emphasizes the importance of individuals recognizing their unique strengths and areas of expertise. He likens ventures to mining for gold, suggesting that once someone discovers their "gold vein" – be it a specific market insight or a valuable network – they should focus on it intensely. Colin advises embracing one's distinctiveness and experiences. He encourages thinking differently from the masses and not being overly influenced by what others are doing. He believes that the industry often falls into the trap of constantly comparing and looking at others, which can be detrimental. Colin's advice to budding investors is to be contrarian and trust in their unique perspective and experiences.

Q: What’s the most counterintuitive thing you’ve learned in venture?

Colin believes that while valuations play a role in venture, they shouldn't be the primary focus. Importantly, this is not entry valuations. Instead, his point is that founders, companies, board members, and investors shouldn't obsess over continually increasing valuations. Such valuations often merely represent a mutual agreement between a private investor and a founder, but they may not always provide a clear indication of a company's worth or potential.
The media often highlights fundraising and valuation milestones, but building a lasting and impactful company takes time and requires many factors to align. While the initial price an investor pays for shares is essential, Colin advises not to get too caught up in chasing headline valuations after that. Instead, he suggests focusing on the larger mission, the product or service, and the people involved, viewing valuation as a secondary concern.