#70: Bruno Montanari - How Venture Capital Supports Science And Innovation

Big corporations strive to bring new solutions to their customers to help them solve their most pressing problems.

To do so the corporation needs to be innovative. That's why companies like Apple, Google, Pfizer, and similar players want to cooperate with start-ups and scale-ups globally.

Such cooperations strive to collaborate with top startups, invest in them, and sometimes acquire them to have access to novel ideas. By innovating the big players stay competitive, secure growth, and also help keep their employees motivated and curious.

One of the best ways to foster innovation is creating Venture Capital funds. Venture funds collect capital to invest in high-risk early-stage innovative startups to help them grow.

In this episode, we talk about:

• Why is Venture Capital important for Innovation in Life Science?
• What is the Secret Sauce of Venture Capital?
• Venture Capital Success Stories
• What is the Current Situation of Venture Capital in Europe?
• And much more

Who is the expert in the show?

Bruno Montanari is a Partner at Seroba. He has a background in venture capital and in investment banking, with a focus on the pharmaceutical, biotechnology, and medical device industries.

Bruno sits on the boards of STORM Therapeutics and Coave Therapeutics.

Youtube: https://youtu.be/nG8DspNug-4

Timestamps:
(00:00) Introduction
(03:30) Start of the Conversation “How Venture Capital Supports Science & Innovation”
(03:45) What is Venture Capital?
(07:30) Why is Venture Capital Necessary?
(08:35) How Capital Intensive is Drug Development in Life Science?
(11:55) Why Do Research Organisation and Big Pharma Need Companies in Between the Value Chain?
(17:15) How Much Capital is Needed to Bring a New Therapy to the Market?
(19:10) Why do some Life Science Start-Ups Fail?
(24:30) How Can Venture Capital Help to Build Europe Into a Startup Continent?
(31:53) How Innovation Changes the World
(32:40) The Entrepreneurship Mindset between Academia and Industry
(36:45) The State of Venture Capital in Europe
(39:00) Elements Needed to Develop the Life Science Industry in Europe
(42:35) Why Do Life Science Companies in Europe get Listed on the NASDAQ?
(49:00) The Advantages of Specialized Investors
(50:50) Benefits for Family Offices and High Networth Individuals to Invest in a Venture Fund Rather than directly into early-stage startup companies
(59:00) Seroba Life Sciences
(01:00:40) Success Stories from the Venture Capital Life
(01:06:15) What kind of Deals are VCs looking for?
(01:09:15) The Importance of Gathering Information before Closing a Deal – on both sides of the negotiation table
(01:14:10) How to Balance Pitching and Relationship Building
(01:19:30) 2x/10x/100X – Why are these metrics important to VCs
(01:23:30) Deal Closed and they lived happily ever after – How does life look like post-investment?
(01:27:00) How VCs Support Their Portfolio Companies
(01:31:35) Warren Buffett vs. Venture Capital – Why is an Exit Important to VCs?
(01:39:00) How to Reach Out to Bruno Montanari and Seroba Life S

The LSG2G Partners
Experts in Life Science

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Transcript

00:00:00:00 - 00:00:05:15

Christian Soschner

Why is venture capital important for innovation in life science?

00:00:05:15 - 00:00:11:24

Bruno Montanari

I think that there can be various secret sources. I mean, the one my recipe has got many ingredients. Okay,

00:00:11:24 - 00:00:25:18

Bruno Montanari

one needs to look at the venture team and look at the experience of the people. And it's not only the years of experience. It's as well what they went through. What stories they went through in terms of investment, that which cycle

00:00:25:18 - 00:00:27:14

Bruno Montanari

of investment.

00:00:27:16 - 00:00:28:11

Bruno Montanari

The,

00:00:28:11 - 00:00:31:21

Bruno Montanari

the scouting for interesting opportunities and negotiation of term

00:00:31:21 - 00:00:34:12

Bruno Montanari

sheets and, and investment, the follow ups

00:00:34:12 - 00:00:45:12

Bruno Montanari

up to the exits and this several times and as well the failures and listen to what they have to say about the failures, are they open and humble enough to acknowledge the fact that. Yes. Okay.

00:00:45:12 - 00:00:54:10

Christian Soschner

Big corporations strive to bring new solutions to their customers to help them solve the most pressing problems.

00:00:54:10 - 00:00:58:20

Christian Soschner

To do so, the corporations need to be innovative.

00:00:58:20 - 00:01:10:09

Christian Soschner

That's why companies like Apple, Google, Pfizer, and similar players want to cooperate with startups and scale ups globally.

00:01:10:21 - 00:01:20:20

Christian Soschner

Such corporations strive to collaborate with top startups, invest in them, and sometimes acquire them to have access to their noble ideas.

00:01:20:20 - 00:01:30:08

Christian Soschner

by innovating the big players stay competitive, secure growth and also help keep their employees motivated and curious.

00:01:30:08 - 00:01:35:22

Christian Soschner

One of the best ways to foster innovation is creating venture capital funds.

00:01:35:22 - 00:01:43:01

Christian Soschner

Venture funds collect capital to invest in high risk, early stage, innovative startups to help them grow

00:01:43:01 - 00:01:48:14

Christian Soschner

up, to the point where big corporations want to acquire them.

00:01:48:14 - 00:01:55:22

Christian Soschner

This is episode number 70, and I am happy to have recorded this anniversary episode with an old friend of mine,

00:01:55:22 - 00:01:59:00

Christian Soschner

Bruno Montanari from Zero Life Science.

00:01:59:00 - 00:02:01:20

Christian Soschner

Bruno Montanari is a partner. It's a robot.

00:02:01:20 - 00:02:12:11

Christian Soschner

He has a background in venture capital and in investment banking, with a focus on the pharmaceutical, biotechnology and medical device industries.

00:02:12:11 - 00:02:18:06

Christian Soschner

Bruno graduated in 1998 with a PhD from a university in Paris,

00:02:18:06 - 00:02:23:14

Christian Soschner

and in the same year completed a master's degree in Strategic Management.

00:02:23:14 - 00:02:34:15

Christian Soschner

Prior to joining the firm in 2017, Bruno was a partner on this capital in Paris, in charge of life sciences investments for the venture capital team.

00:02:34:15 - 00:02:43:08

Christian Soschner

His previous venture capital experience was at Atlas Venture in Paris and London, and CTP Capital in Paris, and Montreal.

00:02:43:08 - 00:02:53:01

Christian Soschner

He started his career in 1999, in London, in the healthcare teams of the investment banking divisions of Deutsche Bank, and later Merrill Lynch.

00:02:53:01 - 00:02:59:10

Christian Soschner

Bruno brings a wealth of experience and network, particularly in continental Europe, where he is based.

00:02:59:10 - 00:03:03:24

Christian Soschner

Bruno sits on the boards of Storm Therapeutics and Cove Therapeutics.

00:03:03:24 - 00:03:07:08

Christian Soschner

In this episode, we will discuss questions like

00:03:07:08 - 00:03:11:04

Christian Soschner

why is venture capital important for innovation in life science?

00:03:11:04 - 00:03:14:02

Christian Soschner

What is the secret sauce of venture capital?

00:03:14:02 - 00:03:18:20

Christian Soschner

Some nice and insightful venture capital success stories.

00:03:18:20 - 00:03:23:20

Christian Soschner

What is the current situation of venture capital in Europe and much, much more.

00:03:23:20 - 00:03:24:20

Christian Soschner

Enjoy the show!

00:03:25:03 - 00:03:27:22

Christian Soschner

Go now. It's good to see you again. How are you doing?

00:03:27:22 - 00:03:33:09

Bruno Montanari

Good. And thanks for inviting me. And very happy to be to be there with you and, and the people in the audience.

00:03:34:02 - 00:03:40:17

Christian Soschner

I'm happy to have you here. Bruno, let's talk a little bit about venture capital and innovation.

00:03:40:17 - 00:03:46:01

Christian Soschner

Can you give a little bit of an explanation about venture capitalists? And, since when are you in this industry?

00:03:46:03 - 00:04:18:14

Bruno Montanari

Sure, sure. So venture capital, I mean, people dated back to the 70s in similar ways even earlier than that. Basically it is, a way and I would call it an institutional way because it's going through the creation of certain investment of the money from those funds to support innovation. And, venture capital is more about, I would say, early stage innovation, R&D type of companies in different sectors.

00:04:18:16 - 00:04:48:06

Bruno Montanari

And, you have different type of venture capital funds. I would say the two main ones are the classic, close and venture capital funds, where you have once you raised money, a period of five years to complete your investments and build your portfolio of, of companies. And then, this is followed by another five years.

00:04:48:06 - 00:05:13:18

Bruno Montanari

That gives you time to pursue the divestments and return the money to, to the investors with obviously, this is the the end goal. A very good, return on investment. Sometimes those funds can be prolonged by 1 or 2 additional years if need be. And the other, I would say classic type of funds that we see a lot.

00:05:13:18 - 00:05:49:00

Bruno Montanari

And increasingly for the last years, you know, with business, are the corporate venture funds. So similar approach supporting innovation, R&D type companies, so largely unprofitable companies. But this time, the a vehicle that has been created by a corporate, from a given sector. So obviously we are in life sciences at silver. So we thinking about pharmaceutical and medical devices, corporations that create this venture fund internal venture funds where they allocate money.

00:05:49:02 - 00:06:09:09

Bruno Montanari

And this is more open ended. I mean, we can call them as well a green. And they have obviously more time in the, in the horizon to do various investments and consider an exit out of them. And so as far as I'm concerned, I've been doing that now for about 20 years.

00:06:09:09 - 00:06:11:17

Bruno Montanari

When time flies. Yeah.

00:06:11:19 - 00:06:34:16

Christian Soschner

Yeah. That's true. This is true. Time flies. Especially in the last, ten years. I guess innovation really took off. And, with all the changes coming to the world, the life is getting more and more excited, to, keep up to you. I also did a little bit of research before was recording in venture capital, and, what you said that, venture capital started in the 70s?

00:06:34:18 - 00:06:55:02

Christian Soschner

I didn't know that. I always felt it's a little bit older, but, it seems that the first investments were in companies like, Apple, Microsoft, Genentech, I think also took up some venture capital and it didn't really look very exciting to me when I was a student at the University of Charles. Okay, so not investor putting money into a company.

00:06:55:02 - 00:07:23:12

Christian Soschner

So there is the difference here. And during the research, I found then also that in 1995 the term disruptive technology and disruptive innovation was coined by an author from the Harvard Business School and I asked myself the question, why is it really necessary? For innovation to have venture capital, on the field and that enough investment was already on the market.

00:07:23:15 - 00:07:52:18

Bruno Montanari

So I would say that it all depends about what how you define innovation. I mean, in our businesses, meaning finding new drugs and new medical devices. This is a quite long, complex, process, and it cost a lot. It is very capital intensive. And it is this capital intensity that necessitates, large sources of funding. And an obvious one is venture capital.

00:07:52:20 - 00:08:19:06

Bruno Montanari

So it doesn't mean that innovation is only supported by venture capital. I mean, you can find innovation in different areas and different forms, but what we doing and what, colleagues that are not in the life sciences, sector, but tech sector are doing can be very capital intensive. And so this is where the venture capital play a key role in financing this, this type of innovation.

00:08:19:06 - 00:08:29:13

Christian Soschner

When we talk about capital intensive, can you give a bit of an outlook? What that means, I'll be talking about, a few thousand euros or are we going go a little bit higher?

00:08:29:18 - 00:09:02:14

Bruno Montanari

No, I would say it's, tens of millions of euros. If not, no, it's not hundreds of millions of euros. But one needs to consider, the time window for an investment from a VC fund, because, something which is not necessarily obvious to people which are not into this field is the fact that, we are not going to wait for this new drug candidate or new medical device to be necessary on the market and for a company to become profitable before we exit.

00:09:02:16 - 00:09:30:19

Bruno Montanari

And so the time frame where we support this company is from company creation to, let's say, some kind of clinical stage, early mid or even late stage. Now, depending on the area. And this is where you have given a lot of money. I mean, it's difficult to, to say ballpark how much because obviously from one treatment modality and one sector it might differs.

00:09:30:21 - 00:10:12:13

Bruno Montanari

But I would say that generally companies would need to raise, let's say, anywhere between 50 and 100 or more before you can come to, what we call an exit, which is either the acquisition of the startup we invested in, either an IPO and, this money actually can sometimes not come only from VC firms. It can be complemented with partnerships with corporates, whereby there is a licensing deal and the corporates will provide what we call a fork money and then milestone payments in exchange of some rights to a technology or to a program.

00:10:12:15 - 00:10:42:00

Bruno Montanari

And this is, this is where we will, seen by, by the startups as much as we as investors because we call this non dilutive money. It's, it's cash coming into the bank of the company and not cash in exchange of shares, which would dilute the shareholders see on top of the validation. And as well tapping into the expertise of those large corporations, that can be a very helpful to be sometimes more cognizant and efficient in pursuing the technology.

00:10:42:00 - 00:10:42:22

Bruno Montanari

Other programs.

00:10:43:16 - 00:11:07:10

Christian Soschner

When you think about survival of technology, I mean, looking at the value chain. So, yeah, for example, in life science, we have two universities and research organizations. To put it, really frankly, I know there's more on the field, but let's just say with that, we invest in innovation basically initially, and they produce publications and patents.

00:11:07:12 - 00:11:45:04

Christian Soschner

And on the other hand, of the value chain, we have the big corporations like Pfizer, for example, who, gained some fame with the latest development in mRNA vaccines. Also, Moderna would say mean biotech also would consider them rather big. Gilat Roche and all the big names. The question that I have to you is, and I would like to hear your opinion on that, why don't big corporation not go directly to research organizations and just license, everything out of the university into the organization and to bring that up to speed into the market?

00:11:45:10 - 00:12:33:10

Bruno Montanari

So, so actually they do perform a lot of scouting, and, we investors come across them as much as our startups, actually, either at conferences. So either on the field, meeting sometimes the same people and the same incubators, accelerators or research, organizations. But, I think that one can do it all. Okay. And, it's all about it's sort of both dedication and focus and those large corporations have, I would say big, stakes, which is always to look at the bottom line and try to feel that pipeline, maybe on a short and mid-term basis.

00:12:33:12 - 00:13:01:14

Bruno Montanari

And those research, collaborations with universities usually are very, very early stage. So they do clearly sign some of those. But I mean, it's not necessarily their bread and butter. It's not their focus. And as well they need to be very picky. In, in focusing on, on the, on the right, programs or approach that they really need to complement what they have internally.

00:13:01:16 - 00:13:50:08

Bruno Montanari

Opposite to that, you've got a startup backed by venture capital funds, which life and death will depend upon the given technology, or maybe 1 or 2 programs that might come from those university and research centers. And so it will be obviously a different way of proceeding in terms of attention and execution as well. And I think this is why probably, and I one would have to check the data, but why why I think it's, it's a lot of startups backed by VCs that, usually come out of this research and, the best to value this innovation, up to a point where then the large corporation will be probably more comfortable

00:13:50:08 - 00:14:14:08

Bruno Montanari

and more savvy as well, to take them on board and bring them to the next step. So you see, it's always horses for courses upon the lifetime of a project, you need dedicated people to be able to dig in and find the golden nuggets if you want. Sometimes you really need to polish hard to see the gold, because, this is one of the issue.

00:14:14:10 - 00:14:43:05

Bruno Montanari

It's it's sometimes hard for the tech transfer office to, to really be able to fully value, but the labs have and to be able to, in a way, sell a good story to the outside world to attract people to invest into those, research programs. And, and so, yeah, you need this, this dedication. And then it's about execution capabilities and, and the level of risk obviously is higher at a very early stage.

00:14:43:07 - 00:15:09:11

Bruno Montanari

And so you need the right the right people will have the guts and the strong heart to go with something which is super new, really what we call cutting edge, where probably no one really explored that. And, have, have the guts to say, okay, let's put a few millions to not only consume the data that we know, but then to take it to the next steps and make something really good out of it.

00:15:09:13 - 00:15:37:18

Bruno Montanari

And we always need to keep, as well, the fact that it's not all about the money or about a project in life sciences, at the end of the day, we're talking about patients. And even if many of us, among us investors don't see the patients, okay, because we're not coming necessarily all from a medical background, nor are we going to, visit patients to better know some, some pathologies.

00:15:37:18 - 00:15:58:01

Bruno Montanari

But we we have that in mind. I mean, if you succeed, you will be able not only to improve the quality of life, but put it plainly to save lives. And, and I think this is as well a clear dedication in the startup, so that the focus is very intense and many, many, many, many employees and people.

00:15:58:04 - 00:16:20:24

Bruno Montanari

I have that in mind. Sometimes you will see and find even founders that are deeply related to the course because they or some family members suffers or have suffered or even died or so given pathology that they want to tackle. And this is really, a different ambition and, and motive to make things succeed.

00:16:20:24 - 00:16:43:03

Christian Soschner

I completely agree to what to say. I think the, amazing thing in the family life science industry is that the customer at the end of the day, is not only someone who buys a product like in other industries, but, the technologies really have an impact to, as you said, in the best case, to help patients survive and, or increase the quality of their lives.

00:16:43:09 - 00:17:05:18

Christian Soschner

And this is a great thing. But part of this game or this is capitalism that, it takes sometimes a few hundred million, if not billion, some billion, to bring a product to the market directly. Statistics lately, that said that, meanwhile, to bring a new, therapy to the market, it takes about 3 to $4 billion.

00:17:05:20 - 00:17:08:19

Christian Soschner

So it's something that,

00:17:08:19 - 00:17:11:19

Christian Soschner

I think no founder can bring up themselves.

00:17:11:19 - 00:17:12:06

Bruno Montanari

Except

00:17:12:06 - 00:17:42:09

Bruno Montanari

I know it's true is true. But one has to look into this because, I mean, let's face it, there's a bit of politics involved here with such big numbers that are always inflated and the ever increasing, I came across this kind of stats for a while, actually, since I started this business and even before, to realize quickly that the auction you have the cost of failure included in it because, I mean, let's just for this iteration because this is not real data.

00:17:42:09 - 00:18:02:10

Bruno Montanari

And again, the data is very diverse depending on the therapeutic area indication you're going to go after. But let's say you have one project, out of 100 that will make it to market, you see. And so you've got to take into account all the efforts and money invested and into the 99 orders, that unfortunately fail at some point.

00:18:02:10 - 00:18:28:02

Bruno Montanari

But to help you as well, to get this one across the finish line. Okay. So it might not be 1%, of course, but it's just for restoration. So this is why there's a big, big number. But clearly clearly it's very costly. I mean, I mentioned the fact that as a VC, we think that companies have to raise 50, 100 or more, before becoming, I would say, a good, target for acquisition or IPO.

00:18:28:04 - 00:18:45:24

Bruno Montanari

But it's true that when you think about all the efforts and non-identical Utd since the lab time at University of to market approval and beyond because you've got all the commercial efforts as well. Yes, it is indeed hundreds and hundreds of millions and in some cases even billions.

00:18:46:05 - 00:19:04:09

Christian Soschner

Let's that you mentioned an interesting term, failure. Yeah. I think, nobody plans to fail initially. So everybody wants to be successful as a startup, as a starting company. But failure happens. I mean, but is your opinion why some some things don't hit the market.

00:19:04:15 - 00:19:28:05

Bruno Montanari

I know there are various reasons. I would say that the best reason. And you will understand why I say the best reason is when, after trying to really understand the biology and making a bet that, your new drug, on your devices will address the given best way or target or mechanism of action that you really believe into it.

00:19:28:05 - 00:19:54:07

Bruno Montanari

Well, actually, biology will bring some new features to this original hypothesis. And you will figure out, all the time that actually, not all patients, obviously, all the same, will react the same. And so, I mean, at the end of the day, if, some investment hypothesis around biology, is not is not proven, well, so be it.

00:19:54:09 - 00:20:13:19

Bruno Montanari

But the important thing is that, the original investment is this was backed by experts, key opinion leaders that really believed in to it. But the proof is in the pudding. I mean, we're talking about innovation. So it's not that you can look back and say, oh, it worked before. So I know that you have all chances that it will work again.

00:20:13:19 - 00:20:38:02

Bruno Montanari

Well, actually, no, you don't know clearly, unless you are into some incremental innovation to make some things a bit better. But no, we're talking real innovation here, okay? Something that will dramatically change the way patients are being treated. Or even diagnosed in an honest, and so, so this is, I would say one main reason and I would qualify it as a best reason.

00:20:38:06 - 00:21:15:08

Bruno Montanari

Failure. Okay. Then you have all the reasons. Other reasons can be competition. I mean, to put it simply, today, given the amount of money and new company creations and new ideas generated every day, as soon as you invest into a company the next day, you have competition emerging. Of course, I'm pushing it a bit, but just to say how competitive it became, and it's great at the end of the day because you cannot rest on your laurels, you know, and, just have a nice cup of tea every two hours and think that, okay, you have time.

00:21:15:08 - 00:21:39:23

Bruno Montanari

No, you need to really be focused and up to speed, on the program you want to pursue. And so sometimes competition can come up with something that that is better. And so you need to reinvent yourself, maybe restart. And this is where partly failures can, can happen. And then the worst of the failures is about bad execution.

00:21:40:00 - 00:22:06:00

Bruno Montanari

Okay, let's face it. And bad execution means, unfortunately, a management team, which is not up to speed, with regard to how to best position a technology or a program not up to speed in to the best study design, to really prove their case. And sometimes it can come as well from governance. Okay. And it's partly execution as well.

00:22:06:00 - 00:22:28:23

Bruno Montanari

And when I mean governance is that you've got, board of directors with very different people there and sometimes the agendas and not aligned the vision are, not, are not aligned either. And it creates sometimes confusion, lack of decision making. And you can you can suffer a lot from that as well. So you see you have the authority of failures.

00:22:29:00 - 00:23:13:19

Bruno Montanari

And this is where but probably we'll speak about that maybe later on. But this is where experience is fundamental, because experience means avoiding mistakes that you've seen and experienced before, but as well making sure that you've got the right mindset around the table with people that can work together, with whom there is alchemy, because there are going to be inevitably tough times to go through, and we will need to collectively think in, in the best manner without trying to say to each other and without wanting to be absolutely right compared to others, but really raise the right questions, bring the right expertise, open the book of relationships that we have to help,

00:23:13:21 - 00:23:37:05

Bruno Montanari

and to go through those tough moments. And so the human aspects of it for me is actually critical, sometimes even more critical than the science and the data, you see. And I have this, this say where, you can get it wrong and it's going to be like inverse alchemy. You have gold in the wrong hands and you turn that into lead.

00:23:37:10 - 00:23:44:07

Bruno Montanari

So you need to be super careful about the human aspects in any venture, at any stage of the development of a company.

00:23:44:07 - 00:24:06:10

Christian Soschner

That's absolutely true. I had, once another note saying to set, an A-Team with technology, will always win. And, a team with an a technology has a high chance of, of failing just because of the human factor, as you mentioned. So, so you mentioned, expertise and mindset. To building blocks that venture capital can help with.

00:24:06:12 - 00:24:24:22

Christian Soschner

When you look at the political scale, when we talk about Europe, for example, I very often heard, hear from several politicians that Europe should become the startup continent or several country state. Our country is, this, right. For startups, how can venture capital help on this mission?

00:24:24:24 - 00:24:44:23

Bruno Montanari

So yeah, so that we're hearing about Startup Nation and it's a very nice buzz word that a lot of politicians, like because it makes make them look modern. And it's always people, you know, thinking about the same and typing themselves in the back and throwing medals at each other and good words. Well, that's nice. I mean, at the end of the day, it's needed somehow.

00:24:45:00 - 00:25:15:08

Bruno Montanari

But, I'm kind of more down to earth and, and humble person, and I need to think hard. And it's like a doctor actually, to to address a situation and a disorder, you need to get the right diagnosis because otherwise going to miss the treatment. If there is a treatment. And here, I mean, we need to to see how critical innovation and startup is in our economy and, how to how to help on that.

00:25:15:10 - 00:25:45:03

Bruno Montanari

So, I mean, if we look back at this Covid crisis, it's something interesting. I mean, people realize that, hey, until you industries are not there anymore in Europe or even in the States, I mean, we let them go to emerging countries. And actually, it has been a trend for decades. You know, where we saw let's focus more on competitive industries with highly qualified jobs, high margins and high barrier to entry.

00:25:45:05 - 00:26:11:22

Bruno Montanari

Because this is where the future lies and let go. The I would call that the classic old fashioned industries because of lack of competitiveness, labor costs, which would be too high compared to emerging country as well. Fair enough. But I think we've seen the limit of that with the Covid 19 crisis clearly. And so, when I say that we need to, to, to be to be humble, it's true that innovation is super important.

00:26:11:22 - 00:26:32:04

Bruno Montanari

And I'm going to to come back to that. But let's not forget that, outside of innovation, the real world is composed of many different industries, which are key. In their social societal aspects and making sure that that we countries can stand up. But so now let's focus back on the on the on the innovation.

00:26:32:06 - 00:26:59:06

Bruno Montanari

So behind the Startup Nation buzzwords, what does it mean? It's true that, it's a highly competitive world out there. Okay. And, actually the large corporations and some of them in the past, which were the leaders, just faded away, sometimes disappeared. Because they they were just too lenient with a very nice market share. Some nice cows.

00:26:59:06 - 00:27:36:04

Bruno Montanari

They could milk, and they thought they could make it forever. And all of a sudden, innovation came up and totally changed the picture in terms of business model, in terms of products, solutions. And and they, they lost it. Okay. And this is where innovation becomes critical because you don't want to have a country or even a continent or a political organization like the European Union to miss on, on innovation and, clearly not be able to have, in Europe, maybe an Amazon or Google or Facebook or LinkedIn.

00:27:36:04 - 00:27:58:17

Bruno Montanari

Okay. And similarly, I could talk about many some large pharma or large device companies that are now more in the US than in Europe. And even our old, some, in device industries have been consolidating. And sometimes in Europe they are R&D research centers and not even even more. In Europe it is on the East coast, on the west coast of the US.

00:27:58:19 - 00:28:24:19

Bruno Montanari

Okay. So there's something fundamental that needs to be tackled, which is how to not only keep innovation here in Europe, but how to nurture it to make sure that tomorrow's leaders are now emerging. Thanks to this support. And it can be financial support, but there is more support than finance, obviously. Okay. And this is where venture capital, again play a key role in it.

00:28:24:21 - 00:29:02:18

Bruno Montanari

So so we are clearly, keen in every country in Europe to raise, the what is at stake, meaning this, this, ecosystem of startups and, and actually we facing, an issue, I think, which is not the lack of good science. Okay. And good scientists, we've got great science and great ideas. But it is still I think what's what might be missing is to think is enough people able to value that innovation properly and put that on track.

00:29:02:20 - 00:29:31:05

Bruno Montanari

Okay. And then, and we have, in part, trying to answer this, right now in a few countries in Europe, how to make sure that those companies are not tried out of cash too early and getting acquired by foreign countries and therefore not being in Europe anymore as a future European leaders. And this is where what we call the late stage VC financing slash growth capital comes into picture.

00:29:31:07 - 00:29:50:17

Bruno Montanari

But again, it's not all about about the money, but surely it will help keeping those emerging companies in Europe growing them. And they can grow globally, but still being headquartered in Europe, in in different fields, including, the life sciences field.

00:29:51:06 - 00:30:17:14

Christian Soschner

Interesting parts that you were mentioning. Yeah, it reminded me of the 90s of Europe when, I was at the university and back then, I mean, the world in Europe was extremely crowded because the automotive industry was winning globally. Just think about the German trademarks, Volkswagen, Mercedes, BMW, also the mobile industry. It was, with this, dot com bubble.

00:30:17:16 - 00:30:50:07

Christian Soschner

I think the mobile industry, the European mobile industry conquered the world, practically speaking. And then in 2006, and not in the United States, Steve Jobs reinvent it, the entire mobile industry. So this is what you mentioned disrupting, disrupting innovation and why it's, important to have startups here in Europe for media. Still, the best story that exemplifies how a single company can wipe out and and their industry in a continent, if the continent does not innovate.

00:30:50:07 - 00:31:16:24

Christian Soschner

And, this is, mobile industry iPhone, the best example now, I think everybody has an iPhone or Samsung phone, which comes from Asia here in Europe. And the old trademarks like, Nokia, Ericsson, Siemens that were there until, the first, it would say midst of the first decade of the century icon. They are not they are not they are not there, anymore.

00:31:17:01 - 00:31:46:08

Bruno Montanari

And it creates even geopolitical issues. I mean, do you want your country to be dependent on data being stored, into another country? Okay. Data about your citizens or the customers or or the companies of your country? Do you want your citizens to be dependent upon drugs and devices which are largely produced outside of your country? I mean, there are key questions that that one needs to, to, to face and answer clearly.

00:31:46:10 - 00:32:04:22

Christian Soschner

Yeah, absolutely. I mean, when you mentioned data, I think, most of the data is, most likely stored in the United States. So I buy it by US companies because in Europe we don't have that. The question that pops up in my mind while we are speaking is, I mean, it's clear we need venture capital to move innovation for.

00:32:04:23 - 00:32:29:12

Christian Soschner

But you mentioned, this mindset thing to me is what's what's missing on university? Is this entrepreneurship mindset. And, needs a very specialized, type of personality who on one hand understands the industry and the structure they need to build an innovation towards tool, but on the other hand, also needs to understand the creativity at universities and must have the talent to unite this.

00:32:29:12 - 00:32:30:19

Christian Soschner

Both mindsets.

00:32:30:19 - 00:32:30:23

Christian Soschner

It's.

00:32:31:01 - 00:33:02:10

Bruno Montanari

It's a tough job, but I think it's I think it's like, it's like any two worlds that has to do business together in the value chain. It's a first about communication. And, I must say that I've seen the bad and the good and actually the better over the years where those different parties better communicate. Okay, so obviously not in all institutions, and it's not good in all institutions, but, everyone is is trying to work hard to, to get to that level.

00:33:02:12 - 00:33:45:21

Bruno Montanari

I mean, the issue is that, it, it becomes a bit of a rare breed to find these type of people that would accept, a job in a tech transfer office to do that great valuation work. Well, maybe they could be offered a very nice position, in a startup or in the industry, you see. And so, probably there is some reflection to be done about the, the profile you want to, to attract, and how to, to value those profiles, either financially or in any other, in any other way, to, to make sure that you've got this kind of expertise that will really help value what we have in

00:33:45:21 - 00:34:12:06

Bruno Montanari

research centers and bringing different worlds together to make sure that this innovation is not left on the shelf or just damaged by, by people that are not doing things rightly. But but I can tell you it's improving because, because it's very much in the open. And again, people talk a lot and try to figure out what the best process, ideas, way of doing things are.

00:34:12:08 - 00:34:36:08

Bruno Montanari

So what we're getting there, we're getting there. But then there's maybe a bit of a different, again, talking about mindset. It's about entrepreneurship. And, and, the business sense, I mean, it's it sounds, a bit opening, open doors, but it is what it is. It's true that, us mentalities always very much business oriented.

00:34:36:08 - 00:34:53:08

Bruno Montanari

Okay. And sometimes sometimes more than often. In Europe it's you have different considerations. So you don't have the same stamina, the same the same argument, the same move to get things done. But we're getting there. We're getting there.

00:34:53:10 - 00:34:58:10

Christian Soschner

Game in via computing. So on global scale. So we need to we need to get there. And you've got.

00:34:58:10 - 00:34:59:13

Bruno Montanari

Collaborations as well

00:34:59:13 - 00:35:23:12

Bruno Montanari

between European institutions and and us or even Chinese institutions. So know that there are things that are really moving in the right direction, but obviously it's there are there are economics at stake. Financial is at stake. So it's sort of meddles in making sure that, people get a share of the pie in such collaboration.

00:35:23:14 - 00:35:25:19

Bruno Montanari

And then it's, it's it will be fine.

00:35:26:04 - 00:35:52:05

Christian Soschner

They going to get a share of the biotech, found also other companies. I think this is more common in the United States than in Europe. To participate it also the people in the organizations up to me, when I look back five, six years, it was always clear that, human resources need development. And, the organizations that help with developing young entrepreneurs, young in the sense of first time startups, first time starting a company are venture capitalists.

00:35:52:07 - 00:36:08:22

Christian Soschner

And when I look back to 2015, it was the first time that they realized that compared to the United States, there is very few venture capital here in Europe. How do you see the situation of venture capital currently in Europe, after the pandemic or during the pandemic?

00:36:09:02 - 00:36:33:10

Bruno Montanari

I don't know. Comparison between the states and Europe remains the same. At the end of the day, you've got more funds, more money, and more investment on in, in the US compared to Europe. I mean, in my sector, it's it's very obvious. I mean, if we take different databases and source of information. So maybe the figures slightly differ, but the ratio is is about the same.

00:36:33:12 - 00:37:07:08

Bruno Montanari

For last year, it was a slightly less than $9 billion of this investment in life sciences in Europe. And in the US it was I think $36 billion. So you see notice. Thank you. Dude. More in the US. And it means what it means. Or you see more projects finance, more startups financed. And so if one thinks just by, by statistics, eventually you will have more success stories out of the US and for Europe, just based on the numbers game.

00:37:07:09 - 00:37:54:01

Bruno Montanari

Okay. Then one might say, hey, yes, but it's true. Everything costs more in the US. It's true. For true, it can cost 2 to 3 times more in terms of equipment, salaries, lawyers, I mean, you name it, when you are in, in the US. So it requires more investment behind. But guess what? Just the US is, bigger market somehow for drugs and devices and, and in a way easier to access because it's one country, with one language and one approval process and things like that, compared to Europe, where you can have dissimilarities and things to, to go through, so this, this gap exists.

00:37:54:03 - 00:38:26:22

Bruno Montanari

It's existed for ages since the beginning, and I think it will continue to exist. There is there is another gap which is, which is as well at the end of the food chain, I would call it, which is IPO, but as well, somehow M&A, maybe we'll touch upon this later on. But it's true that, it's a more sane IPO environment in the US, more capable of attracting startups and gives them more financial means for the ambitions compared to what we have in Europe.

00:38:26:22 - 00:38:37:00

Bruno Montanari

So this is as well something where we need to work on. So it's not new. People are trying to improve things, but maybe we'll will get that in. Just.

00:38:37:10 - 00:38:45:02

Christian Soschner

Yeah, for me it was new a couple of years ago. So maybe it's it's an old it's an old well-known problem. You hear it very often. Currently since I start talking with people.

00:38:45:20 - 00:39:14:13

Bruno Montanari

If I, if I may, Christine, I just want to say that on the entrepreneurship. I mean, first you need, an industry in Europe, okay, Osama and device industry, out of which innovation can come from actually. But as well, people with experience that will be the founders or co-founders of startups focused on a given technology program device that will bring that to the next step with more attention and focus than the big guys would ever have put onto it.

00:39:14:13 - 00:39:38:03

Bruno Montanari

Okay, so we need to keep the big guys in Europe, okay? Because this is as well a pool of experienced people. And then in terms of entrepreneurs and startups, I mean, we have had now a huge generation of those and interestingly enough, as much as some biotech and device companies became bigger and became themselves the next acquirers, okay.

00:39:38:09 - 00:40:06:22

Bruno Montanari

After starting Nimble and growing, you've got from this first generation of entrepreneurs, people, and having worked closely to those guys with successes, but as well with failures, because you learn from failures. And this is something that we really need to keep in mind in Europe, failures is not the end of it. As long as you understand why and you don't repeat it, it's it's great in terms of experience to get to the next step with another opportunity.

00:40:06:24 - 00:40:41:01

Bruno Montanari

And so you see a lot of those people coming from, I would say, all names in European biotech, successful ones usually that are now CEO of companies sometimes 2 or 3 times CEO of companies. So you see we are we have entered, I think, into this virtuous cycle in Europe which us experience a long time ago. But again, the US, I think has been largely pulled up with a very attractive and welcoming capital market, which has been lacking for too long in Europe.

00:40:41:01 - 00:40:43:02

Bruno Montanari

And this is something we really need to tackle

00:40:43:02 - 00:40:43:20

Bruno Montanari

now.

00:40:43:23 - 00:41:04:24

Christian Soschner

Completely relate to what to say. Failure is the way to mastery. I started playing golf last year and I just consider minor success. So it's it's just such a difficult sport. But, my teacher said, the pros said, you need every swing that fails to understand how that game works. And, you need to train. And I think entrepreneurship is pretty much the same.

00:41:05:04 - 00:41:34:17

Christian Soschner

You not only need to success stories, you also need to stories about failure. When I look at the Austrian or the Viennese community and Life Science Society, how this and more about how how this evolved since 2006, every company that failed, was the breeding ground for three new companies. So people just move on, try the next thing, as long as they are allowed to legally and not, push down or, in a, in a, in a very restrained by, by legal restrictions.

00:41:34:22 - 00:41:57:03

Christian Soschner

So I think what you say that we must understand that even when a company fails is a good thing for society, that people learn something and can move on and, try the next best thing is very important that, the community evolved. What I didn't understand in the last, 15 years, was, the listings that happened in the life science industry.

00:41:57:03 - 00:42:29:15

Christian Soschner

But if you anything put BioNTech, BioNTech raised money in Europe. Got the thing from family office that supported the company up, to the stage where they could starting thinking about commercializing it. And then they made a decision to get listed on the Nasdaq. I saw the same here in Austria with nobody. But for example, nobody could start that, 40 million venture capital in 2006, up to a couple of times, even during the crisis from 2008 onwards, and then decided to get listed on the Nasdaq or keep a pharma also company here in Austria, same decision.

00:42:29:15 - 00:42:30:22

Christian Soschner

Why is that?

00:42:31:09 - 00:42:55:09

Bruno Montanari

So this is where we're going to talk a bit about the stock market. I mean, what exists in the US and still is missing largely in Europe. Is is one stock market okay. In the US you've got Nasdaq. And so the investors would go on Nasdaq to be able to, to I would call it bet.

00:42:55:11 - 00:43:22:21

Bruno Montanari

That's an educated bet. Most of the time I'll come back on that again. On, on those companies that are raising funds for an IPO because an IPO is not an exit. It's raising funds, okay, to provide more fuel, more cash to the programs and the technology. And so you've got very savvy specialized investors in this, in this US market that can understand what a company is doing.

00:43:22:23 - 00:43:54:13

Bruno Montanari

And they understand as well. They can anticipate the timing, how long it will take to deliver the next inflection points and the next key data set. And and if you are faced with generalist investors, no specialized investors that are not understanding what you're doing. Well, first of all, it might be difficult to attract them as investors in an IPO unless they want to get a bit of a hype because they have a, kind of pocket allocated to anything else than the classic industries.

00:43:54:13 - 00:44:28:03

Bruno Montanari

Okay. Fair enough. But as soon as there are maybe gray or bad news, they will fade away. Okay, so, this is a bit of an issue. This is why you need savvy specialized investors and sometimes even before IPO to fully support the IPO. This this the the nickname for those, is a crossover meaning investor that will come before IPO and with the the mentality that the philosophy that they will invest that IPO time as well to make sure the IPO comes through and that the company can move to the to the next steps.

00:44:28:07 - 00:44:57:20

Bruno Montanari

We still like this in Europe and in Europe. You've got different markets okay. You've got London Stock Exchange. You've got ultimate investment market. You've got your own exploration of Amsterdam genetics, Brussels, you name it. Okay. And so this is a bit of an issue in Europe to make sure you can attract not only savvy investors, specialist investors which are few and far between in Europe, but as well that you attract enough of them in one same market where they can all really, put, put some money.

00:44:57:22 - 00:45:33:00

Bruno Montanari

So there is this issue which is structural issue that we need to address on the stock market in Europe. And, and so you have face to that, either you've got businesses which finally to business which, which might need less money and are okay to maybe raise less to lesser valuation somehow on the European stock exchange. But if you need to raise big money at IPO and with follow ups, and when you want to reach generous enough valuations and as well liquidity meaning trading of shares, well guess what I mean.

00:45:33:00 - 00:45:37:02

Bruno Montanari

The facts the data is there. You better off going on Nasdaq

00:45:37:02 - 00:45:57:04

Bruno Montanari

than on Europe okay. But for European company you need, I think to anticipate the fact that you need to be over the crowds and you will have US companies wanting to list as well on the U.S, Nasdaq and guess what, they've got us investors. Their name is already known to the IPO investors.

00:45:57:06 - 00:46:18:08

Bruno Montanari

So the dynamic is easier for those US companies. And this is where I strongly believe that venture capital in Europe can take the best of the of the two worlds. And this is what that's all about. We've been doing. And we will still push in in doing which is okay. We've got great science. We've got breeds of entrepreneurs that are really up to it.

00:46:18:08 - 00:46:50:08

Bruno Montanari

Now, when you up. But at some point, let's get more visible in the US and let's access the pool of talents and money available in the US. But it's all about the timing. You you need to be to avoid being dogmatic and make sure that when it is really needed, you get there and, else might have a two step process where one might start listing in Europe, but then listing to Nasdaq as well, just to become more aware of what is a public company, a board and the governance which needs to change as well.

00:46:50:08 - 00:47:14:07

Bruno Montanari

And once they are comfortable, they say, okay, now we can go to Nasdaq because we're fully ready, you see. But again, this is a major distinct difference between us and Europe. And and as I said, I strongly believe that, there is market as has been pulled up in a favorable way with a very nice and generous, IPO market, which we have been lacking in Europe.

00:47:14:07 - 00:47:31:09

Bruno Montanari

And this is really something we need to to tackle, because it's not only about, allocating resources in company creation and the early stage financing. If we want to keep those tensions in Europe, it is, let's say, is financing, which includes as well, could I do a market?

00:47:31:18 - 00:47:43:10

Christian Soschner

Yeah, completely agree to that. I mean, coming from the corporate side, what should you do as an entrepreneur when you don't find sufficient investment capital in later stages here in Europe, you have to go somewhere.

00:47:43:10 - 00:47:45:03

Christian Soschner

Yes. And you can't stop the company.

00:47:45:06 - 00:48:10:23

Bruno Montanari

And this is why a lot, a lot of countries, I'm talking about my country, friends, but but others as well have made a big push into later stage slash growth capital funds. To avoid seeing those, companies going too early, either to foreign investors, but worse, being acquired too early by by foreign companies. And so this is one way.

00:48:11:00 - 00:48:17:12

Bruno Montanari

But again, it is not the recipe. And you need to address a few of those things as well.

00:48:17:15 - 00:48:40:14

Christian Soschner

Now since the dynamics in the United States. Interesting. For example, Cathie Wood's Ark funds, that are also investing heavily in listed companies even when they don't have, what's call it a validated business model already. So companies that, clearly have negative operative cash flows. So they just look, she's just with a team. She just looks at, how innovative the companies are.

00:48:40:14 - 00:48:51:06

Christian Soschner

And if they can disrupt an industry and just mix them up and something like that, for example, in my opinion, is missing in Europe. So these foreign investors who also take up risks after, after the IPO.

00:48:52:23 - 00:49:16:15

Bruno Montanari

Probably, but I would prefer having specialized investors, people, not people playing the statistics because again, you need stability on the investor basis. You need you need people investors to understand what it will take and be there when there needs to be a follow on investment after the IPO, you see. Yeah. So okay, that's that's interesting.

00:49:16:15 - 00:49:20:12

Bruno Montanari

But, what is wouldn't be my favorite approach. I would say

00:49:20:12 - 00:49:21:06

Bruno Montanari

that's true.

00:49:21:07 - 00:49:26:15

Christian Soschner

Just to let's talk a little bit, let's say in Europe, for a while I didn't talk about the,

00:49:26:15 - 00:49:42:14

Christian Soschner

situation, how to invest in early stage companies. I mean, I read also on the internet, figures from the United States. I don't have it for Europe. Articles say that, $70 trillion are handed down from the boomer generation to millennials.

00:49:42:14 - 00:50:08:04

Christian Soschner

So basically, they inherit the money because the old generation just passes away. And let's just assume that someone gets 100 billion on the bank account and, can do something with that money. Wouldn't it be logical to start directly investing in startup companies? I mean, we all heard the hero stories. The hundred thousand ex something, return on investment when you just pick the right number.

00:50:08:10 - 00:50:16:14

Christian Soschner

What is the rationale for those people to not directly go into the early stage environment? But to invest in a venture fund.

00:50:16:17 - 00:50:56:16

Bruno Montanari

So, I mean, you I mean, everyone is free and I'm a liberal at heart, so they can do whatever they want. It was the money they have. Are they inherited or earned? That's not too much of my business. But if I had a piece of advice, it would be to think hard about if if they understand the drivers of a market, the unique selling points of a technology program, what sticks in terms of skills, competencies, and the various complex regulatory steps to go through before investing directly.

00:50:56:16 - 00:51:35:14

Bruno Montanari

Because when you don't know, well, an industry as complex and regulated as life sciences, you are prone to surprises and sometimes not the best surprises. Okay. So it's not only a matter of being able or not to understand the data, the science, the biology. I mean that with time and good mentors, you can get there. But it's really to have a good appreciation of the quality of, of a business, of what is being developed in terms of research and development and as if not even more importantly, the quality of the team you're going to bet on.

00:51:35:16 - 00:51:59:21

Bruno Montanari

Because unless it's kind of friends and families that are creating your start ups and okay, it sounds fantastic, you're going to save the world. And guess what? It's my cousin or no time friend. I'll put some money on to him. Okay? Fair enough. But if you don't know the guys, that's tricky because, at the end of the day, as I said before, during that podcast, the human sector is essential.

00:51:59:23 - 00:52:25:05

Bruno Montanari

Essential. So this is where, the there is an arbitrage to be made between investing directly into one company among hundreds of others, sometimes dozens in the same area. You know, trying to second guess if these are really this is really innovative, really cutting edge, if they're going to make it, that understanding competition and positioning, for example.

00:52:25:05 - 00:52:54:17

Bruno Montanari

So there's no arbitrage between this and investing into a venture capital fund. Okay. And actually there are there are a lot of high net worth and semi office that, can do both depending on, on the sector and the maturity of the company. But I'm talking to, to now some it's not many of them. They understand how complex R&D is, how risky it is and to optimize the chances of success and diversify the risk as well.

00:52:54:23 - 00:53:25:17

Bruno Montanari

They might be better off investing into one or more actually venture capital funds, you know, with different investment thesis, even in one same sector like the life sciences, which is pretty broad actually. And, and learning from that with the team of the venture capital fund. But it's not to say that they cannot as well. Maybe from time to time co-invest alongside the fund into those investee companies, it can happen.

00:53:25:19 - 00:53:49:08

Bruno Montanari

Okay. They can be they can be welcomed. So this arbitrage is something that is really needed, in terms of hard thinking, to make sure that the money you have in a way is not going to be wasted on an opportunity, which is not really one, and on people which are not really I would say either experience or worst, but trustful.

00:53:50:01 - 00:54:02:20

Christian Soschner

Let's dive a little bit deeper into the, magic of venture capital. What is the secret sauce of a venture capital funds that they could offer to family offices and, business venture?

00:54:03:23 - 00:54:30:07

Bruno Montanari

So. I think that there can be various secret sources. I mean, the one my recipe has got many ingredients. Okay, but I think you one needs to look at the venture team and look at the experience of the people. And it's not only the years of experience. It's as well what they went through. What stories they went through in terms of investment, that which cycle of investment.

00:54:30:09 - 00:54:53:01

Bruno Montanari

The, the scouting for interesting opportunities and negotiation of term sheets and, and investment, the follow ups up to the exits and this several times and as well the failures and listen to what they have to say about the failures, are they open and humble enough to acknowledge the fact that. Yes. Okay. No, the investment is this originally might have chance or them they might have been wrong.

00:54:53:03 - 00:55:22:24

Bruno Montanari

And how they learn from that. This is a very important and this is this is experience. And experience is as well about the network of people you met over time, how you were able to learn from each other and with whom you want to do business. I mean, after 20 years of experience in VC, I can tell you the people that are like minded that I like and they like to work with me as well.

00:55:23:01 - 00:55:43:15

Bruno Montanari

And so it's not only the fans, it's the people inside the firms. It's very important because this is alchemy needed at the governance level, at the board level, with the managers. Okay. So the human factor is super important and you need to see as well. It's part of the ingredients, the secret sauce. You need to have a complementarity in in the team, in their members.

00:55:43:18 - 00:56:06:20

Bruno Montanari

It cannot be just a collection of individuals, okay. It needs to be people coming from different backgrounds, with different experience, different networks. Because if you've got McKinsey people very, very well in terms of intelligence, all there is the same, you know, having gone through the best case studies and the best, universities and schools, in, in the US, in Europe.

00:56:06:20 - 00:56:28:03

Bruno Montanari

Well, if they turned at the end of the day to think the same, it might not lead you necessarily to, to the best direction. And sometimes it will lead you into a wall. And, and if you have clones and they face failure, they might not be able to understand why and and just be able to, to do, better deals afterwards.

00:56:28:05 - 00:57:00:16

Bruno Montanari

And complementarity is very key. But again, you have to get over a mere collection of individuals. It needs to be a real partnership. People that are not there to take the money for themselves, for their own investments and to take the light, okay, it's people that needs to understand that it's collective and that you bring to the table for your colleagues in a VC forum, but as well for all the portfolio, all the investment made to experience in your network, okay.

00:57:00:18 - 00:57:31:05

Bruno Montanari

And and it's I mean, having gone through that in various funds and knowing other firms, I can tell you that scuba is one of a rare breed where we have this mentality. It is. But for us it is partnership first. It is companies first. And I'm helping the portfolio companies of my colleagues by putting them in touch with relevant people and by sometimes helping with my own experience and my own suggestions, as much as they do for me.

00:57:31:07 - 00:57:49:16

Bruno Montanari

Because at the end of the day, it's collective success. This is what we want to to aim to. And this is this is easier said than done. You need to have the right mentality and you need to have the right economics as well. So yeah. Yeah. This is where, you need to find the right fit. It's like a wedding in a way.

00:57:49:16 - 00:58:11:03

Bruno Montanari

You know, not only you need to fall in love somehow. The beginning and to be aligned and being able to live together. But you need to go along along the journey together as well, with various turns and bumpy roads. From time to time is very important. Very important. That's true. And so and so then it's a success to a quality deal flow.

00:58:11:04 - 00:58:38:13

Bruno Montanari

But again this is this is a network the experience okay. And people being able to understand what's key in a given indication and and an area to spot the right startups, the right approach and as well somehow educate the colleagues about why this is a great opportunity, you know, not imposing anything but explaining and bringing the experts as well to second, what the initial thoughts are.

00:58:38:15 - 00:58:42:12

Bruno Montanari

So it's it's human nature. You see, once again.

00:58:42:15 - 00:58:47:15

Christian Soschner

I completely agree. I mean, the team is important in the think with the robot you have for 20 years or is it's a

00:58:47:15 - 00:58:49:04

Christian Soschner

first for several founders.

00:58:49:04 - 00:59:00:10

Bruno Montanari

Yeah. So so that was the first. There's a life sense is they started this system in Ireland and and the first and one was early 2002. So yes, it's, it's 20 years now.

00:59:00:12 - 00:59:05:17

Christian Soschner

And so robot went through three funds. So, there's four now.

00:59:05:17 - 00:59:07:02

Bruno Montanari

Four. Okay.

00:59:07:04 - 00:59:09:04

Christian Soschner

So there is a, there's a long track record

00:59:09:04 - 00:59:14:20

Christian Soschner

and it's also, I think a well-known, brand in Europe meanwhile, and globally probably also.

00:59:14:21 - 00:59:55:06

Bruno Montanari

Yes. Yes, it's it's, it's resonating more and more, I must say. I think it's it's, it comes both from, I mean, you start to put it all on the, on my head, but somehow the quality of the people and the fact that we are very approachable, okay, and very easy to work with. But it says, well, the fact that, yes, we becoming more visible with, with companies where we have syndicated with other well-known VCs and so we part of that game, you know, where now so about resonates in the mind of many entrepreneurs, of many other VC funds and even into the ears of many LPs.

00:59:55:06 - 01:00:22:19

Bruno Montanari

I the investors in into fans clearly. And we went through a phase where we were more, tagged as Irish medical device. And now people understand that actually, it's been years and years and years that we are not only biotech and medtech and actually more biotech than medtech today. Europe in but as well was an American footprint because we always invested in in the US and Canada on top of you of Europe as well.

01:00:23:06 - 01:00:37:12

Christian Soschner

You mentioned, you like talking about fire stories. There's always this debate, are we success by us to talk more about failure? I love the success stories. So do you can you share one success story from your busy life?

01:00:37:18 - 01:01:07:20

Bruno Montanari

But, so, yeah, there are there are a few, because when you think about it, just that syllable, when you look, I think we have 27 to 28 investments now. And we brought. Well, when I say we. So do you see, this is the, VC trend. I say we say we, but we should always say the companies that we invested in and the teams of those companies brought to the market eventually, ten devices and I think two drugs on the market, which is, which is quite nice as a reward as well.

01:01:08:01 - 01:01:34:17

Bruno Montanari

And so, so if I focus on, on your seller, but I mean, I could talk for ages about example, but I would say I would think about, a company that we have been actually supporting already at the spinout stage from a company, I think it was a conglomerate named I am I. This company names is quanta, and quanta is the next gen dialysis machine delivering high quality dialysis at the clinic and at home.

01:01:34:17 - 01:01:58:23

Bruno Montanari

And the end goal is really making sure that those, patients into dialysis can have, a better life and actually even a better treatment at home than what they have today through or through clinics or specialized, centers. So, we help them spin out. We co-led, years ago, series, which was 10 million pounds back then.

01:01:58:23 - 01:02:28:08

Bruno Montanari

Okay. And, and silver worked hard alongside the other investors and the managers to get the right vision and transformative potential for for this company. Up to the point where, guess what? Coming from a 10 million film series a year ago and of last year, they raised a series of $225 million, being now at commercial stage and being focused, on the US market on top of the the first European countries they would they were focused on.

01:02:28:08 - 01:02:49:14

Bruno Montanari

So that's a brilliant company. And and I've known actually the actual CEO for, for some time even before so about and they've done a superb job and it has not been easy for from that I can tell you. So now they are hopefully on the road to success with the means of the ambitions and becoming the next the next leader in the field.

01:02:49:14 - 01:03:14:17

Bruno Montanari

So we're quite proud for having been part of that, of that journey. I mean other, other stories. So this was more medtech. If we talk more about biotech, there is there was because it which was acquired, Covaxin. So Covaxin, we, we co-leaders, we quickly a series extension. I think it was back in 2010.

01:03:14:19 - 01:03:39:03

Bruno Montanari

And Covaxin was about, the potential of, of the specific given tri specific antibodies. So, a given treatment modality in the biologics area, without getting too much into the details for the audience, that is not necessarily first into this type of technicalities, but basically it was really a big potential to go after better treatment for complex and chronic diseases.

01:03:39:05 - 01:04:04:21

Bruno Montanari

And so we had we provided a lot of input, into the indication and, and help in strengthening the board, the management team, bringing the right advisors. And then we remember of, for naming a steering committee because at the board level, you've got very often subcommittees, transaction committees, remuneration committees. So, Silverberg was part of the M&A committee, and it was a competitive and a process and bidding.

01:04:04:21 - 01:04:31:10

Bruno Montanari

And eventually Jensen acquired the company in, in 2014. And we made a very nice return on that in terms of multiple investors, capital and R. And so it was a very nice story for for sale as well. And lately you've got, I was thinking about a company that has a great potential and, and I think that, the valuation will probably see hopefully an uptick later this year with more clinical data.

01:04:31:12 - 01:05:02:06

Bruno Montanari

It's, company name fusion, which is in Canada, talking about our exposure to the North American market and, Canadian company, which actually, listed on Nasdaq in June 2020. Okay. They raised, they raise more than $200 million as an IPO. And we where they're at series and participated as well in the in the series B and and this is a company into the radio pharmaceuticals targeted radio pharmaceuticals from Colleghi.

01:05:02:08 - 01:05:24:09

Bruno Montanari

There have been big, big acquisition in terms of, of billions being, being put on the table to acquire other companies before in the space. And so this is a company that, not only we, we helped, but that has a great potential. And I think it will it will bring very relevant, drugs eventually to, to the patients.

01:05:24:11 - 01:05:26:16

Bruno Montanari

We're very, very hopeful on that.

01:05:26:16 - 01:06:01:14

Christian Soschner

That sounds great. Fingers crossed, fingers crossed. I've grown up. We had, the political point of view, the corporate point of view. We also had, the point of view of, people investing in VCs. Let's take a little bit the entrepreneurship point of view. How do VCs operate when, I would, when I simplified I mean, it sounds to me like I create a company, I find the team, just pick my buddies from the bar next door and, put them in a pitch deck, that is, send it over to a venture capitalist.

01:06:01:14 - 01:06:08:08

Christian Soschner

And here's $20 million, right after reviewing the pitch deck. How is the reality? What kind of

01:06:08:08 - 01:06:10:06

Christian Soschner

teams be looking for?

01:06:10:10 - 01:06:32:21

Bruno Montanari

Hello? Funny enough, in the tech world, not in life sciences yet. I've seen very, very early stage firms that were ready in three weeks to give a bit of seed money. Really not 20 million, but yes, a few hundred thousand with a very standard term sheet. Okay, so this kind of VC business model exist, but it's really playing the statistics.

01:06:32:23 - 01:07:05:17

Bruno Montanari

Well, I'm not into the tech area to be able to judge if this is sound or not. I found it surprising. I mean in my life sciences area where again, as far as soul is concerned, it's new drugs and new devices. It is such complex, that I don't see how we could bet so easily on anyone coming in our doors and within weeks providing a term sheet and in school, unless, unless really we monitored the guys from before, from wherever they are.

01:07:05:19 - 01:07:32:20

Bruno Montanari

We monitored the area they entering into, and we very quickly understand how great the technology in the approaches. And this is something that is honestly very rare, very rare, because there's always the need for us because as well, we are struggling with so many opportunities in any given day, on top of the portfolio, on top of relationship to investors, etc..

01:07:32:22 - 01:08:13:24

Bruno Montanari

That he takes, it takes some time for us to be fully convertible and descending. But, it's a business is about what the investment assets are and having more interaction with the team to make sure that as well, we've got an aligned vision with them and that there could be a match. Okay. And actually just on the on the as a side note, those last two years being very virtual, prove to me that, okay, we could still do deals virtually without meeting the specific people face to face, but usually there was an element of trust and confidence in people you had known before.

01:08:14:01 - 01:08:33:16

Bruno Montanari

Okay. Not only through a video screen. And, and it makes an entire difference because on this stage you're going to focus more your attention on those compared to people you didn't know from before. And you couldn't meet. Okay. So this human sector is important, at least to me. Maybe I'm now an old part of the old generation.

01:08:33:16 - 01:09:04:04

Bruno Montanari

I don't know, but but I need and and I'm always asking the managers and the founders make sure that everything is reciprocal. It's not only me being there and, looking at your data, your CV, your background, talking about people, about what you do and yourself. But make sure you do the same about me, about my fund and about any co-investors that that will come because it's going to be a journey which might be tough again.

01:09:04:10 - 01:09:11:15

Bruno Montanari

And it kind of short term mid term wedding. So we better, better know a bit each other before we get into bed.

01:09:11:20 - 01:09:35:02

Christian Soschner

Okay, I, I completely agree. Sorry for interrupting you. I just finished I just finished the book, written by Jordan Belfort. Wolf of Wall Street, The Way of the wall. And it's about selling and he pretty much says the same thing you do. It's, different, different game. But, he also says people tend to jump too quickly on the selling side of it.

01:09:35:04 - 01:09:55:20

Christian Soschner

They want to push people through, through to closing. And forgetting about it. He calls it information gathering, phase. And you said, alignment of visions. So I think this is key to success to really get to know the people first, understand what they have to offer, what they need. And, what works, for example, are looking for in those.

01:09:55:20 - 01:10:02:08

Christian Soschner

On the other hand, folks, the companies have to offer before pushing forward to closing, do you do you see it similar.

01:10:02:12 - 01:10:26:19

Bruno Montanari

You know, totally. And, what we all want to avoid is the oh, shit moment was the first board meeting where we look at each other and we say, oh, God, okay, that we didn't hear before. That's new. Interesting. But it's too late. Let's say, and similarly, maybe the managers will say from the behaviors of those investors, oh, my God, this is not what I expected.

01:10:26:21 - 01:10:54:11

Bruno Montanari

And then it's and again, it's all about communication before the deal to make sure that everyone understand each other, have the same expectations. And then it's it's easier it's an easier communication. And you can deal with concerns, issues, questions much more easily. It's so much better. Okay. Rather than being too shy or twinkle football raising a point, either the manager, being not comfortable because, okay, there are some hiccups.

01:10:54:11 - 01:11:17:11

Bruno Montanari

How am I going to announce that to my board and to my investors representing their friends on the board? And, and they say this is not the way a budget should be governed. I mean, the board is there first and foremost to help, to support and to help. Of course, if there is major dissent and three diverging views, then we have maybe some tough decisions to make.

01:11:17:11 - 01:11:40:02

Bruno Montanari

But but it's it's really I always view that as a partnership. Okay. And the same the same way it's still above we think collectively when we make an investment. It's not, Alan, Daniel, Jennifer, myself making an investment. It is the partnership in the investment committee deciding to decline or to agree to an investment. Okay, so it's a collective responsibility.

01:11:40:04 - 01:12:08:17

Bruno Montanari

And this is the same mentality we need to have at the board level as well. Okay. So it's tough, but you need to avoid the prima donnas, the big egos I mean you need to have people which are open 19 and, and open minded. Okay. So coming back to those entrepreneurs, I mean, taking a few folks at the bar buddies and, and writing a quick BP and asking for 20 million, of course, this is this is not, how it's, it's being done.

01:12:08:18 - 01:12:35:21

Bruno Montanari

But one thing for sure, and this is, piece of advice, if I may, is to make sure that you are ready before pitching to a VC. So either you've got already contacts in the VC world, which are kind of close contacts, sometimes even friends. And there you can be more open and and say, okay, I'm wondering if I should say this or this is how to present this.

01:12:35:21 - 01:13:09:10

Bruno Montanari

Is it the best story flow? Is it the key messages that are getting to the audience or not? Fair enough. And you can receive some help, but don't go out there without being ready. With VCs you don't know because we we are flooded by opportunities, okay. By the day. And unfortunately it's it's tough to hear, but somehow our job is to make sure that we can say quickly, no, to be able to focus our resources on the right deals for our fund.

01:13:09:10 - 01:13:37:09

Bruno Montanari

And that way, investors. Okay. And it is as well needed because you don't want, to face investors that, don't come back to you or don't necessarily provide, any relevant feedback that you have to contact every 3 or 6 months to know exactly what's going on. So, you need to have your pitch ready, and the attention span is usually limited.

01:13:37:11 - 01:14:09:07

Bruno Montanari

What I'm saying out of experience is that if in the 21st minutes, sometimes even a slow. So even this, this. So you do not hook the attention, you do not grab the attention of the audience, then it's going to be a tough sell, a tough sell if you manage to grab the attention with the key messages, and the key data, to make us understand how great the business proposal and the investment is, is, is then you want you want big time, okay?

01:14:09:09 - 01:14:33:19

Bruno Montanari

And you need to make our life easy. Okay? Don't go into very detailed, elaborated technical technicalities, you know? Okay. We'll see that at the at the next step when we go under NDA and we'll look into date, reports finally give us the big picture and the key USP as to why you are the best in your field.

01:14:33:20 - 01:14:49:01

Bruno Montanari

Or you will become the best in your field. Okay. This this this this needs preparation. This need to be here. So. So don't come improvising and thinking. Well, at the end of the day, I know my stuff. And, they'll be convinced. Get prepared.

01:14:49:06 - 01:15:04:24

Christian Soschner

Great. Great words. You mentioned that the attention span is very short. I read in an article that it's two minutes 30s that people 20 are pitching, when they don't talk, the VC after two minutes, 30s the opportunity is gone.

01:15:05:02 - 01:15:16:08

Bruno Montanari

Okay. So that may be VCs that have got their iPhone on and looking at the iPhone while the company is presenting, which I resent personally. So this is where the attention span is probably even more limited.

01:15:17:01 - 01:15:37:17

Christian Soschner

Yeah, maybe with social media these days in the tech. But, let me ask you one question, Bruno. You mentioned that on one hand, it's important to understand the work and the development of patients, and on the other hand, be prepared for pitching. And from my experience, I very often see that, companies like to skip this preparation phase and direct the champ, with a not ready pitch deck into the first pitching.

01:15:37:19 - 01:15:51:14

Christian Soschner

How should organizations like the two companies, tackle this problem? On one hand, getting to know the VC before pitching and on the other hand, pitching only when they are ready to b see, how do you see this, information gathering face to

01:15:51:14 - 01:15:52:03

Christian Soschner

be seen?

01:15:52:03 - 01:16:15:21

Bruno Montanari

In an ideal world, they should try and socialize as much as they can by attending conferences. And, and, and making sure they can meet some of the VCs either directly, either through an N plus one, a command relationship, so that, they can get access to those offices and be able to discuss informally, to get to first few feedbacks.

01:16:16:02 - 01:16:42:21

Bruno Montanari

Okay. And I think this this is probably ideal, especially for first time teams, you know, in a startup that never raised VC money before and who are really asking themselves, well, well, those guys, how can I approach them? I mean, we are possible. I mean, we can go to a website. You can you can access us easily. But best is to try and socialize before through a more informal setting.

01:16:42:21 - 01:17:06:20

Bruno Montanari

And conferences are great for that. Actually was always have parties thrown after the conference here and there. So get ready for your liver to suffer a bit too many drinks. But, but it's, it brings a different flavor. And I think it, it helps a lot, but obviously it's like anywhere in this world, in any sector, actually, you will face people that are just very closed, not very nice, not funny.

01:17:06:20 - 01:17:20:20

Bruno Montanari

And I don't want to share views assuming they have any, but so those ones will get rid of them and at least by default, you know, that you want to work with them, okay. And focus on the rest. It's actually a good piece of of due diligence, probably early on.

01:17:20:22 - 01:17:25:21

Christian Soschner

So it's not harmful to talk to because, outside the pitching setting. So it's,

01:17:25:23 - 01:17:26:17

Bruno Montanari

No, no,

01:17:26:17 - 01:17:57:06

Bruno Montanari

no, no, not at all. And certainly not not to me. And very often where I smile. Okay, I need, I need to have a, an investment opportunity that is appealing to me. Okay. And I need to sense that okay. So guys can be trusted. And I like the attitude. But very often, during the entire year, I'm helping, startups, founders, CEOs, in providing my opinion and just making sure they understand it's one opinion among many others.

01:17:57:06 - 01:18:23:04

Bruno Montanari

Okay, I'm not mad to think I've got the truth and I know everything. Far from that. But at least I'm monitoring and pushing organization. And I think they probably enjoy it because, because they, they receive the feedback, they sleep on it. And sometimes they just think, okay, well yeah, it's confident, but it's not. It's not what we want to hear or it's not relevant for us.

01:18:23:06 - 01:18:49:02

Bruno Montanari

I mean, I'm not there to decide or to make sure I'm the right. I have the right thing to say necessarily. But yeah, that's, it's feasible is feasible. And so, you see, it's sort of about building trust, confidence, creating a real relationship. And it makes things much, much more easy when it is prime time for financing. Because when they come to me, I mean, 80% of the job will have been done.

01:18:49:24 - 01:19:23:04

Christian Soschner

Now that's true. So getting to know people first, but then you flip the switch and say, Now I'm pitching because I'm fundraising, then companies should be prepared and, there is another thing that I wanted to hear your opinion on. So it was years, years ago when, I felt I had a great opportunity and, it's like, finding friends from afar, putting me with the pitch deck and then doing the mathematics behind it and say, okay, anybody who invests a million in this company or 5 million, can get back after five years.

01:19:23:04 - 01:19:53:04

Christian Soschner

10 million. So let's say to X, so two x. And, I tried to talk to a VC and she smiled and said, come back and have a ten x, opportunity to X is not enough for us. And, lately I read an article and it originated on, the internet, where, family office stated that meanwhile, it's 100 x opportunity that we are looking for y are these metrics so important in the VC world?

01:19:53:04 - 01:19:53:16

Bruno Montanari

So

01:19:53:16 - 01:20:32:17

Bruno Montanari

okay, so two x ten x 100 x. I mean, I will let those, those people maybe react and tell us where they're coming from. At the end of the day, what is true is that when you consider any VC portfolio, you will have inevitably settings, okay. That's inevitable. And even in the case of successful companies operationally delivering sometimes the pay check at the end at IPO time, post IPO or at M&A is not as high as would have been expected by the investors or by the managers and the co-founders.

01:20:32:19 - 01:21:02:23

Bruno Montanari

So be it. So it means that overall, when you want to return with your fund, let's say three x to your investors in the fund, well, you need to make sure that it is probability weighted somehow. So I understand the comment, which is bring me a ten x opportunity as an investment thesis. And then we'll talk. But I mean realistically, I'd rather have a portfolio well balanced with lots of 2 or 3 four x.

01:21:03:00 - 01:21:25:03

Bruno Montanari

Because we would have done a good job on the investment to this before the investments, and we'll have to a company together to for for risk mitigation and being able to address any issues later on during the life of the investment, rather than relying on a ten X or 26 investment in my ten, 12, 15 portfolio companies.

01:21:25:06 - 01:21:47:10

Bruno Montanari

While the rest is fairly you see, it's it's a dangerous game, the number of game. It's always a dangerous game. And so, it's also to me about maximizing maximizing sorry, the potential of success of an investment. And of course, I mean, it needs to be 2 or 3, four x down the road to make sure that I'm bringing enough money to my investors and that my investors are okay.

01:21:47:16 - 01:22:18:06

Bruno Montanari

But I'm not going to ask for ten x, in a pitch, because honestly, it's a bit ludicrous. Okay, now the difference will be if you consider maybe the tech and life sciences, I mean, the tech world for sure, because somehow you have got business models which are less capital intensive. You can actually reach global scale and have amazing valuations where, okay, the early investors will probably make 30, 40, 50, maybe 100.

01:22:18:06 - 01:22:42:17

Bruno Montanari

I don't know X but it's it's different business models. Okay. And and even in the tech world you know we always talk about the successes okay. And the massive returns. But we forget about unfortunately all the dead bodies like lying around. So, I would put a big grain of salt into this kind of, feedback, but I can see where they're coming from.

01:22:42:21 - 01:23:01:10

Bruno Montanari

But the entrepreneurs shouldn't be, shocked or afraid or shy saying, oh, shit. I mean, there's no way we're going to provide ten x. What are we going to say? No, don't. At least with me. Don't worry. I mean, I will know the hypothesis. I will make my own, and we'll see where that goes.

01:23:01:10 - 01:23:25:03

Christian Soschner

Yeah. I think, many of the stories and podcasts that I hear from, business like investors who invested in Facebook, I think Gary Vaynerchuk is one of those, who made good, who made good money with Facebook over investments and maybe life science, takes a little bit differently. I like fairy tales. And, the great thing with fairy tales is, that it's nice storytelling and it's very engaging.

01:23:25:03 - 01:23:51:07

Christian Soschner

You have the ups and downs and characters who evolve and need to go to phase together. And at the end of the day, mostly Prince and the Princess Mary and then the end of the stories, and they lived happily ever after, and nobody ever told how this happily ever after looked like, can you shine a little bit of light, how the happily ever after looks like if we see once the deal is closed.

01:23:51:09 - 01:23:55:14

Christian Soschner

Is it that way that the VC just walks away and says, okay, I deploy some money and that's

01:23:55:14 - 01:23:56:18

Christian Soschner

it for me? And, I don't.

01:23:56:23 - 01:23:57:14

Bruno Montanari

Know,

01:23:57:14 - 01:24:26:08

Bruno Montanari

this actually, you might think as well, in terms of the storytelling, who will kiss the frog to become a prince? Okay, is it the VC having to kiss founders and managers or the managers having to kiss the VC, which might be, frogs or thoughts? Okay, but this is maybe for for another day. No, of course it's it's just, I mean, signing, the legal documentation for first fund raising is only the beginning of the story.

01:24:26:10 - 01:25:06:07

Bruno Montanari

Okay, now we're talking real. Now we're talking about execution, and we talking about how good of a match we will be together at the governance level to make sure we can help and build together this great opportunity. And this is where expectations will be met or fail, clearly. So it's a beginning of a journey. But again, if things have been done hastily without the right question, ask without the right analysis done well, you are bound to have surprises and probably nasty surprises.

01:25:06:09 - 01:25:38:19

Bruno Montanari

If everyone has done a proper work at knowing each other and understanding the business, at aligning visions, it will go better. It's not to say that there will not be tough times, because again, inevitably this is the life of the startups, okay? It's very rare. It's very rare that a plan is being executed. As expected. Okay. Without hiccups, without competition emerging, without data, which are not the one we expected without people leaving the company to go to whoever and having to be replaced.

01:25:39:00 - 01:26:07:02

Bruno Montanari

Yes. All of this happens. All of this happens. But, but it's it's again, it's all about anticipation. And it's, it's the time spent before the, the signing of the legals for fundraising that probably will direct and the, the tracking to which you will unlock for this journey. Very important. And sometimes you see things coming from far away.

01:26:07:04 - 01:26:32:08

Bruno Montanari

You want people that you said, you know what, there's no ideal deals. So let's let's get to work on it. That signed this fundraising and we'll figure out and there's a bit of that as well. You know, you don't know exactly how it will how it will fare. And for me, this is the excitement as well. I mean, if everything was a stepwise process already cooked and digested ahead, I think I would be so bored I would have done something else with my life.

01:26:32:10 - 01:26:52:21

Bruno Montanari

I mean, I like, I like, I like the fact that we have to renew our thinking. We have to be always open minded to look at what's going on in the, in the, in the field areas, sometimes in very different areas, to be able to feed into the technology and, and the programs, to hear very interesting people that we want to add to governance and to the management.

01:26:52:23 - 01:27:03:09

Bruno Montanari

I mean, it's it's it's great actually, but you have to adapt. You have to adapt, and you have to have a strong heart and strong guts as well. Not to say anything about any other part of our anatomy.

01:27:04:11 - 01:27:33:13

Christian Soschner

Yeah. That's true. So after the the investment is done, there will be further interactions with, with the venture capitalists. What? Help us can venture capitalists provide, during the tough times of, of the company that you said people are leaving and, or fallen rounds must be some kind of fundraising must happen. My. What's the role of risk in in all these, problematic areas that happen in the daily life often of.

01:27:33:16 - 01:27:59:17

Bruno Montanari

The the rule I'm trying to impose myself. Well, there are a few rules. But it's it's come from experience. The DoCoMo first. I'm not the manager. There's a red line not to cross. Okay. I'm an investor, so I have to. That's shareholder and usually board member being property director or observer. So this needs to be taken into account because I'm there to help and support.

01:27:59:17 - 01:28:27:19

Bruno Montanari

I'm not there to decide and do in lieu of the management. Very important. The second aspect is not to raise anxiety levels unnecessarily. Okay. You can I would say, if we could poke people and raise their heads saying, well, guys, be careful, because at that speed you have a wall in front of you, so you better watch out.

01:28:27:21 - 01:28:56:05

Bruno Montanari

But, there is enough reasons to, I mean, deeply troubled or face concerns that you don't need to raise anxiety levels unnecessarily. Okay, this is a second rule that, I'm always trying to impose myself. And so here is where communication happens. And the best thing is when you can anticipate issues. And so you have already solutions when the issues pop up okay.

01:28:56:07 - 01:29:23:11

Bruno Montanari

And then it's a matter of deciding which alternative, which solutions you want to to go after. But it says, well, being there as a sparring partner, being elaborated enough to listen to the, to the concerns or the issues, listen to the management and bring your good advice and good advice is not, oh, I've got a great genius idea that no one has heard of.

01:29:23:11 - 01:29:45:21

Bruno Montanari

And please do it because I'm a genius. No, not at all. I will always explain the context and where this advice is coming from, what I've seen and experienced before, and very often it is the case that, oh, I'm thinking about, an expert in such a such field that will be probably helpful in having a second opinion from so that you better know exactly what we need to do.

01:29:46:02 - 01:30:09:20

Bruno Montanari

You see. So there is there needs to be this kind of dialog. And often and this is why as well, if you see is is best when it is more local because you can talk easily and meet people more easily. You know, you've got a call from the CEO or you're calling the CEO because you've got, an idea or concern a question or some something that came through to you when we it.

01:30:10:00 - 01:30:37:22

Bruno Montanari

I need to talk to my CEO about that the next morning. You can have breakfast. Okay. And it's, it's, a good informal setting to put things on the table to discuss and to share views. So, this is where, where we we can be helpful is bring the experience, the bringing the network and being there not to judge and raise level of anxiety or impose anything but as a support and to help.

01:30:37:24 - 01:30:44:22

Bruno Montanari

But easier said than done, because this is where you need to have like minded people and being able to to work together on that.

01:30:44:22 - 01:30:50:07

Bruno Montanari

Sometimes the agendas differ and it's human nature, but it is a different story.

01:30:50:07 - 01:31:13:16

Christian Soschner

That's true, that's true. Human nature plays service an important role in business and it's very often underrated. I have another question, Bruno, about the topic that, heard in the life science industry the first time I was at the university, investment was small thought, coming from the Warren Buffett approach, when we deploy capital in a company, it stays there forever.

01:31:13:16 - 01:31:32:21

Christian Soschner

And our preferred investing period is forever. And in the VC world, up there, the first time I met Mrs., I heard the term exit. So that we need to exit the story. Why is that so important to the VC about why can't we act like Warren Buffett just

01:31:32:21 - 01:31:33:19

Christian Soschner

to know.

01:31:33:21 - 01:32:00:02

Bruno Montanari

That some VCs would be more patience? Okay. Because they have an, an evergreen open ended fund boss. And maybe they have the people with the the kind of mindset that matches this kind of more long term patient views. But it's true that a classic VC, I mean, will be on the road every three, four, five years to raise a new fund.

01:32:00:04 - 01:32:24:09

Bruno Montanari

And when you raise new fund, guess what? You have to talk about your experience, your track record, the other funds. And this is where exits and good execs makes a difference. Okay. And sometimes people that you will meet are more keen simply on the financials. They want to know if you made ten, 15, 20, 30% IRR or even more.

01:32:24:11 - 01:32:49:02

Bruno Montanari

Okay. In some cases, sometimes we say, okay, financials are one thing, but actually tell me, tell me the stories into which you invest. Why they were cutting edge. Where did you help in terms of society patience. How did it work out. And it depends upon who you're talking to. But, it's a fact. I mean, you need to show that you did good deals.

01:32:49:04 - 01:33:09:08

Bruno Montanari

And the best thing is cash on cash. Where are the exits? And this is why we have as soon as we receive an opportunity, the exit in mind. Is this something that will be IPO a boon in a few years? Is this something that the film industry has its attention on? Onto? Okay, so that there will be collaborations and maybe acquisitions?

01:33:09:10 - 01:33:32:06

Bruno Montanari

Because if we don't think about exits and if we let it go, well, not only there will be more failures, probably by being too lenient and not focused enough, but as well. Guess what? We will not be able to raise. Another son will be out of business. That's it. And this is where it's important to think about the innovations entrepreneur that they have in their hands.

01:33:32:12 - 01:33:53:09

Bruno Montanari

Is it really made for VC capital? Is it really made for VC funding? Is this really what they want to to go after and maybe what type of investors they want to bring in? Okay. Sometimes they are better off having but it's it's hard. And again we talk about arbitrage. It's not necessarily the best thing for those high networks.

01:33:53:09 - 01:34:18:23

Bruno Montanari

And so I your face but those those person would be more maybe more patients and more than maybe okay. To the point where unfortunately okay, if this is where maybe some startups and managers, we said, you know what, trusts a billionaire. He's got enough money will always backup. So we can think about restarts. Reinventing ourselves if we sell doesn't matter and we don't have to get acquired or go into IPO.

01:34:18:23 - 01:34:49:18

Bruno Montanari

Let's continue our life. It's it's good enough, but it's not the same. Drive. Clearly. Let's say it's for the best either, honestly, because again, it's such complex and competitive, you really need to be totally focused and then think about what you're doing day and night to deliver and be always at the forefront, because otherwise you will have you will have bad surprises with competition coming ahead or things that are badly executed.

01:34:49:20 - 01:35:09:08

Bruno Montanari

So yeah, it's it's being driven by that. Clearly. Some will say it's, it's bad, but it's not neither good or bad. It's the fact it's a reality. You need to be aware of this. And guess what? It works out. It works out pretty well for for all the parties when it's for success. And we do it again and again.

01:35:09:14 - 01:35:12:22

Christian Soschner

So it's just the role of the game, part of the game.

01:35:12:24 - 01:35:15:04

Bruno Montanari

It is it is duty.

01:35:15:04 - 01:35:31:04

Bruno Montanari

But to think about the investors in the first one, if you're if you weren't in fund, I mean you would like to see some returns out of it and not have to wait 15, 20 years for them. Right? Because otherwise you would say, well, why am I doing that? Okay, maybe it's for the good of humanity.

01:35:31:04 - 01:35:42:13

Bruno Montanari

Maybe I'm helping indirectly. New drugs and devices to come to market, to come to patients. But still this financial aspects, a lot of, of, of investors into firms have it in mind.

01:35:42:22 - 01:36:08:16

Christian Soschner

So the current I read, I think it was in November last year that Sequoia, set up a new fund with, $9 billion that, intends to invest longer over a several decades because they think that, those disruptive innovations sometimes need not only 3 to 5 years to come to fruition, they need ten, 20 or 30 years.

01:36:08:18 - 01:36:17:02

Christian Soschner

Do you see a trend on the venture capital markets that this thinking that Sequoia, presented last year is also taking hold in Europe?

01:36:18:13 - 01:36:55:15

Bruno Montanari

Personally, I didn't come across that in Europe. I didn't come across that in our, in our field. Okay. I mean, 20 year or more type of investment horizon is multiple infrastructure. Not not for for R&D type projects in in, in biotech, medtech or even tech. But what one would need to probably look into this more details, because I suspect that even if the fund is being kept open longer, they're probably bringing some cash over the years to investors so that the investors are not sitting and waiting for 15, 20 years or more before seeing the green back.

01:36:55:17 - 01:37:16:12

Bruno Montanari

So it's probably a mix of investment where they are low themselves. So longer period of time there's another element, but it's it's going to be maybe a bit boring for the audience, which has to be taken into account. It's the management fee. I don't know, the investors in a fund we like to see the fund managers taking management fees for so long out of the money they bringing in to into a fund.

01:37:16:14 - 01:37:38:21

Bruno Montanari

So I think there's more into that story that needs more, more details and insight to really understand how that works. It might be that there's no no more management fee of your return anyway. Okay. And they still work on the portfolio, I would say for free, but in exchange of maybe a higher carried, I don't know. But there must be something in terms of economics to make it work because it's not philanthropy.

01:37:39:01 - 01:37:40:11

Bruno Montanari

Right?

01:37:40:14 - 01:37:50:00

Christian Soschner

That's true, but I didn't I just read the press release and not, there were not much details about the metrics. Bruno, are there any questions open that you would like me to ask?

01:37:51:09 - 01:38:09:23

Bruno Montanari

We covered, I think, a lot with the topic. We we have, I don't know, is if the audience maybe can jump in and ask questions, either in writing or live, which I'm more more than happy to, to answer to, even if, if it's, it's just been know what an I and half.

01:38:10:00 - 01:38:13:04

Christian Soschner

Hour and a half. Yes last time time time flies when you have fun.

01:38:13:06 - 01:38:35:10

Bruno Montanari

But yeah, it was a good conversation. Actually I didn't at the time a person clearly, but I think, I think we covered a lot already, honestly. So so I am personally more than happy to, to receive after this podcast. Any any questions? I'm totally open to that. You can reach me through LinkedIn very easily or the other several by websites or by life sciences website.

01:38:35:12 - 01:38:57:04

Bruno Montanari

You go on the team page and you click on my name, and there will be a message sent to send to me. And, and we can have further talk and, if we can have a face to face discussion as well. That's my preferred route. I'm sure those two years of painful, distance station and, and virtual world.

01:38:57:06 - 01:38:57:24

Christian Soschner

That's that's

01:38:59:09 - 01:39:15:10

Christian Soschner

can really meet again globally. It, is also, for me, necessary, like you mentioned before that. So probably we are from an old generation. That, loves meeting in person. Bruno, if you agree, I will put your contact data in the description of the podcast.

01:39:15:10 - 01:39:17:07

Bruno Montanari

For sure. With the.

01:39:17:07 - 01:39:25:00

Christian Soschner

Articles. I would like to thank you very much for your time and for giving, great insights into the VC world. And

01:39:25:04 - 01:39:37:09

Bruno Montanari

Well, many things for an invitation. It was a great moment, and, I liked it a lot. I hope there will be more of those. Thank you question. And thank you. Thank you to the audience for for those who attended during this, this podcast. Thank you.

01:39:37:11 - 01:39:38:16

Christian Soschner

Eric. Have a great evening.

01:39:38:16 - 01:39:39:22

Bruno Montanari

Bye bye.

01:39:39:22 - 01:39:48:08

Christian Soschner

Thanks for listening. Please, please share the podcast and make sure you've subscribed. Have a great day!