EP 161 - Enis Hulli: VC Secrets Exposed: Why Only US-Based Startups Dominate (and How to Beat the Odds)

Why do Europe’s brightest founders still feel forced to leave for Silicon Valley—no matter how much money or talent we pour into the region?
 Every year, ambitious startups across Europe and CEE struggle to scale—not for lack of ideas, but because of invisible barriers that keep global success out of reach.

Is it really just about capital—or is there a deeper mindset and playbook that only a handful of founders ever discover?

In this episode, venture insider Enis Hulli (General Partner at e2vc, investor in 40+ startups, 3 unicorns, and builder of bridges from Istanbul to the Bay) pulls back the curtain on the real reasons US-based startups keep winning—and how founders from Turkey, Eastern Europe, and beyond can finally turn the tables.

🎧 Watch now to learn:
1️⃣ The “power law” that decides which founders build generational companies—and why most never see it coming
2️⃣ Why relationships, not pitch decks, determine who actually gets funded—and how to break through if you don’t have the right connections
3️⃣ How emotional resilience and founder mindset shape the fate of entire regions—not just individuals
4️⃣ The little-known risks of playing the European “safe game”—and how to engineer luck for outsized results
5️⃣ Tactical lessons on team building, brand, and why your anti-portfolio (the deals you missed) might matter even more than your winners

👤 About Enis Hulli
Enis is General Partner at e2vc, a leading early-stage venture fund focused on scaling tech startups from Emerging Europe to global markets. With investments in 40+ companies (including three unicorns), he’s spent his career helping founders unlock the path from local player to world-class leader.

💬 Quotes That Might Shift Your Thinking:
(01:30:44) “I don’t think we’ll see founders choosing Europe over the US in our…”
(01:34:37) “There are twenty different ways to kill a reputation on any side of the…”
(01:38:31) “To avoid complacency, I surround myself with people who make me feel like I…”

🧭 Timestamps to Explore:
(00:16:58) How the Bay Area’s Talent Network Effect Became Unstoppable
(00:20:48) Work-Life Balance vs. Blitzscaling—What It Really Takes to Go from Zero to One
(00:25:43) Why Founders Trump Pitch Decks Every Time
(00:30:38) The Perils of Planning for an Exit Too Soon
(00:34:34) The Three Qualities Every VC Looks For—And Why Mindset Still Wins
(00:40:30) How IPO Markets Shape (and Break) Venture Capital
(00:43:52) Fundraising Mistakes That Kill FOMO and Crush Deals
(01:12:58) Why Bay Area Mindset Still Outpaces Europe’s Best
(01:30:44) The Real Reason Europe Loses Its Unicorns
(01:34:37) Reputation, Relationships, and the Hidden Dangers of VC Control
(01:38:31) How Top Investors Avoid Complacency and Stay Hungry

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🎙️ Beginner’s Mind ranks in the Top 10% globally—and is recognized as the

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Transcript

Why Europe Still Loses Its Best Founders to Silicon Valley

Christian Soschner 0:00

Every year Europe produces world class tech talent and yet nearly every founder with global ambition still backs their backs for Silicon Valley. Why is it that despite decades of effort, Europe struggles to keep its best entrepreneurs? And what if the real problem isn't capital or ideas, but a hidden mindset gap that shapes the fate of entire regions. If you have ever wondered why billion dollar companies keep emerging from the Bay Area while so many European founders feel trapped by bureaucracy, this conversation holds the answers. Because what's at stake isn't just personal success, it's the future of how innovation, wealth and talent move across continents.

Why Founders Still Choose the US Over Staying Local

Enis Hulli 0:55

But that making such a big shift, so much so that founders who are gonna build in the US would actually not go to the US and stay in.

What Separates Generational Companies from the Rest

Christian Soschner 1:03

This episode dives into what separates those who build generational companies from those who get left behind, from the power law that makes or breaks venture capital, to why relationships not pitch decks determine who actually gets uh funded and how emotional resilience, not market timing, decide who survives the chaos of global tech.

Reputation: The Invisible Currency in Venture Capital

Enis Hulli 1:32

You would basically be ruining all of it by doing uh by not being laser focused on your core activity, reputation. It's all about reputation.

Christian Soschner 1:40

Today's guest, Anis Huly, isn't just any investor. As a general partner at E2BC, he's led investments in more than 40 startups, including free unicorns, helping founders from Turkey and Eastern Europe break out onto the world stage. He has lived the journey from summer houses in Istanbul to billion dollar boardrooms. And he is here to share the raw, unfiltered truth you'll never hear on a panel.

Enis Hulli 2:15

And to get to the next level, now we're raising our third fund, it's a hundred million dollar fund, which I can see how we're gonna raise, whether that fund can go from a hundred to hundred and fifty million, I can see that happening.

The Real Stakes of Building a Global Company Today

Christian Soschner 2:25

So if you believe the next great company could come from anywhere, or you are chasing your own impossible dream, this conversation will change how you see ambition, risk, and the real rules of the global game. But before we jump in, if you want to hear more industry leaders, top entrepreneurs, and world-class venture capitalists on this show, there is something simple you can do. Every follow, every like, every share. That's what helps me bring even bigger voices and sharper insights to you. If you want more of the best minds in the business, help us grow by sharing this episode with just one person who would appreciate it. Now let's get started.

First Time Going Live: The Evolution of Founder Visibility

Enis Hulli 3:18

This is the first time I'm doing this, so I'm pretty excited. First time doing an event over yeah, over LinkedIn, that's also live and over Zoom, but also recorded.

Christian Soschner 3:27

It's the first time that you do an event over Zoom.

Enis Hulli 3:31

I think so. Or maybe people don't even add me. Oh really? Not over Zoom. Over LinkedIn, that's done on Zoom. So it's like a LinkedIn event that is a LinkedIn event page, but then the streaming is over Zoom.

Christian Soschner 3:43

That's that's awesome. I think it's uh let me just think I think it's 200 200 live streams that I did since the start of the pandemic.

How Technology Changed Communication in Business

Enis Hulli 3:52

Nice, nice, nice.

Christian Soschner 3:53

I love how technology evolved. I mean, when I think back 10 years ago, I think we were on GoToMeeting, um, which was it worked, sometimes it didn't.

Enis Hulli 4:03

Yeah, true, true, true, true. I I used a couple of different pieces of software, but I don't I don't remember their names. Um, yeah, I don't remember. This was like yeah, pre-pandemic, me trying to do my own podcast era.

Early Podcasting Days and Startup Curiosity

Christian Soschner 4:15

Anis, where do you call from today?

Enis Hulli 4:18

I'm currently in our summer house um in southern Turkey. I decide to spend the week here, so we'll it's my summertown, and then in two days we're gonna go to my wife's summertown and then back to Istanbul. So yeah, this is me like the pre-summer spending my time in the summertown era.

Christian Soschner 4:36

Uh southern Turkey Turkey is uh is beautiful. I was, I mean, I I'm a tourist. When I go to Turkey, I'm a tourist basically. So I know the the I think the I don't know if it's still the biggest tourist hub, uh SIDE. It's uh in the southern part. Side, yes, still is.

Enis Hulli 4:50

I've never been actually.

Christian Soschner 4:51

I I love the the Mediterranean Sea, it's really beautiful. Yeah, but for me in August, in August and July, it's pretty hot in the southern part of Turkey.

Enis Hulli 4:59

It is, it is, it is, and then in like July, August, you try to go to the northern parts of it with also some towns, and then yeah, you basically, you know, you you immigrate, you go from south to north as the the um summer progresses.

Christian Soschner 5:14

What do you recommend for tourists when they want to spend the summer in Turkey? What is the best best part for that?

Enis Hulli 5:22

Depends what they want. Like if it's if if it's partying, then it's a Cheshmer boatroom, I would say. Um, if it's more like family life, kids, etc., then the summer town where my wife is from, Kalkan is actually pretty amazing. Nature is great, you can have your own boat, go out with the boat every single day, and it's everything's much more calm. Um, the city would sleep after midnight, etc. Then I would go for Kalkan, for example.

Christian Soschner 5:46

The city sleeps after midnight, really. That happens today in summer.

Enis Hulli 5:50

Yeah, it's it's it's all older people. Yeah, it depends. There's the different segments of it, you know. It's like a mobile gaming company with different segments of users. So that segment of users that that's what they want.

Christian Soschner 6:01

Yeah, Turkey is huge, so you can uh segment the country for different types of uh interests. Exactly, exactly. So you grew up in Turkey, obviously.

Enis Hulli 6:13

Yes, so I grew up in Izmir, which is the third largest city in Turkey. I I was born and raised here, I went to high school here, and then I went to Canada for school. So the first time I actually moved abroad was for college back in 2009.

Christian Soschner 6:27

Why this was one question when I read your material uh that sparked my interest. Why Canada?

Enis Hulli 6:34

Uh I was stupid, I think. I was gonna go to the US. I actually made an early application to Northwestern uh for E and Pulse. I got in, I was gonna go to Evanston. Um, but then my family is full of engineers and they were kind of mobbing me as to why I'm not studying engineering. And it was already too late because in the US, after you did an early application and you got in, you cannot reapply to any other college. You've actually basically accepted your offer. So I was left with Canada. And my uncle and my cousins live in Toronto, that's why I did U Toronto and McGill. Got into both of them, and then the reason why I chose McGill over U Toronto was I think Montreal seemed to be a more fun city, more European lifestyle. I don't know, close to New York. I can go there whenever I want, was my line of thought, which is not true, I would say. So it was a bad call, but that was what I think, what I was thinking back in the day.

Discovering Startups: The Turning Point Moment

Christian Soschner 7:22

Yeah, this makes sense. I mean, Canada is a beautiful country, and New York, not far away, uh airplane. Yeah, yeah, exactly.

Enis Hulli 7:30

But yeah, I never went again. So I I actually didn't attend my own graduation. I finished school, came back to Turkey, and never been to Canada again. So it's been 12 years. That I mean, I liked my student life there, but I think that was it. I only liked my student life.

Christian Soschner 7:44

Student life is always great. And then you made an interesting pivot. Uh, civil engineer engineering pressured by your family, and uh you studied in in Canada, and then you decided to go into venture capital. What sparked this transition?

Enis Hulli 7:58

I was I was getting really so winters were cold, it's negative 20 degrees, you're in Montreal. Um, you're you're freezing to death whenever you go out. So, first year you can go out, party, whatever, first year passes. Second year, I was obsessed with football. So I was playing all sorts of different football games, etc. Sure. Third year, I was super bored. That's when I learned about the whole startup world. And my girlfriend back then, my wife now, lived in London. So I was going to London pretty frequently. Uh, I also didn't like civil engineering at all, so I wasn't going to school at all. So in London, I met with the startup world, um, learned about this thing that you know, young people are building startups, they're fine, they're um they're founding companies, etc. So I joined a startup called Good Buzz. It was the marketing tech technology um based out of London. I was still living in Canada, but the co-founder was in London. So we were trying to build a marketing tech company for a year and a half. Didn't work out well. We were never able to raise a series A. So that garnered my interest into the startup world while I was still in college. Post-college, I did some mechanical engineering for like three, four years, but I think I always had it in mind where I wanted to go back to the startup ecosystem because I vividly remember doing mechanical engineering in the eastern parts of Turkey in a construction site, but I would be listening to this week in startups, for example, um, in a weird remote location in a construction site. So I think I always had it in me that I wanted to go back to the startup world. I just didn't know how or with what role. And then it turned out to be venture capitalist.

Christian Soschner 9:22

How did that happen? How did it happen that you uh jumped into venture capitalists?

Building the First Fund: From Angel Network to VC

Enis Hulli 9:27

I think I'm I think I'm too risk-averse to be a startup founder. Um, I think I would always be a founder, meaning I would find my own company. It wouldn't necessarily be a startup where it's you know high stakes, high risk, high return. I'm too risk-averse for that. But to invest into people like that, I'm not that risk-averse. So first I wanted to start angel investing just to realize that my capital is nothing. So I start, I tried to turn that into an angel network called First Seed, where I would um I've I garnered interest from people who are looking into the field, young people in Turkey, so that we'll all chip in 50k to 100k, 10, 20 of us, so that we'll be deploying 500k to a million, for example, in a span of two years. But while building that angel network, I met with 500 startups and they had this model where they were growing internationally, they would enable GPs to raise funds with their name. So it would be for us, it was 500 Istanbul, the first fund in Turkey. There was 500 Southeast Asia, Japan, Korea, Mexico, etc. So we made a deal, we made a partnership with them to do fund one. So me trying to build my own angel network quickly turned into me trying to build my own small microfund.

Fundraising in 2016 vs Today’s Market Reality

Christian Soschner 10:32

When did your first fund start?

Enis Hulli 10:35

When did I first fund what?

Christian Soschner 10:37

When did your first fund start? Which year? Which year?

Enis Hulli 10:40

Oh, the fund is mid-2016. So I think mid-20 mid-end of 2015 is when I met with 500. Beginning of 2016 is when we started fundraising, and then mid-2016 is when we actually closed the fund. Um, and throughout that time, I was also doing construction. So I was doing mechanical engineering, heating, ventilation air conditioning. So um, during the day, I would be in the construction site doing heating, ventilation, air conditioning. During the night, I would be talking to people, trying to fundraise, go to incubation centers, go to accelerators, meet with startups, etc.

Christian Soschner 11:08

That makes me a little bit curious. Uh, you started your fund in Turkey, which is clear. I mean, you are from Turkey, so that you do something for your own home country is quite natural. My question to you is how did you perceive fundraising for a fund in 2016?

The First Strategic Insight: Think Global from Day One

Enis Hulli 11:24

Um, compared to today, there wasn't that many funds. Um, there were only a couple of funds that have launched and raised their funds over the past two to three years. And being in the market, we were probably the only one trying to raise. Um, so for people who are already interested in becoming LPs, investing into funds, it was really easy to access them and to have that first meeting because there weren't a lot of products or fund managers that they can look into, anyways. And then our value proposition was different. Our value proposition was to invest into Turkish founders that have um a global focus, um, if not a US-only focus, which wasn't the case before. So all the existing funds were more focused on the hyper-local ecosystem or the economy of Turkey. It was the typical emerging market thesis where if you look into markets like Southeast Asia, Latin America, Africa, Middle East, et cetera, you would find that the first generation of success stories would be local Amazon, local Uber type companies. And that's what the investors were going for in Turkey. But our positioning was kind of different than that, where we were trying to um anchor ourselves to the technology talents in Turkey while everything, so sales and marketing, fundraising, down-the-line MA, IPO, et cetera, would only gonna be in the US. So I think our value proposition made sense to that um initial pool of backers.

Christian Soschner 12:36

I think this this is interesting. You started investing in Turkey, but already early you decided that all the sales marketing and IPO, if that is an exit strategy, happens in the United States.

Understanding the Power Law in Venture Capital

Enis Hulli 12:48

So even revenue, first revenue, first customers happens in the US. I think you know how it's first the ideology that sets the culture, that sets the processes in a company. For us, from an ideological and philosophical standpoint, we believe that VC only made sense if you're writing the power law. If you're not writing the power law, then this asset class stops making any sense. And to be able to write the power law, you have to do equities in the US. Um, Europe, even Europe, a very mature rich market like Europe, failed to create a single Deca corn in a decade now, almost. Um, so that tells you something. Whereas if you look into funds in the UK, which is much more connected to the US, Estonia or Israel, you would see that you know these unicorns and decaces are being born year in, year out. That says something. And we try to, I think philosophically speaking, we believe that equity is the US game. And to make return in the um in the venture capital space, you have to write the power law. If both of these statements are true, then you have to play this game in the US.

Why the US Dominates Venture Returns

Christian Soschner 13:44

So investment in your fund means that you take the company, local company, and bring it to the United States at the end of the day.

Enis Hulli 13:52

It's 50-50. I would say it's a two-way street. So half of the portfolio are founders who are already based in the US, they want to employ technology teams back at home. And they see us as a bridge to back at home and talent operations back at home, et cetera. Whereas half of the portfolio are founders who are already based in Turkey, or not based in the US, but they want to move to the Bay Area and they want to have their engineering team back at home, but they would be spending the majority of their time in the Bay Area. So that would be the that would like an equal split of our initial portfolio.

The Two Types of Founders: Local vs Global

Christian Soschner 14:19

What does your European soul say about this strategy? So let's just take you out of venture capital for a moment and look from the European or Turkish perspective, European perspective, uh, Middle Eastern perspective. I mean, I hear this story all the time. We start here in Europe, Middle East, um, and then move to the United States because we need to play the game and the market is just bigger and you have more investors. What does your soul say about that strategy?

Blue Ocean vs Red Ocean: Choosing the Right Game

Enis Hulli 14:44

Uh, my soul and my consciousness is fine about that strategy. I think um what's important is how do you want to play this game? If you want to play the game of blue ocean markets, so newly emerging technologies that are just getting um being hyped about you don't know when the market is gonna mature, if it's a year, five years, you never know, then that game is a very US game because you need high enterprise budgets, higher ND budgets. Um, enterprise software spending in the US is larger than the rest of the world combined, excluding China, et cetera. So that pushes you towards that. If you're if you want to play the game of investing into more mature markets where you see how big the market is, you see the competitors, you know the nuances and different differentiations that you can um build as a company, whether that's on the product layer, go-to-market, customer segment, et cetera, if that's the game you want to play, you don't have to necessarily go to the US. But then at least in our DNA, we were more tailored towards blue ocean markets and founders who are building technologies in these very nascent spaces, there we're taking a big, big market risk. And the market might never mature to be big enough or might get commoditized pretty fast with another big tech player. We're taking all of that risk. What the upside is if the market matures, then you're very well positioned because you've taken that position over and over again, day in, day out for the past whatever how many years. Since that's our thesis, if that's your thesis, and since that's our thesis, you have to play a US game. But that's not the only thesis in VC. There are a lot of different theses that you know funds can build upon, and not all of them have to have this um US bridging strategy.

Why the Bay Area Still Wins the Innovation Race

Christian Soschner 16:10

No, it speaks a lot for the United States and uh a lot less for Europe, unless you're uh a PE fund, uh private equity fund, that's a different game then. But in venture capital, I totally agree to what you say. I mean, you have a lot of talent uh flocking to the United States from all over the world, higher valuations, more capital available, and uh it's not even the US, it's the Bay Area.

Enis Hulli 16:33

So if you if you exclude the Bay Area from all of the metrics and look at US minus the Bay Area, compare that to Europe, you might Europe might even win in everything, in like number of talent, number of engineers, number of unicorns. But Bay Area has this super strong talent network effect where talented people want to be with other very talented people, and that's a the sclywheel effect just makes the difference a special place.

Christian Soschner 16:54

But why did this happen? I mean, um, I'm reading currently the book uh The NVIDIA Wave, written by Tai Kim. And in the first chapters, he writes about the 90s when NVIDIA started. And uh at the beginning of the book, there were also companies in Canada that were pretty famous. Nvidia started working with a German company, with a German chipmaker back in the 90s. So, also I'm 50 years now and grew up in the 90s basically and started in the 90s. Uh, you all felt that the United States, Canada, Europe, European ecosystems are pretty much on the same level. It didn't look to me that they are so far ahead. And then Silicon Valley just took off. My question to you is you know both ecosystems, you know the European ecosystems, Canada, London, Turkey, and United States in the Bay Area. What's your interpretation? Why is the Bay Area so far ahead? I mean, the last 30 years it just skyrocketed. Why is why did it happen?

Enis Hulli 17:50

I think the venture capital in general as an asset class also skyrocketed. Startups building equity value in a startup and then take taking that to the public is also like a three-decade old strategy. And all of them just built more modes to the Bay Area as a geography. When you take those out, when you take the capital as a moat part out of it, when you take the public markets and the fact that startups can grow and um IPO and the public markets out of it and purely look at this as RD and company building, but only those two components are still there, then I think um the these regions might be would be more comparable to each other. And that was the case a few decades ago. But then venture capital as an asset cost, capital becoming a mode, companies, startups being able to go public uh while still burning cash, while not reaching profitability for years and years and years to become just $100 billion, if not more companies, just made it natural that one place doesn't have to be the Bay Area, is gonna have this flywheel, this self-fulfilling prophecy of becoming the place. And it happened to be the Bay Area.

Culture Differences: Europe vs Silicon Valley

Christian Soschner 18:52

Yeah, yeah. And they they just keep the position. I mean, they have the capital now, they have the talent now, they have the big companies there. And this is uh not much can happen that this um really doesn't work anymore. Um, when we look not only at the capital side, but on the execution side, um, how different is the culture in the Bay Area?

Enis Hulli 19:14

From a culture standpoint, it's so different. I mean, in terms of people, people's times are very valuable in the Bay Area because they're imagine being a 10x talent, 10x engineer. Your time is very valuable. So, what you're gonna learn for the next weeks or hours or months is very critical for you. So you want to spend time on the technology that's gonna matter in the long term or learn about it or build build on it. That goes uh same to company building, where you want people who are very obsessed with their times, who want to work on particular technologies because they believe in the long-term value of that technology, and that goes to your customer relationship as well, where you want to talk to potential customers who are in turn are gonna convert into actual customers. You don't have time to waste in any of that. But when the pieces of the puzzles come together, it makes it such that it's um high trial, high failure. You would try again. Um, whether you would also switch jobs, you're not gonna be stuck in the same role for years and years and years if not if you're not growing as a person. Everyone's looking that everyone's looking for that power law, not just the VCs, but everyone from a talent from an engineer perspective as well. But when the whole culture of the city is tailored like that, the risk-taking appetite goes way higher than what it would have been otherwise. And I don't I don't like the lifestyle in the Bay Area, but people are only there for I feel like people are there because it satisfies their ambitions, their passion, their purpose in life from a work perspective. And work is 80% of a lot of people's lives, you know, and that makes a difference. And that's a complete different culture than in Europe, where work shouldn't be 80% of your life, or you shouldn't find your life's purpose in work. The moment you say things like that, um, and if a lot of the people, you know, if you're a potential customer, if you're an engineer, if you're a founder, thinks like that, the whole culture is, you know, just different.

Can You Build a Unicorn with Work-Life Balance?

Christian Soschner 21:00

In your opinion, is it possible to build a unicorn or the next trillion dollar company um with a work-life balance that is uh four days work and the rest is um downtime?

Enis Hulli 21:16

It is possible. I mean it it matters. Is it possible to get from zero to one like that? I don't think so. Is it possible to go from one to ten? Maybe ten to a hundred for sure. I don't think you can sustain an unhealthy work-life balance for a very long amount of time. It this should be, at least for me, it's more in in sprints rather than continuous like that. It's more of a step curve function. Um, so can you build a decacorn with a uh work life balance as a founder? You can. Can you go to zero to one like that? I don't think you can. I think you need that, you need that um you need that bump, you need that um speed run in general.

Why Obsession Matters in the Early Startup Phase

Christian Soschner 21:52

Why is it so important in the beginning that's uh the full focus on the on the on the task at hand?

Enis Hulli 21:58

Because other than first. It's only you as the founder, you are the company. Um, you are 100% of the company, if not 100 times 50 of the company. The other people can be building, can be just you know, um, wouldn't be adding much value, but dragging you down as a founder. Sometimes even that happens. Um, but then over time you build inertia, you build inertia where such that you are the company is not just you. I mean, you're just one component of it, and that's where you know, um, you having a healthy mindset becomes more important, work-life balance becomes more important, um, culture of the company becomes tremendously important. If you haven't done it correctly, it's very tough to switch, but um, not the case initially. That's why I think when you are the company and the company is just you, and that is the case for a while, then inertia is not there, and you being able to move fast enough, iterate, uh, be obsessed at work, where when you're taking a shower, you're still thinking about work, etc., is critical.

When the Founder Is the Company

Christian Soschner 22:49

Yeah, couldn't agree more. Alex Tang and Divia Strebelaive wrote in the book, the um The Venture Mindset, that um, on average, a we see before they say yes, look at 101 pitch decks, which makes a nice number, 101. Um, when you talk to founders from your region, what makes them investable for you?

Enis Hulli 23:14

I think it's broadly speaking, we have two types of founders in our portfolio. Founder type one is um they're uniquely positioned in their field. They've spent 10 years on data streaming technologies, they've spent 15 years building in the observability space, building a logging protocol, for example. And just by their CVs on the face value, you can understand that they're one of the top 10,000 people in that field. And then speaking with them, it's easy to qualify whether they're top couple thousand or not. I think that qualifying that picking part of that piece is not that tough. It's easy to do. Um, because they're uniquely positioned in their field, how many of those top few thousand people are going to become founders? Three, five, not more. And then how many of them are gonna be able to attract uh venture capital money to be able to turn that into a larger company? So there, I think access is tough because these are top-tier people, but picking is easy. And you don't bet on their entrepreneurial approach. Of course, they have to be entrepreneurs, they're building companies, but at the same time, their minds don't have to tinker all the time because they know what they're gonna build and they're very good at that. They're one of the top 0.01% in building that, anyways. Whereas this other half of our portfolio, our founders where they're not the top few thousand in their field. They've just getting started. That's where we there's a current ability and there's a potential ability, and we're betting on the fact that the founders are gonna um surround themselves in an environment where they can seize that upside potential and you know reach their potential ability. There, they're not top few thousand, but we believe in their entrepreneurial approach. We believe that um they'll be iterating so much for a few years that A, they're gonna grow as a person, so they're gonna become uniquely positioned in a field just because they spent a couple of years in it, and they're gonna tweak every single part of the business model, they're gonna play with every single lever so that eventually it's gonna work. Here we're taking a big bet on their entrepreneurial skill set. Here we try to qualify entrepreneurial skill set more because it has to be 12 out of 10, it's to be tremendous well. Um, and then everything else should be obviously eight out of 10. Whereas on this part, their unique position, it has to be 12 out of 10, but you can compromise a little on their entrepreneurial spirit.

Christian Soschner 25:18

That's that's a good point. When we focus on the pitch text, I mean also assume that you get a lot of pitch tags in your inbox. What's the one thing that you want to see in a pitch tech that makes you stop and say I get them on a meeting?

Enis Hulli 27:17

Putting the founders aside, because uh normally I I hate looking at pitch tags. All I do is I go and look at founders, and if the founder is interesting, I meet with them. I don't go through you know 15 slides trying to understand what they're building. Um it's either the because founders are the only thing that get us from zero to one. Um and then we look at everything else, but it's gonna get us back from one to zero. So if we're looking into the market, competitive landscape, metrics, financials, any of that, um, it's because we've already bullish on founders. The founders were able to get us from zero to one, but we're looking for reasons not to invest. And I think 50% of the time we find those reasons and we end up going back to zero. Um, but first, founders need to get us to one. So the only page on the deck that I look at is actually the founders. And then I even don't stop looking at that. I go to LinkedIn, I do my own like you know, five-minute research online to you know validate the founders and then want to take a meeting.

Raising Millions with a 15-Minute Pitch Deck

Christian Soschner 28:10

This is my next question to you. I mean, when you look on LinkedIn today, um, everything revolves around pitch tech. So when they look at the device on LinkedIn and uh all these uh acceleration programs, incubation programs, I think 90% of the content is how to design a pitch tech that investors invest in you, and then a real investor, you say, forget it. The most important thing for the first step is the founder. Do I believe that they can make it or not? Why is the industry or why does it look like that all the content created is so much focusing on pitch techs?

Why Exit Strategies Don’t Matter Early On

Enis Hulli 28:44

I think pitch tech is good because it gives you the clarity. I mean, it gives you a data point for you to further validate the founder. When I take that first meeting after validating the founders, before that meeting for 15 minutes, I go over the pitch tech. But not just not to understand what they're building, I don't care that much about that, but to be able to ask pinpointed questions and go into their brains, their line of thinking. Um, how they view the competition is one piece of it, but then how they view the actual market. Um, if there's a go-to-market slide, why have they put it there? If it's very weak, if it's very generic, a lot of the times you don't want anything on the pitch tech to be chat GPT, meaning like it's just generic, you know. When the moment it becomes generic, I needed a GTM slide. That's why I put it there. Type. Um, it says something because it's I think less is more. It's better if that slide never existed in the first place. And if if the founder says, I have no idea about the GTM, so I just didn't put it, it's a much better, it shows you that the founder is able to be to uh work around that ambiguity and not try to find these very custom standard answers that you know never stick. So a lot of times pitch tech matters because it gives you those initial questions, initial you know, parts where you can then pull and learn more from the founder and how um he or she is thinking.

Christian Soschner 29:56

Yeah, I think it also helps founders uh think the case through. And uh, I mean, even if it looks generic at the beginning or a business plan, you just have a template, but it really forces people to think through certain positions and come up with ideas.

The Problem with Planning Your Exit Too Early

Enis Hulli 30:10

Yeah, some pitch decks that are so as a fund, we try to do portfolio support, but the one thing where we're good at, I think, has been follow-one funding, where our portfolio raised about $3 billion in follow-one funding. And we try to work with the founders to raise those A rounds, uh say a year or two years after we invest. And regarding the pitch tech, sometimes it's so cluster crystal crystal clear in a founder's mind that pitch tech takes 15 minutes to build. It looks very ugly, no one cares because it's very nuanced and the real information is there. Um, a lot of our companies raised you know five to ten million dollar rounds with pitch techs that were prepared in 15, 30 minutes max that looked very ugly, but gave the real data points where the founder wanted to convey um into a potential investor.

Christian Soschner 30:53

Yeah, I think also the case matters more than uh the layout of a pitch tech. The case must make sense. Yeah. How important is an exit strategy to you?

Can Venture Capital Predict the Future?

Enis Hulli 31:02

So not important. I mean, I maybe our LPs don't like me for it, but in general, I mean, I don't think the best companies are sold, they're bought. So a lot of the times we don't we don't want to talk about exit strategies because A, it changes along the time a lot. B it's not a core founder skill set. It can, I mean, you can get that skill set five years in the moment you become a after you become a 10 millionaire, our business, you can start thinking about who's a strategic buyer, why, etc., if your business stumbles, you know, because businesses do stagnate, and these more at these moments of stagnation, these existential questions obviously come to founders' mind, and we want them to be able to start thinking those when the time comes. Um, not as an upside scenario, but more like a downside protection scenario. But it's not important five years before while they're raising their pre-seed rounds. In fact, if the founder has put it um in her pitch deck, or is if she's mentioning about exercises, et cetera, it becomes a 10-minute conversation where I start asking questions about their long-term ambitions, about you know, about their resilience, about their perseverance, stamina, et cetera. So it brings all of those question marks, even the fact that um he or she is thinking about it.

Christian Soschner 32:12

I have always a problem with an exit strategy when a founder or an entrepreneur or a CEO talks about it. Um got my training in the 90s in business schools. And usually what I expect is or what I want to see is that people are passionate about building a lasting company. As you said, I totally agree to what you said. Uh, an acquisition happens. So if someone wants to buy a company and it's the best way forward for the team and the idea, of course, you make it, but it should not be planned, in my opinion. And then I see pitch text today also on LinkedIn with in 18 months we sell our company, in five years, uh we start the next company or something like that. Uh, how does it make sense to you?

Founder-First vs Thesis-Driven Investing

Enis Hulli 32:52

No, it doesn't. And I really don't like that mindset because also, again, going back to the power law example, um, riding a power law, trying to build a billion dollar, if not $10 billion company, there's no way you can foresee who's gonna buy your buy you seven, eight, nine years ahead of time. I mean, let alone you're not you're not go, you don't know what the technology is gonna look like tomorrow. You don't know how the pendulum is gonna swing. Um, so you don't have time to think what's gonna happen eight years from now from an MA perspective. Those are the types of founders that we want to back, you know. And if this was my own money, if this wasn't the LP's money, there are some companies where I would want to stay in forever, you know. I don't I don't like the fact that this asset class has a firm fund lifecycle.

Christian Soschner 33:33

You mentioned looking into the future nine to ten years. What's your take on predicting the future as a venture capitalist?

The 3 Traits Every Successful Founder Must Have

Enis Hulli 33:40

Oh, I'm I'm not that. I'm I'm really not that. I mean, our thesis has been to be founder first, and the moment you become founder first, you don't become thesis first. Um, you start good you start following great founders who, in return, put you into certain theses. Yes. For example, 2016, 17, 18, we did in we did 10 investments in health tech, two of which became unicorns. It's not because we had a big thesis on health tech, it's more so that we follow great founders, and great founders turned out to build in the health tech space and during that era. 2019, 2020, 2021 has been a lot of dev tools. 2021 onwards, 2022, 2023, has been a lot of AI. You would see that 50% of our investments have been in AI. And then we had this Turkish mobile gaming throughout from 2020 till 2025. It's not because we had these ground TCCs around that, not really. Um, and I think if let's say you got bullish on AI, 2020, you're very bullish that AI is gonna come. Worst thing you would do with that unique insight, with that unique asymmetric information is to try to find pre-seed opportunities in Turkey that you want to back. You know, you can go and buy Nvidia stock and you know you would make whatever dozens of access um instead. That's why. So we're not we're not thesis driven at all, we're very founder-driven.

Christian Soschner 34:48

Yeah, I totally agree. I think predicting the future in investing is so hard, next to impossible. Uh, you mentioned NVIDIA, for example. I mean, even when I look at a public company like NVIDIA, um, I mean, now everybody loves Nvidia, and now NVIDIA is the big success story, and Jansen Wang is, I think, basically the number one hero on entrepreneurship. Uh 2018, uh, NVIDIA was just a commodity company, chips, nobody needs chips, and uh, I think they lost 60 to 70 percent of their stock price within a few weeks, and nobody loved it. Uh AI changed everything, so predicting the future, I completely agree to what you say, uh, is really hard 10, 20 years into the future. Uh uh, founders first makes sense, but uh what are the character traits? What do you want to see in founders when when you look at them? What are the three most important points they need to check off on your list?

Why Motivation Matters More Than Skill

Spotting the Founders Who Never Stop Growing

Enis Hulli 35:41

First off, I think is the the the table stakes part. So the easy part is if they fall into this one category of having that unique insight into one space, I try to validate that. Or if not, if they fall into this category, then I want to validate their entrepreneurial skills and entrepreneurial ambitions. That's easy. Second part is a founder that has a low opportunity cost, meaning they just started a business, they have nothing to lose. Anything is just gonna look better if they survive over the next couple of years. Those founders tend to have a very high risk-taking appetite because they've got nothing to lose. Of course, they're risk taking. But three years, five years in, they've already sacrificed a lot from their lives. They haven't seen their husbands, their wives, their kids, etc. It's been five years. The company is now a 50, 100 people company doing a couple million dollars in revenue. So there is something to lose. There is more inertia there. And their risk appetite goes lower naturally. Obviously, we try to build in schemes where to uplift their risk appetite high, for example, do more secondaries, make sure that the founders also get some cash out so that our incentives become aligned, where we're trying to ride the parallel and make this a generational company so that they're not you know conservative at their approach. It works, it doesn't work, but it's very tough to gauge. Um, there we're trying to understand the core motivations of why they want to build a business. And this goes back to their childhood traumas, relationships with their dads, relationships with their environments, the um all the issues they have as to why they want to sacrifice the next five, 10, 15 years of their lives into building something if they want to sacrifice that. Because if they're in it for the money, it's a good motivation as long as they need the money. The moment they go off that threshold, there's a hurdle. The moment you jump that hurdle, you you're motivationless. And it happens to us. I would say half of our portfolio are founders like that. Where and it's very sad for venture capitalists because all the stars would be aligned. Um, and it's very tough to get those stars aligned. But one star, um, which is founders still having that ambition and risk-taking appetite to go another 10x might might not be blinking. And then the company you know stagnates, becomes a tech SME. And we have a lot in our portfolio. So to validate that, you try to go to the inner core motivations of a founder. I think that's that's the humane part, that's the more psychological part of it. I'm I'm not saying we're great at it, we're for sure not. I think gauging a founder's unique insights, it's very easy to do it with a 95% accuracy. Gauging a founder's entrepreneurial skill set, it's very easy to do it with like an 80% accuracy. And you know, with that 95 and 80% accuracy is you'll be fine from a picking perspective. If you've already solved the access problem, you'll be fine in picking. But then this grander um ambitions, grander inner motivation, etc., I'd say with 50% from an accuracy perspective.

The Problem with Venture Capital Fund Lifecycles

Christian Soschner 38:21

Let's stay a little bit with under personalities. What uh you mentioned makes a lot of sense when I look, for example, back in the 90s in the business schools. Uh, it's the normal life cycle of a company. You have an idea, put a team together, you start, you take off, and then you pick, and someday the company just vanishes and is replaced by another company. And I always thought this happens to every team, it's a natural way of life, it's like uh spring, summer, fall, and winter. And then there are these personalities like Jeff Bezos, Jensen Huang, um, Elon Musk. Jeff Bezos, for example, started Amazon as a bookshop online, was nothing special back then. A lot of companies did it. A lot of companies vanished, but Jeff Bezos then said, no, let's not stop with books, let's make it a marketplace. And then after the marketplace came AWS. He placed a lot of bets internally, many failed, some worked out. In your opinion, when you look at personalities, have you found a method to distinguish uh these special types of personalities who are never satisfied, who always keep going from the other ones? What makes the difference?

When Time Becomes Your Biggest Enemy

Enis Hulli 39:30

So, in that natural course of life, you know, going from winter to spring to summer, etc., and that companies eventually die. Obviously, when you take n to infinity, everything goes to zero. Um it's fine as long as it doesn't happen because of founders' inner motivation and inner spirit and inner drive. I think that's one thing where we're trying to increase our accuracy on because we can't control all of it. You can't control some a lot of the times founders do everything super well. Um, they also have that inner core still on fire, burning. They have that risk-taking appetite, but something else happens from a tech inflection, competitive move, regulation, anything can happen, you know, and you can't control of it. So our goal is not to control um those things, those things happening from externalities. We're trying to control those things happening from an internal um founder's mindset perspective. And yeah, we're not good at we're not even good at that. So let alone all these externalities that you have to focus on. If this is a long game, a fund is a 10-year fund with two-year extensions, it becomes a 12-year fund. And um I don't like it. I don't like that fact that it's a closed loop fund. If you ask me, it has to be an open loop fund, which makes you know, and go to infinity. And the fact that everything goes to zero um is a risk. But I think with technology, there are different modes that didn't exist before. So it takes a lot, it's hopefully gonna take a longer time for these trillion dollar businesses to you know go to zero.

Christian Soschner 40:50

Yeah, you just need to catch the apples alphabet's um metas very early and just stay in it for the very long game. And the rest comes by itself. I think the hardest point is just to find it and then staying in it and with a 12-year fund.

Enis Hulli 41:05

With a functioning public market, I understand the closed loop funds because eventually everything ties back to an IPO. You either want to IPO a business or you want to sell to a company who has IPO'd, or you want to sell to a company who's gonna sell to a company who's IPO'd, etc. So there's the value chain goes towards there. But when there's a clogging from an IPO perspective, um, then the whole business model crumbles because of fund life. Um because when you if time is to your advantage, everything is great. If time is your disadvantage, it becomes your biggest enemy. And I think a lot of the funds were not there yet, but we'll be there in two to three years. A lot of for a lot of the funds, um, time became an enemy.

Why Many Unicorns May Not Survive the Next Cycle

Christian Soschner 41:43

Yeah, I totally agree. I mean, my favorite scenario still is building a company towards an IPO because it makes you bulletproof as a team. If you go for an IPO, you need to check off a lot of boxes. And by doing so, if the business model works, it becomes bulletproof. If you don't aim at an IPO, then you have uh very often problems with compliance and people just don't take it serious, and this becomes later a stepping uh um something they uh stumble over it. But with this 12 years fund period, I think one of the problems is when you have a bad market for an IPO and you need to uh return your fund, you need to force your companies basically into an IPO and can't hold them back. Is there any solution to that problem?

Financial Engineering and the Reality of SPACs

Enis Hulli 42:26

So, not really. And I think a lot of the people are gonna hit that wall. I mean, uh, music stopped a while ago for venture capital. I think after 2020, 2022, music stopped. But I guess after the music stopped, we continued to sing. So we continue to dance and sing all of us because there are capital calls, money is coming in, management fees being paid, etc. So, although the actual music stopped, the market didn't um wasn't able to, you know, go smaller. And then the large companies, large unicorns, etc., they had to stay afloat. So they raised funding in these very absurd terms with very high liquidation preferences, et cetera, just to be able to stay alive, which in return push the VCs to stay alive as well. But now there are two pressures that are actually coming. One is the liquidation pressure of you know actually returning money and doing it, doing DPI and the situation of the public markets. Um, and number two is they have to raise their new funds, otherwise, they're gonna be out of market. So I think next two years we'll see, you know, half of the unicorns die, half of the VC funds not being able to raise their new funds, etc. And it's just natural, it has to happen.

Christian Soschner 43:27

Yeah, valuations are pretty high, but now the IPO markets are back, which is basically a good thing.

The 3 Biggest Mistakes Founders Make with VCs

Enis Hulli 43:32

And they're not back yet, but they think that it's gonna they're gonna get back in the second term for Trump. So if you have this assumption that IPO markets is gonna be back, say in 18 months, and there's these there's this demand of lined up of all these great companies that have raised a lot of funding with from legitimate sources who've been looking to do an IPO for the past you know three to five years, the the easiest thing that comes to mind are SPACs, um, which might mean that SPACs are gonna be back. I don't know, that's what it looks like.

Christian Soschner 44:01

There's a lot of uh financial engineering on the market. What I never understood was what's the benefit of a SPAC?

Enis Hulli 44:08

Yeah, I mean, in this case, if you think public markets are gonna look better in two years, plus your company is gonna look better in two years, and if you think that the public thinks that, it starts making sense to you know grab that pool of uh public funding and then have another whatever 18 months, for example, um, to go public at a flat price with not enough public disclosures. Um, I I I'm not good at this from a financial engineering perspective. I I suck at it. Um, even in our portfolio companies, I think going from zero to one, I'm very passionate about it. It's not like we support a lot, but at least I'm interested in what's happening in a business. The moment it actually becomes a business, there's inertia, it's a 50 people company doing a couple hundred thousand dollars monthly revenue, etc. And then there's all these financial nuances, etc. I yeah, my my interest fades.

Why FOMO Drives Venture Capital Decisions

Christian Soschner 44:54

Yeah, no, I mean if I think the the spark makes sense for investors when they don't find uh a target to invest in, they can just structure a vehicle and then invest later for the company. I think that the FPO process was never a problem, so this is uh easy part. But when we go back uh to founders, um, and we are in the early stages and uh they start with the journey. Uh I think they have a lot of mistakes when reaching out to VCs. What are the three biggest mistakes that you see when you interact with founders that they could easily fix if they knew it to get a better success chance when pitching VCs?

Enis Hulli 45:30

I think the the the uh from a grand scheme of things, from an ideological standpoint, they have to spice the deal up, which means that they are unique. VC is not, money is a commodity, their company is not. Um Have to, as a founder, you're trying to give the message that the V V C e they invest today or they're never going to be able to invest again. Um, when whenever a VC feels that they can invest into this company a year from now, even if they do super well, even if the valuation is 4x of what it is today, if I know that I can invest, then I wouldn't invest today because time becomes my average and I can price it. Um, you have to make me not be able to price it. If I've lost it, I've listed forever. And then going back to your question and to advice, all of the advice I'm gonna give is gonna be around this umbrella. For example, doing massive email reach outs to a lot of VC funds, et cetera, makes the deal lose its spice. Or making me feel like I can get this deal whenever I want by, you know, trying to build a relationship, sending emails over and over again, et cetera, makes me feel like this type deal is not spiced up. I can get into this deal a year from now, even if they, even if they do super well. Um, and then also in the meeting, try not pushing me to a decision, zero-to-one decision, uh makes me linger. And if I can linger, time becomes my advantage. And you don't want that as a founder, you just want me to say yes or no and then move on with it because there's a lot of VC funds that you can speak with. So for a lot of fun, for a lot of um first-time founders, especially, they think from this as a relationship-building business where they have to really build relationships with a VC. So they email and email and email and email, and a lot of the times I think it it just makes a VC lose uh lose her appetite.

Fundraising Is a Sales Process — Here’s Why

Christian Soschner 47:09

Really, you think this makes VCs lose their appetite?

Enis Hulli 47:14

Yeah, because I mean VCs are triggered by FOMO. VCs are very discovered. A lot of them have moved into this industry from financial markets. They're not entrepreneurs, they're so discovers, and they only make a decision if they're pushed to it and they're FOMO'd into it, etc. Um, and you have to make sure that they're FOMO and pushed into it.

Christian Soschner 47:32

But this is basically a sales game then at the end of today.

Why Timing Pressure Changes Investor Behavior

Enis Hulli 47:37

100% sales game. It's a sales game where you have to make sure that you only have one product and one person is gonna buy it. It's not like you have 10 of it and you don't care. I mean it's very psychological, depending on which VC you're speaking with. If you treat them with a high respect and they're you know entitled to it, it might be good. But for funds that are, you know, if if if you're building in um a space where Andreessen has an edge in and you're speaking to a partner who's you know building in that space, for example, the data team at Andreessen, then obviously you have to treat them with that respect because they they they've earned that respect by investing into a bunch of unicorns in that space. But if not, then you have to treat them like commodities. Um, and a lot of the founders that I like um see VCs and the capital as just as just a need, as a hurdle, they have to jump. Um, and they do whatever they can to jump that hurdle. Eventually, it's the money that you need, you know. Obviously, things that go come with it are good. All the support, positive signaling, brand value, etc., obviously do matter, but doesn't matter you know as much as the funding that comes with it.

Christian Soschner 48:41

That's an interesting point. So basically, your recommendation is treat it like a SAGE process at the end of the day. When you speak with a VC, see the human and play an emotional game with them.

How to Qualify the Right Investors

Enis Hulli 48:52

100%. Make them speak. Make them speak. Don't pitch the whole thing. Try to turn this into a conversation where you try to understand their hidden biases and their minds so that as you're talking about your business, you'll only pinpoint to those specific points where you think they have biases. You don't have to go through the whole thing. If they don't have a question mark about the market size, don't talk about the market size. Um, you know, and from a sales perspective, push them to a decision. They either buy or they don't. Uh they can't linger. Um, and make them feel that make them feel that you're the type of founder who treats everyone like that because you want to move stuff. You know, you want things to move, you don't want any clogging in any parts of your business.

Christian Soschner 49:31

So if I interpret what you say, so it would basically be a mistake to say you have the pitch tech now, we have spoken, take your time and think it through. And when you're ready, then come back to us. You would rather recommend a way we say, Look, uh, I want to move forward, my team wants to move forward. Uh, how long does it take for you to make a decision?

Enis Hulli 49:54

Exactly. Makes sense. I think a very condensed sales process is good. So 15 days, 20 days talking to 100 VCs, it's good. Um, but very condensed. The more a deal is in on the table in the market, you hear about a deal two months later, you hear about it again, etc., creates this negative signal, uh, which makes the deal, which makes the VCs lose their FOMO. You know, you have to play the FOMO game.

Creating Urgency Without Saying It Directly

Christian Soschner 50:18

What do you think about uh separating the deal phase from let's call it a marketing phase or relationship phase? Because at the end of the day, to understand biases, you need intel about the VCs. Um, so my advice to a founder would be reach out to VCs, meet VCs to understand what's the sweet spot, do they have money to invest? Um, are they actually investing, are they divesting to understand their biases? Uh how do you see this approach? Is this uh not good? Is it good?

Why Sales Skills Are Essential for Founders

Why Cold Outreach Rarely Works in Venture Capital

Enis Hulli 50:48

Yeah, I think they should know if uh I mean learning about the vintages of funds, their deployable capital, um, etc., has to be more um easier to grab, either getting intelligence from other founders or doing an online research. Because trying to, I understand, I mean, we're fundraising for our fund as well. And to get one LP interested to a meeting takes an effort. You know, you do a long list of 100 people you want to meet. From that 100 people, you find 200 connections so that you would ask two for each one. Um, from that 200 messages that you've sent, hopefully 30, 40 of them are going to turn into double opt-in intros. And now from that 30-40, hopefully 10 would want to meet with you. So you're having 10 meetings after all that effort. Um, the point, the point that I'm trying to get is if you do all of that process for unqualified leads, so funds who have who potentially might not have any deployable capital left, who are in between vintages, et cetera, then it's just so much work. I think you have to do that homework before you meet the fan, meet the fund. You and then asking about the funds um approach is good because it makes you seem like a founder who has options and who are qual who's qualifying which fund to take into the round because you have options. But then those questions have to be more nuanced and to the point, not like how big is the fund, um, how much um have you started deploying, what's the vintage? Those are like easy data points to grab.

Christian Soschner 52:07

So qualifying makes sense, and uh teams basically should do that at the end of the day. But when they start fundraising, when they send an email to raise funds, they should put a time ticker on it and say we want to be done in 180 days, 90 days, whatever.

Enis Hulli 52:23

Uh, so saying that makes it like a goal. It has to look like a reality rather than a goal, you know. And the way to do that is again like a sales process. But if someone books a meeting, if you email today and they book a meeting for 12 days from now, it's been a it's a long time, 12 days. In the 12th day, you should be like, there are some funds who are interested, who are already in the data room. I can send you the data room, but I would need a decision next three days, etc. So it's it's not like sending a time ticker email, it's the it's your approach, the way you frame things, the the words that you choose that you know signal that.

The Power of Warm Introductions

Christian Soschner 52:56

Okay, okay. So everything time frame matters even in VCs. I learned something new. I learned something new. I always thought in uh the bigger the tickets the less important are time frames, but obviously it's not.

Enis Hulli 53:12

Yeah, no, I don't think it is.

Christian Soschner 53:15

Okay, so say sales skills is something that founders should have at the end of the day.

Enis Hulli 53:19

I mean they sell to their employees, they sell to their company. I mean, eventually it's a sales game. So you have to be good at this part of it as well from a sales perspective.

Christian Soschner 53:28

Yeah, no, absolutely, absolutely agree, absolutely agree to that. Um when people use direct messages on LinkedIn, what's uh how should it look like in your opinion?

Why Intermediaries Kill Your Deal Momentum

Enis Hulli 53:41

So getting a direct cold outreach to a VC has a very low conversion rate. When you look into uh when you look into the investments we've done so far and we've we've invested into 75 different companies, how many of them were through call LinkedIn outreach is zero. Hypothetically, it might work if both um if I knew about that, I if I knew of that person and she knew she knows about me. If that's the case, then it's not that cold of an outreach because we're in mutual circles. So it makes sense that she didn't bother to find a mutual to reach out to me, but she just messaged me called out, right? Then it would work. But if it's like we're not in any of the circles with each other, if we don't know of each other, and it's a right called LinkedIn outreach. If it looks good, if the founders, you know, uh pedigree is good, I would want to get a first meeting, not myself, but maybe someone from the team. But the chances of that converting is super, super low. So my advice is if it's a if you know of me and if you think I know of you, cold outreach would make sense because why bother? But if not, then it's much better to go through a mutual.

Christian Soschner 54:42

So warm introductions still matter today?

Enis Hulli 54:45

Um, 100%. I mean, all of our investments have been through warm introductions and mostly not warm introductions to VCs, because VCs are incentivized to do warm introductions, they're already on the cap table of a company. But warm introductions through other founders, operators, etc., are where the bulk of the I I dissected that, but I think I'm making this up right now. But I looked into it back in the day. Out of our 75 investments, about 40% of them were founders that we already knew from before. Um, about 40% of them came through mutuals, about 20% of them were our called outreaches, where we called outreach to that founder to our data-driven stack, whatever that means.

Christian Soschner 55:21

I always thought um warm introductions are something that um is part of social capital. And um, you naturally play that when you see a company and Noah VC and you think they have a lot of overlaps, uh, naturally you make an introduction. And then I learned, I think it started 10 years ago, that there seems to be an entire warm introduction industry, which you always found a little bit confusing, where companies start reaching out and say, look, we buy uh we pay a success fee when you make a warm introduction.

Relationships: The Only Real Asset in VC

Enis Hulli 55:49

Um there's an intermediary in between who's doing the introduction. I for me personally, it's an immediate red flag because it's so easy to me. Um, why bother with an intermediary? And I think for a founder, this is like marriage, you want to build that relationship yourself. You don't want to outsource that relationship building part.

Christian Soschner 56:10

Okay, no, totally agree to that. But it's good to remind people that uh do it yourself, uh do it through real real worm introductions and not uh hire an intermediary who just puts you in a catalog and sends it around to as many VCs and hopes for a lucky shot.

Why Venture Capital Is Still a Human Game

Enis Hulli 56:25

Those also it commoditizes you. I mean, working with an intermediary and intermediaries do send us emails every now and then just makes you one of the eggs in that basket. You know, it's like some VC funds also do it. I hate it. Some VC funds would send these periodic emails where like companies in our portfolio who are fundraising, and there would be like a list of eight companies, for example, who are fundraising. It commoditizes the opportunity so badly that you know, you know, you want the other part, you want the other potential investor to feel like you're sending her this deal because of whatever reason you have, because you think it would really fit their thesis, blah blah blah. But you've actually given some thought and you've only selected a handful of VCs where you want them to participate in that deal, and you're just sending it to them personally, not making an email blessed to you know 100 different connections that you have, because everyone has VC connections, everyone has a thousand VC connections, but try to pick and choose which ones are the best for which opportunity.

Why Early-Stage Investing Feels Like Marriage

Christian Soschner 57:18

But isn't that a little bit um I would house relative first that isn't that a little bit the result of the data-driven phase that we commoditize everything, put everything into lists and send lists around and care less about relationships, while for VCs, and you mentioned it, uh relationships matter.

Enis Hulli 57:39

This is its own, I mean, the the only thing that matters is the relationships. If you like take everything out of our business today, everything out of it the track record, the pedigree, the LPs, the capital, the team, the branding, take all of it out. Just leave me with the relationships. It's so easy. Give it a year, it's gonna look like the same. Do the opposite where everything stays the same, but the relationships are foregone, it will take another 10 years to get there.

Christian Soschner 58:06

Yeah, yeah, yeah. That's true. That's true. That's true. Another relationship at the end of the day. Yeah, focus on that and never forget. I mean, this is why I'm not so worried about artificial intelligence replacing people. It's always a human game at the end of the day. And all companies that had the approach, uh, I take all people out of a business, uh, then there is no business anymore.

The First Investment: Lessons from Carbon Health

Enis Hulli 58:25

Yeah, it's a very personal and emotional business as well. I mean, if you if you're a bank, you're trying to give debt, if you're trying to give a loan as a bank, um, and you're getting a mortgage for your house, for example, you don't care which bank you work with, you look at the rates, which whoever gives you the best rates, you choose, because for you it's a commodity, you just need the capital and the best payment terms possible. Um, but moving on that spectrum from giving getting a mortgage to doing an equity investment on a pre-side opportunity turns that into a marriage. You might claim that any equity deal is marriage, it's not because when you're when you're um when you're a series C company and there's a series C fund investing in 15% of your company, it is a marriage, but it's a marriage with the company, not with you. Um, whereas here you are the company, so you are the only thing that matters in the equation. So it becomes a very, very um personal game.

Christian Soschner 59:14

Yeah, completely clear. I think even even with with with loans uh with modcatches, I think even that matters. The interesting thing that I had observed from the human psychology standpoint is now with social media, uh, yes, at the end of the day, interest rate matters, and maybe this might be the first part that people look at, but then they get on social media, then they find who runs that bank in the end of the day. How do they think? Uh, do they have the same values like me? For example, I mean, we have a lot of go a lot a lot going on on politics, and do they think uh climate stack matters, or are they more from the other side and think the oil industry matters? And I think these little nuances become more and more important, especially when people put more content on social media.

Enis Hulli 59:55

True, true, true, true. I think there's the difference is it's not personal, it's the firm and the firm's and what the firm represents, you know, from an ideological standpoint. I hope VC becomes like that too, because for some VCs it is the firm is much larger than the individual, but at least um smaller VCs who are you know sub-10 years old, etc., it's more personal than firm. The moment it becomes firm, then you've built something bigger than yourself, and I think it would feel amazing. Uh, but a lot for a lot of the VCs it's not there yet because it's just you know, yeah, all of us were trying to prove ourselves, basically.

Christian Soschner 1:00:30

That's true. That's true. When we look at your career as an investor, I'm curious to learn what was your first investment? What's the story behind it?

Why Founder Quality Became 100% of the Decision

Why There Is No Pattern to Finding Unicorns

Enis Hulli 1:00:39

Um, our first investment um would be carbon health. It's a health tech company in the US, became a unicorn, raised a billion dollars to date. But when I started venture capital, um, Erbil, um, who's actually now one of our portfolio founders, um, this company called Huma and the Crypto Web3 smart contracts space. Um, but Erbil was the was the first advisor to the fund. And he back then he was doing personal investments, and one of them was Carbon Health. And we agreed that the moment we raised the fund, we're gonna get that asset into the fund on cost. And while I'm fundraising for the fund, I was pitching that deal because there were two deals that we already did. One of them was this one, the other one was a DevTools company. Um, and now with Carbon Health, the company pivoted a dozen times. I mean, it started as a patient engagement solution, it moved into an end-to-end clinic solution with the software. Founder realized that this is not working out, so he decided to build his own clinic to better understand the needs. So we ended up having a clinic in downtown San Francisco where you know they're actual doctors, and you know, it's it's a it's a clinic. Um, and then he realized that to grow this brick and mortar business, he needs to do mergers and acquisitions, so became a very acquisitive company would be buying small clinic chains around the US, and then obviously became a unicorn. Um, my learning there was um Eran, the founder was actually the founder of Udemy before, which is a company that went public in the education space. He went from the education space from a personal itch. His personal itch was that growing up in Turkey, he had to walk miles and miles at snow to a school that only had one room. It's a one-room school where um students in the first, second, and third grade will be bundled into one room. Um, schools in the fourth, fifth, sixth grade will be bundled into one room, and they would get the same education because there are not enough teachers. So that made him become very passionate about uh making um education much more accessible, obviously using the internet. And then going into the health tech space, he had a personal issue with um his mom's health, which pushed which pushed him um towards a direction of like how everything needs to be much more integrated and embedded in health tech, so that you would be doing your tests, you would be going to the doctors, et cetera. Everything has to be in one space um from a software layer perspective. So he built the software layer, turns out there's no adoption for it. So he had to prove the point himself by building a clinic chain. It made me understand the importance of the founder, importance of pivoting. He not only pivoted the industry, I mean, as a from a personal level, going from education to health tech, he also pivoted the business model multiple times. And um, starting my journey as a venture capitalist, I would say 80% of my decision making was founder focused. Founder gets you 80% there, but then you look at everything else, it became 100% afterwards. So I think 2018, 2019 onwards. I've I mean, in the company, whenever we're um discussing deals with my partner, we only discuss founders. We try not to touch anything else. So we don't look at the competitive landscape, oh, but their metrics are good, their financials are doing super well, etc. We don't talk any of that.

Christian Soschner 1:03:36

Carbon Health was founded by the founder of Udemy. Did you understand this correctly?

Enis Hulli 1:03:41

Yes, so the founder of Udemy um after you know being moved out of Udemy, started Carbon Health, and we did the pre-seed back in 2016.

Christian Soschner 1:03:51

2016, that's a long time. And it became a unicorn again.

Enis Hulli 1:03:54

It became a unicorn in 2020 or 2021. It was COVID, I vividly remember. I was in my study room, carbon became a unicorn, I got out of my room, and my wife was there in the living room. I was like, darling, we're rich. Not the case, because VC doesn't work like that, but I vividly remembered that moment.

Christian Soschner 1:04:13

Yeah, but it was one of the first investments with your fund that you got into your fund.

Enis Hulli 1:04:21

And it directly became a unicorn. Not directly, but like four years after.

Christian Soschner 1:04:26

Isn't that amazing?

Can AI Replace Venture Capitalists?

Enis Hulli 1:04:27

Yeah, it was. I think it really helped us in. So it was the first unicorn of the fund. Um, and then two others followed, billion to one and insider. But um carbon pushed us to be able to do the second fund while raising the second fund, and then throughout that fundraising process, first um billion to one became a unicorn, and then insider also became a unicorn. Um, but yeah.

Christian Soschner 1:04:49

I think if just thinking about the the ray, I think it's less than one percent out of uh less than one of hundred startups become a unicorn at the end of the day. So it's really a rare revamp that you can be proud of that to make the first pick and exactly nail it what many VCs want to have.

Why Access to Founders Beats Everything Else

Enis Hulli 1:05:05

Yeah, when I look into the companies that we've backed, um, they had to have that have a unicorn status, and there are four of them. Um, and let's also count the ones that are 100 million plus. There's another six, seven there. So it's full of like 10, 11 companies, and you're trying to understand patterns, you know, in terms of the access to the deal, founder, persona, picking, um, it's all of it. So the whole value chain, there's no there's no pattern. It's so sporadic and so unpredictable that you can't, there's so much randomness involved that I can't actually pinpoint into one thing that mattered the most. And carbon was also like that. Was it my connection? Not really. Um, the fund wasn't even there yet. Um, did we have a great brand where we were able to get access to that very competitive deal through our brand? Not really. Um, so you you can yeah, it's very I think it's impossible to do to find any patterns that where you can, you know, um push through multiply leverage that's gonna take you to the next level.

Christian Soschner 1:06:03

So there is no pattern at the end of the day. So even after investing in multiple uh unicorns, there is no real pattern that you can just put in an AI and say, this is the pattern. If a company checks off all of these criteria, you we get a unicorn 10 years later.

Enis Hulli 1:06:21

No, definitely definitely not. The moment you think that you just created another blind spot for yourself, and three years later you'd be like, Oh, that was the blind spot I created, and that's why I missed this one deal. And the worst thing is in that the worst thing in venture is creating those blind spots, is what I think.

Christian Soschner 1:06:37

I read so much on LinkedIn these days about how artificial intelligence will disrupt the investment process of venture capitalists. But in my opinion, if there is no pattern that you can use to identify the next unicorn, how useful is artificial intelligence then?

Enis Hulli 1:06:54

And like if for a VC, if there are three pillars, there's the access part, there's the picking part, and then there's the support part. Um, and when people are building, when people are talking about the fact that AI can replace VC, they're only focused on the picking part, um, which for some funds might be very important. Maybe if you ask uh for some funds, it's 80% of where the value lies, and then the others are in total 20. For us, it's not the case. I think for us, 80% of the value is that access part of it because um you're trying to access that top 1% of founders. If you're not able to access them, then it doesn't actually matter how well you want you're trying to pick out of the other 99%, right? So for us, um, we think it's an access game. So 80% of the value is in that access part of it, and that's not something that an AI can mimic.

Christian Soschner 1:07:42

So it still will be a human game in future.

A Startup Failure Caused by Lack of Capital

Enis Hulli 1:07:45

Is what I think. Um, as long as as long as access to capital stays as is, it's a human game. If the market changes drastically and it becomes like mortgage, where the market grows by another hundred X and capital is readily available everywhere, then it might get more commoditized, less personal, less humane, maybe, but I don't see that happening.

Christian Soschner 1:08:07

Yeah, we need up. When we look on the other side, success, it's always great to talk about success stories. Um, what is your biggest failure story?

When Capital Becomes the Deciding Factor

Enis Hulli 1:08:17

In our portfolio, we had multiple failure stories. I mean, obviously. Um, some of them went down big, some of them went down um not so big. I think I'm thinking which one um I should pick, but there was this one company where the company raised only $1.5 million and it was going head-to-head with a US public company. Founder moved to the US. We pushed him to fundraise. We're like, you have to fundraise, you have to fundraise, but he's not American. Um, and he wasn't able to build great relationships with a lot of the VCs in the period. So he procrastinated fundraising forever. Company was growing, so it got to 30 million in annual revenue. And this um giant, this public giant was would have like a billion dollars in annual revenue. So we're eating their pie, we're getting there. Um, first they tried to put like they tried to league a strong arm us. Um, they were sending all these lawsuits, these patent issues, et cetera, which were all wrong. But you know, we don't have the capital to back our statements. And then they wanted to go through an MA process. Um, meanwhile, obviously they became too hostile. So the founders were also having these clashes between each other, but all in all, the company collapsed. Um, and uh for me it was bad because with $1.7 million raised, they went to $30 million in annual revenue, they went head to head with this um public unicorn in the US. They had a fair chance. It's just that the war chest wasn't big enough. Um, should they have another $20 million um of war chest in the bank, both to sustain operations but also the legal portion of the equation, I think the company would have ended in a very different space, in a different place.

Christian Soschner 1:09:46

What was your biggest learning from this failure?

Why Founders Avoid Fundraising (and Pay the Price)

Enis Hulli 1:09:50

My biggest learning from this failure, I think, was that for some companies, um capital is not a lagging, it's a leading indicator. A lot of some great founders they raise capital and then they um satisfy or fulfill the business um to you know um to put the foundations of it. Whereas other founders, they have to capital always lags where you go to this next milestone to unlock this new amount of capital, and then you have to go to this next milestone. If you're competing in a market where your competitor doesn't have any capital issues, but for you, capital becomes a legging, lagging metric. And if the market doesn't change, because sometimes the market changes so drastically that these profitable companies end up becoming it almost becomes like an anti-fragility layer for these companies, but in this case, the market didn't change. Um, the one that doesn't have a capital issue would eventually win. And I think we should have pushed the founder um even stronger to raise that capital.

Christian Soschner 1:10:40

So at the end of the day, it was really the war chest, a bigger watch would have changed the game.

Enis Hulli 1:10:46

Yes, and it's sad because there's a lot of things that can go wrong. The team can go wrong, product, product market fit, competitive pressure, blah, blah, blah. The two things that hurt the most, I think, is one founders' inner motivations, as I've said, but second is just capital not being available. Because what you try to guarantee as a fund is that you want to make sure that all of your founders have more capital um than their resilience. You know, you want to make sure that capital is never a bottleneck in their ambitions. Um, and then you know, sometimes it works, sometimes it doesn't, but it wasn't a capital issue.

How Mindset Can Kill or Save a Company

Christian Soschner 1:11:20

When you see a founder having obviously personal issues uh with a certain part of the business like fundraising, I mean, procrastination is for me a huge indicator that he might not like it so much and uh he has other preferences. But I never understand when I see teams where someone says, Yeah, yeah, we do it, we do it, but then postpone it for a week, another week, a month, half a year. Why don't they just hire someone and put someone on the board who loves that part of the business? What hold what has holds this founder back?

Enis Hulli 1:11:53

Um, first, like getting hiring someone who's gonna have like a chief of staff, investor relations, etc. A lot of the times at these stages are also red flags because VCs want the founder to lead that effort. A good scenario would be another founder leading it. A good scenario is there are like four or five founders, and then one of them is just better at this or wants to do it, et cetera, and then you know he or she would lead it. Uh, but in this scenario, it was more like a solo founder situation, which again, uh by the way, is one of the fragilities of the business. Having a solo founder means that you know these things do happen. Whereas having four or five different founders just becomes uh just gives you more barrel um, you know, for all that ammunition that you're gonna need.

Christian Soschner 1:12:34

How would you manage then uh this situation? I mean, when hiring is a red flag at the end of the day and um there is no founder, what's the solution then?

Always Be Fundraising: A Founder’s Discipline

Enis Hulli 1:12:43

I think it's it's a mindset issue. I think if the founder had a different mindset or a different approach to it, um, and then if we were able to push um him to that different mindset, it would take some, it would, it would look ugly, it would look toxic, but I think it was the right call. We we could have easily nudged the founder to switch the mindset, you know, um, make this a survival issue because it was a survival issue. It eventually became a survival issue.

Christian Soschner 1:13:07

How can you push a person to urgency and make that clear that it's a survival issue?

Why Environment Shapes Founder Behavior

Enis Hulli 1:13:14

Uh obviously, like from a financial perspective, from a financial metrics exile cash flow perspective, doing a fragility analysis, that etc. was easy, it was already done. But I think the founder also had that you don't want to go bad with a founder, so whenever he needed capital, there was capital available from internal sources, um, which made him procrastinate more and more, which looked founder-friendly and supportive in that you know, short-term thinking. I think in the long-term thinking, it just made the situation even worse.

Managing Emotions in Venture Capital

Christian Soschner 1:13:44

Yeah. By the way, speaking, I mean, there is this uh quote from Elon Musk that pops in my mind. He was that uh higher for mindset because uh skills you can train, but mindset, you need the brain transplants to get that. And this is for me. I mean, when when we talk about fundraising, my suggestion is always uh always be in fundraising mode, always build relationships, always do your intel. And when you need money, then you already have uh the right people lined up, and you just need to then play the game that you manage or that you said, uh, create some FOMO, tell them we need money now, three months, and then we are done. But always have someone on the team who plays that game and it never steps out of it. And when I look at startups very often, they race, then they build, then they run out of money, then they race again, and it just is always a uh a disruption of the business.

Handling LP Expectations in Uncertain Markets

Enis Hulli 1:14:32

No, for sure. It's a very Bay Area mindset. Um might also, I mean, play in places where capital is abundant and you see all these founders next to you who are playing that game, you get FOMO'd into playing that game, and then that mindset goes towards that. But if you're a founder based out of Istanbul, Bucharest, Sofia, it's very tough to get stumble upon that mindset just because capital is not abundant, it's not readily available, and you don't have enough number of founders who are playing that game. You don't even know that that play that game exists. And the moment you clash to the fact that that game exists because you've just moved to the Bay Area, for example, um, sometimes you're a bit defensive, especially if you're doing businesses doing well. And then our goal is to um kill that defensiveness. Um, that's you know, that's hurting the business.

Christian Soschner 1:15:16

Never be on the defense, always on the offense. It's good advice. Um, I think I mean investing is an emotional roller coaster, right? Uh, how do you manage emotions in this high-stakes game of investing?

Why One Breakout Company Changes Everything

Enis Hulli 1:15:30

To me, it's not. I mean, obviously, we're VCs, it's not that I mean, it's it's a roller coaster for the founders, it's their only company. Um, and it matters a lot for them. For us, we have a portfolio of companies. So obviously, one company doing well, one not doing well either makes me happy or makes me sad. But A, there's a lag. I only learn about it six months later because everything's happening day in, day out, day out, and a VC doesn't know. And then because it's a portfolio, there's a buffer to it as well. You know, it hurts me less than it's hurting a it hurting me more. So it's I don't think it's a it's it's actually a roller coaster for me. A company becoming a unicorn doesn't make me, you know, crazy happy because I mean your your ego is not um fulfilled because what happened? You invested in the right company six years ago. So maybe I don't know, I should find a time machine, go back six years and congratulate myself from six years ago, but it's not my success today. It's my success from six years ago, and that guy doesn't exist anymore because it's been six years. Um, whereas a company going bust also feels the same because it's an investment you've made five years ago, for example. Um, so I don't think from a roller coaster perspective, on the portfolio layer, um, I go up or down. I go up or up or down on the roller coaster more from a founder perspective, how the firm is doing in general. And by firm, I mean the team, capital allocation, capital fundraising, our branding, our brand positioning. So those are things that I can control within my grounds, and they become more of a roller coaster for me.

Christian Soschner 1:16:53

How do you manage uh LPs? I can imagine that with the geopolitical landscape that we had in the last five years, we had COVID, then Russia-Ukraine, then we had uh Gaza, then we had Iran now. And you always see these ups and downs on the stock market. And I can imagine that also when fundraising with LPs, they also have their ups and downs because they also invest in the stock market. How do you manage that um to give future perspective, to stay positive, optimistic, and keep them going and moving and investing rather than staying put into nothing?

Enis Hulli 1:17:28

It's really easy to find all these excuses from you know COVID pandemic to SPACs to companies getting overfunded so that it's very tough for them to satisfy their value again, um, to the illiquidity of markets for the past three years, etc. There's always excuses, but I think all of these are just excuses. Because we're playing the power law game, I think the way to manage those expectations is to make them focus on one or two companies in the portfolio at any given time. It doesn't have to be the same company every single time. But as long as there are one or two companies that are doing tremendously well, then you're fine as a fund manager, you're fine as a fund. The moment there are no one or two companies that are doing tremendously well, and you're trying to manage expectations on a basket of companies who are, you know, all doing mediocre, then it becomes tough. So my I think the way we do it is we just focus on one or two ones that, you know, have actually broken out. And with fund one and fund two, we had those breakout successes, which makes me a bit more comfortable.

Christian Soschner 1:18:23

So it's uh sunshining the breakout successes and highlighting uh what works well, even when the market conditions are tough.

The Hardest Challenge: Building a VC Team

Enis Hulli 1:18:30

Exactly. Fund one to fund two, and fund one first five years was 2016 until 2021, amazing vintage. Um, for fund two, it's been 2021 till 2025, not so great from a VC perspective. And when I look at fundraising graduation, revenue graduation, and the overall IRRT of the fund, fund two is better than fund one in worst conditions, in worst uh economic environment. Um, and you know, telling that to people really resonates with them. And then um in terms of putting spotlight onto a few companies, um, it really changes your return profile by a lot. If this company does 2x versus 5x, makes your fund go in by another 10x, you know. Um, and that's when you when that's what you focus on and that's what you report on, it's it's much easier. It's much it's much easier for LPs to understand, align, and manage what they're gonna expect from the fund.

Christian Soschner 1:19:26

But isn't that isn't that concept hard to grasp initially that when you say uh when you place capital into let's say 10 companies, in the basket of 10 companies, and nine fail. I would say my my middle European, my central European mindset would say, when you have nine failures, uh you didn't do well, my friend. But in investing in VC, when you have one great company, they can really I mean there is no end. Uh, when you have one NVIDIA and they get from zero to one trillion in ten years, just exaggerating, it returns multiple times your fund. But isn't that a concept that's hard to grasp for many people?

Enis Hulli 1:20:05

I mean, it's it's hard to grasp. It's either you have to give an example of Sequoia and Sequoia's fund that had WhatsApp, which had the highest failure rate, but the best best returns, blah, blah, blah, or they see it. Um, in our fund one, Carbon Health, um, after becoming a unicorn, we had a $10 million fund where Carbon Health alone was 2.2x of the fund. Um, so on a financial perspective, when they see it, you know, they they they um they grasp it. Um so as long as I think one company becomes about 0.5x of your T VPI, it's easy to tell people they understand it, they believe in it. But when you have five companies that are all you know 0.1x um T VPI, although they're doing well, maybe you invest into 40 companies. So first they started as being 2.5% of the portfolio each, but now you have five that are 10% each. It's not, I mean, they don't see the difference between the two.

Christian Soschner 1:20:55

Yeah, yeah, absolutely, absolutely. What was your toughest challenge in these 10 years? Your personal toughest challenge.

The 20% of Work That Drives 80% of Results

Why Deal-Making Is Everything in Venture Capital

Enis Hulli 1:21:06

Good question. Um I would say team building because doing investments in fund one, um, with my ex-partner, we didn't have a team, so it was much more sporadic, solo, you believe you invest, etc. There was no there was no pattern, there was no mechanism. And then with fund two, we obviously built a team. We have 11 people in the company now, etc. And the feedback loop is so long. Eventually, you're compromising the time that you can give to your LPs, which would in return help fundraising, instead, you're giving to the team. Um, the time that you can give to deal sourcing and deal making, which actually has you know um impact, you give it to the team. And same with brand building. I see this brand as the foundation layer of VC, and then on top of it comes the two pillars of like LP part of it and the demand side, supply side, LP part of it, portfolio part of it. And instead of focusing on all this three, you're focusing on the team, who hopefully are gonna, in reverse, um, are gonna make you stronger in the long three to five years time. Um, I think that was the toughest part of it. I I still don't know whether a lot of the funds you would see that partners or GPs will be writing checks and other people would be doing the legwork until they become partners or GPs, which isn't what we do. So in our case, the the the fund, the team is very horizontally spread. Everyone does um startup, um, everyone does deal sourcing. For everyone, it's 60-70% deal sourcing. And every single second meeting with the founder is with a GP present, together with an analyst, associate, principal, etc. And when we write the check, it's our deal together with the GP and you know, for example, an associate in this case. With this horizontal culture, you expect everyone to source good deals, to find those right networks to get into so that they build a brand for themselves and then they source the right deals. That takes a long time. Um, so that's been the toughest challenge.

Christian Soschner 1:22:56

I'm curious. Uh, you have a lot of experience in VC, you beat the team, and I like this 80-20 principle. This when you look at companies, this 20% of activities that create 80% of the returns. Uh, my question to you is uh as a VC, what are the 20% of activities a VC team should do to create 80% of the results?

Learning by Doing Deals, Not by Studying

Enis Hulli 1:23:19

Deal making. In fact, I sometimes believe if it's 80-20, it's good. Sometimes it's uh 20 to 150, where the other 80% of what you're doing is actually diminishing your value that you've created in that 20% of really 100%. Um, I'm scared that anything that we're doing, which is not deal making, because deal making builds track record, deal making builds network, um, deal making, you have to do deal sourcing, so you know it increases your exposure. And then um deal making also fulfills your brand, and brand is the actual brand is the only mode on a V. Venture Capital doesn't have any modes apart from brand building, and that takes a long time to build and a long time to diminish. So the VC funds who are not doing that well today are probably gonna diminish in a very long time. It will take another 15 years for them to close shop. So, from that perspective, um, I think deal making is the only thing that matters, and then anything that feeds into deal making, I would put into that category, and that's where the 2080 lies in.

Christian Soschner 1:24:21

So it's basically talking to founders all the time, finding better deals, finding better networks, being active, being out on the market.

Why Missing Great Deals Hurts the Most

Enis Hulli 1:24:29

Yes, and and doing deals. Um, because a lot of the VCs, when they try when they become venture capitalists, they try to um they have to be convinced into doing a deal. So some VCs would actually spend two years, three years. VCs, but I mean I mean individuals who just joined the venture capital firm wouldn't do any deal for three years. Um so for those people to fulfill their ROIs, that first deal that they do better be a unicorn, you know? Because you know, this is a game of doing a lot of bets. So you have to feel comfortable and owning your mistakes.

Christian Soschner 1:25:00

So you really mean deal making, closing deals, signing checks, even when you feel you don't have all the information yet.

Enis Hulli 1:25:07

Yes. Dealing with that unknown is more important than knowing itself. I mean, it's a this is a game of dealing with the unknown.

Christian Soschner 1:25:15

So it's the core activity that you recommend to VCs is make deals, checks.

Enis Hulli 1:25:22

Exactly, exactly. And for a new grad or a junior person who's just joined the VC fund or is looking to join a VC fund, try to do deals. You're gonna learn so much, and there's no other way of learning. I don't think anything you'll read, hear from people, etc., is gonna matter as much.

Christian Soschner 1:25:38

But this forces your when you hire someone, this forces them into making decisions as well. It's not only a deal is a decision then.

Enis Hulli 1:25:46

Yes. So actually, when we for our team, we want them to push deals. Eventually it's our call. We need that push. We need that. Um, if if they're very highly convicted about the founder that they think this founder is great, irrelevant of what we feel, they have to nag us in and out, in and out, in and out, make their case, make their case. Um, and we'll never judge them for deals that turn out bad. But if there's a good deal that they missed or they haven't pushed hard enough, it's a career breaker for them. I mean, they are God knows where their career was gonna be.

Turning Missed Opportunities into Strategy

Christian Soschner 1:26:18

I read that also in the venture mindset, uh Besima Capital called it the um Besima Venture, I think, called it the anti-portfolio. How important is that? The deals that that didn't work out.

Enis Hulli 1:26:32

Oh, that didn't work out because for us, anti-portfolio are companies that did super well, but we didn't invest in them.

Christian Soschner 1:26:37

Yeah, also this one, this these two mistakes that didn't invest it and didn't work out, and the other one, um, you had it on your radar, but you let it pass.

Why Eastern Europe Became a Focus Region

Enis Hulli 1:26:47

It's important to have those because it shows access for some funds. They don't have large anti-portfolios because they didn't even have access to those opportunities in the first place. That's the worst. The worst is when in your mandate, in your geography, there are unicorns that are not in your portfolio, but also not in your anti-portfolio, is like, what were you doing with your time? We have a lot of anti-portfolios, especially in Eastern Europe. One of the things that made me build conviction on Eastern Europe is I've looked into a lot of deals that were around for a very long time. I wasn't able to pull the trigger because I felt like I didn't have a firm grasp of the ecosystems, and then a couple of them did super well. Um, and two of them actually also spoke with a lot of experts in the issue, and a lot of the experts were naysayers. I don't trust experts. I mean, I don't, they will tell you 100 ways why this is not gonna work out, but all you need is this one way where it is gonna work out, and I think there's that's their blind spot. That's why they are experts, they're not builders. Um, so yeah, that that's why we doubled down on Eastern Europe actually, because without a specific mandate, with a mandate, if you had to do 20 deals in Turkey, you have to do it. The way you do it is every single best deal you've seen in the past three months, you have to do it, or six months maybe, you have to do it. Otherwise, you just think it's not good enough, it's not good enough, which was the case for us in Eastern Europe. I didn't feel mandated to invest. There was no push to me to investing. So we re rebranded the fund, focused on Eastern Europe, just so that we created that mandate ourselves.

Christian Soschner 1:28:12

But isn't that annoying at the end of the day for UBC? Uh, when we stay a little bit with this anti-portfolio approach, that you had a deal on your radar, found internally that you don't invest in that deal, particular deal, and then it becomes a unicorn.

Enis Hulli 1:28:27

It happens a lot, it's it's very sad.

Christian Soschner 1:28:30

But how can you how can you how can you approach the situation to learn something to do better next time? What's what's your approach to this uh anti-portfolio thinking?

The Rise of Eastern European Startups

Enis Hulli 1:28:40

Yes, in some of the cases, what we thought was that um we were very bullish on the founder, but we end up not writing the check. So if you're bullish on the founder, you should write the check. So it kind of increased the weight on the founder, and then um brand signaling and what the other VCs think, etc. For some of these companies, they were in the market for a while and local VCs, you know, weren't doing the deals, but it's a very shallow market, it's not a functioning value chain. I think in functioning value chains like the Bay Area or London, you have to listen to the market. The market says something, but in very shallow and non-functioning financing value chains like in Romania, Bulgaria, etc., um, you shouldn't care what the market thinks.

Christian Soschner 1:29:19

Why did you expand from Turkey or core area to to Eastern Europe? What was the motivation to uh include that in your thesis?

Why Europe Can’t Compete with the US (Yet)

Enis Hulli 1:29:27

Yeah, so our thesis was very US focused. We would invest into founders who have a very US forced approach. And when you look globally as a region, Eastern Europe is where this is already being done. We couldn't have it expanded into the Middle East, Southeast Asia, Latin America, et cetera, because they would We're interesting into very hybrid local businesses, which wasn't core to our thesis, but Eastern Europe was um core to our thesis, where we would be leveraging the brand, our San Francisco presence. We have an office in SF. We have one we have one person in SF. So all of these things were assets that we can leverage together with our thesis um in Eastern Europe.

Christian Soschner 1:30:00

Oh, that's great. How do you see Eastern Europe today?

Enis Hulli 1:30:03

Uh Eastern Europe, I think from a unicorns perspective, you would see a lot of amazing companies coming out of Eastern Europe, all of them with a US first or a global first approach. And um, just like the rest of the market, they're all lined up for IPOs. So I think we're gonna see much more like much more IPOs that are gonna happen in the next, say, two years. What was good about Eastern Europe is they had that anti-fragility. So capital was never to their advantage, capital was to their disadvantage. Because of that, they had much better unit economics, much better profitability, et cetera, in their businesses. So when the music stopped, when the market turned two and a half years ago, all of their competitors crumbled, whereas they rose. So I think we would see that a lot of the Eastern European companies who are number three, number four in their respective um industries are gonna become number one from a valuation standpoint just because of how um cash efficient they they have been for a decade now.

Christian Soschner 1:30:55

You mentioned uh that we've been seeing a lot of IPOs from Eastern European companies. Um in Europe or in the United States.

The Taxpayer Dilemma in European Innovation

Enis Hulli 1:31:07

80% US. I think it's either US or the UK is more the question because a lot of Eastern European founders either moved to the UK to start companies or expanded to the UK after they started companies in Eastern Europe for that portion of the market, UK would be more relevant, but 80% of the case it's still the Bay Area.

Christian Soschner 1:31:27

What must what must happen in Europe that it becomes a natural decision for European founders to stay European on also on the capital market?

Enis Hulli 1:31:39

Impossible. I think the whole bureaucratic Eurocrats regulations, um how fragmented every single market is, etc., should change. So I don't see that happening in our lifetimes, to be honest with you. I can see how the US market wouldn't do as well. I can see how Euro can do much better than US dollar, but that making such a big shift, so much so that founders who are gonna build in US would actually not go to the US and stay in somewhere in Europe throughout the lifecycle cycle of a business. And this decision being the right decision, I don't think we'll see it.

Christian Soschner 1:32:19

Okay, okay. It's not satisfying for a taxpayer perspective, but understandable from the corporate builder perspective that uh I think the taxpayer also wants this.

Why Wealth Still Flows Back to Europe

Enis Hulli 1:32:28

I think the taxpayer in Europe also would rather have a hundred companies with a billion dollar valuation than one company with a hundred billion dollar valuation who's not paying that much tax. So the Europe taxpayer also wants um these companies to go not go tremendous so much so that they can lobby the government and then you know ease or optimize their taxes, go international, etc. Europe, I mean Europeans also don't want that.

The 3 Ways to Destroy a Venture Fund

Christian Soschner 1:32:53

I mean the the but correct me if I'm wrong, uh of course. The the the problem I see with with that thinking is that in Europe, uh we have Horizon Europe, we have a lot of local public funds, uh tax money that goes into the startup industry, which is fine, and it helps really moving the companies forward. Um, sometimes they become a little bit too government addicted and bureaucratic, but uh they also create a lot of interesting companies. And then from a taxpayer perspective, what happens is that the companies grow, of course, then they switch over to the United States and make an IPO there and move also the majority of the team or start building the majority of the team in the United States in the end of the day. Which means when I when I think it through that when this company goes public, becomes a huge success, has a lot of revenues, uh, there is not so much tax returns on the European side at the end of the day. We invest a lot, we take a lot of early risk from tax capital, but the returns happen then for the United States uh tax pocket and not so much for European tax pocket.

Enis Hulli 1:33:58

Yeah, I think my Europe is a great place to spend money. So irrelevant of whether you're European or not, or whether, in the example, in your analogy, the taxpayer gets back to Europe or not. Um the wealth is created and it's going to be spent in Europe. And for that's also true for a lot of the American wealth that's also created, by the way. It gets returned on being you know spent in Europe.

Christian Soschner 1:34:18

Yeah, hopefully, hopefully, hopefully. But when you are in the United States, is there a reason to come back?

Enis Hulli 1:34:23

Yeah, true, true. But then these companies and founders, etc., also you know optimize their taxes much more in the US.

Why “Value-Add VC” Is Often Overrated

Christian Soschner 1:34:33

That's true. That's true. Uh, when we go a little bit back in the conversation, you mentioned uh we talked about the anti-portfolio and also the habits that can kill a fund. When a UBC approaches you and says, What are the free activities that I should do to kill a fund quickly? What uh are the most toxic activities a VC can do?

The Only Value That Truly Matters in VC

Enis Hulli 1:34:55

Not being focused on your venture capital activity is one thing. I think it would kill a fund, both from a deal sourcing perspective, team perspective. If there are three layers of it, the deal sourcing, the team, and the LPs, you would basically be ruining all of it by doing uh by not being laser focused on your core activity, reputation. It's all about reputation, like not being focused on your fund activity is one way to kill reputation, but there are 20 different ways to kill reputation on any side of the equation, and it happens to all of the VCs. So second would be um reputation, and I would say the third would be trying to control companies. So the more you think you're better than the founders and try to put that founder my founder head on and try to do portfolio supports, try to navigate decisions, try to talk about marketing strategy, go to market strategy, um product strategy, et cetera, with the founder. You don't know when you've crossed the line, but if you've crossed the line, it's already too far. That would affect your branding, that would affect your reputation, that would affect your portfolio, um, that would affect the psychology and the mentality of your founders. And I think a lot of the first-time fund managers in places where there are not enough fund managers, especially in places like Eastern Europe, um, do fall into that trap or they think they know better. It's just that they know the chat GPT answer to a lot of the questions.

Christian Soschner 1:36:17

But isn't that a trend in VC in the in recent years? Uh, I always read about this value-added PCs who said uh we want to work with our founders. Um how how how do we approach this?

Enis Hulli 1:36:31

The real value is the value that you provide to a founder without adding any value, that signaling effect. The fact that a fund has funded you might have might lure more talent in just because the fund has backed you, it's better for your employer branding. It might be good for your visa if you're moving to the US. That name opens a lot of doors. It might be good for customers because a lot of these full customers would have this false sense of confidence in your product just because this one fund has backed you. I think that's like nine, or other funds would get FOMO'd into investing in you just because this other fund has backed you. I think that's 99% of the value. 99% of the value is the value that you provide without you know moving a finger. That just comes with your presence of being as a part of that company. And then that's not the only, I mean, not every fund has that. So you try to do your best, hustle for the founder, do introductions, uh, meet with other VCs so that you do these close contacts so that when the right time comes, you do those introductions. That's true. But these are small fine-tunings, these wouldn't make or break a company. I don't think any actual VC support would make or break a company, but the ones that actually have a big impact are the types of values that the VC does without doing anything.

Avoiding Complacency After Early Success

Christian Soschner 1:37:39

No, I totally agree. I totally agree to what you say. I think the signaling is very important. Um, but then you often experience that uh VC get support role, and then it becomes tempting to say, no, do this that way. No, let me make the introductions to VCs. And I make the introductions to industrial partners, and the VC slowly grows into an operational role. How do you stay emotional out of that?

Enis Hulli 1:38:03

Yeah, I think it comes with learning, like you have to people cross that line. Um, then they realize that it's bad for performance, it's bad for relationships. Some founders do push, try to push them out, and then it becomes a clash, and then they learn. I think for that persona um of a fund manager, that they wouldn't learn it by you know how like um smart people learn from other people, whereas for dumb people, you have to see it for yourself. I think they have to see it for themselves.

Raising the Next Fund: Scaling a VC Firm

Christian Soschner 1:38:33

Okay, okay. And the second part that you mentioned is uh I think the password is complacency, that uh which I think is always a danger when success uh sets in. In the beginning, you close your first fund, uh, nobody knows you, you are not successful yet. So it's easy to stay focused and work on the tasks that move the things forward, but then money comes pouring in, you become more famous, people know you, people greet you on the streets when you fly to San Francisco, uh, they recognize you, you get to know the big names, you close the next bigger fund, you become really famous. And then isn't that a danger that complacency sets in and distracts the entire team from the core focus, from the core function of a fund? How how do you how do you avoid that feeling of complacency in your fund?

Investment Focus: AI, DevTools, and Gaming

Enis Hulli 1:39:23

By feeling that you're not by not being satisfied of what you've done kills complacency. And then I think that you also you know you surround yourself with people or you you anchor yourself into a group of people in your mind where you're the inferior, which also kills complacency. And at least for us as a fund, um, I feel like we're not a firm yet, we're still not a brand yet. Our success of backing a couple of unicorns has been very sporadic and just out of luck. Um, and then you know, whether this firm is gonna exist 15, 20 years from now, I have no idea. And to get to the next level, now we're raising our third fund, it's a hundred million dollar fund, which I can see how we're gonna raise. Whether that fund can go from 100 to 150 million, I can see that happening too, but like that's where the ceiling is, at least for us. Um, so what is that next step? I have no idea. Can we ever reach that next step? I have no idea. Um, I think that mindset would you know kill complacency and you know make you feel inferior in a market. And I think it's good.

Christian Soschner 1:40:24

You are in the process of raising your next fund, or do you have plans to raise it?

Enis Hulli 1:40:30

No, we are in the process, so we'll close it in the next three months. Um it's a hundred million dollar pre-seed fund, uh, also focused on the Baltics, Eastern Europe, and Turkey. Same strategy, pre-seed seed, million dollar average check size, 40 companies.

Christian Soschner 1:40:44

So is there still room to invest when somebody listens to the episode to the live stream now, or are you already done?

Why Gaming Talent in Turkey Is World-Class

Enis Hulli 1:40:52

No, there is there is room to invest. I wish we were done. We're not done. It's a very fragmented LP base. So we have 116 LPs in the fund. Out of that 116 LPs, I would say about 35 of them are founders themselves. So we've been backed by a lot of founders, but then we also have um DFIs like EBRD, IFC. We have 20 different corporates, five banks, so it's a very diverse group.

Christian Soschner 1:41:14

What's your focus with the new fund? Are you still you mentioned in the material that your first fund was focused on mobile gaming? And what's the focus of the new fund?

Enis Hulli 1:41:24

Um, I would say we will do 20% mobile gaming. So the two we believe that there's a lot of mobile gaming talent in Turkey, is one thing. Second is we believe there's a lot of technical talent in Eastern Europe and Turkey. So 20% of the fund would be mobile gaming, 80% would be technical founders. Um, and what those technical founders are gonna build, I have no idea. For now, we're still betting on AI. Um, but six months from now, and you know, I don't know what we'll be betting on. So it's more, I mean, we we have lingered around DevTools and AI with fund two, with fund three, it might be quantum for all I know. I have no idea.

Christian Soschner 1:41:57

Is mobile gaming still a thing?

How AI Will Transform the Gaming Industry

Enis Hulli 1:42:00

Um, I'm not sure. So I'm not very bullish on mobile gaming, to be honest with you. Then you might ask why are you investing into mobile gaming? Um, first, because I'm not thus driven. If I was TS driven, I would have a bearish view on mobile gaming. Two, let's say I'm not, I mean, can I short mobile gaming? I can actually not short that asset. I can not invest, sure, but that's not the same. And then third, I can make this statement where the best Turkish founder I've seen in the past six months is also one of the best in the world. I can easily make that statement. Turkish talent is so top tier. I cannot make that statement in any other industry, in any other country. I cannot say the best biotech founder out of Hungary is one of the best in the world. No, maybe it's the worst founder in the world, you know, or the best um AI dev tools founder in Turkey is the best in the world. I cannot make that claim, but Turkey has that talent edge where I can make that claim, which pushes me to invest more and more into mobile gaming.

Christian Soschner 1:42:54

Yeah, gaming is obviously thinking I think uh gaming is uh one of the oldest industries in the world as well. So people like it.

Enis Hulli 1:43:01

And a lot of the a lot of the consumer adoption, consumer iteration, new technologies, etc., come through gaming. And you see these either platform shifts, medium shifts, or technology shifts that you know disrupt the market, enable new players to become unicorns every five years in gaming.

Christian Soschner 1:43:17

How how what's your take? I mean, you're an expert in gaming, obviously. Um 80s, there was always these linear games. Um, it was Commodore computers and then was uh the Microsoft-based machines, but it was always very linear. Um, now we have Alphabet, VO3, now we have uh LMs. How do you see these tools influencing the gaming industry?

Why Technical Founders Often Lack Business Mindset

Enis Hulli 1:43:44

First of all, I'm not a gaming expert. I think I if there's one thing I know, it's mobile puzzle gaming. So it's very specific. Um a lot of the Turkish success stories in mobile gaming has also been mobile puzzle. And that's the field I know, all the different uh mechanics, core loops, different games that you can play, different games, meaning different strategies you can employ, etc. I have some idea of apart from that, I have no idea. In terms of your question around um LLMs, I think it's gonna hyper-optimize gaming, which is gonna increase the upside potential because lately it has become a very um low margin business, which was also implied by the valuations, especially in the public markets. A gaming $100 million business is not the same as a AI or a SaaS or a DevTools $100 million business. There's this very large discount on that revenue multiple. If not, it becomes an Ebita multiple, and there are reasons for that. But I think that hyper-personalization can drastically that comes with LLMs. And this is hyper personalization in levels, assets, monetization, whatever it might be, it might be, um, is gonna increase the upside potential where you're gonna grasp more of the money you're leaving on the table because there's a lot of value that's created with mobile games, and there's very few whales that actually pay for that amount of value that's created, whereas the rest of the um uh probability spectrum end up the company ends up leaving money on the table, creating more value for the end customer than the value that it gets back uh through monetization. I think that's gonna, you know, um get get more optimized.

How Environment Shapes Entrepreneurial Thinking

Christian Soschner 1:45:12

You said before uh you mentioned briefly biotech, that uh we have good tech people here in Europe, uh, and they would fully subscribe that, especially in biotech and other deep tech areas, that we have a lot of technically driven founders. What I sometimes miss is uh what makes them a founder, in my opinion, is the business and entrepreneurship mindset. How do you perceive our tech-driven founders? Do they have enough uh entrepreneurial spirit business mindset or compared to San Francisco? Or is there something that we can improve here?

Why Some Founders Hit a Growth Ceiling

Enis Hulli 1:45:45

No, then definitely not that entrepreneurially um spirited. And I think it's very tough to change because it's in the core of how they for you to become uniquely positioned in your space, say in biotech, takes a decade, if not more. And by then you're 35 years old, and you have been in an you've been surrounded in an environment where some things are valued and some things are not valued. It's very tough to change that afterwards. And for a lot of the um European universities or RD centers where a lot of this um RD activity happens, they're surrounded in an environment where entrepreneurial spirit is not as cherished, or failure means a lot, success doesn't mean much, also goes for you know um wealth, wealth um generating or um fundraising or creating a company, et cetera. Whereas in the US, those are things that matter eventually. That's the environment that this uniquely positioned person, person's character is built upon, built upon. And then when they decide to become a founder, they have all the right ingredients from a mindset perspective. So I think it's very tough to change after 35. And I'm not saying that Europe cannot change that. I'm just saying that you cannot change that on a personal level.

Christian Soschner 1:46:52

How would you coach a founder when you say there is a potential to have a great idea, to have the tech, but they like the entrepreneurial spirit and business mindset, and you know the environment in San Francisco? How would you approach this situation?

Defining Entrepreneurial Spirit

Enis Hulli 1:47:04

A lot of the times those founders are happy with themselves. And being happy with yourself might be good for your psychology, might be good for your relationship, your family, but it's not good for the business. Um, in the business world, you have to always surround yourself with people that you aspire to become. And when you become them, you've already reshuffled the number amount the people around you where you're still inferior, you're trying to go overreach. A lot of our founders, um, also the one in the biotech space, um, hopefully, um, when they're going to become public and they're a company that does more than 200 million dollars annual revenue, he feels so inferior. He's like, I want to build a generational business. I'm not even a 10-year-old business yet. My competitors are generating billions of dollars of revenue. I'm nothing compared to them. And this is a company that's, you know, a billion-dollar company. Um, that mindset is lagging, lacking in those people that you've mentioned. And a lot of the times they are happy in the environment that they're in. They see themselves as top quartile, top decile in the society, in their university, etc. And then that's um that puts a ceiling on your potential.

Christian Soschner 1:48:08

Okay, so for the VC point of from the VC point of view, then simply not so not investable at the end of the day.

Enis Hulli 1:48:14

Uh for me, yes. I don't think that those are things I can change. They have to change to validate. So they if for a founder like that, if she um moves to the US, spends another two to three years, surrounds herself with the right people where she feels inferior, so that she starts to go out of her comfort zone to grow in these areas where she's never grown or she's never flexed her muscles. Um, that might change my perspective. But all of those things have to happen before I change my perspective.

Christian Soschner 1:48:44

And for investments with a new fund, uh that does matter a lot that this entrepreneurial mindset is established in a team before you invest.

How to Test a Founder Under Pressure

Enis Hulli 1:48:55

Uh definitely. Definitely. Because if I at the end of the day, we're backing founders. Um, by the way, this is something we discuss in mobile gaming in Turkey a lot, where we're seeing a lot of great founders, a lot of a lot of great product people who are not founders, and there's like a lot of them. So I'm looking into 10 deals with founders who have built games, became successful, they know how gaming works, but they're not founders. And then how am I going to pick? Should I not pick, just invest in all of them, or should I start picking? Which brings you back to the core question. Um, it brings you back to the fundamentals of like, are these founders? Do you believe in their entrepreneurial spirit? If not, then you shouldn't. Um, and then we try to pick on that um perimeter.

Christian Soschner 1:49:34

What's your definition of entrepreneurial spirit? What's your how do you measure that for your investments?

Why Comfort Zones Kill Growth

Enis Hulli 1:49:40

It's it's very tough to, I mean, there's a lot of different parts of it, and it's very tough to gauge, but um, pragmatism, being practical, going up, become being comfortable with going out of your comfort zone, um, always changing what you think that you know that's all it might also be pragmatism, but you know, iterating on your thinking throughout your process, resourcefulness. For example, previously you've asked me about reaching out to me, get introductions, etc. If a founder cannot find a mutual who's going to introduce us, I mean that's the easy, easiest part. You know, founder needs to be much more resourceful than that. And you would see that um when you talk to different founders. It also comes with their aspirations, why they're building a company, because sometimes it seems easy, it's not. And a lot of the founders that I see, especially in mobile gaming, want to become founders just because they feel like it's time, it's fine, it's the time that they try as well. That's a very bad reason to start a business. So you try to stress those, um, stress test those areas.

Christian Soschner 1:50:36

You mentioned comfort zone. Um, I think uh successful people are never in the comfort comfort zone, really. But um can you imagine Jeff Bezos starting Amazon and then moving it up the value chain? Uh, there's always something new to learn, and it's never time to settle. But how do you measure it when you when you when you see a founder? How do you find out how adaptable they are to new challenges, how comfortable they will feel when something happens around them?

The Role of the Middle East in Global Expansion

Enis Hulli 1:51:05

Yeah, I think the first five to ten meet minutes with of a meeting with me is a bit traumatic for a founder, that pleasant, because I try to shake their grounds um and see what's left. And when I'm shaking their grounds, I'm really putting them out of their comfort zone. It's sometimes more on a personal level where I'm asking about their about asking them about their relationship with their families, etc. Sometimes it's on the business layer where they've spent a lot of time working on this, and I'm just on the core attacking it, saying that I don't believe in this and this and this and this. And then you start to see that person maneuver with that um shaky ground that tells you a lot. And then there's also things that you check on the face value that shows you how adaptive they are into new environments, going out of their comfort zone, et cetera, like their career, their college, the what they've chosen to study. And then post-college has all these different clues that you're trying to take out of it, or the way they found their co-founders. How challenging are their co-founders to them? Um, etc.

Christian Soschner 1:52:05

So you pressure test them in the first few minutes.

Enis Hulli 1:52:08

Yes. And then um, if it fails, it failed, and then I end up with a bunch of founders that hate me for it.

Christian Soschner 1:52:15

That's life, that's life. Everybody's starting. Uh, I think your cat was it your cat that was briefly saying hello?

Enis Hulli 1:52:21

It's my parents' cat, but yes, so we have a bunch of cats in all of the different locations. This cat is the cat and the summer house.

Christian Soschner 1:52:30

Oh, yeah, I have two cats too. So I was back home. Um, we are in the final part of our conversation. I have uh a few questions left. If you have some time. Of course. Um you know San Francisco, you operate out of Turkey, and what I found amazing in the last two or three years is that I changed completely my perspective on Saudi Arabia and United Arab Emirates. I always tied them automatically to the oil business. And just thought petrochemical industry, when you have something in that area, you can send them. I'm all in deep tech, biotech, I don't have anything for them, so check it off the list. And then I had a few interviews and they said, no, no, they are changing, they are investing in much more areas and they are building an ecosystem there. Um, from your Turkish perspective, how do you see the activities in Saudi Arabia and uh and Dubai, for example? Do you think that can be the next solution for Europeans to not only look towards San Francisco but also into this this area when they want to scale up with investments when they found on especially Series A, B, C, D?

Blue Ocean vs Red Ocean Explained

Enis Hulli 1:53:36

Yeah, I put companies into three different categories. Some companies, just because of how blue ocean their markets are, they're very um Bay Area first and they have to be US first, and they become unicorns, being US first, and then they expand globally. For those companies expanding into a market um like Saudi Arabia, for example, did become after they became unicorns, they would be expanding into Europe. And why not try Middle East? Maybe it's also for capital raising reasons, because some of the some of these capital sources do want some presence there, and then you satisfy that it makes sense. But you only do that after you've become huge. But that's for companies in blue ocean spaces. For companies that have a hyper-local play, um, these would be regional um accounting software as a service companies, HR companies, about a lot of the local marketplaces where the transaction happens locally, like Uber clones, for example, etc., you either start in the Middle East or you don't. You cannot expand there because it's a hyper-local business. So someone else would be doing it there, anyways. There's no need for you in the market. And then there's a third type of a company, which is starting in a red ocean market, meaning they cannot target the US because it would be too late. Probably 10 other companies are already executing that business in the US. It would be suicidal. So they have to expand globally. And then while expanding globally, should they go to Singapore to expand into Southeast Asia? Should they try India? Should they try Middle East? Should they try Latin America? Middle East is definitely one that's in the priority list. As I as a UK, you British or a European founder, I would try Middle East, which would A, because they like playing with these technologies, B, they have the budgets to back it up, and then C, you can actually, it would ease out your fundraising in the long run as well. So I think for that third type of companies who are starting in red ocean markets, want to expand globally early on. It's not like they can only focus on Germany and become unicorns. No, they would get to CDZ in Germany, but then they would try to have to open multiple offices. One of them would be Riyadh or Dubai with local investments.

Why the US Dominates Emerging Technologies

Christian Soschner 1:55:26

You mentioned a couple of times blue ocean companies, blue ocean strategies. Uh, for listeners that not that are not familiar with this term, can you give your definition? What's a blue ocean company?

Enis Hulli 1:55:37

For me, a blue ocean market is a market where there's not that much competition because there's no market to speak of, there are no enterprise budgets. It's just the early aim of a technology, and there's a lot of different enthusiasts playing with the technology, and some developers in some corporates are playing with it as well, but nothing substantial. And then when you try to build and build and build on this category, and if that's this category explodes, you become a massive winner in the space. Whereas red ocean markets are markets where there's a certain need. There's a market, there are competitors, there are some companies who have become unicorns, some that went public, etc. Um, but there's always these small niches or nuances or regional differentiations that you can execute to you know find a place for yourself, those with the more red ocean companies. Um, in those red ocean companies, it would be very tough to go and start in the US because the market would already probably be taken by a handful of players.

Christian Soschner 1:56:28

So it would be, for example, um CUDA from NVIDIA would rather be a blue ocean strategy and red ocean strategy iPhone of already existing market mobile phone in 2007.

Enis Hulli 1:56:39

Uh yes, yes, correct. Or looking from, yeah, I mean cloud as well, for example, building a cloud provider post-2010 would be a very, very um red ocean strategy.

Why the US Strategy Won’t Change Soon

Christian Soschner 1:56:52

And so your assessment basically is that the Bay Area is so far ahead for blue ocean market strategies, uh, mindset, talent, capital availability, understanding that even Saudi Arabia with their massive cash flow from the oil industry won't be able to compete soon in the future with the ecosystem.

How Founders Can Reach Enis Hulli

Enis Hulli 1:57:16

For you to become for a region, for a region to have a lot of um for a region to have a lot of appetite for blue ocean technologies, it needs to have high enterprise budgets, which sure Saudi Arabia can. Needs to have a lot of RD offices in the region. I don't think Saudi Arabia has, and it has to have a very liberal economy with a lot of competition, where the giants are just competing and clashing with each other. So they're investing in the next 10 years. They're not just investing for today or to optimize today's top line or bottom line, they're investing for the next 10 years of their companies. Um, those three components don't exist in Saudi. Even the examples that you give in terms of oil, etc., are very monopolistic, oligopolistic structure.

Christian Soschner 1:57:57

But they don't exist in Europe either at the end of the day.

Enis Hulli 1:58:00

I mean, we had something in the in the 90s, but now yeah, there's not enough business turnovers on you know, any part of the ladder.

Christian Soschner 1:58:08

So it's it's natural. Um, everybody who thinks who listens to the podcast, everybody who thinks they have a blue ocean strategy with their company should reach out to you, and you can help them at the end of the day uh make the big leap uh towards San Francisco, get the company off the ground, move it forward. Exactly. And then later, when they flip the strategy and when the market exists and we are entering Red Ocean territory, then you can also help them coming back to Europe.

Enis Hulli 1:58:41

Exactly.

Christian Soschner 1:58:43

And this is not gonna change pretty soon.

Enis Hulli 1:58:45

No, I think this is core to our strategy.

Christian Soschner 1:58:49

Yeah, it's it's bad for Europe, in my opinion. I think we have a lot of potential here in Europe. We should do more with it.

Enis Hulli 1:58:55

Uh, true. I think what's good about Europe is talent is everywhere, it's very fragmented and bits and pieces slide all across the continent, um, which is good from an opportunity standpoint, which is good to scale talent, you have to adapt to this. If you need if you don't need 10x engineers that are best in the world, but you need a lot of people who are very talented, etc. Europe is a good place to build that tech backbone. It's not bad. But then again, I think that tech bond needs to be building for the US, not for Europe.

Christian Soschner 1:59:23

Um, before I come to my last two questions, is there any topic that you would like to discuss at the end of the podcast that we didn't tackle yet? No, I think this is all good. How can found us reach out to you?

Enis Hulli 1:59:37

Um, LinkedIn, Twitter, email, all of it would work.

Christian Soschner 1:59:42

And at the end of the podcast, what's your final message to found us that you would like to leave them with?

Enis Hulli 1:59:50

Our thesis is bridging to the US, but then a lot for a company, for a founder starting off in Romania, Bulgaria, um, Hungary, Turkey, etc., they have a lot of issues finding early adopters, those they have a lot of issues raising pre-seed funding, seed funding, finding the right talent, etc. Let's all bear in mind that all of these are a direct consequence of being based out of Turkey or Hungary. So you can build your company here, you can scale your talent ops here, but you have to you know make that move and get your first customers in the Bay Area so that that's where you anchor your product, and then everything is gonna be you know dragged by it.

Christian Soschner 2:00:27

Enis, thank you very much for this conversation. I completely agree to everything you said. If you have a great company, if you want to go global, go to the United States, have a team here in Europe, but at the end of the day, you need to build in the United States. That's that's the situation. Well, thanks for having me. This is great. Thanks for your time, your candor, and your vision. And I can't wait to see who reaches out to you hearing after hearing this podcast, and let's stay connected and let's stay in touch. Ciao. See you, bye-bye. If today's conversation shifted your thinking even a little about what it really takes to build world-changing companies, you're not alone. We heard how mindset and ambition, not just capital, decide who leads in the global arena. We learned why relationships, resilience and the power law shape everything in venture capital. And Any Surrey left us with a truth few talk about. The best founders never settle, and they never stop growing. If this episode helped you, made you rethink your own path, or gave you a new tool for your journey, share it with one person who would benefit from it. That's how this show grows, by word of mouth, from one ambitious mind to another. If you share it, please tag me on LinkedIn or your favorite social platform so I can reshare your post with my network. And together, we will bring even more industry leaders and visionary voices to the table. And if you're hungry for more, stay tuned. Our next episode goes even deeper into the mindset and mechanics behind extraordinary results. Thanks for listening and see you next time on this channel.