(Re)Investments of 2020

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Happy Birthday

It’s easy to forget what March 2020 was like. We were told to wash our hands while singing ‘Happy Birthday’, we had to Google ‘furlough’ (or at least I did) and wonder what it all meant for entrepreneurs and freelancers, and we had to question what this ‘new normal’ was.

The most important thing to do though was to make decisions, and some of them were pretty tough. One of my favourite quotes from Seth Godin is this one:

“You don’t need more time …you just need to decide”.

So that’s what I tried to do at the beginning of that first lockdown — decide. How could any of us know what was right? We didn’t. Should I take a mortgage holiday? Probably. Am I the kind of person who does that? I am now. Are there any Government handouts? Some. Should I take them if I am entitled to some? I think so.

Portfolio decisions

For my portfolio too, there had to be some tough decisions made. Lose the office? Furlough staff? And what’s the right thing to say to customers?

The main decisions in those early days were focused on cost cutting. Just like I took a mortgage holiday, everything is negotiable so I encouraged founders to talk to their landlord, talk to their staff and talk to their customers. Remember: Integrity is everything. Integrity is hard-won but can be lost with just one wrong decision so think about how partners, staff and customers will view (or perhaps more importantly how you communicate) your decisions in 6, 12, 24 months time. I saw some founders pay for their poor decisions quite quickly.

Once we got through that phase, which didn’t last too long, there were then questions about runways, fundraising and burn.

Reinvestments

This year the DMG Syndicate made three investment. They were reinvestments into the following portfolio companies:

Coconut

DMG first invested in Sam and Adam in 2017 then again in 2019 so this in 2020 is the third time and Coconut is our most invested in company. Since meeting them in 2015 I’ve loved Adam’s work ethic and output and Sam has the charm of someone that everybody wants to invest in and work with. I’ve always thought everyone should have a side hustle but more than ever side hustlers and freelancers are going to play a massive role in the post-Covid economic recovery.

LiveSmart

Before first investing in LiveSmart in September 2018 I tried it. The results of the LiveSmart coaching programme was nothing short of life-changing for my physical and mental health. Last March, with the world in lockdown, Alex and Rich hit the fundraising trail hard. Hundreds of emails and dozens of pitches later they came out with their biggest funding round to date including a good chunk from DMG Syndicate Members.

Stay One Degree

In January 2019, a few months after we first invested in Stay One Degree, Kash, my DMG Syndicate co-founder, emailed a contact he had at Mandarin Oriental to ask if they wanted to chat to startups and to Stay One Degree in particular. Well over 18 months later we could happily announce that MO had invested. This was also the DMG Syndicate’s biggest investment to date. Mandarin Oriental is a great partner for many reasons not least for when we’re allowed to get away on holiday or take a ‘workation’.

Why just reinvestments?

As soon as lockdown happened the entrepreneurs pitching me said their business was perfectly placed for Covid. What a coincidence! Perhaps that’s true but Covid or not I’d prefer to see how they get on for 18 months or so first. The guaranteed result of starting a startup is that things will get incredibly hard and the founders will want to (and be under huge pressure to) give up. If I’ve just met them then I’d rather see how they handle a bit of pressure before diving in.

I also have vastly restricted time due to homeschooling my two kids (apologies for the lack of blog posts in January), I’m a PAYG investor (so don’t have lots of money that I am obligated to deploy like a fund does) and I have to earn a living (those mortgage holidays don’t last forever) so I did some consulting with a commercial vehicle OEM and started more formal founder coaching too.

With my thesis of getting to know people for a long time before investing, I have my eye on the next three or four (from the dozen on my whiteboard shortlist) so I’ll be gearing up (and saving up!) for them later in the year.

Anything else?

Away from the DMG portfolio I put my money where my mouth is in two ways:

what3words

On the last day of their crowdfunding round I joined 10,362 others and bought some what3words shares. I’ve been a fan of Chris and the team since the very beginning. Chris came to three meals with 9others in the spring of 2013 to test out his idea with other entrepreneurs and I loved it so much I worked with Chris and the team later in 2013 to recruit talent, seek investment and connect him with good people from the 9others network around the world.

BitCoin

It’s an aim of mine to own one whole BitCoin (BTC) this year (I currently have 1/5 of a BTC). What will happen to the price of BitCoin? I have no idea. Some say it could go to zero, some say $500k so take your pick. No one knows for sure which is correct but what each of us can do is make our own decision. If I get 1BTC and it goes up 10x in the next three or four years could it pay off the rest of my mortgage? I’d like to think so… but time will tell.

Any more startup investing?

Having observed how some founders have navigated 2020 I know who I’d like to invest in next. I’m looking at EdTech, FinTech and IoT. There’s another with a terrific API business model but I might be too late to the party.

In the next post, which I will publish tomorrow behind the paywall, I’ll share more about the investment I made just last week. The founder of that company is someone I’ve known for almost six years and I think she’s the perfect person to run the goldmine it’s fast becoming. Subscribe to find out who, what and why.


Important: None of these posts are investment advice. If you are thinking about investing you should seek the advice of a suitably qualified independent advisor.

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