Access to Finance | Ambition to Scale – The Fundraising Journey (Chapter two)

Well it's really lovely to meet you Sherry and for 
the audience, in case you do not know a lot about   this highly accomplished woman, let me give you 
some key milestones in a very short period of time.   5 billion is what she has raised. 70 plus
investments in startups. She's an investor   in 5 venture capital companies and she's had 
also IPO involvement which we're going to hear   all about. In addition, she's also been an 
investor in LinkedIn, in Zoopla, in Interactive   Investor, in in Joby and there is so much 
more else that we are going to hear about today.   So sherry, can you take us from the 
beginning up to that very first listing?   Sure, thanks very much Susan. So I'm a Canadian and I came over to the UK and I studied at the London School of Economics and 
that really definitely changed my life in   a whole bunch of ways.

After I studied there, I 
became a computer programmer but it was because   I was very influenced by what I had learned about 
entrepreneurship and about technology when I   was doing my first master's. After being 
a computer programmer which again set me up for   my career as a software entrepreneur, I 
then, I ended up at some point working with a   number of people who had MBA's and I thought, oh I
like the way they think. I think I need one of   those, so I applied to a bunch of MBA schools and I
ended up going to one on the East Coast   where I met the Co-Founder of my first business which was again, I sort of wasn't really, I knew   I was interested in entrepreneurship after the 
LSC but I became an entrepreneur after my MBA.   I joined my first startup with a co-founder, which we sold to Euromoney and that was   using systems like what I used to programme when 
I was a computer engineer but we wanted   to do something slightly different.

We want to 
gather information from emerging markets and   make it available to western investors using the 
internet, rather than using conventional mechanisms.   The first company which is now called 
ISI Emerging markets at that time was called   Internet Securities and again we thought it 
was a cool name at first but it wasn't after   that so we changed the name into something 
that was more adaptable.   Shortly after that I started my second 
startup and that was called Interactive Investor   which is still very active in the UK, does about 
a quarter of the trades, a quarter of the trades.   Founded it because I wanted to create, the 
first company was a B 2 B institutional play   and I became fascinated with B2C, and interact 
investor was giving the power of institutions to   consumers because thought it should be a lot 
easier for them to make investments and to track   investments and their pensions 
and everything else.

So founded that in '95. '97 sold the first one as I said to Euromoney and then in 2000 start a sort of float.   Interactive Investor. At that time dual floatations 
were all the rage so we floated it on Nasdaq   and London and it was 33 times 
oversubscribed, which was very exciting.   Then you may remember something else happened 
in year 2000, which was a rather large adjustment   in markets. A huge market crash, so went 
from being oversubscribed to market crash   probably about three weeks after the 

Then learned a lot as chairing   a company during a crash, you 
learned a lot about I don't know, what   happens when the markets go very up and very down 
at the same time. That launched again a   plural sort of career. Shortly after the 
market crash about a year and a half after that   we sold that company and I became an 
angel and really went plural   after that. I like the way you called what 
happened that time an adjustment in the market   because there's probably a lot 
of people on the call either who really will   remember that or really won't but an adjustment 
it certainly was, so that brings us up then to 2000.   Of course I'd love to ask you lots about what 
happened with the funding journey along the way   but in the meantime of course since 2002 let's say 
2020 a lot has happened too, so take us through the   last two decades. Thank you, so yeah when it was 
a market it was like entering a nuclear winter I   think, the 2000 crash but yeah it was a 
very, very large adjustment and where the term   irrational exuberance was coined, which again there had been seen that there was   irrational exuberance on behalf of investors and it was replaced by a nuclear winter.

So   after that I started, so after selling, so floated it and then sold it then   became an angel investor which I loved and loved
so much that I've got about 70 angel investments   under my belt and also I like 
being hands-on. I like literally working alongside   the entrepreneurs, so do that. Again, I'm 
a hands-on active active angel investor for   further on I also am an investor in venture capital firms and I enjoy doing   that, they're slightly later stage so at that point you sort of delegate to others.   Board of Raspberry Pi which is a hardware 
company owned by a foundation, that takes   the profits from the hardware company and plows 
it into education about making things and using   computers where I'm actually making computers. Again, the the reason we started up Raspberry Pi   is there had been a decline in the ability of 
students to do programming and there was less   students applying to computer science and they 
were less able because they were using devices   rather than knowing how they actually worked 

So we wanted to create a movement about   actually understanding what it took to make things 
using both hardware and software. Raspberry Pi has been a large part of my life and I really, really love it. Founded a couple of other   charities, so founders for schools which takes 
founders of businesses and puts them into schools.   This is because somewhere along 
the line I also had three lovely children.  Actually I was 5 months pregnant when 
I floated Interactive   Investor which was pretty full on but at some 
point they started growing up and I was aware   of there not being founders and entrepreneurship 
not featuring as a really viable career   for students to think about. They 
were still telling students that they should   be doctors, lawyers, bankers 
which there's nothing wrong with banking or   law or anything else but my life 
as an angel investor is actually filled with   really exciting fast growth companies and 
they employ about a hundred percent of the   net new jobs are in these these new companies.
I thought why aren't they at schools talking   about this really cool stuff that we do as 
entrepreneurs, so started up a charity to   help that but it was a platform, very similar 
to other platforms that we put together.

I was the   first angel in uh into Zoopla which you mentioned 
and also joined them for the flotation and then   we de-listed them. So I think de-listing is also 
an interesting, actually I've de-listed a couple of,   maybe three companies, sort of put 
them on the stock market and then taken them off   the stock market which is fun and interesting 
and there's good reasons for floating things and   there's also good reasons sometimes for removing them from the stock market.   Another charity is called the 
Scale-Up Institute and this was   really helping the government understand what 
they needed to do in order to stimulate economic   growth by removing barriers from startups 
and scale ups that were growing very rapidly.   In the UK we discovered that it was a little bit 
harder here than in some other countries, so we   set up an institute to remove the barriers in 
the UK and I'm super pleased to say that   many of those barriers have been removed and 
we've seen a 25% increase in the number   of scale ups per 100,000 of population since 
we set up that institute   which is good.

Then human capital, I'm 
fascinated with the future of work. I'm absolutely   fascinated by it so have done a a lot of work 
at Cambridge Assessment which is examinations   and also Cambridge University Press which is 
writing the books or publishing   the books that are written by the professors. Then also work at Pearson as a   NED there and spent a little bit of 
time lecturing in entrepreneurship and finance   at London Business School.

All of which is over the past 20 years, interesting but again   teasing apart what is the future of work? How do 
you prepare people to be appropriately skilled so   that they can work in a scale up or they can even 
work in a large company? Co-founder of Workfinder   also which is around the future of work as well 
making it really easy for students while they're   at university to have short-term, part-time 
jobs in scale-ups because there's nothing like   tasting the fruit of a company that you 
might want to work at that also prepares you for   understanding what that means. If you're at university you can work in the pub or   you can work in a in a scale-up. I definitely know 
what I think is more valuable so we wanted to make   that, but well for both parties we wanted to 
make that super easy.

So that's kind of   potted history of the last 20 years.
It can be clumped into a bit of policy stuff,   quite a lot of finance stuff, a lot of education 
but usually around entrepreneurship and   removing barriers, talent barriers that prevent 
prevent economic growth from happening because   there's a real talent shortage. Well in many 
countries but particularly in the UK at the moment.   You know what strikes me Sherry, is the amount 
of times you said the word start in that – start,   launched, took, I mean the amount of action that 
was in those past 20 years as well as, as you say   I love the way you say, somewhere along 
the line I had three beautiful children   in there as well. Could you just 
in you know in a couple of seconds tell us   what does 2021 look like for you? Now 2021 is still quite busy   but probably slightly 
more focused in the last 20 years so I'm   on the Board of the Stock Exchange, the London 
Stock Exchange and really enjoy that Non-Exec   directorship and really focused on the primary 
markets and the issuers. So I obsess about the   issuers. Some people 
on the board are focused on risk and compliance   and I'm like is there anything we can do so 
that we can get more companies floating? How   else can we help these sorts of things? So I think 
I had something slightly different.

I think I'm the   only person on the stock exchange who has floated their own company, but isn't that crucial?   Isn't that crucial the fact that of basically having been a customer you could say of   of the service in which you're on the board of? 
That must be really important. Yeah well I   suspect that's why they approached me and asked 
if I wanted to be on the board but it's also   why I suggest is that yes and I think 
there's other things that we can do to make   it easier, which is again knowing 
your customers is a good thing. So on the board   of LSE which I love, on the board of Pearson 
which is the world's largest education company   and involved in primary education, secondary education,   further education, higher education but also doing 
a pivot towards B2C or direct to consumer   because of the need to upskill adults around 
the future of work which doesn't involve the   historically, the classic incumbents, incumbent 
educational institutions. So that's really very   interesting.

It's a very large company but 
it's absolutely entrepreneurial at   its heart and it's making an adjustment so that 
it can help adults after they've been through   university upskill themselves in a variety of ways, which is fun. So   it's small but it's big but 
it thinks like a small, it thinks like a small   startup which is quite fun. I don't think 
I would have anticipated that feel in such a   large company but it is there which 
is fun. That agility as we'll   talk about is is super important. There's 
something else that really strikes me about you   and I'm sure all of the audience are echoing my 
thoughts on this is you're amazing at thinking big.  In terms of the Ambition to Scale, is the 
whole idea and the whole essence of what the   theme of this conference is all about, how have 
you built the muscle of thinking big and how   do you know when when thinking big enough? Well there are so many issues   and problems to solve that you might as well 
solve big ones, I'd say but I think I in systems and I like to understand – what is the benefit of doing   this activity? So if I go to two other things that 
I sort of started up, one is Digital Boost which is   a platform similar to Zoopla and similar to 
LinkedIn, but this is a platform for upskilling   adults in digital.

I knew from the work 
of the CBI and others that you know 90% of adults   currently working, don't have don't feel confident 
about the skills that they possess in order to do   their jobs but they can't quit their job 
in order to go back to full-time universities.  Like well how can you create a market 
where they have access to short   stackable courses. It's just like well 
there's this issue, shouldn't just let it be and   what I love about entrepreneurship 
is all we do as entrepreneurs is solve problems.   We don't accept instead of saying, oh it works 
this way wish it didn't. It's a works this way   it shouldn't, we'll change it. Let's find some other 
people that can help us solve this problem.   Then before you know it you've created the future. 
Then our whole world is filled with   people who don't accept the status quo and you set 
about forming teams to improve it.

So I mean but   there's a great thing I think from 
business school and it was, if you are here you   owe it to you know, and it's one of the 
large universities and again it's a   message to the students, if you're here you can 
think clearly. For heaven's sake choose a big   problem worth solving. If you choose big problems 
worth solving you're going to be a talent magnet,   you will be a customer magnet, you will be a 
finance magnet and your work will have incredible   impact. So I always think you should think 
big because why sort a small problem if there's   a really big one there that still 
remains unsolved. You've got the appetite   and the energy to focus on it. They're easier to solve. If you can see a problem,   you can articulate it, you can break it down and 
then you can make it something of the past and   then you know what, there'll be another problem 
that comes up into your mind and it's annoying.   I think focusing energy in a positive way rather 
than saying, Oh I don't really like it.   Just change it, change that into positive energy. 
Form a team and then you'll have a   good impact.

Then you'll just list exactly, it's 
brilliant the way you see it. Do you know what I've   seen you do there and you've almost drawn your own 
diagrams you've done it, is that you've applied a   computer programming mindset to a problem in an 
entrepreneurial way. I can just see   that you're drawing these issues out 
and that basically form a team, off you go,   solve it. Then there'll be another one to solve, 
it's brilliant to see. Along the way of course   there there can be an awful lot of logistical 
challenges and and there's a lot to be,   that there's a lot that happens.

So can you give 
us any like secret growth hacks that you've had?   Like you mentioned there for example that you came across a lot of MBA's. You said, Oh I might   like to be, I might like to have one of those. 
Have you any growth hacks like that along the way   that you could share with us today? Yeah one of the growth hacks, I love projects and bringing teams together like 
a small task force where you just work away   in a single-minded focus at something. Maybe it's 
launching a new product feature, maybe it's solving   a problem that's been bugging you for a long time. 
I use students at university as growth hacks.   I think at Digital Boost, there is 10 full-time people, so 
it's a small company but we've had 70 MBA's working   for us in this last year as interns, doing 
a variety of let's focus like a laser beam on   this and just crush this issue.

Then, oh it's 
fixed, great, let's think about the other one.   So I think a team and a single-minded 
focus is really helpful, well for scale ups   and for startups because you often get very, very 
busy and your permanent staff you know are dealing   with a thousand spinning plates and it's like 
but you really need to focus and nail down a few   things. So my biggest growth hack is using interns 
of students who are at university at the moment.   They're hungry and they want something 
meaningful and they want real   projects and so what better thing.

So again, work 
in a pub or work in a startup on some   meaningful problem that you can just bust open if 
you focus on it and bang away at it for a while,   that's probably the best growth hack that I've 
used over, I mean over and over and over for the   past two decades. It's laser focus on something. You 
make it a team's sole focus.

They still work with   your other team that's spinning a thousand plates but they have one sole objective, they   can't get distracted. They can't have another 
priority. It's a you're here to do this, so you   align a temporary sort of team 
and you're clear about what you asked them to do.   The start of that is you have to know a small 
problem that you want to solve with, say   5 people over a couple of months and that does 
require some of your thinking on your own   part.

I think I learned that through when I was a President of the Alumni Association   and someone who was a master user of, this is  
volunteers said look it, you can get a bunch of   people around in a committee but you need to have 
them responsible for one thing so they feel on the   hook for delivering it and that ah, well it's very 
meaningful to you if you're the only one that's   responsible for it because you're going to work that 
much harder to deliver that. I think if you do   that with teams as well, so you know it's not going to 
get solved if you don't sort   of deliver. You'd be amazed at what people do but 
they also so A- they deliver but B – it's really   fulfilling to them to say yeah it was a bit of 
a mess as there was this you know grey mass that   was ill-defined when we arrived and we worked away at it and it was solved by the time   we left and that's my legacy.

I feel really 
proud about the impact I had on that organisation   and you leave the organisation in a much better position but you've done   something which is really important and helpful 
and that you know gives us meaning in our lives.   Can we go to the thousand spinning 
plates that you just mentioned because by the way   I have worked with interns as well and I know 
exactly what you mean.

I think it can be a   brilliant process but you also of course do need 
your core team just like you were saying. Sherry   you've been through a range of finance rounds, 
whether it has been private or public equity. What   happens operationally when that drive is happening 
because that can take up an enormous amount of   energy and thinking time and focus and all of what 
you mentioned but at the same time there's still a   business there to produce earnings and hopefully 
subsequently dividends and so on like that.  Operationally, what has been your experience 
of this? It's really important. So again I don't know if you're familiar with 
raising but you think about responsible consultant, you know consulting. I like 
intense fund fundraising where you take a couple   of the senior management team not everybody. 
Not the whole company because the operations   have to stay there.

So when I sort of floated 
Interactive Investor the first time is that we had   the most amazing CTO who really was phenomenal. He's like I don't ever   want to see a single investor. Do not put me in 
front of those people and do not distract me.  I'm going to keep the wheels on your bus. You go out with finance people, you go talk to all   those people on those roads, don't bug me. I'm going to focus on this and if you absolutely   have to talk to me, then talk to me but also leave everything to me. It means I'm   going to take decisions that need to be taken on a 
day-to-day basis and you're not going to know what's   going on because you can't know everything. He 
had been through a number of financings previous   you know before and I love that because 
it's a clarity of thought.

So now it's a right   so CEO, CFO really going to get very distracted 
probably 70% of their time on a financing.  there's a lot there's a lot to do on that 
but hive off the rest of the team and separate   it so that that you've got the operations, the day-to-day operations don't fall   apart and you don't stop your product development 
because often CEO is involved in product   development. So either you get a backlog of product 
development that the rest of the team is going to   deliver when you're distracted or you delegate it to somebody and you train them   and you prepare so that you can go through this 
very intense period.

I was on a call yesterday   and it was with, again a CEO had just finished 
the financing and he was commenting on how it   was so much easier to raise finance right now. He said, when I was financed I could do   eight back-to-back investor calls, you know zoom 
calls in a day and I remember the last   time I did it, my god I had to fly over here. I had 
to fly over here, I had to fly over here and here's   much more efficient process. So I think that the 
efficiency of capital raising has gotten easier   with this zoom and investors are comfortable with making financing decisions   without necessarily having to fly the whole 
team over you know either way. So   I think it's one of the blessings of 
the past year is that we can get quite a lot   done much more efficiently in a shorter period 
of time, which is good. You have to   parcel them out and say right, you know 
I'm not going to talk you know, I'm not going to   update you every five minutes on the financing and 
I don't need you to update me every five minutes   on what's going on with the operations and we're 
just going to really focus on the   separation of duty so that we can get it 
done and just be mindful of people's time.

It's   important that the wheels don't fall off the bus 
because the last thing you want after financing   is to have the operations grind to a halt just 
at the end because you didn't think about how   distracting it would be. You should plan that 75% of 
your time will disappear for two or three months.   You say that so simply as in 75% of your time 
will disappear for two or three months,  but what I'm getting from you is that that is 
that is realism. Did you ever not realise that?   Were there any consequences? Okay why don't you 
tell us about that then, your face is telling   me it all. Yes, you can over share. The other thing is that we might get excited   as entrepreneurs and senior leaders about the 
financing because it is quite exciting. You're   meeting X and Y and Z and you're excited about what they can help you do and what you will   do with all of that money when it comes in. If you over share with the rest of the team, they   often can feel quite uncertain.

So I think I, again I think just allow people   to focus on delivering the business and I've had really terrible, when I've over   shared or you've gotten everybody involved 
in that, again the operations stopped and the   business development stopped which meant that your 
revenues fell off because you weren't doing   the business development conversations. You weren't 
doing the product development conversations, you   weren't shipping product. So in a small company there are implications of you   taking your eye off the operations, so I 
do think it's important to be very mindful about   if I'm going to really not be present for a 
couple of months, then who's going to do  that stuff because it's dangerous to the 
whole organisation.

You do a   financing and everything stops or you have 
a decline in revenues or profits or whatever   or you have a disaster that's 
been poorly handled because somebody wasn't   empowered and delegated to work on that 
then it can be really quite   bad. So that's why I now do that and it's a lot of scar, a lot of scar tissue   that built up that sort of focus and that as 
a recommendation. Actually, as you talk   about that I'm reminded of the risk that 
you take when you're when you're raising money   from that point of view but actually I think a 
lot of us think about risk in terms of downside.   What if this doesn't work? What if I don't raise 
enough? Like what if? what if on the   downside? But Sherry, is there is much risk on 
the upside? What if I don't think big enough   and maybe there might be like, we may 
not have the capacity to serve the orders from   a business development point of view and we 
may not have thought of the potential that   investors might have thought of before.

your thoughts about the upside   and sorry the risk to the upside which is, 
what if you're not thinking big enough early enough?   Well I think if you're not thinking big enough 
you'll have a hard time raising money. So people   can often disabuse you, I think of that notion, if you're not thinking big enough and I actually think it's really 
an excellent process in having conversations with   investors and prospective investors because they 
will say – Have you thought of this? Have you thought   of this? You might have and you might not 
have so it's a great investor that   has the domain expertise actually helps you see 
additional opportunities that you might not have   perceived and their networks also help you solve 
those. So I think it's really helpful   and I think you could have a fatal flaw 
if you're not thinking big enough.

I think   you should push yourself really hard to think 
through – What's the impact on your customer? What   is the prospective response going to be of this competitor or the incumbent?   Are you increasing the market with 
your product or service? Or are you nibbling away   or taking giant bites out of somebody else's 
pie? I think understanding where you fit into   the picture is really important. I honestly think if you're not thinking big enough   very unlikely that investors are going to back you 
because they will because that's what investors do.   They help you see, again usually investors are systemic thinkers   you may have a small narrow thing, it's just like 
well we have to know how this fits into   our economy or you know which is 
either a local economy or it's a global economy   but you really need to think about playing chess, it's like what are the   next 16 moves that you're going to make.

Don't talk 
to me just about the next three that you can see.   I want you, if I'm going to invest in 
somebody, I want to know that they've thought   through what that chess game is going to be for 
the next 1,3,5 years. I don't want you to   talk about something that tactically you can 
focus on the next quarter because that won't   provide the dividends because you'll get blindsided by something   that you didn't think about. When you talk about 
thinking ahead, the 16 steps, the chess board – What's   the trigger of one of those steps being an IPO as 
distinct from a bigger and bigger round or an exit? Well what's an exit? For some is a debut, a market debut of others so again an exit is never actually an   exit, it's usually an entrance of something else 
which you need to deliver on. So sorry to   throw that back at you. You're right, you're 
right. I suppose what I'm really saying is – What's   the difference between bigger and bigger rounds 
private equity versus going into public equity   versus selling completely and walking away entirely? Yeah, well I think selling isn't   usually necessarily for some very large part of 
the team isn't walking away.

So if you're   evaluating whether or not you sell a company or 
whether or not you float it, you're usually running   those two processes in parallel and you're trying 
to see whether or not it truly is better for that   organisation, that service to be independent, truly 
independent i.e. on a on a stock exchange   with all other stock exchange springs or if it 
might be more valuable as a division of something   else because that something else can bring it a 
channel of distribution or   other skill sets that it wouldn't 
otherwise have.

I think that discovery   of should we sell it or is its destiny better 
on the market? is an   important aspect for the team to go through 
with its advisors and it's shareholders.   Sometimes you decide to sell if you think that maybe the founders coming, you know maybe the   founder doesn't have what it's taken, maybe they're 
exhausted. Maybe there's other stuff going   on and you think, it's going to be really hard for 
them to exist or they can't pull together the team   so you're often making decisions as an 
investor, it's like, are they going to be able to   successfully do a debut and then hold the wheels 
on the bus for that period of time? Or is it   better that it would be owned by by something else for instance,  where they don't want the senior management 
team because they've got people that come in   and do that sort of stuff so again those are sorts of discovery when we,   one of the companies we sold we put it into 
an auction, there were 17 different potential   purchasers and what you're doing there is, where 
does it fit really nicely into where's their   cultural fit? Where is there not 
overlap, so there's not going to be like a tissue   rejection in the company.

Remember that many 
M&A activities fail. Many more of them fail than   succeed so you if it's your company that you're 
selling and those people you hired and you love   and their families that you've been responsible 
for, you don't want them to end up in something   that just gets shut down or where they all leave 
because it wasn't a good fit. So I think the thought processes are – Where's the ultimate destiny 
and where will it be best served? Where will the   customers and all of the stakeholders be better served? You know as we bring this   conversation to a close Sherry, one of the prizes 
here today is an hour's mentoring session with   your good self and I think that is going to be 
so valuable to the person in question   who wins that prize but let me just tell you 
what I've taken out of this conversation.   Why solve a small problem when you can solve a 
big one? A growth hack is interns in university   and give them a laser focus on a problem 
that you can just bust open as you mentioned.   RACI is a great tool for stakeholder analysis 
and particularly how it changes depending on the   cycle.

That the efficiency of capital raising 
has actually increased the moment because you can   have back-to-back meetings rather than flying the 
team all over the world. Keep your eye on the   operational ball and if you're not going to do 
that make sure somebody else keeps the wheels on   your bus. Also push yourself to think bigger 
and the role of capital individuals should all   should always be to position the capital where 
the business has the best role. On that note   is there any final words that you have for our 
audience today. I don't think there's anything   more fun or exhilarating or worthwhile than 
starting up something that is used by millions   if not billions of of people. It's hugely creative, it's not easy but it is incredibly rewarding.   If you know if you're doing it sometimes 
you have great days, sometimes you have bad days   but generally the ecosystem wants you to win.

So if you're thinking about whether or   not you want to do it or maybe you're having 
a bad day, just keep on. It's worth  it and our world is created by entrepreneurs and 
people who help them solve issues and improve our   lives rather than accept the status quo which 
may not be what we want. So if you get grumpy,   don't grump about it. Think about how can I change 
this and then go do it. Sherry you're amazing.   It's been a joy, truly a joy to interview 
you. Thank you very much for being here today   and showing us your Ambition to Scale. 
Thank you very much and keep well..

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