As Elkstone launches a €100m fund for Irish start-ups, one of its newest venture partners gives his advice for entrepreneurs and explains what he’s looking for in a great founder.
Barry Brennan has more than 25 years’ experience in corporate finance, investment management, angel investment and venture investment. He founded CapF9 Ventures, a boutique advisory firm focused on helping Irish companies with growth and funding strategies, and has a passion for working with early-stage founders tapping into technology and innovation.
Brennan recently became a venture partner with Elkstone. This Irish multi-family office has been an active investor in early-stage companies for a number of years, backing LetsGetChecked and Flipdish long before they were tech unicorns. Elkstone has now launched a new €100m fund focused on investing in Irish seed and pre-Series A companies. It also invests at later stages in Ireland, the UK, Germany and the US, and is looking for interested founders to get in touch.
‘Interview your investors in the same way the investors are interviewing you’
– BARRY BRENNAN
In your opinion, which areas of science and technology hold the greatest scope for opportunities?
My principal area of competence is in software, and I remain bullish on prospects as digitalisation and digitisation continues apace. I am especially excited about this sector in Ireland. We have the talent here and a great opportunity to grow truly global companies out of Ireland. Elkstone is committed to trying to accelerate this by providing founder-friendly capital to great founders.
Subsector wise, there are many opportunities but it is also hard not to mention Web3 and crypto right now. Ireland is making a mark here. For example, the Launchpool TechStars Web 3.0 Accelerator is being run from Huckletree in Dublin and Blockchain Ireland is doing some great work in the ecosystem. That said, I am still trying to figure out the opportunities in Web 3.0. It is a minefield!
What are the qualities of a good founder? Are good entrepreneurs born or can they be made?
I am a lifelong believer in continuing education so I’d like to think we can all learn to be entrepreneurs. That said, here are some qualities I like to see in a great founder:
- Honesty and transparency
- Long-term strategic thinking with a real vision for the business
- Ability to work with others and assemble and maintain a great team
- A storyteller, able to convince others that their journey is unmissable
- Resilience (and a little madness – founding a company is one of the hardest, riskiest but most satisfying things anyone can do!)
What does a successful entrepreneur need to do every day? What tools and resources are a must?
- Invest in a great team and think about the team every day and how you can improve it
- Particularly at the early stage, focus on cash in the bank and be careful how you spend
- Again, for early-stage businesses in particular, focus on understanding the sales process for the business and hiring the right people to help you sell your product – this helps with point two (cash)
What are the critical ingredients to start-up success?
- A great team
- Tackling a real and imminent problem or pain point
- A unique and defensible insight, technology and solution
- The ability to take a significant market share of a large market opportunity
- The tools and team to sell in the chosen customer segment
- Proper capital for the journey ahead
How can founders assemble a good team?
This is especially hard today given market labour conditions are difficult right now as the war for talent rages. Participation in accelerators and meet-ups can help identify like-minded potential partners and team members.
Getting your (and your company’s) name out in the market, for example on LinkedIn, can help with inbound enquiries. Investors and other founder networks are also a great source for recommendations.
More generally, approaching relationships and interactions in the community in a non-transactional manner creates the environment for people to deal with you in such a manner and this approach often helps in creating and building networks.
What advice do you have for founders who are starting to look for investment?
Understand the present but also future capital requirements for your business. For example, if your business is a capital-intensive business, you will need significant funding not just now but also in the future.
Research your investors, and understand what a VC might look for in ideal investment versus an angel investor. Make sure you get good legal advice on your legal structure and funding advice on any terms you receive from external investors. This means you have strong foundations in place from the start of your journey.
Interview your investors in the same way the investors are interviewing you – these investors will be part of your journey for the next few years; it helps to like them.
What are the biggest mistakes that founders make?
- Scaling too quickly and spending too much capital before product market fit
- Not understanding the capital required now and in the future for your business model
- Running out of cash
- Having the wrong team for the right problem!
What are your views on mentorship and the qualities one should look for in a mentor?
I am a huge fan of mentoring, for example I’ve had mentors for many years helping me with various aspects of my own career and get huge satisfaction out of being a mentor.
There are many types of mentor-mentee relationships out there depending on the need and the relationship. At a basic level, there needs to be huge trust between the parties and a clear understanding of what is being expected from the relationship, and in certain cases specialist industry or other experience matching the problems the mentee is facing.
What’s the number-one piece of advice you have for entrepreneurs?
Simple: focus, focus, focus.
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