Professor Chris Mairs, CBE, is a SyndicateRoom super angel, Venture Partner at Entrepreneur First and a Fellow of the Royal Academy of Engineering. He has a wealth of experience investing in startups and was chairman of Magic Pony Technology, which was acquired by Twitter in 2016 for $150m.
We highly recommend listening to the full conversation below:
But if you’re looking for some fast wisdom, here are the three main takeaways.
1. Invest in exceptional founders.
Chris: “What Entrepreneur First is looking for is a CTO with deep, deep technical expertise. And the CEO with an understanding of how to potentially apply that expertise and technology to a particular domain, and the ability and the charisma and the articulateness to be able to persuade investors and potential customers of the significance of the technology.
Just ask yourself, Is this person exceptional enough? When we're looking at what we're looking at, particularly at the CEO of a business, sometimes I've invested in businesses, where I thought the idea was great. And I wasn't sure about the CEO. Now, if I were to go back again, I think I would apply my rule of investing in founders, as opposed to investing in businesses, even more fundamentally.”
2. Applied AI is one to watch.
Chris: “The one area, which I think I probably didn't even mention at the time, which has been amazing and has gone forward much more quickly than I expected, is in the area of application of AI to life sciences and biotech. And the announcement of AlphaFold from DeepMind, of course, a great example of that, but there are many businesses I've worked with in drug discovery, in material sciences, in use of bio catalysts for industrial processes: many, many different ways of using AI to better understand cells, DNA proteins, and come up with some pretty amazing progress in many different fields."
3. It can be more profitable to spread your investment widely than to follow on.
Chris: I'll tell you a story about a recent analysis I did on my portfolio. I've done some rounds, some companies where I did follow on and some where I didn't, and it's not that clear why I made the decisions. So I then thought, well take all the money that I have invested, divided by the number of companies that I've invested in, and then let's do a hypothetical portfolio where I just did a one shot investment in each company, have that same ticket size in every single company, never follow on and then just look at what the performance would have been.
And the depressing fact is that I would be 30% better off if I had just taken that approach. Rather than what I've actually done, which is varying my initial ticket size based on some judgments I thought I was making, or deciding to follow on or not deciding to follow on. So I could have saved myself a lot of brain power, done a 25k ticket and never followed on, and that would have given me a better portfolio than what I've got. Generally speaking, I don't follow on, I think that if you have enough deal flow, and I have more than enough deal flow, and I invest very, very early, then I can get better returns by deploying the money in another company at the early stage, rather than by using it as a follow on ticket.