Max Bautin, deep tech investor come adrenaline junkie, has been a Non-Executive Director on Concirrus’ board since his firm IQ Capital invested in mid 2018. We caught up with Max to get his advice for early stage entrepreneurs and, if it were invented, the technology that he would throw all his investment funds at!
Give us a quick run-down on your career and how you ended up at IQ Capital.
Having grown up in a Siberian scientific research town not unlike CERN, I got a scholarship to go to Maryland for my undergraduate degree where I focused on economics. After that, I worked for a few years for private equity funds that were acquiring new licenses for mobile operators and internet service providers in developing countries. My job was to be part of the team starting a new mobile operator - I was the finance/operations guy who arrived with the operating license in one hand and a bunch of equipment and money in the other. I was there to help recruit the team and run the company for a couple of years while it was getting going - I guess that’s where I got my start-up bug. I did that for several of these operators before deciding to go to Cambridge to do my MBA in 2000. During my MBA I bumped into local technology investors and, because I thought I knew a thing or two about technology and investment, I joined a local asset manager and looked after their seed investment funds to start with. While I was rapidly learning that I did not know as much as I thought about tech investing, I met my business partners, Ed Stacey and Kerry Baldwin, and we started IQ Capital in 2006. The first fund we raised seems small now - £25 million - but back then felt like a big achievement. Over the past ten years we have grown more than ten times in terms of assets under management, team, portfolio and our most recent fund raised was £250 million in total, having established ourselves as the top deep-tech VC fund in the UK.
What are you most proud of?
Professionally, the thing I am most proud of is building IQ Capital into an outstanding deep tech Venture Capital (VC) firm. We have built it from start-up to scale up and it is now probably the number one deep tech investor in the UK. We are in this position because we backed a number of fantastic entrepreneurs who have built amazing companies and this has, in turn, transferred a lot of success to us. Being on this journey with some of the most exciting tech entrepreneurs in the country makes me very proud.
Who have been your role models in your career?
My first, second and third bosses have all made a lasting impression on my career. Colin Wearmouth, my second boss, is now more of a godparent to my family now, whilst Nigel Brown got me into Venture and was the Chairman of IQ Capital until 2014. The common traits they have, and that I very much appreciate, are humility, an analytical mindset and being supportive to their team. They are also very good at execution by systematically identifying problems, coming to decisions, implementing these decisions and learning from their mistakes. Some people have bright ideas but not everyone is a great leader like these three. I learned a lot from them, and still do, because of these qualities.
What is the most important characteristic that every leader should possess?
They must inspire people, and learn to delegate well - and to do that they need both IQ and EQ. Sometimes we see technology leaders becoming authoritarian in their businesses which can work if they have a very solid mission that people want to share in, but this is generally at the cost of the working environment so it’s not sustainable. Personally, I like to work with people and businesses that can build great cultures around them - companies that are great places to work and striving to change the world. Sometimes people are already very good leaders and sometimes they can be coached but some characteristics are difficult to develop. There is a difference between ‘knowledge learning’ and ‘emotional learning’. The emotional transformation is the hard bit that doesn’t always happen. If you don't have the emotional capability no amount of IQ can compensate for that.
What advice can you give entrepreneurs just starting out with a new venture?
Don’t start unless you believe your idea is world leading and, after that, your team is your most important asset. Always go for the very best people, at least in your country, and not just those that you can attract, you need to identify them and go after them. That’s how high your ambition must be, otherwise succeeding in a big way is much less likely. Above all, have real passion for doing it – building a company is a long, hard journey and working so hard on something you don’t enjoy is a great way to end up in a clinic.
For other entrepreneurs seeking to build a business, what advice can you give them when times get a little challenging?
Entrepreneurship is hard and sometimes companies fail but you can’t take it to heart, you need to give it a go. No company in this world has succeeded from the get-go, all companies go through lots of challenges and you need a lot of perseverance and focus. Sometimes there are challenges throughout the existence of the business, and it is having the ability to withstand those challenges that is a necessary part of being successful.
What challenge do you think someone should have solved by now?
The definitive guide on how to build a technology business from a start-up into a successful scale up. I don’t think anybody will ever be able to do that because every company is so different, but wouldn't it be wonderful? I would invest in that.
What interests you most about Concirrus and the market they’re targeting?
I’m fascinated by technology disruption as a topic. Almost all industries are susceptible to that, but some industries are special. In the banking and insurance industries the status quo was protected by regulation and some objective barriers like capital costs of going into the business for a very long time. But now, suddenly, that has changed which makes it possible to rethink the rules of engagement. It’s fascinating to see the rate that this is happening at. Concirrus is leading the charge for the insurtechs and I think it has enormous potential.
What is your advice for entrepreneurs when it comes to work-life balance?
As much as I would like to say healthy work-life balance for an early-stage tech entrepreneur is possible, I have not seen much of it. If you want to be a tech entrepreneur and pull off a successful company, you must realise it will come at a cost to your personal life – at least for a few years. I appreciate it might not be the popular answer, but I think parking everything for at least four to five years until the company can get to scale is necessary... and then you can rebalance and reduce your personal involvement. This sacrifice is what makes it so difficult for people and their families, you certainly will need huge support from your loved ones to do it.
What do you do to switch off from work?
I am a maturing adrenaline junkie and my biggest hobby right now is white water kayaking. I like the outdoors, especially mountains and rivers, and the Alps and Scotland are the best reachable places for white water. I also used to fly gliders, ride motorbikes and free dive (sadly not often these days). I like running and swimming and enjoy team sports, especially volleyball. Now that IQ Capital is a bit more established, the pressures are not quite as relentless as when we were a start-up ourselves, so I do find time for family and a healthier work-life balance.