This is part two of my conversation with Saul Klein, co-founder of Phoenix Court Group.
Saul talked about his investment in Wise and why he’d back founder Taavet Hinrikus to chop lettuce. The story started eight years before Phoenix Court actually signed a term sheet. Saul had worked with Taavet at Skype, so by the time Wise turned up at a Seed Camp demo day, his conviction had nothing to do with the pitch.
Phoenix Court is turning founder evaluation from an art into a science. They have spent eleven years building an internal system called Nazare, which collects sentiment across ten dimensions from everyone who meets a founder, and is starting to use that history to flag when a team might be about to repeat a mistake it has made before.
There’s more that makes Phoenix Court unique. For Saul, fund size should be treated as a discipline rather than a fundraising target. Local Globe stays at roughly £150 to £170 million, Latitude around £200 million, and Solar around £250 million, sizes Saul says the firm has committed to for its next three fund cycles regardless of what LPs might prefer. Basecamp, the vehicle Phoenix Court uses to back emerging managers off its own balance sheet, charges no fee at all.
Saul’s advice to anyone starting out as a solo GP? Get started. For the first couple of funds, he says, the only thing LPs can really diligence is whether you get into good companies and whether founders rate you, and neither requires a large cheque.
We finished on where Saul thinks this all goes over the next twenty years, including his hope for a version of the Silicon Valley model that isn’t winner takes all, and what it would take to build many new Palo Altos.
Part one covers his path from LoveFilm and Skype into venture, and the recent decision to restructure Phoenix Court as a company with a foundation as its largest shareholder. Worth listening to that part first if you haven’t already.
Hope you enjoy it.
PR
